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COURT OF APPEALS
DECISION
DATED AND FILED
April 21, 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 No.
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STATE OF WISCONSIN
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IN COURT OF
APPEALS
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DISTRICT III
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Betzner Family, LLC,
Plaintiff-Respondent,
v.
Midwest Amusement Park, LLC and US Acquisitions & Oil,
Inc.,
Defendants-Appellants.
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APPEAL
from a judgment of the circuit court for Shawano County: Fred W.
Kawalski, Judge. Affirmed in
part; reversed in part and cause remanded with directions.
Before Hoover,
P.J., Peterson and Brunner, JJ.
¶1 PER CURIAM. Midwest
Amusement Park, LLC and US
Acquisitions & Oil, Inc. (hereinafter Midwest)
appeal a judgment establishing a property boundary and awarding compensatory
and punitive damages. Midwest argues the
trial court erred by rejecting Midwest’s
adverse possession defense, awarding punitive damages, and not sufficiently reducing
the compensatory damages award. We
reject Midwest’s arguments on adverse
possession and punitive damages and affirm the judgment in those respects. However, we reverse in part the compensatory
damages award and remand for the trial court to redetermine the award. Additionally, we sanction Midwest’s
counsel for misrepresenting the record and citing an unpublished decision.
BACKGROUND
¶2 Midwest purchased real estate abutting the western boundary
of Betzner Family, LLC’s farmland in Shawano
County in June 2003. The Betzners had owned and farmed their
property since 1948. Midwest
purchased its land from Terry Kralovetz, who constructed a go-cart track after
he purchased the land in 1991. Kralovetz,
in turn, had purchased the land from Harry Hoppy, who had owned it since
1953. Hoppy and Tom Betzner’s father had
constructed a fence between the properties.
However, Kralovetz, with Tom Betzner’s permission, removed the fence and
woody vegetation that had grown up around it, so the go-cart track could be
seen from a nearby road.
¶3 In 2005, Midwest contracted James
Mahoney to excavate its land along the boundary with the Betzner property.
Betzner observed the excavation in July and
called the sheriff to report a trespass.
After he was told nothing would be done without a survey, Betzner hired Michael
Nordin, a licensed land surveyor. Nordin
surveyed the property and concluded the excavation encroached along the entire
length of the boundary by approximately eighteen to twenty feet and up to
fifty-one feet at one end. Betzner’s
attorney then sent a letter to Naomi Isaacson, Midwest’s
managing member, demanding removal of the fill deposited in the disputed area. The fill was not removed and Betzner filed an
action requesting a declaration that Nordin’s survey line established the
boundary of his property and claiming a trespass and continuing trespass
against Midwest.
ANALYSIS
¶4 Midwest first argues it
established its affirmative defense of adverse possession of the disputed strip
of land. The burden of proof is on the
party asserting the claim for adverse possession. Allie v. Russo, 88 Wis. 2d 334, 343, 276 N.W.2d 730
(1979). Further, “[t]he evidence of possession
must be clear and positive and must be strictly construed against the claimant.
All reasonable presumptions must be made
in favor of the true owner.” Id. We will affirm the trial court’s factual
findings unless they are clearly erroneous.
See Wis. Stat. § 805.17(2).
¶5 Midwest argues the fence
constructed between the abutting properties established the boundary line. Betzner, and ultimately the trial court,
agreed with this proposition. What was
disputed, however, was the precise location of the removed fence. Midwest’s position is essentially that Betzner
conceded he had always farmed right up to the fence and that the boundary of
the cultivated area did not change, and photographs showing some weeds demonstrated
that Midwest did not intrude into the farmed
portion of the field. Additionally, Midwest relied on the fact a single fence post was
recovered.
¶6 However, Betzner testified he farmed only as close to the
fence as his equipment would allow. He also opined the thin strip of weeds may
have sprouted up at the edge of his crop because the fill had suffocated the
plants below it. The fence post was also
not determinative. As the trial court
noted, it was disputed whether the post was from the north-south fence
establishing the boundary or instead from an old fence that ran east-west.
¶7 More importantly, the trial court relied on the evidence
concerning a 1991 survey of the Midwest
property from when Hoppy was selling the land to Kralovetz. Betzner testified he was in the field when
the survey was complete and observed the fence line closely coincided with the
survey line, stating it was about a “foot either way.” Nordin testified the survey lines in the 1991
and 2005 surveys coincided. He further
stated it was his father’s practice to note any observed discrepancies between
a survey line and fence line and there was no notation on the 1991 survey map.
¶8 The trial court explained it gave more weight to Betzner’s
testimony because he was more familiar with the land compared to Midwest’s witnesses, “whose involvement with the property
was both brief and relatively recent.” We
conclude the trial court’s determination of the fence’s location to be the
survey line was not clearly erroneous, especially given the heavy evidentiary
burden placed on an adverse possessor.
¶9 We next address punitive damages. Midwest argues in its initial brief that it
was improper to award punitive damages because it was not pled and Midwest was not provided actual notice of the claim. In its reply, however, Midwest
apologizes and concedes the matter was specifically mentioned twice at trial. Nonetheless, Midwest argues the trial court
erroneously exercised its discretion by failing to determine whether Midwest impliedly consented to trying the issue.
If issues not raised by the pleadings are tried by
express or implied consent of the parties, they shall be treated in all
respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be
necessary to cause them to conform to the evidence and to raise these issues
may be made upon motion of any party at any time, even after judgment; but
failure to so amend does not affect the result of the trial of these issues.
Wis. Stat. § 802.09(2).
¶10 Generally, the decision whether to amend the pleadings is
within the trial court’s discretion. Hess
v. Fernandez, 2005 WI 19, ¶12, 278 Wis. 2d 283, 692 N.W.2d 655. However, the first sentence of Wis. Stat. § 802.09(2) is
mandatory. Hess, 278 Wis. 2d 283, ¶14. “If there is a determination that the issue
was tried by the express or implied consent of the parties, the court must
amend the pleadings to conform with the proof presented at trial.” Id.
To determine implied consent, the court must use the
test of actual notice, and if it finds no actual notice, it should find
no implied consent to try the unpleaded issue. If … the circuit court finds that there was no
consent to the trial of the unpleaded issue, it must [then] apply a balancing
test and make an “interests of justice” determination.
Id. (citations omitted). Thus,
if Midwest had actual notice of the punitive
damages claim, Betzner is entitled to have the pleadings amended.
¶11 On the first day of the trial, Midwest raised a relevance
objection when Betzner questioned Isaacson about Midwest’s
assets. Betzner stated it was relevant
to punitive damages, and subsequently responded he would make a showing he was
entitled to punitive damages. The court then
permitted the question. On the second
day of the continued bench trial, thirty-two days later, Betzner objected to a
question. Midwest
responded, “[I]t’s relevant because part of the claim here is trespass, and
they are claiming punitive damages ….”
¶12 While the court did not explicitly state its determination that
Midwest had notice of the punitive damages claim, the record plainly indicates Midwest had actual notice. Thus, as a matter of law, Midwest
gave implied consent to try the punitive damages issue, see id., ¶21, and the
trial court appropriately amended the pleadings to conform to the evidence.
¶13 Midwest also argues the record
did not adequately support a punitive damages award. Punitive damages may be awarded “if evidence
is submitted showing that the defendant acted maliciously toward the plaintiff
or in an intentional disregard of the rights of the plaintiff.” Wis.
Stat. § 895.043. An
“intentional disregard” requires that the defendant acted with a purpose to
disregard the plaintiff’s rights or was aware that his or her conduct was
substantially certain to result in the plaintiff’s rights being disregarded. Wischer
v. Mitsubishi Heavy Indus. Am., Inc., 2005 WI 26, ¶24, 279 Wis. 2d 4, 694
N.W.2d 320.
This will require that an act or course of conduct be
deliberate. Additionally, the act or
conduct must actually disregard the rights of the plaintiff, whether it be a
right to safety, health or life, a
property right, or some other right. Finally, the act or conduct must be
sufficiently aggravated to warrant punishment by punitive damages.
Id., ¶24 n.28 (quoting Strenke v. Hogner, 2005 WI 25, ¶38, 279 Wis. 2d 52, 694 N.W.2d 296) (emphasis added). Whether the evidence will support an award of
punitive damages is a question of law that we decide independently of the trial
court.
Jacque
v. Steenberg Homes, Inc., 209 Wis. 2d
605, 614, 563 N.W.2d 154 (1997).
¶14 The circuit court found it was “at best callous and at worst
utterly reckless” for Midwest to intrude on
Betzner’s land without first attempting to determine the boundary. This failure was especially significant because
Midwest’s officers were “professional,
experienced individuals” who “dabble in multi-million dollar transactions and
should be well aware of their responsibilities.” Indeed, as noted previously, Naomi Isaacson
is an attorney. Additionally, when
conducting work on the opposite side of its property a year earlier, Midwest did have that boundary surveyed. The court also faulted Midwest
for not removing the fill following Nordin’s survey. Because Midwest’s
representatives were new to the area, the court concluded they could not have
formed a strong belief that they had a valid claim for adverse possession.
¶15 The trial court also focused on Kalmar Gronvall’s conduct,
stating “his tactics appear to be the stuff of a B[-]rated movie” and that “[c]ontroversies
of this kind are to be settled in the courts and not on the street.” The court noted Gronvall was vocal at a
judicial view of the property and was observed digging holes near the area in
dispute. In the latter instance, an officer responded
and observed Gronvall burying a metal rod.
Subsequently, Nordin returned to verify the location of the survey rods
with a GPS device and discovered one of the rods had been removed. Gronvall was also involved in another incident. When Betzner, his attorney, and Nordin met in
the field, Gronvall watched them with binoculars and then blocked them in and
approached them at a nearby wayside. Further,
during the pendency of this action, Kalmar Gronvall’s son and Elizabeth Nett, a
Midwest employee, entered Betzner’s land from Midwest’s
property and began cutting grass and hay. Both individuals were cited for and convicted
of trespassing.
¶16 Midwest argues it should not be punished for the conduct of
others and asserts there was no evidence that Gronvall acted on Midwest’s behalf.
The trial court, however, concluded “the only logical inference is that
he is the alter ego of the defendant….” Gronvall
was a prior Midwest board member. He also told Nordin’s survey crew to leave
the disputed boundary area because they were trespassing. Given the extent of Gronvall’s involvement,
his prior status as a board member, Nett’s status as an employee, and the fact
they approached the disputed land area from Midwest’s property, the trial court
could reasonably infer they acted on Midwest’s
behalf.
¶17 We conclude the evidence of trespass, continuing trespass, and
harassing behavior more than amply supports an award for punitive damages. Punitive damages are especially appropriate
in cases of trespass to land. Jacque, 209 Wis. 2d 605. “Society has an interest in punishing and deterring intentional trespassers beyond that
of protecting the interests of the individual landowner. Society has an interest in preserving the
integrity of the legal system. Private
landowners should feel confident that wrongdoers who trespass upon their land
will be appropriately punished.” Id. at
620. The court further recognized:
The fact that the actor knows that his [or her] entry
is without the consent of the possessor and without any other privilege to do
so, while not necessary to make him [or her] liable, may affect the amount of
damages recoverable against him [or her], by showing such a complete disregard
of the possessor’s legally protected interest in the exclusive possession of
his [or her] land as to justify the imposition of punitive in addition to
nominal damages for even a harmless trespass, or in addition to compensatory
damages for one which is harmful.
Id.
at 621-22 (quoting Restatement (Second)
of Torts § 163 cmt. e (1979)).
¶18 Finally, we address Midwest’s
claim that the record does not support the trial court’s compensatory damages
award. The determination of damages is
within the trial court’s discretion and will not be upset unless clearly
erroneous. Three & One Co. v. Geilfuss,
178 Wis. 2d 400, 410, 504 N.W.2d 393 (Ct.
App. 1993). The trial court allowed damages
for the restoration of the disturbed land.
In doing so, the court rejected Betzner’s witness’s proposed cost. Betzner presented a work estimate from Jeff
Nolan, which was based on a land area of 32,000 square feet. The survey map, however, showed the disturbed
area comprised only 11,900 square feet. The court therefore used Nolan’s per-unit cost
estimates for fill removal and topsoil replacement, but recalculated the total
cost using the smaller land area figure.
¶19 Midwest asserts the trial
court should have reduced the final compensatory damages award by an additional
forty percent because Betzner testified the fill was only placed on forty
percent of the area designated on the survey map. Betzner testified there was fill “on the
northern part” of the cross-hatched area shown on the survey map, as well as
some at the other end, but “not that much.” When Betzner pointed out the area containing
fill on the map, Midwest suggested it was about
one-third. Betzner replied it was about
forty percent. However, Betzner also
testified the entire cross-hatched area had been stripped of its soil.
¶20 We conclude the record does not support the trial court’s $7,988
award for fill removal because that amount was erroneously determined based on
the entire cross-hatched area on the survey map. However, the $4,775 award for topsoil
restoration of the entire area is supported by the record. We therefore reverse in part the judgment for
compensatory damages and remand for the trial court to redetermine the award
for fill removal.
¶21 We cannot ignore Midwest’s
carelessness and rule violations. We
sanction Midwest’s appellate counsel for its
misrepresentations of the record, see
fns. 5 and 7, and citation of an unpublished case, see fn. 9. See Wis.
Stat. Rules 809.19(1)(d)-(1)(e), 809.23(3), and 809.83(2). Counsel shall pay $200 to the clerk of this
court within thirty days of the date of this decision.
By the Court.—Judgment affirmed in part;
reversed in part and cause remanded with directions. Attorney sanctioned.
This
case will not be published. See Wis.
Stat. Rule 809.23(1)(b)5.