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COURT OF APPEALS
DECISION
DATED AND FILED
August 14, 2008
David R. Schanker
Clerk of Court of Appeals
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NOTICE
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This opinion is subject to
further editing.� If published, the
official version will appear in the bound volume of the Official
Reports.�
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals.� See Wis. Stat. � 808.10 and Rule 809.62.�
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Appeal No.�
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STATE OF WISCONSIN���
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IN COURT OF
APPEALS
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DISTRICT IV
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Judith S. Flint,
����������� ����������Plaintiff-Respondent,
�� �����v.
Dale Noble,
�� �������������������Defendant-Appellant.
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����������� APPEAL
from a judgment of the circuit court for Dane County:� michael
n. nowakowski, Judge.� Reversed and cause remanded for further
proceedings.�
�1������� LUNDSTEN, J. Dale
Noble appeals a circuit court small claims money judgment for $4199.28 in favor
of Judith Flint.� The parties� dispute arises
out of Flint�s
purchase of a newly constructed home from Noble and/or his construction company
(�Noble�).� Noble argues that the circuit
court erred in its interpretation of a disclosure provision in the purchase
contract that obligated Noble to disclose any �completed or pending
reassessment.�� We agree with Noble.� We reverse the judgment and remand to the
circuit court.
Background
�2������� The pertinent facts are not disputed and are as follows.
�3������� Both parties were represented by real estate agents.� The Multiple Listing Service (�MLS�) report for
the property stated an asking price of $334,900, and included the following
information regarding assessed value and real estate taxes:
Total Assess:��������������� $
345,000 / 2005
Net Taxes:������������������� $
1590 / 2004
�4������� On September 20, 2005, Flint
made an offer of $332,900 on the property using the standard �WB-11 Residential
Offer to Purchase� form.� The form
contains a default provision providing that net real estate taxes will be
prorated between the buyer and seller based on �the net general real estate
taxes for the current year, if known, otherwise on the net general real estate
taxes for the preceding year.�� The default
provision is followed by a blank space to insert an alternative provision,
along with this warning in bold and italic print: ��CAUTION:�
If proration on the basis of net general real estate taxes is not
acceptable (for example, completed/pending reassessment, changing mill rate,
lottery credits), insert estimated annual tax or other formula for proration.�
�5������� Flint and her agent submitted Flint�s offer using the
default provision; that is, they did not insert an alternative provision into
the blank space.� Noble accepted the
offer that same day.� The 2005 tax (mill)
rate and 2005 tax amount remained undetermined at the time.
�6������� By accepting the offer, Noble also bound himself to an
additional provision, the one at issue here.�
Under that provision, Noble represented that he had disclosed whether
there was a �completed or pending reassessment of the Property for property tax
purposes.�
�7������� The sale closed on November 21, 2005, at which time Flint received a prorated
credit of approximately $1411 for real estate taxes based on the 2004 tax.� Later that month, or in early December 2005,
the 2005 mill rate and tax were set.� That
2005 tax of almost $6200 was approximately $4000 more than Flint expected.� After Flint
was unsuccessful in reaching an agreement with Noble about the proration, she commenced
this action against him and obtained the above-referenced judgment.
Discussion
�8������� The circuit court found that Flint
was aware of the 2005 assessment because the MLS report disclosed it, and Flint does not dispute
this finding.� As already indicated, the
MLS report stated:
Total Assess:��������������� $ 345,000 / 2005
Net Taxes:������������������� $ 1590 / 2004
Similarly, Flint does not assert that she was unaware that
the stated tax amount of $1590 was for the previous year, 2004.� We surmise, as Flint
might have, that the prior assessment was substantially lower because the
parties tell us that the home Flint
purchased was newly constructed and, therefore, the 2004 assessment did not
include the full value of a newly constructed home.�
�9������� Despite its finding, the circuit court nonetheless determined
that Noble breached his duty to disclose any completed or pending reassessment under
the real estate contract.� The court reasoned
that Noble �did not disclose that the prior year�s taxes had been based on an
assessment that was substantially less than what this assessment was.�� The court appeared to conclude that, because
Noble failed to �disclose� the fact that the 2004 real estate taxes were based
on an �entirely different assessment� and likely to rise significantly with the
new assessment, the parties never negotiated the tax proration and Flint was damaged.
�10����� Noble argues that the circuit court erred in its interpretation
of the pertinent disclosure requirement under the contract.� The interpretation of a written contract is a
question of law for our de novo
review.� Tang v. C.A.R.S. Prot. Plus, Inc.,
2007 WI App 134, �27, 301 Wis.
2d 752, 734 N.W.2d 169.
�11����� Although the disclosed information may be insufficient for
Flint to have reasonably estimated her 2005 property tax liability, the
question is not whether Noble supplied the best information available, but rather
whether he complied with the contract.� We
agree with Noble that the circuit court misinterpreted the disclosure
requirement.� In effect, the circuit court
imposed an obligation on Noble not only to disclose to Flint that there was a �completed or pending
reassessment,� but also to explain that
the 2005 real estate taxes were likely to be significantly higher than the 2004
real estate taxes.� We see nothing about
the disclosure provision that obligated Noble to provide this additional
explanation; rather, the disclosure provision obligated him to disclose any
�completed or pending reassessment.��
Noble met that obligation.
�12����� In support of the circuit court�s decision, Flint points to a trade publication, which
states:
Another special circumstance
that the seller must be especially aware of is the obligation under the offer
to purchase to disclose any completed or pending reassessment �.� Receipt of a reassessment notice triggers the
disclosure duty for the seller �.� As with new construction, it is
important that the parties understand that the property taxes may undergo a
significant change so that they may negotiate an equitable proration.
(Emphasis added.)� The publication�s reference to the seller�s
duty, however, simply reflects the disclosure provision.� If anything, the publication cuts against Flint based on what it
does not say.� Although the publication explains that �it is
important that the parties understand that the property taxes may undergo a
significant change,� the publication does not say that the seller has a duty to
ensure that the buyer has such an understanding once the seller has disclosed the
pending or completed reassessment.
�13����� Flint
also argues that, by signing the offer, Noble represented more generally that
he had �no notice of new conditions affecting the property, i.e., significant higher
taxes than the previous year.� The new
assessment which [Noble] had, should have been disclosed.�� The first part of Flint�s argument fails to recognize that
Noble did not have the new, higher tax amount to disclose.� Noble might have estimated the new tax based
on the prior year�s mill rate, but the contract does not obligate him to do so.� What Noble had was the new assessment amount.� The second part of Flint�s
argument is not helpful because there is no dispute that Flint was aware of the new assessment
amount.�
�14����� In essence, the question this case presents is who, if not
Flint herself, is legally responsible for her apparent assumption or belief
that the 2005 property taxes would not differ significantly from the 2004 taxes
and her apparent failure to appreciate the possibility that in 2004 the
assessment was substantially lower. �Nothing
before us supports a conclusion that Noble is legally responsible.
�15����� Importantly, Flint provided no evidence�and the circuit court
did not find or conclude�that Noble knew or intended that Flint enter into the
purchase contract with an incomplete understanding of its terms.� Cf. Hennig v. Ahearn, 230 Wis. 2d 149,
168, 601 N.W.2d 14 (Ct. App. 1999) (based on parties� past practice of
highlighting revisions in agreement, jury could find that defendant hoped
plaintiff would unknowingly accept a last-minute change that defendant did not highlight).� Flint
provided no evidence that Noble otherwise intended to mislead her. �On the contrary, Flint testified that there was no discussion
about the property taxes between her and Noble or anyone else.� Noble similarly testified that he made no
verbal assertions to Flint
that the taxes would be less than they turned out to be.
�16����� In addition, Flint
provided no evidence to support a finding or conclusion that, unless Noble had
told her, she was in no position to know or discover that the 2005 taxes were
likely to be significantly higher.� See Green
Spring Farms v. Spring Green Farms Assocs. Ltd. P�ship, 172 Wis. 2d 28,
39, 492 N.W.2d 392 (Ct. App. 1992) (real estate sellers must disclose
conditions material to the decision to purchase and which the purchaser is in a poor position to discover).� In addition to having access to the 2004 real
estate tax amount and the 2005 assessment, Flint was represented by a real estate agent
and knew that she was purchasing a newly constructed home.� Furthermore, as already indicated, the first
page of her standard-form offer to purchase specifically and prominently
cautioned both Flint and her agent:� �If
proration on the basis of net general real estate taxes is not acceptable (for
example, completed/pending reassessment, changing mill rate, lottery credits),
insert estimated annual tax or other formula for proration.��
�17����� If anything, Flint�s case seems
akin to Ritchie v. Clappier, 109 Wis.
2d 399, 326 N.W.2d 131 (Ct. App. 1982).�
The plaintiff there failed to realize or understand one of the legal
consequences of a real estate conveyance he signed in favor of the defendants.� Id.
at 400-02.� The circuit court ruled for
the plaintiff based on the defendants� failure to �disclose� the legal effect
of the conveyance.� Id. at 402, 404.� We reversed.�
Id.
at 404, 406.� We acknowledged that sellers
have certain duties to disclose hidden characteristics of a property, but
concluded that the law does not impose a similar duty to disclose the legal
consequences of a conveyance.� Id. at
403.� Here, the circuit court imposed on Noble
the obligation to connect the dots.� But
the contract imposed no such obligation.
�18����� One wonders why Flint�s
own real estate agent did not advise her regarding the property tax
situation.� We do not determine what
Flint�s agent was obligated to do, but if the agent represented Flint
throughout the transaction, the agent would have been in a good position to
spot the issue and advise Flint accordingly.�
�19����� In sum, we reverse the circuit court�s judgment and remand to
the circuit court for further proceedings not inconsistent with this decision.
����������� By the Court.�Judgment reversed and
cause remanded for further proceedings.
����������������������� This opinion will not be published.� Wis.
Stat. Rule 809.23(1)(b)4.