COURT OF APPEALS DECISION DATED AND RELEASED November 27, 1996 |
NOTICE |
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 96-1418-FT
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT IV
PATRICIA POCHTARUK and
JOHN SACHAREWYCZ,
Plaintiffs-Respondents,
v.
GEORGE KOWAL,
Defendant-Appellant.
APPEAL from a judgment
of the circuit court for Columbia County:
LEWIS W. CHARLES, Judge. Affirmed
in part; reversed in part and cause remanded.
Before Vergeront,
Roggensack and Deininger, JJ.
PER CURIAM.[1] George
Kowal appeals from a money judgment in favor of Patricia Pochtaruk and her
father, John Sacharewycz (the respondents).
The court awarded damages on various claims against Kowal arising from a
real estate transaction. With one minor
exception, we reject Kowal's arguments.
On remand, the trial court shall enter a modified judgment reducing the
respondents' monetary award by $94.95.
Kowal owned a motel
complex consisting of seven old cabins, a house, two garages and a new forty-two
unit motel building with an uncompleted manager's residence. Early in 1991, Pochtaruk, as an interested
buyer, conducted a lengthy inspection of the premises. Pochtaruk later testified that during the
inspection, Kowal represented to her that the motel whirlpool had all necessary
permits for operation. The inspection
did not include areas Kowal maintained for his private use, including four
rooms in the new motel, and the house.
The respondents decided
to buy the motel, and returned in May 1991 to close the deal. The parties executed a land contract with
two additional contracts or riders attached.
The first, rider A, contained the following clause: "The purchasers have inspected the
premises being purchased and are aware of the condition of said premises,
acknowledging that the apartment adjoining the office is not completed, and
purchasers agree to purchase said premise in `AS IS' condition ... and shall
complete the work required at their own expense...." The parties also agreed that Kowal could
continue living in the house on the premises, and pay his share of utilities
while doing so. Rider B provided that
Kowal would remove property and trash from the larger garage, remove debris and
construction waste adjacent to and in the basement of the motel building, and
vacate the four motel rooms he had been using.
Kowal did not meet the
deadlines for vacating the motel rooms or the garage. Nor did he remove his trash as promised in rider B, or pay his
share of the utilities as promised in rider A.
The respondents learned sometime after closing that the whirlpool did
not have the necessary operation permits, and that they could not obtain those
permits without substantial design modifications. Those modifications cost respondents $3,750. They also incurred repair costs for damage
in one of Kowal's four motel rooms, after he finally vacated them.
In May 1993, in order to
remove Kowal from the premises, the respondents paid Kowal the balance on the
land contract and received a warranty deed.
The parties also executed a possession agreement, requiring that Kowal
promptly vacate the premises, which he did.
However, he left behind large amounts of trash.
The respondents
commenced this action in 1994, seeking recovery of the costs they incurred when
Kowal breached his implied and express warranties on the property, and the
rider provisions in the land contract.
After a bench trial, the trial court found that Kowal breached the
contract and awarded damages for whirlpool and room repair ($4,607), removal of
trash ($952), and failure to pay utilities ($1,000). On appeal, Kowal argues that the "AS IS" provision of
rider A waived all warranties such that the respondents could not recover on
the whirlpool and room damage claims, that respondents waived all claims
through inaction and acquiescence, and that they failed to adequately prove
damages for the utility charges, and for a $94.95 plumbing charge.
The trial court properly
determined that the "AS IS" clause in rider A did not protect Kowal
from the respondents' warranty claims.
Kowal contends that the clause plainly excludes all express or implied
warranties because the "AS IS" provision plainly applied to the
entire motel complex. We disagree. One can also reasonably construe the
provision as applying only to the unfinished manager's apartment, which the
clause expressly references. A contract
such as this one, with two reasonable interpretations, is ambiguous. Central Auto Co. v. Reichert,
87 Wis.2d 9, 19, 273 N.W.2d 360, 364-65 (Ct. App. 1978). If a contract is ambiguous, the fact-finder
may resort to extrinsic evidence to construe it. Id. Here,
extrinsic evidence in the form of Pochtaruk's testimony showed an intent to
apply the "AS IS" provision only to the unfinished apartment. Kowal did not offer any evidence to the
contrary. That ends the matter, because
the trial court's finding based on Pochtaruk's undisputed testimony is not
clearly erroneous.
The trial court properly
rejected Kowal's waiver claim. As Kowal
notes, the respondents made little or no effort to assert their claims against
him before they commenced this action.
He argues that the latest point for asserting those claims, without
waiver by either inaction or acquiescence, was when the parties terminated the
land contract and executed the possession agreement in May 1993. However, the respondents presented testimony
that Kowal consistently engaged in threatening, harassing and intimidating
behavior toward them, and toward motel guests, while he remained on the
property. Attempts to discuss financial
matters only aggravated the situation.
On occasion the police were called.
This evidence of Kowal's course of conduct allowed the court to
reasonably conclude that the respondents did not waive their claims against
Kowal because they had no choice but to postpone asserting them until their
contractual relationship was terminated and Kowal had moved from the
premises. An enforceable waiver must be
voluntary. Shannon v. Shannon,
145 Wis.2d 763, 775, 429 N.W.2d 525, 530 (Ct. App. 1988).
Evidence supports the
trial court's $1,000 award for utility charges. The trial court stated that the award was nothing more than
"guesswork and speculation" that would be reversed if appealed. However, if anything, the award was too
small. The respondents presented
evidence that one water and one electrical meter served Kowal during his tenure
at the motel between May 1991 and May 1993, and that the total charge on those
meters was $4,949. Pochtaruk estimated
that Kowal's share of this charge was $3,525, with the remaining use attributed
to the seldom rented older cabins.
There was no evidence to the contrary.
Without such evidence, Kowal cannot reasonably argue error in a
substantially lower award, which averages to $41 per month for full utility
service to a large occupied house and detached garage.
Evidence does not
support the $94.95 award for plumbing repair.
Pochtaruk could not recall whether the repaired damage, in one of the
new motel rooms, occurred before the respondents assumed possession of the
motel. Without such evidence, Kowal
could not be held liable.[2] On remand, the trial court shall enter
judgment reduced by $94.95 with costs to the respondents.
By the Court.—Judgment
affirmed in part; reversed in part and cause remanded for entry of a modified
judgment.
This
opinion will not be published. See
Rule 809.23(1)(b)5, Stats.