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COURT OF APPEALS DECISION DATED AND RELEASED FEBRUARY 18, 1997 |
NOTICE |
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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(1), Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 96-1693
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT III
LA VERNE SWANSON and
EVELYN M. SWANSON,
husband and wife,
Plaintiffs-Respondents,
v.
RONALD W. NELSON,
Defendant-Appellant.
APPEAL from a judgment
of the circuit court for Pierce County:
ROBERT WING, Judge. Affirmed.
Before Cane, P.J.,
LaRocque and Myse, JJ.
PER CURIAM. This appeal arises out of a landlord-tenant
dispute. Ronald Nelson appeals a
judgment granting his former landlords LaVerne and Evelyn Swanson $4,000
damages and dismissing Nelson's counterclaim.
Nelson argues that the trial court erroneously directed a verdict
against him because (1) there was credible evidence that the parties agreed
that Nelson would be reimbursed for repairs he made on the rental premises; (2)
that the parties' agreement is found in the lease; (3) that under §
704.25(2)(b), Stats., a periodic
tenancy was created with the same terms as those found in the lease; and (4)
the Swansons were unjustly enriched by the repairs. Because Swanson failed to show that he made capital improvements,
and there was no evidence that the Swansons agreed to make repairs, we reject
Nelson's arguments and affirm the judgment.
In 1977, when the
Swansons decided to retire, they leased their 200-acre dairy farm, including
the home and buildings, to Nelson for a one-year term. The written lease provided for an annual
$7,200 rental payment and that Nelson would "perform all work of making
repairs and improvements on said land as soon as the same become necessary,
provided, however, that it shall be the obligation of [the Swansons] to provide
materials for any capital improvements to the buildings now existing on the
land."
At the end of the
one-year term, the parties agreed to an extension until March 31, 1980, and
indicated their agreement by their initials.
After March 31, 1980, the parties orally agreed to a rent increase to
$800 per month. Nelson testified that
when he moved in, the farm was operational and everything was working. Nelson stayed on the farm until March 31,
1993.
The Swansons paid for
all the repairs and improvements until 1980, including new electric wiring of
the house and barn, a new sewer system for the house, new shingles on the barn,
new grainer and corn crib, new furnace in the house, new kitchen floor,
insulation for the house and new carpeting to the living room. Nelson does not dispute that several times
between 1980 and 1993, the Swansons told Nelson that they would not make
further repairs.
In 1992, the Swansons
entered into a contract to sell the farm to a third party for $150,000. Nelson had rejected the Swansons' offer to
sell it to him at the same price, insisting that the price should be lower in
consideration of the repairs he made.
Nelson estimated that he made approximately $10,000 of repairs over a
twelve-year period, amounting to $69 per month. Nelson testified that the $10,000 sum included amounts he paid
for parts and labor to fix farm equipment, such as a silo unloader and the barn
cleaner. He used the expenses as tax
deductions over the years. Nelson
testified that the Swansons told him that some day the farm would be his or if
he did not buy the farm, they would "make it right."
Nelson stopped paying
rent on November 1, 1992, and made no payments for the following five months,
at which time he moved from the premises.
After he moved out and the Swansons demanded the back due rent, Nelson first
sought payment for repairs he made over the previous twelve-year period. He testified that he never asked for
reimbursement before, "because I kind of always assumed that I was going
to buy it anyway." However, he had
been having health problems and "I was kind of hesitant about buying it at
that time, and so I was putting that off, you know, trying to find out what was
wrong at first."
The Swansons initiated
this action to collect $4,000 in back rent.
Nelson counterclaimed for breach of contract and unjust enrichment. The case was tried before a jury. After all the evidence was presented, the
Swansons moved for a directed verdict.
The trial court rejected Nelson's counterclaim because it concluded that
there was no agreement to pay for repairs.
The trial court rejected the unjust enrichment claim because there is no
proof that the farm had any greater value as a result of the repairs. The trial court granted the motion, entered
judgment for $4,000 in favor of the Swansons and dismissed Nelson's
counterclaim. Nelson appeals.
We conclude that the
trial court properly entered a directed verdict. No motion challenging the sufficiency of the evidence as a matter
of law to support a verdict shall be granted unless the court is satisfied that,
considering all credible evidence in the light most favorable to the party
against whom the motion is made, there is no credible evidence to sustain a finding in favor of such
party. Section 805.14, Stats.
Whether the trial court erroneously directed the verdict is a question
of law we review de novo. See Weiss
v. United Fire & Cas. Co., 197 Wis.2d 365, 388, 541 N.W.2d 753, 761
(1995).
With this test in mind,
we conclude that there is no evidence that the Swansons had any obligation to
pay for repairs. The lease states that
the Swansons would pay for materials for capital improvements, not
repairs. An improvement to real
property is distinguished from repairs.
An improvement is defined as "a permanent addition to or betterment
of real property that enhances its capital value and that involves the
expenditure of labor or money and is designed to make the property more useful
or valuable as distinguished from ordinary repairs." United States Fire Ins. Co. v. E.D.
Wesley Co., 105 Wis.2d 305, 309, 313 N.W.2d 833, 835 (1982) (citations
omitted). Nelson does not argue, and
the record does not disclose, that Nelson's expenditures were in the nature of
capital improvements to the farm.[1]
Second, it is undisputed
that the Swansons advised Nelson that they would pay for no more repairs. Nelson's claim that the Swansons stated that
they would "make it right" is insufficient to support a jury finding
that the Swansons were contractually liable to make repairs over the term of
his tenancy.[2]
We also reject Nelson's
argument that § 704.25, Stats.,
confers an obligation on the Swansons to reimburse Nelson $10,000 for
repairs. Section 704.25(3) provides
that a periodic tenancy, taking effect after a lease expires, is upon the same
terms and conditions as those of the original lease. As we previously observed, the lease provided not that the
Swansons would pay for repairs, but that they would be obligated to make
capital improvements. Nelson does not
argue that his repairs were in fact capital improvements.
We further reject that
the Swansons had a duty to reimburse Nelson under § 704.07, Stats. This section applies when there is no contrary agreement in
writing. Under the parties' written
agreement, the Swansons had no obligation to make repairs, but only to pay for
capital improvements.
If the written agreement
was found to have expired, we reach the same result. There is no showing that Nelson's expenditures were of the nature
a landlord would be responsible for under § 704.07(2), Stats., such as "necessary structural repairs," or
plumbing and wiring not in reasonable working condition.
Also, in the absence of
a written agreement, the "tenant is also under a duty to keep plumbing,
electrical wiring, machinery and equipment furnished with the premises in
reasonable working order if repair can be made at cost which is minor in
relation to the rent." Section
704.07(3)(b), Stats. Nelson does not demonstrate whether the
repairs he made were in the nature of those listed in this section, nor does he
argue that the sums expended, which averaged approximately $69 per month, were
not minor in relation to the $800 per month rent. We conclude the record falls short of supporting a claim under §
704.07.
We reject Nelson's claim
that the court's statement to the effect that a "contract is not a
lease" is reversible error. See
Sampson Investments v. Jondex Corp., 176 Wis.2d 55, 62, 499
N.W.2d 177, 180 (1993) (a lease shares the qualities of both contracts and
conveyances). Here, the lease did not
require the Swansons to pay for repairs.
Whether the lease was found to be in effect or to have expired, the
result is the same. Nelson failed to
make the necessary showing that the Swansons had an obligation to pay for the
repairs Nelson made.
Finally, we agree with
the court that the record fails to demonstrate that the Swansons were unjustly
enriched. To show unjust enrichment, a plaintiff must show that the plaintiff
must have conferred a benefit on the defendant. See Ramsey v. Ellis, 168 Wis.2d 779, 784-85,
484 N.W.2d 331, 333 (1992). There is no
claim that the premises were not in good working order when Nelson first rented
them. Nor is there a showing that the
repairs Nelson made exceeded the normal maintenance required under the parties'
written agreement and § 704.07, Stats. There is no showing that Nelson's
expenditures in any way increased the value of the premises. Because the trial court's finding that no
benefit was supported by the record, the trial court properly rejected Nelson's
unjust enrichment claim.[3]
By the Court.—Judgment
affirmed.
This opinion will not be
published. Rule 809.23(1)(b)5, Stats.