COURT OF APPEALS
DECISION
DATED AND FILED
August 4, 2010
A.
John Voelker
Acting 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 II
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Central Supply, Inc.,
Plaintiff-Respondent,
v.
Roosevelt Capital, LLC
d/b/a Promotions Unlimited,
Defendant-Appellant.
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APPEAL
from a judgment of the circuit court for Racine County: Emily
S. Mueller, Judge. Affirmed.
Before
Brown, C.J., Neubauer, P.J., and Kessler, J.
¶1 PER CURIAM. Roosevelt Capital, LLC, appeals
from a judgment in favor of Central Supply, Inc., for the unpaid sum Roosevelt agreed to pay under a contract for an open line
of credit. Roosevelt
argues that the contract is unenforceable because it is too indefinite and
Central Supply’s promise to provide credit was illusory. We conclude that the evidence supports the
trial court’s finding that the parties had reached an enforceable agreement and
that Roosevelt did not avail itself of the
available open line of credit. We affirm
the judgment.
¶2 Central Supply is a wholesale distributor of consumer products,
including Kodak disposable cameras. In
September 2006 it sold $70,350 worth of disposable cameras to Promotions
Unlimited Corporation (PUC) on credit.
PUC failed financially and Central Supply went unpaid. In January 2007, Roosevelt
purchased PUC’s assets and was aware that PUC owed Central Supply $70,350. Roosevelt
sought to do business with Central Supply and requested that it be afforded an
open line of credit. A February 1, 2007
letter from Central Supply to Roosevelt embodies
the contract at issue here. The letter
acknowledges Roosevelt’s purchase of PUC assets and the request that Central
Supply sell merchandise to Roosevelt on open
credit terms of net thirty days. Central
Supply agreed to sell to Roosevelt on “open terms,” and “a workable line of
credit” on the condition that Roosevelt pay
PUC’s debt in twelve monthly installments.
The letter was “accepted and agreed” to by Roosevelt’s
vice-president.
¶3 Roosevelt made two monthly installments
in February and March 2007. When Central
Supply failed to make sales calls on Roosevelt or make known the available
products, Roosevelt determined that Central Supply had no interest in doing
business with Roosevelt and it ceased making payments. Central Supply commenced this action to
recover the balance due of $58,625 under the letter contract. Roosevelt
answered denying that a contract was formed or was enforceable, and it
counterclaimed for the payments it made as unjust enrichment to Central
Supply.
¶4 The dispute was tried to the court. The trial court found that Roosevelt
had drafted the language used in the contract and asked Central Supply to put
it on its letterhead. It was Roosevelt
that first used the phrase “workable line of credit,” the phrase that Roosevelt claimed was so indefinite as to render the
contract unenforceable. The court found
that the parties understood the phrase to mean a line of credit similar to that
afforded to PUC. It concluded that the
contract was not void for indefiniteness and it obligated Central Supply to
extend a line of credit for purchases and Roosevelt
to make the monthly payments on the PUC debt.
Addressing Roosevelt’s claim that Central Supply failed to fulfill its
obligation under the contract because it never made sales calls on Roosevelt, the court found that Central Supply’s manner
of business with PUC had been only a sales calls basis. Although Central Supply did not make any
sales calls to Roosevelt, Roosevelt had never
contacted Central Supply to inquire about specials or other merchandise for
sale. The court found that Roosevelt made an internal decision that it did not need
products from Central Supply and it simply chose to stop making payments under
the contract. The court found that
Central Supply never denied open credit to Roosevelt. Judgment was entered for the unpaid balance
under the contract.
¶5 “Vagueness or indefiniteness as to an essential term of the
agreement prevents the creation of an enforceable contract, because a contract
must be definite as to the parties’ basic commitments and obligations.” Management Computer Servs., Inc. v. Hawkins, Ash,
Baptie & Co., 206 Wis. 2d
158, 178, 557 N.W.2d 67 (1996) (emphasis omitted). However, indefiniteness may be cured by the
parties’ subsequent conduct and by their own practical interpretation. Id.
at 179. When the finder of fact “can
determine the parties’ intentions, ‘indefiniteness disappears as a reason for
refusing enforcement.’” Id. at 180
(quoting Arthur L. Corbin, 1 Corbin On
Contracts § 4.1, at 544 (Joseph M. Perillo, revised ed.
1993)). The question becomes whether
there is sufficient evidence to ascertain the intent of the parties looking at
both the wording of the contract as well as the surrounding circumstances. Metropolitan Ventures, LLC v. GEA Assocs.,
2006 WI 71, ¶24, 291 Wis. 2d
393, 717 N.W.2d 58. The definiteness of
a contract may be a question of fact to be decided by the trier of fact or a
question of law to be decided by the court.
Management Computer Servs., 206 Wis. 2d at 178. Here, questions of fact were presented.
¶6 The trial court found that the parties shared an
understanding that a “workable line of credit” meant credit enjoyed by
PUC.
In reviewing findings made by a trial court in a trial
to the court, “[i]t is well settled that the weight of the testimony and the
credibility of the witnesses are matters peculiarly within the province of the
trial court acting as the trier of fact” because the trial court has a superior
opportunity “to observe the demeanor of witnesses and to gauge the
persuasiveness of their testimony.” Kleinstick
v. Daleiden, 71 Wis. 2d
432, 442, 238 N.W.2d 714 (1976) (footnote omitted). It is for the trial court, not the appellate
court, to resolve conflicts in the testimony, see Fuller v. Riedel, 159 Wis. 2d 323, 332, 464 N.W.2d 97 (Ct.
App. 1990), and we review the evidence in the light most favorable to the
findings made by the trial court, see
Global
Steel Prods. Corp. v. Ecklund Carriers, Inc., 2002 WI App 91, 10, 253 Wis. 2d 588, 644
N.W.2d 269. When more than one reasonable
inference can be drawn from the credible evidence, this court must accept the
inference drawn by the trial court. Noll
v. Dimiceli’s, Inc., 115 Wis. 2d
641, 644, 340 N.W.2d 575 (Ct. App. 1983).
We must search the record for evidence to support the findings that the
trial court made, not for findings that the trial court could have made but did
not. Becker v. Zoschke, 76 Wis. 2d 336, 347,
251 N.W.2d 431 (1977).
Tang v. C.A.R.S. Protection Plus,
Inc., 2007 WI App 134, ¶19, 301 Wis. 2d
752, 734 N.W.2d 169.
¶7 The trial court’s finding of a common understanding of the
phrase is supported by the evidence.
Central Supply’s representative testified that there had been discussion
about the number of units Roosevelt was
interested in purchasing and that it was comparable to the amount PUC had first
ordered. Roosevelt’s
representative understood that it would be allowed to buy whatever it needed
for its programs on open credit. Since Roosevelt was essentially stepping into PUC’s shoes, the
past practice was relevant in determining the provision of open credit. Roosevelt had
contacted all PUC vendors to establish a relationship and continue business as
PUC had done. Roosevelt
proposed the contract language suggesting that the phrase “workable line of
credit” was sufficient for its purposes.
¶8 It was not necessary for the parties to pin down a limit on Roosevelt’s line of credit for the contract to be enforceable. See Management Computer Servs.,
206 Wis. 2d at 181 (“Parties often agree to a contract provision that is
ambiguous and thereby gamble on a favorable interpretation should a dispute
arise, rather than take the time to work out all their possible disagreements,
especially since such disagreements may never have any consequence.”). Neither of Roosevelt’s
two representatives at trial had a specific dollar amount of credit in mind
when contracting with Central Supply.
Additionally the term “net 30” reflected that the parties would operate
on a month-to-month basis and the arrangement would be flexible.
¶9 The phrase “workable line of credit” only gives rise to a
question of “interpretation of the parties’ intent, not one of mutual assent or
indefiniteness.” See id. at 182. Because there
was a mutual understanding of the open credit to be provided to Roosevelt, the contract was not indefinite in its making
and not rendered unenforceable.
¶10 Roosevelt argues that the
contract fails for lack of consideration because Central Supply’s performance
under the contract is illusory. It
points out that Central Supply never offered products to Roosevelt
for purchase and Central Supply intended to apply some unknown credit
limit. “A contract is illusory when the
contract is ‘conditional on some fact or event that is wholly under the
promisor’s control and his [or her] bringing it about is left wholly to his [or
her] own will and discretion.’” Metropolitan
Ventures, 291 Wis. 2d
393, ¶33 (citations omitted). When only
illusory promises are made, the party not constrained in any way has not given
consideration and, therefore, no contract exists. Devine v. Notter, 2008 WI App 87,
¶4, 312 Wis. 2d
521, 753 N.W.2d 557.
¶11 The decision of whether or not Roosevelt
actually purchased any product and availed itself of the open line of credit
was not Central Supply’s alone. True,
Central Supply did not pursue Roosevelt for
orders as it had previously done with PUC.
The contract did not require any specific sales method. The trial court found Roosevelt
had not attempted to make purchases so there was no refusal by Central Supply
to fulfill its obligation to give credit.
The obligation to allow open credit was not conditioned on events solely
within the control of one party and therefore was not illusory.
¶12 The fact that Central Supply would impose a credit limit not
previously communicated to Roosevelt also does
not render its obligation to perform under the contract illusory. Central Supply had the obligation to supply
open credit at a minimum to the extent previously granted to PUC. It did not have a right to deny credit to
that extent. It remains that both sides
of the contract had obligations but that Central Supply was not called upon to
perform. Roosevelt
could not simply disavow the contract.
By the Court.—Judgment affirmed.
This
opinion will not be published. See Wis.
Stat. Rule 809.23(1)(b)5.
(2007-08).