COURT OF APPEALS DECISION DATED AND FILED March 18, 2009 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
and CROSS-APPEAL from a judgment of the circuit court for
Before
Brown, C.J.,
¶1 PER CURIAM. RE/MAX Realty 100 and Bunch & Associates (collectively RE/MAX) appeal from a judgment in favor of WED Development, LLC, for the sum it expended in settling a lawsuit against WED and William and Elaine Honeyager filed by Stephanie and Jason Barwick, clients of RE/MAX. WED cross-appeals from the judgment challenging the remittitur of the jury’s damage verdict. We reject RE/MAX’s claims that a directed verdict should have been granted, the economic loss doctrine bars recovery, and it was error to permit proof of the settlement amount and attorney fees as damages. We reject both parties’ argument that the remittitur of damages was improper. We affirm the judgment.
¶2 The Honeyagers are both members of WED and licensed real estate brokers. In April 2003, WED owned residential property and listed it for sale with Elaine acting as the seller’s real estate agent. The Barwicks expressed an interest in purchasing the property and retained Daniel Bunchkowski, a RE/MAX agent, to act as a buyer’s broker. When the Barwicks’ offer to purchase was accepted, a home inspection was conducted. The inspector encountered a bat in the attic and terminated his inspection of the attic at that point. The inspector told the Barwicks about seeing a bat in the attic. Bunchkowski’s assistant, Dan Kallas, was also present during the home inspection and testified he did not hear anything about a bat in the attic.
¶3 After the Barwicks purchased the residence, they discovered that it was infested with bats and the attic was covered with bat dung. The Barwicks sued WED and the Honeyagers, claiming they had knowledge of the bat infestation but did not disclose it. After mediation, the lawsuit was settled for $40,000.
¶4 WED then commenced this action against RE/MAX based on the failure to notify WED of the bat found in the attic. The matter was tried to a jury over three days. The jury found that RE/MAX was causally negligent and that WED/Honeyagers were not. It also found that WED/Honeyagers did not make a factual representation that there were no bats at the property. The jury awarded $74,000 in damages. On motions after verdict, the trial court determined that the damage award was not supported by the evidence and gave WED the option of a new trial on damages only or taking entry of a judgment for $57,000, “the highest amount of damages supported by the evidence.” Judgment was entered for $57,000 plus costs and disbursements.
¶5 RE/MAX first argues that as a matter of law, Elaine Honeyager, as the listing real estate agent, was negligent with respect to her duty to inspect the property and that it was entitled to a directed verdict on the question of whether WED/Honeyagers were causally negligent.[1]
A motion for a directed verdict should be granted only where the evidence is so clear and convincing that a reasonable and impartial jury properly instructed could reach but one conclusion. When a jury verdict is attacked, the reviewing court inquires only whether there is any credible evidence that under any reasonable view supports the verdict.
Liebe v. City Fin. Co.,
98
¶6 As the listing agent, Elaine had a duty to “conduct a reasonably competent and diligent inspection of accessible areas of the structure and immediately surrounding areas of the property to detect observable, material adverse facts.” Wis. Admin. Code § RL 24.07(1)(a), (b) (Nov. 2007). WED’s expert witness explained that the duty to inspect does not include areas accessible only by use of a ladder. See § RL 24.07(1)(d). The expert indicated that Elaine was not required to inspect the attic by use of a ladder.[2] Thus, it cannot be said that the jury could reach just one conclusion—that Elaine had a duty to and failed to inspect the attic and discover the infestation of bats. There was competing evidence on Elaine’s knowledge of there being bats in the attic and so a jury question existed on that as well. Additionally, evidence that Elaine was not required to inspect the attic and her denial of any prior knowledge of a bat in the attic is sufficient evidence to support the jury’s finding that WED and the Honeyagers were not negligent.
¶7 RE/MAX argues that the economic loss doctrine bars WED’s
action against it and also precluded any recovery by the Barwicks against WED
thus making WED’s settlement payment to the Barwicks unnecessary. Whether the economic loss doctrine bars
claims in a certain case presents a question of law that is subject to de novo
review. Below v. Norton, 2008 WI
77, ¶19, 310
¶8 Below holds that the economic loss doctrine bars the buyer’s
common law claims for intentional misrepresentation against the seller in the
context of a residential real estate transaction.
¶9 There is no contractual relationship between RE/MAX and
WED. Because the economic loss doctrine
confines parties to their contractual remedies, it does not apply when there was
no opportunity for the parties to negotiate contractual protection. See Daanen & Janssen, Inc. v.
Cedarapids, Inc., 216
¶10 RE/MAX next argues that the $40,000 settlement figure should
not have been utilized as an element of WED’s damages because WED could have
mitigated its damages by going to trial on the Barwicks’ claims and the $40,000
amount bears no reasonable relationship to the Barwicks’ actual damages. RE/MAX suggests that the question is whether
the settlement amount is a valid measure of damages. The record does not include a transcript of
the summary judgment hearing where the court ruled on RE/MAX’s claim that the
settlement did not represent a proper measurement of damages. We cannot review what is not before us. It is the obligation of the appellant to
present this court with the record necessary for resolution of each issue
raised; if the record is incomplete, we may assume it supports the trial
court’s ruling. See Galatowitsch v. Wanat,
2000 WI App 236, ¶23 n.8, 239
¶11 The evidence at trial was that WED was billed approximately
$17,000 in attorney fees for defense of the Barwick lawsuit and that it paid
only about $11,000 of that sum. RE/MAX
argues that because
¶12 A judicially created exception to the “American rule” permits
recovery of attorney fees “where the wrongful acts of the defendant have
involved the plaintiff in litigation with others, or placed him in such relation
with others as to make it necessary to incur expense to protect his interest.” Hall v. Gregory, 2007 WI App 112,
¶17, 300
¶13 Both parties challenge the trial court’s postverdict determination that the $74,000 damage award was not supported by the evidence and that a new trial on damages could be avoided by WED’s acceptance of a $57,000 award. WED argues the trial court erred in determining that the damage award was excessive and thereby limiting the type of damages WED could recover. RE/MAX argues that the trial court failed to undertake a reasoned process in determining a reasonable amount of damages. RE/MAX contends that the maximum reasonable recovery is $14,600, representing the Barwicks’ actual bat remediation expenses of $3600 and WED’s attorney fees of $11,000.
¶14 The trial court did not expressly state that the damage award
was excessive. Rather, it decided to
remit the award because it was not supported by the evidence. See Wis.
Stat. § 805.14(5)(c). The
award can be set aside as excessive because it “is too large to be supported by
the evidence” or “where it is clear ‘that the amount awarded must necessarily
reflect an allowance for the effects of injury not sufficiently proved....’” Wester v. Bruggink, 190
¶15 WED suggests that the jury’s damage award can be sustained as
including damages for the inconvenience, aggravation, and humiliation the
Honeyagers went through as a result of the Barwick lawsuit. Although WED sets forth a thorough review of
the evidence and the circumstances of the Barwick lawsuit, it does not point to
any evidence suggesting inconvenience, aggravation, or humiliation of the
Honeyagers or, more importantly, WED as a separate entity. WED’s assertion in its cross-appellant’s
brief that the Honeyagers were at risk of losing their real estate broker
licenses is not supported by any evidence.
The trial court observed that case was tried and argued with the
settlement amount and attorney fees as the only elements of damages. No argument was made in front of the jury for
any sum of damages but the settlement amount and attorney fees. The jury may have had sympathy for the
Honeyagers but that alone cannot support the damage award. See Olson v. Siordia, 25
¶16 Under Wis. Stat. § 805.15(6),
upon finding the damage award excessive, the trial court “shall determine the
amount which as a matter of law is reasonable.”
The determination is a matter committed to the trial court’s discretion
and if there is a reasonable basis for the trial court’s determination as to
the proper amount, it will be sustained.
Badger Bearing v. Drives & Bearings, 111
¶17 No costs to either party.
By the Court.—Judgment affirmed.
This opinion will not be published. See Wis. Stat. Rule 809.23(1)(b)5.
[1] WED argues that RE/MAX waived the claim by not specifically arguing for a directed verdict as to Elaine Honeyager’s negligence. Even if RE/MAX’s motion “to enter a directed verdict on all issues on behalf and in favor of the defendant RE/MAX and Mr. Bunchkowski” was not specific enough to preserve the right to a directed verdict, in its motion after verdict RE/MAX raised the issue and requested the jury’s answer be changed. The issue is not waived.
[2] RE/MAX unfairly misrepresents the record when it states that WED’s expert ultimately opined that “the listing agent, Elaine Honeyager, was negligent and the buyer’s broker (RE/MAX) was not negligent.” The record citation for this statement does not contain direct evidence that the expert concluded that the listing agent was negligent. Rather, the referenced testimony refers to the expert’s deposition where RE/MAX attempted to redefine the expert’s opinion that any broker that was aware of the bat was negligent in not assuring all parties were notified of the condition to include the “listing agent as we’ve defined it.” Not enough of the deposition transcript was offered into evidence to explain what “as we’ve defined it” means. Indeed, at trial the expert recalled that the small portion of the deposition utilized at trial followed multiple pages of going around and around the point. Although the deposition was admitted as an exhibit at trial, the trial exhibits are not part of the record.
[3] All references to the Wisconsin Statutes are to the 2007-08 version unless otherwise noted.
[4] RE/MAX withdrew its request for a jury instruction on the mitigation of damages.
[5] The
“American rule” is that “parties to litigation are generally responsible for
their own attorney’s fees unless recovery is expressly allowed by either
contract or statute, or when recovery results from third-party
litigation.” DeChant v. Monarch Life Ins. Co.,
200