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COURT OF APPEALS DECISION DATED AND RELEASED NOVEMBER 20, 1996 |
NOTICE |
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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. 95-2661
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT II
FRANCIS LIU,
Plaintiff-Appellant,
v.
MARK CHAO,
Defendant-Respondent.
APPEAL from a judgment
of the circuit court for Racine County:
ALLAN B. TORHORST, Judge. Affirmed.
Before Brown, Nettesheim
and Snyder, JJ.
PER
CURIAM. Francis Liu appeals from a judgment dismissing his
complaint against Mark Chao, Liu's former partner in a restaurant
business. On October 1, 1993, Liu and
Chao sold the restaurant to William Dye, the attorney for an undisclosed
principal. On October 5, 1993, Dye sold
the restaurant to Chao at the direction of the undisclosed principals, who were
revealed to be Fred and Gretchen Hackbarth, the parents of Chao's fiancee. Liu then sued Chao, seeking rescission of
the sale or, alternatively, a money judgment.
The trial court dismissed the complaint after a trial to the court. We affirm its judgment.
Prior to the initial sale, Liu had indicated
to both Chao and the broker who handled the listing contract that he refused to
sell his share of the business to Chao.
Evidence at trial indicated that after receiving the offer from Attorney
Dye, Liu requested the broker to ask Chao whether he was trying to buy the
restaurant through a third party, to which Chao answered "no." Liu further testified that, while reviewing
the offer and a proposed counteroffer, he asked Chao if he had any idea who
might be purchasing the restaurant, and Chao told him he had no idea. Liu testified that, before the closing, Chao
also told him that he "was not involved with the buying," that he had
no financing with which to buy the restaurant, and that he had arranged for a
new job in Milwaukee after the restaurant was sold.
After acquisition of the
restaurant by Chao, Liu commenced this action, alleging that Chao, as his
business partner, had a legal duty to disclose to him that the Hackbarths were
the undisclosed principals seeking to buy the business, and that Chao had
consented to manage the business after the sale to them. On appeal, Liu reiterates this argument,
claiming that Chao's actions violated §§ 178.17 and 178.18(1), Stats.
In addition, he contends that he acted reasonably in relying on Chao's
representations that he was not involved in buying the business, did not know
who the purchasers were, and was taking a job in Milwaukee.
The findings of fact
made by a trial court in a trial to the court will not be disturbed unless they
are clearly erroneous. Noll v.
Dimiceli's, Inc., 115 Wis.2d 641, 643, 340 N.W.2d 575, 577 (Ct. App.
1983). Where the trial court acts as
the finder of fact and there is conflicting testimony, the trial court is the
ultimate arbiter of the credibility of the witnesses. Id. at 644, 340 N.W.2d at 577. When more than one reasonable inference can
be drawn from the credible evidence, the reviewing court must accept the
inference drawn by the trial court. Id.
After hearing the
testimony in this case, the trial court found that the sale to the Hackbarths,
acting through Dye, was fair and equitable and constituted an arms-length
transaction with an unrelated, independent buyer. In reaching this conclusion, it found that the sales price paid
for the restaurant was fair and reasonable, and resulted from arms-length
negotiations between both partners, the broker, and Dye as agent for the
Hackbarths, producing an offer and counteroffer. It also found that, at the time of the offer and counteroffer,
the Hackbarths intended to purchase the restaurant for themselves and merely to
employ Chao in operating it. It further
found that the Hackbarths had a reasonable basis for deciding to transfer
ownership to Chao after acceptance of the counteroffer. In addition, it found that they remained at
financial risk after the sale to Chao and their acceptance of a promissory note
from him because the mortgage they took out on their home to obtain the
purchase money for the restaurant remained in effect. Based on these factors, it found that the Hackbarths' original
purchase of the restaurant through Dye was legitimate and arms-length.
Because these findings
of fact are not clearly erroneous, they cannot be disturbed by this court on
appeal.[1] Based on the findings, particularly the
finding that the sale to the Hackbarths was a bona fide, good faith
transaction, Chao's representations that he was not buying the restaurant or
involved in buying it must be deemed truthful.
Chao's subsequent purchase of the restaurant therefore cannot be deemed
part of a subterfuge entitling Liu to any kind of relief, even assuming the
partnership statutes cited by him apply.
In making this
determination, we note that the trial court made no finding as to truth of
Liu's allegation that Chao denied knowing who the buyers were. However, even if true, Chao's failure to
disclose that he knew who the buyers were and that they intended to hire him as
a manager provides no basis for relief.
Based on the trial court's finding that the sale to the Hackbarths was a
bona fide, arms length transaction, the information about who they were and
their intent to hire Chao did not affect the partnership in any way, or the
financial gain it would receive from the sale.
Since Chao's potential employment by the new owners was not a type of
financial benefit that affected the partnership or its financial gain from the
sale, the trial court properly determined that no right to relief arose under §§ 178.17
and 178.18(1), Stats.
By the Court.—Judgment
affirmed.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.