COURT OF APPEALS DECISION DATED AND FILED May 28, 2003 Cornelia G. Clark Clerk of Court of Appeals |
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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 from a judgment of the circuit court for Sheboygan County:� james j. bolgert, Judge.� Affirmed.�
����������� Before Brown, Anderson and Snyder, JJ.
�1������� PER CURIAM. Luige�s Pizza Factory, Ltd. appeals from a judgment dismissing its suit against Denis and Carol Petri to enforce the Petris� guaranty of Open Range Meats, Inc.�s debt to Luige�s.� The circuit court found that a contract of accord and satisfaction between Open Range and Luige�s satisfied the debt guaranteed by the Petris.� Because this finding is not clearly erroneous, we affirm the judgment dismissing the complaint against the Petris to enforce their guaranty of the satisfied debt.
�2������� The Petris did business as D.C. Distributing and did business with Luige�s.� The Petris sold D.C. Distributing and its assets to Open Range.� Open Range agreed to assume D.C. Distributing�s debt to Luige�s.� As part of the transaction, the Petris guaranteed a $24,000 promissory note given by Open Range to Luige�s.� After the transaction closed, Open Range became a distributor of Luige�s.�
�3������� The business relationship between Luige�s and Open Range deteriorated, and representatives of Open Range, James Pope, and Luige�s, Larry Drake, met to discuss how to resolve the difficulties.� Luige�s ultimately sued the Petris to enforce their guaranty of the $24,000 note.� In their answer to the complaint, the Petris alleged accord and satisfaction because Open Range had satisfied all debts owed to Luige�s, thereby relieving the Petris of their guaranty on the $24,000 note.� The court found that Open Range and Luige�s entered into a contract of accord and satisfaction which eliminated the debt guaranteed by the Petris.� Luige�s appeals.
�4������� �An accord and satisfaction is an agreement to discharge an existing disputed claim.�� Cook & Franke, S.C. v. Meilman, 136 Wis. 2d 434, 439, 402 N.W.2d 361 (Ct. App. 1987).� As with any contract, accord and satisfaction requires an offer, acceptance and consideration.� Id.� Offer and acceptance exist when the parties mutually express assent, and consideration exists if the parties manifest an intent to be bound to the contract. �Gustafson v. Physicians Ins. Co., 223 Wis. 2d 164, 173, 588 N.W.2d 363 (Ct. App. 1998).� Whether the parties assented and exchanged consideration are factual questions, not legal questions.� See NBZ, Inc. v. Pilarski, 185 Wis. 2d 827, 838, 520 N.W.2d 93 (Ct. App. 1994) (existence of consideration is a factual question); Hoeft v. U.S. Fire Ins. Co., 153 Wis. 2d 135, 144, 450 N.W.2d 459 (Ct. App. 1989) (whether offer is accepted is question of fact).���
�5������� We reject Luige�s argument that our standard of review is de
novo because we must construe a contract of accord and satisfaction between
Open Range and Luige�s.� A contract
cannot be construed until its existence is confirmed.�� See NBZ, 185 Wis. 2d at 838.[1]� This matter was tried to the circuit court,
and we review the court�s findings of fact regarding the existence of a
contract of accord and satisfaction.� We
will uphold those findings unless they are clearly erroneous.� Wis.
Stat. � 805.17(2) (2001-02).�
We apply a de novo standard of review to the circuit court�s
legal conclusion that the facts are sufficient to establish the existence of an
accord and satisfaction contract.� See
Bantz v. Montgomery Estates, Inc., 163 Wis. 2d 973, 978, 473 N.W.2d 506 (Ct. App. 1991) (whether
facts satisfy a particular legal standard presents a question of law which we
decide de novo).�
�6������� Open Range gave a $24,000 note to Luigi�s.� The question on appeal is whether Luigi�s and Open Range resolved the note obligation via accord and satisfaction.� If the parties entered into a contract of accord and satisfaction, the Petris cannot be pursued on their guaranty.� Cont�l Bank & Trust Co. v. Akwa, 58 Wis. 2d 376, 388, 206 N.W.2d 174 (1973) (�As a general rule the payment or other satisfaction or extinguishment of the debt or obligation of the principal discharges the guarantor.�).[2]�
�7������� The court found that representatives of Open Range and Luige�s had several face-to-face meetings to resolve the difficulties in the relationship.� Pope testified that he and Drake discussed the sale of Open Range to Luige�s and which aspects of Open Range�s business Luige�s wanted to purchase.� The discussion about the financial terms focused on Open Range�s open invoices to Luige�s and the balance owed on the $24,000 note.� The parties agreed that no additional consideration would change hands and that the amount Open Range owed on invoices and the note would be satisfied if Luige�s took over Open Range�s business, including Open Range�s customer lists and equipment.� During a November 10, 1999 conversation, Drake told Pope he would accept the deal.� Pope then sent a November 16 letter confirming the deal.� With the letter, Pope provided an Open Range customer list and a proposal for managing the delivery routes and other Open Range assets which would �conclude any balances due to Luige�s.�
�8������� Although Pope did not receive a response from Drake to the November 16 letter, Pope believed that the agreement was in place.� Luige�s retained the customer lists and the Open Range equipment.� Pope believed that the Open Range debt was cancelled, and he never received any more invoices from Luige�s for amounts due or requests for payment on the note.���
�9������� Drake testified that he met with Pope on November 10, but did not discuss purchasing any sales routes.� He also denied having reached an agreement with Pope regarding the Open Range debt.�
�10����� The circuit court found evidence of accord and satisfaction in the confirming letter of November 16, 1999, and the testimony of Pope that from November 1999 through Open Range�s bankruptcy filing thirteen months later, Luige�s did not demand payment for payment of the principal amount due on the note, even though previous payments had been made on interest only.� The court found that Luige�s accepted Open Range�s business in satisfaction of the note.� This arrangement eliminated the debt the Petris guaranteed, and therefore Luige�s could not pursue the Petris on their guaranty.
�11����� The circuit court found Pope�s testimony more credible than
Drake�s on the question of whether the parties agreed to satisfy Open Range�s
debt to Luige�s.� As the fact finder,
the circuit court was entitled to weigh the credibility of the witnesses.� Micro-Managers,
Inc. v. Gregory, 147 Wis. 2d
500, 512, 434 N.W.2d 97 (Ct. App. 1988). �We conclude that the circuit court�s findings are not clearly
erroneous because they are supported by the record and reasonable inferences
from the record.� The court�s findings of fact also satisfy the
legal requirements of an accord and satisfaction contract:� offer, acceptance and consideration.
�12����� Luige�s
argues that accord and satisfaction cannot be inferred from the parties�
conduct.� We disagree.� Accord and satisfaction may be inferred if
the parties� conduct is consistent with an agreement to resolve a claim.� See Hoffman v. Ralston Purina
Co., 86 Wis. 2d 445, 454, 273 N.W.2d 214 (1979).� Pope described the terms of the agreement to
the circuit court, and Drake and Luige�s performed consistently with those
terms.� The court obviously rejected
Drake�s testimony that he never agreed to the proposed resolution of Open
Range�s debt.� Luige�s acted
consistently with an agreed-upon resolution of Open Range�s debt for a period
of time which was more than sufficient and reasonable to deem Luige�s to have
assented to the resolution of the debt.�
Cf. id. at 455-57 (retention of settlement check for
unreasonable amount of time constitutes consent to settlement).���
����������� By the Court.�Judgment affirmed.
����������� This opinion will not be published.� See Wis. Stat. Rule 809.23(1)(b)5.
[1] Only when the facts are undisputed does the existence and interpretation of a contract become a question of law which we decide de novo.� Gustafson v. Physicians Ins. Co., 223 Wis. 2d 164, 172-73, 588 N.W.2d 363 (Ct. App. 1998).
[2] Neither party contends on appeal that the Petris remain obligated on their guaranty if Open Range�s debt to Luige�s was satisfied.