COURT OF APPEALS DECISION DATED AND RELEASED September 25, 1996 |
NOTICE |
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-2062
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT II
PETER N. PAPPAS,
Plaintiff-Respondent,
v.
JOHN R. HUXHOLD,
Defendant-Appellant.
APPEAL from a judgment
of the circuit court for Kenosha County:
MICHAEL FISHER, Judge. Affirmed.
Before Anderson, P.J.,
Brown and Nettesheim, JJ.
PER
CURIAM. John R. Huxhold appeals from a judgment ordering a
partition of apartment buildings he jointly owns with Peter Pappas. He argues that he should not have to make
certain payments to Pappas and pay the 1994 real estate taxes out of personal
funds if the income from the apartment buildings is insufficient to permit such
payments. We conclude that the evidence
support's the trial court's judgment and affirm it.
In order to settle
litigation between them, Pappas and Huxhold entered into an agreement in 1986
regarding Huxhold's right to manage the jointly owned apartment buildings. The agreement provided that Huxhold would collect
rents and make prompt payment of taxes, mortgage, insurance, utilities and
maintenance. Huxhold was also to set
aside $150 a month in escrow to be used for major repairs. Huxhold was permitted to keep the balance of
income remaining. The agreement was for
seven years, ending on June 13, 1993.
Pappas commenced this
suit after the expiration of the agreement for an accounting of 1992 loan
proceeds that were to be applied to major repairs and of that period of
Huxhold's management after July 1, 1993.
Huxhold counterclaimed for a partition of the property.
The matter was tried to
the court. It determined that partition
was appropriate and awarded one building and a storage unit to Huxhold. Huxhold was ordered to pay Pappas $2880 as
compensation for Pappas's interest in the storage unit. Pappas was awarded the other building. The court also determined that the parties
had agreed that after July 1, 1993, Huxhold would continue to manage the
building and he would pay Pappas $1400 per month. Huxhold had made three payments for 1993, and judgment was
entered for $23,800 for payments due through February 1995. The judgment further provided that during
1995 Huxhold would pay the real estate taxes which accrued in 1994 on the
entire property.
At the outset, we
address Huxhold's claim that the question of whether an agreement was made
regarding apartment management after expiration of the seven-year contract was
not properly before the court. He
argues that Pappas did not allege the agreement in the complaint and offered no
evidence of it in his case-in-chief.
The issue was properly before the court. First, in his direct examination, Huxhold opened the door to inquiry
about the agreement when asked whether an agreement had been made for management
fees after the termination of the seven-year contract. Second, Pappas sought an accounting for the
period after expiration of the seven-year contract. In attempting to provide the accounting, Huxhold
"charged" Pappas with $4200 for the 1993 payments. An explanation of that item was
required. Huxhold made no objection
when on rebuttal Pappas explained the circumstances of the payments. Huxhold waived his claim that the court
could not consider whether an agreement had been made. Third, the pleadings are deemed amended to
conform to the evidence. Section
802.09(2), Stats.
Huxhold argues that the
trial court's finding that he agreed to pay Pappas $1400 per month while he
continued to manage the apartments is clearly erroneous. For purposes of appellate review, the
evidence supporting the court's findings need not constitute the great weight
and clear preponderance of the evidence; reversal is not required if there is
evidence to support a contrary finding.
Bank of Sun Prairie v. Opstein, 86 Wis.2d 669, 676, 273
N.W.2d 279, 282 (1979). Rather, the
evidence in support of a contrary finding must itself constitute the great
weight and clear preponderance of the evidence. Id. In
addition, the trial court is the ultimate arbiter of the witnesses' credibility
when it acts as the fact finder and there is conflicting testimony. Id. We accept the inference drawn by the trier of fact when more than
one reasonable inference can be drawn from the evidence. Id.
Pappas testified that he
and Huxhold met to discuss apartment management after the expiration of the
seven-year agreement. Huxhold asked
that he be allowed to retain all the monies through the end of June even though
the agreement expired on June 13, 1993.
Pappas agreed. Pappas indicated
that he offered to permit Huxhold to continue managing and pay him $2000 a
month or that he manage and pay Huxhold $2000.
In doing so, Pappas sought to reinvolve himself with the apartment
operations after the expiration of the agreement giving Huxhold exclusive rights
to apartment rents. His demand for
payment was based on the large sums of money Huxhold appeared to be taking from
the property. Pappas ultimately agreed
to accept $1400 a month. Huxhold
testified that Pappas never offered to manage the property. Obviously the conflict in the testimony was
resolved by the trial court finding Pappas more credible.
Huxhold argues that it
is inconceivable that he would agree to pay Pappas any amount when the
apartments were operating at a loss and that such an agreement was not reduced
to writing after the previous agreement.
The court is not required to speculate as to the parties' reason for not
reducing the agreement to writing. What
is relevant is that the elements of a contract—offer, acceptance and consideration—were
established. Consideration exists in
that the agreement was in lieu of an accounting and Pappas's claim to share
equally in the profits. Further,
partial performance was made by Huxhold's three payments in 1993, ceasing with
the commencement of this action. The
evidence supports the court's finding that an agreement was made.
Huxhold contends that
even if there was an agreement to pay Pappas, it only required payments to be
made out of partnership assets. Thus,
Huxhold would not have to make the $1400 payment if there was not sufficient
partnership income to pay it.
Similarly, he claims that there is no evidence to support a finding that
he must pay the 1994 real estate taxes out of personal funds if apartment
income is insufficient.
Although it may be true
that Pappas and Huxhold did not expressly agree on whether Huxhold would be
personally responsible for the payments and taxes, the management arrangement
after the termination of the seven-year contract implicitly continued Huxhold's
duty to pay all expenses. There is no
doubt that under the seven-year contract Huxhold was personally responsible for
all liabilities. The trial court found
that Pappas was not damaged by Huxhold's late payment of taxes because late
payment meant that Huxhold "would simply receive less in the end if he had
to pay late fees on the tax payments."
The trial court found that Huxhold was to get "whatever was left
over." The record establishes that
the parties continued that arrangement but for Pappas seeking some return after
his seven-year exile. Huxhold continued
to be personally responsible for payments and taxes.
Because the agreement
was made, partnership law does not control.
The agreement to pay Pappas a fixed sum with Huxhold retaining all rents
was itself outside the typical "partnership" concept which Huxhold
now claims should be followed. The
agreed upon sum was not tied to partnership profitability. The parties made certain arrangements to
alter normal partnership sharing.
Huxhold cannot now hide behind concepts of equality which the parties
never adhered to.
Moreover, the trial court was acting as a
court of equity in granting the requested partition. Watts v. Watts, 137 Wis.2d 506, 534‑35, 405
N.W.2d 305, 315 (1987). The court has
the power to apply equitable remedies as necessary to meet the needs of the
case and to do complete justice between the parties. See Syring v. Tucker, 174 Wis.2d 787, 804,
498 N.W.2d 370, 375 (1993).
On Huxhold's motion for
reconsideration regarding his personal liability, the trial court explained its
attempt to do equity between these parties.
The court implicitly found that Huxhold should be held responsible for
the liabilities or the project's inability to generate sufficient income which
resulted from his nine years of management.
This was reasonable in light of the years of profit and high management
fees Huxhold generated up until the termination of the seven-year
contract. The trial court implicitly
rejected Huxhold's assertion that there were insufficient rents in 1993 and
1994 to cover expenses. Huxhold held
the records and was unable to give a clear picture of the claimed financial
impoverishment. The trial court was
within its discretion in fashioning the equitable remedy as it did.
In light of Huxhold's
personal responsibility for payments to Pappas and real estate taxes, we need
not address his contention that the trial court should have ordered that the
payment of a five percent management fee to Huxhold was an expense to be paid
before determining if sufficient income existed to make payments to Pappas.
By the Court.—Judgment
affirmed.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.