2009 WI App 8
court of appeals of
published opinion
Case No.: |
2007AP2823 |
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Complete Title of Case: |
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Plaintiff-Appellant, v. Thomas P. Jezeski,
Defendant-Respondent. |
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Opinion Filed: |
December 23, 2008 |
Submitted on Briefs: |
September 29, 2008 |
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JUDGES: |
Brown, C.J., |
Concurred: |
Snyder, J. |
Dissented: |
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Appellant |
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ATTORNEYS: |
On behalf of the plaintiff-appellant, the cause was
submitted on the brief of James D. Peebles of Selsing Law Office, |
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No brief was filed by respondent. |
2009 WI App 8
COURT OF APPEALS DECISION DATED AND FILED December 23, 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 |
IN COURT OF APPEALS |
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Plaintiff-Appellant, v. Thomas P. Jezeski,
Defendant-Respondent. |
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APPEAL
from a judgment of the circuit court for
Before Brown, C.J.,
¶1
¶2 On March 26, 1998, Bernice H. Jezeski, the mother of Stanley
and Thomas,[2]
transferred to
[Thomas would own the parcel] temporarily, until
such time as [
¶3 It was almost two years before
8. The parties assets, their interests therein, the values thereof, and their encumbrances and debts are found to be set forth in the parties financial disclosure forms which were updated as required by statute on the record marked as exhibits at the time of trial and are on file herein.
¶4 The divorce judgment incorporated the parties’ marital
settlement agreement. The marital
settlement agreement recited that the parties did not own any real estate,
either jointly or in their sole names, and awarded to each party the personal
property in his or her possession and the debts in his or her name.
¶5 After the divorce,
¶6 After a short bench trial, the court made an oral ruling. The court started by commenting that after reviewing the file, it was suspicious of Stanley’s motives because the contract referred to a potential divorce between Stanley and his spouse. The court found that the divorce judgment “shows no real estate owned by either party and division of other assets and debts ….” The court discussed possible reasons for keeping the parcel out of the marital estate and found “that the purpose of the transfer on a temporary basis to Thomas was to avoid consideration of this property in the divorce proceeding.” Based upon this finding the court concluded:
Now, given
that, the question is whether it’s appropriate for me to grant relief to
But I think
it is totally inappropriate for me to undue [sic] or grant relief to someone
who acted in this fashion, as I have found.
So I’m denying relief requested by the plaintiff and dismissing the
action.
¶7
¶8 If Stanley is challenging the trial court’s finding that he
entered into the contract with Thomas to avoid consideration of the parcel by
the family court, we give deference to the findings because of the superior
opportunity of the trial court to observe the demeanor of witnesses and to
gauge the persuasiveness of their testimony. Kleinstick v. Daleiden, 71
¶9 The contract itself establishes that
¶10 At issue is whether a contract entered into to hide a substantial asset from a spouse and the family court during a divorce is enforceable. Determining whether this contract is enforceable is a question of law that we review de novo. See Heyde Cos., Inc. v. Dove Healthcare, LLC, 2002 WI 131, ¶9, 258 Wis. 2d 28, 654 N.W.2d 830 (determining whether a no-hire provision of a contract is enforceable is a question of law).
¶11 The preference in
¶12 Stanley’s “no harm, no foul” argument—the parcel was gifted property that is not included in the marital estate so no one was harmed by this contract—is wide of the mark. Each party in a divorce has a statutory obligation to disclose all assets, no matter how acquired. Wisconsin Stat. § 767.127(1) provides, in part, explicit directions on what a party must disclose:
Required disclosure. In an action affecting the family ¼ the court shall require each party to furnish ¼ full disclosure of all assets owned in full or in part by either party separately or by the parties jointly. Disclosure may be made by each party individually or by the parties jointly. Assets required to be disclosed include, but are not be [sic] limited to, real estate ¼. The court shall also require each party to furnish, on the same standard form, information pertaining to all debts and liabilities of the parties. The form used shall contain a statement in conspicuous print that complete disclosure of assets and debts is required by law and deliberate failure to provide complete disclosure constitutes perjury. (Emphasis added.)
¶13
¶14 The contract aided
¶15
¶16 In 1901, the supreme court addressed an action brought by grain
commission merchants against a
¶17 More recently, we refused to enforce a contract under which
Abbott, a nonlawyer, was to be paid a fee for all referrals to Marker, a
lawyer, that were favorably resolved. Abbott,
295
¶18 Stanley, recognizing that we would not enforce a contract that
assisted him in skirting a statutory duty to fully disclose all of his assets,
offers the alternative argument that if the contract is void and unenforceable,
the parties should be returned to their precontract positions. In other words,
The general rule is that both at law and in equity a court will not aid either party to an illegal agreement, whether executory or executed, but leaves the parties where it finds them. There are exceptions to this rule. One is where the parties are not in pari delicto. Another is where there is a slight illegality and recovery of anything transferred is permitted if necessary to prevent a harsh forfeiture.
Venisek v. Draski, 35
¶19 “In pari delicto potior
est conditio defendentis is a doctrine which states that in the case of
equal fault, the position of the defendant is stronger.” Evans v. Cameron, 121
And indeed in cases where both parties are in delicto concurring in an illegal act, it does not always follow that they stand in pari delicto; for there may be, and often are, very different degrees in their guilt. One party may act under circumstances of oppression, imposition, hardship, undue influence, or great inequality of condition or age; so that his guilt may be far less in degree than that of his associate in the offense. And besides, there may be on the part of the court itself a necessity of supporting the public interests or public policy in many cases, however reprehensible the acts of the parties may be.
Evans, 121
¶20 We are hard pressed to find that
¶21
¶22 The trial court should advise the family court that a parcel of
real property was not disclosed as required by Wis. Stat. § 767.127(1).
The files should be referred to the district attorney for
¶23 This resolution does not leave Rosalie,
Failure to disclose; constructive trust. If a party intentionally or negligently fails to disclose information required by sub. (1) and as a result any asset with a fair market value of $500 or more is omitted from the final distribution of property, the party aggrieved by the nondisclosure may at any time petition the court granting the annulment, divorce, or legal separation to declare the creation of a constructive trust as to all undisclosed assets, for the benefit of the parties and their minor or dependent children, if any, with the party in whose name the assets are held declared the constructive trustee. The trust shall include such terms and conditions as the court may determine. The court shall grant the petition upon a finding of a failure to disclose assets as required under sub. (1).
By the Court.—Judgment affirmed and cause remanded with directions.
No. |
2007AP2823(D) |
¶24 Snyder,
J. (dissenting). On July
28, 2004, Stanley Jezeski and his brother, Thomas, entered into a real estate
contract with the sole and intentional purpose of hiding an asset from a
Wisconsin family court during
¶25 After a bench trial, the trial court found that “the purpose of the transfer on a temporary basis to Thomas was to avoid consideration of this property in the divorce proceeding.” The trial court then held in relevant part:
I am not going to enforce a contract that I think is
intended to protect real estate from [Rosalie] … because the purpose [of the
real estate contract] was to hide assets [from a Wisconsin circuit court].
¶26 In spite of the trial court’s tacit finding that the purpose of
the contract was to fraudulently hide an asset from Rosalie and a Wisconsin
court of record, and contrary to the court’s admonition that it would not
enforce such a contract, the trial court entered a decision resulting in the
enforcement of the illegal contract in favor of Thomas,
¶27 The majority agrees with the trial court’s findings:
The contract
itself establishes that
Majority, ¶9.
¶28 The majority presents the appellate issue as to whether or not
a contract to hide a substantial asset from a spouse and the family court
during a divorce is enforceable. I
agree. The majority concludes that
“[t]he contract is invalid and unenforceable because it assists
¶29 “A contract is considered illegal when its formation or
performance is forbidden by civil or criminal statute ….” Abbott, 295
¶30 In support of their enforcement of the contract, the majority
acknowledges the general rule applicable to illegal agreements: “The general rule is that both at law and in
equity a court will not aid either party to an illegal agreement, whether executory or executed, but leaves the parties where it finds them.” Venisek v. Draski, 35
¶31 In spite of its acknowledgment that the contract is illegal ab
initio, the majority then balances the culpability of Stanley and Thomas, and
applies in pari delicto potior est
conditio defendentis, which directs that in the case of equal fault, the
position of the defendant is stronger. See Evans v. Cameron, 121
¶32 I disagree with the majority’s conclusion that the degree of
guilt between the brothers is distinguishable.
The fraud upon our system of law could not have occurred without Thomas’
involvement. Evans addressed whether a
plaintiff client was in delicto with
her retained attorney when she followed his advice to lie during her bankruptcy
proceeding. Evans, 121
¶33 Likewise, Thomas stands in pari delicto with
¶34 The real estate contract is unambiguously illegal in its sole,
principal and initial purpose: to impose a fraud upon the courts and laws
of the State of
¶35 After resolving this appeal in Thomas’ favor, the majority
recommends that “[t]he files should be referred to the district attorney for
Green Lake county for consideration of filing perjury charges against Stanley
under [Wis. Stat.] § 767.127(1).” Majority, ¶22. I agree that the matter should be referred to
the district attorney, as well as to the family court for appropriate action
under the family code. However, I
disagree the referral should be limited to
[1] Thomas,
the respondent, did not file a brief.
The failure to file a responsive brief may be the basis to summarily
reverse the order of the circuit court. See Wis.
Stat. Rule 809.83(2) (2005-06).
By counsel, Thomas advised us on April 21, 2008, that he elected not to
file a responsive brief, and he moved to have the appeal dismissed as being
frivolous. Thomas was then notified by
an order dated April 25, 2008, that the appeal could be summarily reversed if
he failed to file a brief. Nevertheless,
we opt not to summarily reverse because it would sanction a fraud upon the court. We decline to find the appeal frivolous
because Thomas did not properly brief his request.
All references to the Wisconsin Statutes are to the 2005-06 version unless otherwise noted.
[2] There is a third brother, Daniel J. Jezeski, who is not a party to this action.
[3] This factual background is undisputed. I am not making it up.
[4] Thomas
did not file an appellate brief.
Consequently, he concedes that
[5] The majority recommends that the file be returned to circuit court and that “[t]he trial court should advise the family court that a parcel of real property was not disclosed as required by Wis. Stat. § 767.127(1).” Majority, ¶22. This advice to the family court occurs after the majority has vested the legal title of the real estate in Thomas, effectively removing the asset from the reach of the family court. While the majority states that it will not speculate on how the family court might have treated the hidden parcel during the divorce proceedings, it does note that at the time of the divorce “the parties had few assets and a large number of debts.” Majority, ¶13. While this court should not speculate, neither should we deny the family court the full opportunity to properly consider the concealed asset under the applicable family law statutes.