text:
    James N. Zentgraf and Diane M. Zentgraf, Plaintiffs-Respondents, American Motorists Insurance Company, Involuntary-Plaintiff-Appellant, v. The Hanover Insurance Company, a foreign corporation, and Daniel E. Duame, Defendants.
    Court of Appeals

      No. 01-0323.

      Submitted on briefs November 7, 2001.

    Decided December 27, 2001.

    2002 WI App 13
    (Also reported in 640 N.W.2d 171.)

      On behalf of the involuntary-plaintiff-appellant, the cause was submitted on the briefs of Cori Lynn Prahl, of Hills & Hicks, S.C., of Brookfield.
    On behalf of the plaintiffs-respondents, the cause was submitted on the brief oí James P. Maloney, Esq., of Milwaukee.
    Before Wedemeyer, PJ., Fine and Schudson, JJ.
   SCHUDSON, J.

¶ 1. American Motorists Insurance Company (American) appeals from the circuit court "order approving distribution of settlement proceeds under [Wis. Stat.] § 102.29" (1999-2000). American argues that the circuit court erred by: (1) awarding Diane Zentgraf damages for the loss of society and companionship of her husband, James Zentgraf, when no evidence was presented to support the award; and (2) failing to provide for its attorney's fees as costs of collection under § 102.29. American is correct and, therefore, we reverse and remand with directions.

I. BACKGROUND

¶ 2. James Zentgraf was employed by Access Industries, Inc., to service elevators at various client locations. On September 29, 1995, while traveling to a client location, his vehicle was rear-ended by a vehicle driven by Daniel Duame, during a five-vehicle accident. Mr. Zentgraf sustained injuries for which he received medical treatment.

¶ 3. On September 8, 1998, Mr. Zentgraf and his wife, Diane, filed a complaint against Duame and The Hanover Insurance Company, Duame's automobile liability insurer. The complaint joined American, the worker's compensation insurance carrier for Access Industries, as a plaintiff, pursuant to Wis. Stat. § 102.29. The complaint alleged that Duame's "negligence and carelessness" caused the collision and Mr. Zentgrafs "injuries and damages," as well as Mrs. Zentgrafs loss of "the aid, society, companionship, services and consortium" of her husband.

¶ 4. Upon receiving the summons and complaint, a representative of American's claim department wrote to the circuit court, advising that American's lien had been paid in full and, therefore, American would not be participating in the lawsuit. The letter requested that American be dismissed from the action. The court, however, did not grant the request for dismissal, and American subsequently retained legal representation for the action. On December 24, 1998, American's attorney filed a "notice of lien and intent to participate in prosecution under [Wis. Stat. §] 102.29."

¶ 5. In a letter dated May 12, 2000, counsel for the Zentgrafs notified the circuit court that the case had been settled. The following November, however, because the parties had been unable to reach an agreement regarding distribution of the settlement proceeds, the Zentgrafs moved for approval of the $15,000 settlement and distribution of the proceeds as outlined in their proposed order: $3750 to Diane Zentgraf; and $11,250 to James Zentgraf, to be distributed pursuant to the provisions of Wis. Stat. § 102.29. At the November 13, 2000 hearing on the motion, American objected to the proposed order. The court adjourned the hearing to allow for testimony.

¶ 6. At the January 8, 2001 hearing, the parties reported that they still had not reached an agreement regarding distribution of the settlement proceeds. American, arguing that the claim for loss of society and companionship was worth only $500, acknowledged that it was attempting to increase the portion of the settlement that would be subject to distribution under the Wis. Stat. § 102.29 formula. See DeMeulenaere v. Transp. Ins. Co., 116 Wis. 2d 322, 325, 342 N.W.2d 56 (Ct. App. 1983) ("[A]n award for loss of consortium is not to be considered in the distribution formula of [Wis. Stat. §] 102.29(1)...."). The court took no testimony but, after hearing further argument from attorneys for American and the Zentgrafs, announced that it would review "the file and the documents" and issue a decision within thirty days. On January 11, 2001, the court signed the Zentgrafs' proposed order, without modification.

II. DISCUSSION

A. Mrs. Zentgrafs Claim

¶ 7. American first contends that the circuit court erred by awarding Mrs. Zentgraf damages for the loss of society and companionship of her husband. It argues that the award "must be set aside as it lacks any credible, supporting evidence or analysis of the court's rationale behind the award." The Zentgrafs respond that, in support of Diane's claim, they presented portions of James' deposition — the "adverse examination referring to the nature of the derivative claim" which, they argue, "explained the impact of his injury on his activities as related to [Diane] and care of the children and her increased responsibilities for the same." American replies that because "Mrs. Zentgrafs claim for loss of consortium is an independent claim based on her life experiences," the circuit court erred when it granted the award "without any sworn testimony, affidavits or any support from Mrs. Zentgraf to establish her claim." Although American's contention that any such evidence would have had to have come from Mrs. Zentgraf herself is incorrect, its primary argument is sound.

¶ 8. American fails to offer any authority establishing that Mr. Zentgraf s deposition was categorically insufficient to establish Mrs. Zentgrafs loss of society and companionship. As our supreme court has explained:

Since 1967, we have recognized the common-law right of wives as well as husbands to bring an action for loss of consortium when the other spouse is injured by the acts of a third party. Consortium involves "... a broad range of elements such as love, companionship, affection, society, sexual relations, and the right of support or the performance of marital services, any one of which is sufficient to constitute a cause of action." Loss of consortium may involve a spouse's loss of society and companionship during a disability. It may also involve increased care for the injured spouse, increased responsibility for the children and a change in social position.

Kottka v. PPG Indus., Inc., 130 Wis. 2d 499, 519, 388 N.W.2d 160 (1986) (citations omitted). The court continued:

[T]he elements of loss of society, affection and sexual companionship in a spouse's action for loss of consortium are personal to the claiming spouse and apart from the claim of the injured spouse. The claim for a loss of consortium is derivative, in the sense that it does not arise unless the other spouse has sustained a personal injury. However, the claim is not for the other spouse's personal injury but for the separate and independent loss which the noninjured spouse sustains.

Id. at 521 (citations omitted). Thus, while, as American has argued, "Mrs. Zentgrafs claim for loss of consortium is an independent claim based on her life experiences," nothing precludes her from proving her claim through Mr. Zentgrafs testimony.

¶ 9. Still, while the legal premise of American's reply is flawed, the factual premise of its primary argument is fully supported by the record.

¶ 10. In reviewing the sufficiency of the evidence in support of Mrs. Zentgrafs claim, we will uphold the circuit court's determination if the circuit court "examined the relevant facts, applied a proper legal standard, and, using a demonstrated rational process, reached a reasonable conclusion." See Martindale v. Ripp, 2001 WI 113, ¶ 28, 246 Wis. 2d 67, 629 N.W.2d 698. Here, however, because the circuit court failed to state any basis for its decision, we must "independently review[] the record to determine whether the circuit court properly exercised its discretion." Id. at ¶ 29.

¶ 11. The Zentgrafs rely entirely on portions of Mr. Zentgrafs deposition. The brief portions to which they refer, however, aside from confirming that the Zentgrafs had a long-term marriage and two minor children, merely establish that although his treating physician had not restricted his activities, Mr. Zentgraf did not really want to do much other than sit back and "kind of' relax. He admitted that he still did yard work, including operating his snowblower. He testified:

Q: Is there anything that you feel you absolutely cannot do since this accident?
A: Probably just be comfortable.
Q: What do you and your wife like to do together for relaxation?
A: Right now ain't too much but watching TV Probably why she calls me a couch potato now.
Q: What did you do before the accident for recreation with your wife?
A: Go out and do stuff, more shopping, stuff like that together.
Q: Do you ever go to movies?
A: No. We['d] probably rent them if we did.
Q: How about going out to dinner?
A: Yes, we used to do that.
Q: Do you still go out to dinner?
A: Not that much.
Q: Why is that?
A: I'm working second shift now, and I['d] just rather stay at home I guess.

¶ 12. Clearly, this testimony is insufficient to support Mrs. Zentgrafs claim for deprivation of "the aid, society, companionship, services and consortium" of her husband. Even if Mr. and Mrs. Zentgraf had been doing more shopping and dining out together before the accident, Mr. Zentgraf attributed any change to his second-shift employment and his preference to stay home.

¶ 13. Thus, Mr. Zentgrafs testimony does not describe Mrs. Zentgrafs loss of anything even on "a broad range of elements such as love, companionship, affection, society, sexual relations, and the right of support or the performance of marital services." See Kottka, 130 Wis. 2d at 519 (citation omitted). Nor does our independent review of the record reveal that any other evidence was submitted to establish her claim. Thus, based upon the record before us, we conclude that the circuit court erroneously exercised discretion when it awarded damages to Mrs. Zentgraf as outlined in the Zentgrafs' proposed order. See id. at 522 (holding that portion of settlement representing recovery on injured worker's wife's claim for loss of consortium, as well as costs of collection of the claim, must be excluded from allocation of proceeds under Wis. Stat. § 102.29(1)).

B. Attorney's Fees as Costs of Collection

¶ 14. American next contends that the circuit court erred by failing to provide for its attorney's fees as costs of collection under Wis. Stat. § 102.29. American argues that Diedrick v. Gehring, 62 Wis. 2d 759, 216 N.W.2d 193 (1974), "creates an unmistakable directive that the court must allocate a portion of the settlement to compensate [American's] attorneys for their services." American further relies on Kohlberg v. Sullivan Foods, Inc., 644 N.E.2d 809 (Ill. App. Ct. 1994), a case in which the court stated that Diedrick "clearly indicates that the court must allocate some portion of the fee to the compensation carrier's attorney when that attorney participates on behalf of the carrier, regardless of whether that attorney's participation aided the employee," id. at 812 (emphasis added), and held that the law firm for the worker's compensation carrier was entitled to fees for the services it provided "regardless of whether it contributed anything to plaintiffs' settlement," id.

¶ 15. Pointing to American's documentation in support of its request for attorney's fees of $5,651.25, the Zentgrafs respond that none of American's counsel's activities constituted "legal efforts or activities to prepare the case for trial or to reach a settlement." The Zentgrafs contend that "[n]o such attorney fees are available for the mere documentation of the amount of a claimed lien under [Wis. Stat.] § 102.29 and Diedrick, . .. absent active participation in the pressing of the principal third party claim." They further argue that American is not entitled to attorney's fees because it did not "contribute services toward the successful result" and has not" 'joined in the pressing of the action' within the meaning of § 102.29."

¶ 16. Thus, the Zentgrafs assert that "[r]egardless of all else, there is no question but that all activities after settlement of the claim are not recoverable out of the settlement amount generated by others and it is improper for American... to seek reimbursement of such charges, fees and expenses." They do not, however, provide any authority to support their assertion. See Wis. Stat. Rule 809.19(1) (e), (3) (a) (appellate brief must contain argument on each issue, citing authorities upon which each contention relies). Indeed, the record all but refutes their position.

¶ 17. The Wisconsin Worker's Compensation Act does not define "pressing" of a claim, see Wis. Stat. ch. 102, and although Wisconsin case law utilizes the term, no published case explains what constitutes the "pressing" of a claim. Certain sources, however, provide definitional guidance, wholly consistent with common sense and common usage.

¶ 18. Webster's Third New International Dictionary (1993) contains multiple definitions of "press," one of which is "to follow through (a course of action)." Id. at 1795. Other definitions of "press" include "[t]o seek to influence, as by insistent arguments; entreat insistently" and "[t]o attempt to force to action; urge on." The American Heritage Dictionary 980 (2d college ed. 1985). Here, clearly, under any of these definitions, American took numerous actions to "join in the pressing" of the claim against Duame and his liability insurer and to pursue its interests regarding the distribution of the settlement.

¶ 19. In addition to repeatedly notifying the circuit court of the amount of its lien claim and its intent to participate in the prosecution of the claim against Duame and his insurer, counsel for American: (1) was in frequent contact with attorneys for the other parties; (2) responded to requests from both defense counsel and plaintiffs' counsel to produce documents; (3) requested, received, and reviewed medical records from multiple medical institutions; (4) spent time preparing for the final pretrial conference; (5) frequently reviewed the case file to determine the status of discovery and investigation; (6) prepared for and attended a mediation conference; (7) analyzed Wis. Stat. § 102.29 implications for settlement and repeatedly communicated with the Zentgrafs' attorney regarding distribution of the settlement proceeds; (8) prepared a motion to postpone the hearing on the Zentgrafs' motion to approve the settlement and distribution of its proceeds as outlined in their proposed order; (9) prepared a letter brief and affidavit with supporting documentation; and (10) prepared for and attended the motion hearing. Although the Zentgrafs emphasize that the action was settled in April 2000, substantial issues regarding distribution of the settlement funds remained until the circuit court signed the Zentgrafs' proposed order on January 11, 2001.

¶ 20. Therefore, we conclude that the circuit court violated Wis. Stat. § 102.29(1) when it denied American's request for attorney's fees in its entirety with no explanation. See Brewer v. Auto-Owners Ins. Co., 142 Wis. 2d 864, 869, 418 N.W.2d 841 (Ct. App. 1987) (outlining formula to be used by circuit court when "claims not subject to [Wis. Stat. §] 102.29(1) allocation compete for insufficient settlement proceeds with claims subject to [Wis. Stat. §] 102.29(1) allocation"); see also Martindale, 2001 WI 113 at ¶¶ 28-29. Accordingly, we reverse and remand for: (1) determination of whether the full $15,000 is a "fair and reasonable amount" for settlement of Mr. Zentgrafs claim, see DeMeulenaere, 116 Wis. 2d at 330, and thus subject to distribution under the formula of Wis. Stat. § 102.29; and (2) further proceedings to determine the attorney's fees due counsel for American and Mr. Zentgraf.

By the Court. — Order reversed and cause remanded with directions.

       All references to the Wisconsin Statutes are to the 1999-2000 version unless otherwise noted. Wisconsin Stat. § 102.29(1) provides, in relevant part:
      The making of a claim for compensation against... [a] compensation insurer for the injury ... of an employee shall not affect the right of the employee, the employee's personal representative, or other person entitled to bring action, to make claim or maintain an action in tort against any other party for such injury. .., hereinafter referred to as a 3rd party; nor shall the making of a claim by any such person against a 3rd party for damages by reason of an injury to which ss. 102.03 to 102.64 [of the Worker's Compensation Act] are applicable, or the adjustment of any such claim, affect the right of the injured employee or the employee's dependents to recover compensation. The . .. compensation insurer who shall have paid or is obligated to pay a lawful claim under this chapter shall have the same right to make claim or maintain an action in tort against any other party for such injury... . Each shall have an equal voice in the prosecution of said claim, and any disputes arising shall be passed upon by the court before whom the case is pending.... If notice is given as provided in this subsection, the liability of the tort-feasor shall be determined as to all parties having a right to make claim, and irrespective of whether or not all parties join in prosecuting such claim, the proceeds of such claim shall be divided as follows: After deducting the reasonable cost of collection, one-third of the remainder shall in any event be paid to the injured employee or the employee's personal representative or other person entitled to bring action. Out of the balance remaining, the ... insurance carrier ... shall be reimbursed for all payments made by it, or which it may be obligated to make in the future, under this chapter. . . . Any balance remaining shall be paid to the employee or the employee's personal representative or other person entitled to bring action. If both the employee or the employee's personal representative or other person entitled to bring action, and the... compensation insurer ... join in the pressing of said claim and are represented by counsel, the attorneys' fees allowed as a part of the costs of collection shall be, unless otherwise agreed upon, divided between such attorneys as directed by the court.... A settlement of any 3rd party claim shall be void unless said settlement and the distribution of the proceeds thereof is approved by the court before whom the action is pending.. ..

       American subsequently amended the notice four times, filing the last amendment on September 21, 2000.

       At the hearing, counsel for the Zentgrafs first indicated that Mr. Zentgraf "would be testifying to the nature and extent of injuries he sustained in his motor vehicle accident as well as his relationship with his wife." Shortly thereafter, however, counsel advised the court that he was "not going to have [his] client testify." Counsel suggested, instead, that the court "make a determination as to the appropriate distribution" based on the arguments and written submissions, including portions of Mr. Zentgrafs deposition. Counsel for American objected to "the plaintiffs' submissions in the record," contending that they were "not in proper form."
      Although it never explicitly ruled on American's counsel's objection, the court took no testimony and, instead, indicated its intention to make its decision based on the submissions and arguments. On appeal, American does not challenge that evi-dentiary ruling but, rather, addresses what it deems the insufficiency of the only evidence — the submitted portions of Mr. Zentgrafs deposition.

       American relies on a passage stating that Wis. Stat. § 102.29(1) "specifically requires the court approving the settlement to determine the attorneys' fees to be allowed where both the injured party and the compensation carrier joined in bringing the claim to court, and then requires the trial court to divide the fees allowed 'between such attorneys.'" Diedrick v. Gehring, 62 Wis. 2d 759, 763-64, 216 N.W.2d 193 (1974).

       In Kohlberg v. Sullivan Foods, Inc., 644 N.E.2d 809, 811 (Ill. App. Ct. 1994), the court reasoned: "The substantive rights of the insurer are implicated here as it would have to pay the attorney fee if [the law firm representing the insurer] is not paid from the proceeds of the settlement."

         See DeMeulenaere v. Transp. Ins. Co., 116 Wis. 2d 322, 325, 342 N.W.2d 56 (Ct. App. 1983) ("[B]ecause the trial court has failed to explicate its reasons for approving the settlement, we vacate the order and remand the cause with directions.").


source: Caselaw Access Project

author: CURLEY, J.

license: Public Domain

text:
    State of Wisconsin, Plaintiff-Respondent, v. Justin Kolp, Defendant-Appellant.
    Court of Appeals

      No. 01-0549-CR.

      Submitted on briefs November 6, 2001.

      Decided December 27, 2001.

    2002 WI App 17
    (Also reported in 640 N.W.2d 551.)

      On behalf of the defendant-appellant, the cause was submitted on the brief of Jennifer L. Abbott of Abbott & Kingsley, of Milwaukee.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of James E. Doyle, attorney general, and Michael R. Klos, assistant attorney general.

      Before Fine, Schudson and Curley, JJ.
   CURLEY, J.

¶ 1. Justin Kolp appeals from the judgment of conviction, following his guilty plea, for possession of marijuana with intent to deliver, contrary to Wis. Stat. §§ 961.01(14), 961.14(4)(t), and 961.41(lm)(h)l (1999-2000). Kolp contends that the trial court erred in denying his motion to suppress. The police found drugs on Kolp's person during a pat-down search which occurred after he had knocked on the back door of a house during the execution of a search warrant for drugs and was then escorted into the house by a police officer. Kolp argues that the pat-down was unlawful because: (1) the search warrant only authorized a search for evidence of the crime of possession of controlled substances, not for the more serious offense of possession of controlled substances with intent to deliver; thus, the pat-down search was unwarranted under State v. Guy, 172 Wis. 2d 86, 492 N.W.2d 311 (1992); and (2) the search warrant's authorization to search the occupants of the house could not serve as the basis for the pat-down because Kolp was not an "occupant" of the house, having been admitted by the police rather than a resident. Because we are satisfied that the brief pat-down search was reasonable under Guy, we affirm. Accordingly, we need not discuss Kolp's second argument. See Gross v. Hoffman, 227 Wis. 296, 300, 277 N.W. 663 (1938) (stating that only dispositive issues need be addressed).

I. Background.

¶ 2. After receiving an anonymous tip that a resident of a home in West Allis was smoking "weed," West Allis Police conducted six garbage searches of the home over the course of several weeks. Four of these searches yielded marijuana stems, marijuana seeds, drug residue, packaging associated with drugs, and other paraphernalia commonly used with marijuana consumption. Based upon the anonymous tip and these search results, the police obtained a search warrant for the home which was executed on March 21, 2000. The search warrant, issued by a court commissioner, authorized the search of all persons present on the premises. Although it permitted the police to search for "Possession of Controlled Substances (Marijuana) (THC)," it also had a line drawn through the request to search for evidence of "Possession of a Controlled Substance with Intent to Deliver (Marijuana) (THC)." The search warrant also authorized the search for specific items, including marijuana, scales, plastic baggies, drug-related paraphernalia, weapons, beepers and money.

¶ 3. While executing the warrant, a detective heard someone knocking on the back door. The detective went to the back of the house where he observed Kolp, who had crossed an enclosed porch and was standing at the inner back door. The detective told Kolp to come in, and at the same time held onto his elbow and guided him into the kitchen. Once in the kitchen, the detective patted down Kolp for the officers' safety. In the process, the officer felt two objects that he thought were consistent with packages containing drugs. The officer seized the contents of the packages, which weighed over 52 grams and later tested positive for marijuana. Once at the police station, Kolp gave an incriminating statement. Kolp was charged with possession of a controlled substance with intent to deliver. At a hearing, he argued that the drugs found during the search should be suppressed. His motion was denied and Kolp pled guilty to the charge.

II. Analysis.

¶ 4. Kolp submits that the trial court erred in denying his motion to suppress the contraband found on his person because: (1) the Terry stop requirements were not present as the search warrant only authorized a search for evidence of possession of controlled substances, not the more serious crime of possession of a controlled substance with intent to deliver and, thus, unlike the situation in State v. Guy, 172 Wis. 2d 86, 492 N.W.2d 311 (1992), the reasonable suspicion that drug traffickers often carry weapons was not implicated here; and (2) Kolp could not be considered an occupant of the home because he was not invited in by a resident.

¶ 5. Kolp challenges the search and seizure under both the United States and Wisconsin Constitutions. The Fourth Amendment to the United States Constitution and Article 1, § 11 of the Wisconsin Constitution, guarantee citizens the right to be free from "unreasonable searches." This court, in construing Article 1, § 11 of the Wisconsin Constitution, consistently follows the United States Supreme Court's interpretation of the Fourth Amendment. State v. Betterley, 191 Wis. 2d 406, 416, 529 N.W.2d 216 (1995). Upon review of an order denying suppression, this court will uphold the trial court's findings of fact unless they are against the " 'great weight and clear preponderance of the evidence.' " State v. Kiper, 193 Wis. 2d 69, 79, 532 N.W.2d 698 (1995) (quoting State v. Richardson, 156 Wis. 2d 128, 137, 456 N.W.2d 830 (1990)). Whether the facts satisfy the constitutional requirement of reasonableness is a question of law, which this court reviews de novo. See State v. Young, 212 Wis. 2d 417, 424, 569 N.W.2d 84 (Ct. App. 1997). Whether the search here passes constitutional muster is a question of law. See Guy, 172 Wis. 2d at 86.

¶ 6. A frisk for weapons is a search. Id. at 93. In determining whether a search is reasonable, this court balances the need for the search against the invasion of the suspect's privacy entailed in the search. Id. Pat-down searches are justified when an officer has reasonable suspicion that a suspect may be armed. Id. at 94. The officer's reasonable suspicion must be based on "specific and articulable facts which, taken together with rational inferences from those facts, reasonably warrant that intrusion." Richardson, 156 Wis. 2d at 139 (quoting Terry v. Ohio, 392 U.S. 1, 21 (1968)). The test is objective:

[T]he issue is whether a reasonably prudent [person] in the circumstances would be warranted in the belief that his [or her] safety or that of others was in danger.. .. And in determining whether the officer acted reasonably in such circumstances, due weight must be given ... to the specific reasonable inferences which [the officer] is entitled to draw from the facts in light of his [or her] experience.

Guy, 172 Wis. 2d at 94 (citation omitted). Finally, the determination of reasonableness is made in light of the totality of the circumstances known to the searching officer. Richardson, 156 Wis. 2d at 139-40.

¶ 7. Thus, the issue is whether the searching officer had a reasonable suspicion that Kolp was armed. Here, the police were conducting a search for drugs. As noted in Guy, "[t]he execution of a warrant to search for narcotics is the kind of transaction that may give rise to sudden violence." Id. at 96 (citations omitted). The officer who searched Kolp had twelve years of experience, and testified that for approximately the last three years he had executed in excess of 100 search warrants per year. He also testified that he has executed search warrants where weapons were found. He volunteered that, in his opinion, people involved in drugs often carry weapons. Consequently, he stated that when he is carrying out a search warrant for drugs, it is common for him to search everyone present at a residence for weapons. Given this information and the officer's experience, we conclude that the arresting officer had a reasonable suspicion that a party knocking on the door of a house being searched for drugs could be carrying a weapon.

¶ 8. Kolp argues that his situation is more like the facts found in Ybarra v. Illinois, 444 U.S. 85 (1979), where officers found heroin during a frisk of a bar patron while executing a search warrant for drugs at the bar. Id. at 88-89. There, the Supreme Court held that the frisk was unconstitutional. Id. at 96. However, "[t]he frisk in Ybarra took place in a public tavern where people came and went and legally conducted business." Guy, 172 Wis. 2d at 98.

¶ 9. In contrast, the search of Kolp took place at a private home where, apparently, Kolp knew the occupants of the house because he entered an enclosed porch and knocked at the back inner door rather than knocking at the door of the porch or the front door. Moreover, as our supreme court observed in Guy, "executing a search warrant in a home can be more dangerous than doing so in a public place." Guy, 172 Wis. 2d at 98.

¶ 10. Kolp also argues that because the search warrant was not issued for possession of a controlled substance with intent to deliver, no large amounts of drugs were suspected and no drug trafficking was indicated. In this context, however, we do not distinguish between major and insignificant drug dealers or users in determining whether a frisk is reasonable. As noted in Guy, "[pjolice must be able to react flexibly when executing a search warrant," and "[t]o require police to distinguish between major and insignificant dealers or users before making a limited frisk for weapons would be impractical and could unreasonably put officers in danger." Id. at 99.

¶ 11. Thus, under the circumstances, we conclude that the arresting officer had a reasonable suspicion that Kolp may have been armed. Accordingly, we affirm the trial court's decision to deny Kolp's motion to suppress and enter judgment against the defendant.

By the Court. — Judgment affirmed.

       All references to the Wisconsin Statutes are to the 1999-2000 version unless otherwise noted.

       A defendant may appeal from an order denying a motion to suppress evidence even though the judgment of conviction rests on a guilty plea. Wis. Stat. § 971.31(10).

       A garbage search is a search of the garbage from a suspect's household by police. See generally California v. Greenwood, 486 U.S. 35 (1988); State v. Stevens, 123 Wis. 2d 303, 367 N.W.2d 788 (1985).

        Terry v. Ohio, 392 U.S. 1, 21 (1968).

       The Fourth Amendment to the Constitution of the United States provides:
      The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
      Article 1, § 11 of the Wisconsin Constitution provides:
      Searches and seizures. Section 11. The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures shall not. be violated; and no warrant shall issue but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched and the persons or things to be seized.

       Kolp does not dispute the right of the police to seize what the officer believed to be two bags containing drugs. Kolp also argues that if the Terry stop requirements were not met here, the police could not utilize the search warrant's authorization to search all the occupants of the home because he was not an occupant, inasmuch as the police let him in, and not a resident of the household. Since we have determined that the frisk was reasonable, we need not address this issue.


author: CURLEY, J. FINE, J.

text:
    Dave Flores and Greg Montoto, Plaintiffs-Respondents, v. Jack Raz and Margot Raz, Defendants-Third-Party Plaintiffs-Appellants, v. Wisconsin State Fair Park, Third-Party Defendant.
    Court of Appeals

      No. 01-1104.

      Submitted on briefs November 6, 2001.

    Decided December 27, 2001.

    2002 WI App 27
    (Also reported in 640 N.W.2d 159.)

      On behalf of the defendants-third party plaintiffs-appellants, the cause was submitted on the briefs of Joseph J. Welcenbach and Robert J. Welcenbach of Welcenbach & Widmann, S.C., of Milwaukee.
    On behalf of the plaintiffs-respondents, the cause was submitted on the brief of Coral D. Pleas and Daniel J. O'Brien oí Schulz, Duffey & O'Brien, S.C., of Milwaukee.
    Before Wedemeyer, PJ., Fine and Curley, JJ.

       Petition to review denied 3-19-02.

   CURLEY, J.

¶ 1. Jack Raz (Raz) and his wife, Margot, appeal from the trial court's grant of summary judgment to Dave Flores and Greg Montoto. Raz argues that the trial court erred: (1) in determining that, despite the lack of an express clause in the business purchase agreement making the Wisconsin State Fair Park Board's (Board) approval of the sale a contingency, the Board's approval was an implied condition precedent subject to performance within a reasonable period of time; (2) in finding that the two-year delay in approving the sale constituted an unreasonable time period; and (3) in ruling that Flores and Montoto could recover the monies paid in contemplation of the sale under a claim for "unjust enrichment."

¶ 2. Because the Board's approval of the sale was an implied condition precedent to the contract, subject to completion within a reasonable time, we affirm. Further, because the Board's failure to approve the sale for two years after the contract was executed was an unreasonable period of time under the circumstances, the buyers were entitled to rescind the contract and recoup their monies.

I. Background.

¶ 3. The Razes own and operate Jack's West Side Deli, a business located on the Wisconsin State Fair Park grounds. Raz entered into a lease with the State Fair Park Board on May 27, 1977. Under the lease, Raz rents space from State Fair Park to use as a vendor during the State Fair week each year, but the buildings erected by Raz, as well as any fixtures of the business, remain his personal property. The lease also provides that Raz can sell the business, but only with the consent of the Board. This lease has been automatically renewed each year.

¶ 4. In August of 1998, Flores and Montoto approached Raz and asked if he would be interested in selling the equipment and buildings comprising the deli. Raz expressed interest and the parties met with Rich Bjorklund, the executive director of the Wisconsin State Fair, who indicated that he supported the sale. After this meeting, on August 13, 1998, the parties entered into a business purchase agreement. According to the agreement, Flores and Montoto would purchase all of the equipment and buildings comprising Jack's West Side Deli for $154,500; however, the business purchase agreement made no mention of the fact that the purchase was subject to the approval of the Board.

¶ 5. Pursuant to the terms of the purchase agreement, Flores and Montoto paid $2,000 earnest money at the execution of the agreement. They also paid Raz $28,000 at the end of August 1998, as a down payment. The balance of the purchase price was due on March 15, 1999. In March 1999, Flores and Montoto refused to pay the balance of the purchase price and requested the return of their monies because the State Fair Park Board had failed to grant approval of the sale. Ultimately, the Board did approve the sale on August 3, 2000, two years after the parties entered into the business purchase agreement.

¶ 6. However, on October 25, 1999, Flores and Montoto commenced an action to recover their $30,000. Raz counterclaimed for $124,500, the balance due on the purchase price. The trial court granted Flores' and Montoto's motion for summary judgment and dismissed Raz's counterclaim, concluding that the Board's approval of the sale was an implied condition precedent to the contract, and, because the condition had not been met within a reasonable time, the contract was unenforceable. The trial court then found that the elements of a claim for unjust enrichment had been proved and awarded Flores and Montoto $30,000.

II. Analysis.

¶ 7. As noted, the trial court granted Flores' and Montoto's summary judgment motion, finding that Raz's retention of the $30,000 constituted "unjust enrichment." In an appeal from the entry of summary judgment, this court reviews the record de novo, applying the same standard and following the same methodology required of the trial court under Wis. Stat. § 802.08. Voss v. City of Middleton, 162 Wis. 2d 737, 747-48, 470 N.W.2d 625 (1991). After reviewing the record, we affirm the trial court's decision; however, we do so on other grounds.

¶ 8. Raz submits that the trial court erred when it failed to grant his summary judgment motion and, instead, granted the vendees' motion. Raz argues that because the Board ultimately gave him permission to sell his property located on the State Fair grounds and no contingency provision exists in the agreement hinging the sale on the Board's approval, he was entitled to summary judgment. We disagree.

¶ 9. While Raz correctly notes that the parties failed to include a clause conditioning the sale on Board approval, his subsequent argument misses the mark. Raz argues that his circumstances mirror those fact situations where the failure to include a financing contingency was found not to be a bar to enforcement of the contract. See, e.g., Perkins v. Gosewehr, 98 Wis. 2d 158, 295 N.W.2d 789 (Ct. App. 1980). Unlike Perkins, where the parties failed to include an adequate financial contingency, here, there is an absolute impediment to the sale being consummated. Without Board approval, Raz could not legally sell his property. Therefore, Board approval, unlike the financing contingency in Perkins, operated as a bar to the sale of Raz's property.

¶'10. "Where an agreement contains no express provision as to some matter, the meaning in respect of such matter will be implied if an implication is warranted by the facts and circumstances of the particular case... ." 17A Am. Jur. 2d § 195 (1991). See also Kelley v. Ellis, 272 Wis. 333, 337, 75 N.W.2d 569 (1956) (citing 12 Am. Jur. Contracts § 64) ("Where an agreement contains no express provision as to some matter, the meaning in respect of such matter will be implied if an implication is warranted by the facts and circumstances of the particular case, as where a provision for performance in a reasonable time is sometimes implied."). Here, it is clear that everyone knew that Board approval was necessary. Indeed, the parties met with the executive director, who encouraged the sale. The facts and circumstances point to the parties' intention that Board approval would be necessary to complete the sale. Thus, the Board's approval was an implied condition precedent to enforcement of the contract.

¶ 11. Further, the general rule is that where there is an absence of a provision as to the time for performance, a reasonable time is implied. Wis JI — Civil 3049 sets forth the rule: "A contract which provides that it is to continue for an indefinite period continues for a reasonable time under the circumstances." See also De Lap v. Inst. of Am., Inc., 31 Wis. 2d 507, 512, 143 N.W.2d 476 (1966) ("Where there is no provision as to the time for performance, reasonable time is implied."). Thus, the implied condition that Board approval was needed was subject to a reasonable time limit.

¶ 12. In determining what is a reasonable amount of time, the trial court can consider what is a "reasonable time under the circumstances." See Wis JI — -Civil 3049. When we look to the circumstances surrounding the signing of the business purchase agreement, it is obvious that the parties assumed that Board action would occur before March 15, 1999. The parties had been assured by Bjorklund that Board approval would be forthcoming. Further, the contract was structured in a manner that strongly suggested that the parties intended to consummate the sale on March 15, 1999. The contract called for three separate payments: the first payment was due at the time of the execution of the contract; the second payment, labeled a "down payment," was paid as required in August, 1998; and the final payment to complete the transaction was due on March 15, 1999. Common sense dictates that Flores and Montoto would not have agreed to pay ., Raz the entire purchase price without completing the sale and taking ownership. This conclusion is reinforced by another clause in the contract that stated that the sellers would be responsible for any liability incurred on the property up until March 15, 1999. The only reasonable reading of this clause is that Raz would not be responsible for any liabilities after March 15, 1999, because the property would then be owned by Flores and Montoto. Therefore, under the circumstances present here, a reasonable time period for the Board's approval would be a date after August 13, 1998, but before March 15, 1999.

¶ 13. Raz points to case law in other states that have relieved the seller of his obligation to perform when consent or cooperation of a third party was necessary. In Foreman v. E. Caligari & Co., 130 S.E.2d 447 (Va. 1963), the court stated:

The rule appears to be that if one undertakes unconditionally to perform an act which is not inherently impossible, but merely requires the acquiescence or consent of a third party, or the performance of a preceding act by the latter, the nonperformance is not ordinarily excused by the fact that it subsequently proves impossible for the promisor to comply with his contract, because of the refusal of the third party to give his consent or perform the act; in other words, the contract will not, merely from the fact that acquiescence in or performance of an act by a third party must precede compliance therewith, be construed as conditional upon such acquiescence or performance.

Id. at 452 (quoted source omitted). However, Wisconsin law stands opposed to such á broad conclusion. In Oremus v. Wynhoff, 20 Wis. 2d 635, 123 N.W.2d 441 (1963), the supreme court addressed a situation where an owner of property agreed to have a number of apartments rented before the sale of the property in question. Id. at 640. Although this agreement involved the performance of third parties, the court held that acceptance of the offer to purchase did not create a duty on behalf of the owner to rent the apartments in question, but merely gave the purchaser the right to refuse to go through with the deal if the vendor failed to have the apartments rented. Id. Similarly, Raz was not required to get the Board's approval, but Flores and Montoto could refuse to buy the property without it.

¶ 14. The present situation is further exacerbated by the fact that no date of performance was specified. As stated in Schneider v. Warner, 69 Wis. 2d 194, 230 NW.2d 728 (1975):

But what of a situation where no definite time for performance is fixed? Is one party obliged to wait indefinitely upon the other? We hold he is not.... This is because a contract for sale of land is one for simultaneous exchange of performance, the seller's conveyance of merchantable title, and the buyer's payment of the purchase price.

Id. at 199. How long were Flores and Montoto expected to wait? What if the Board refused to approve the sale after they had already paid Raz the balance of the purchase price? We conclude that they waited a reasonable time for the Board's approval before commencement of this action.

¶ 15. Finally, Wisconsin law permits rescission when an act has not occurred within a reasonable time. Illges v. Congdon, 248 Wis. 85, 95A, 20 N.W.2d 722 (1945) ("A breach of an express or implied condition going to the essence of the contract justifies its termination.") (citation omitted). Consequently, when the Board failed to act in a timely manner, Flores and Montoto were entitled to both terminate the contract and demand the return of their money. "If the vendor is unable to convey the required title at the time stipulated in the contract or implied by law, the vendee may ordinarily elect either to rescind and recover amounts paid on the contract, if the purchaser is ready, able, and willing to perform..." Am. Jur. 2d Vendor and Purchaser § 643 (1991). This remedy is also supported by Wis JI — Civil 3049, which states, in part: "A contract which is silent as to its time of duration may be terminated at any time by either party upon reasonable notification to the other party."

¶ 16. Thus, the trial court correctly ruled that Flores and Montoto were entitled to both rescind the contract when the Board had not approved the sede by March 15,1999, and to recover the $30,000 they gave to Raz in contemplation of the sale. Accordingly, we affirm.

By the Court. — Judgment affirmed.

FINE, J.

(dissenting).

¶ 17. The majority recognizes that both parties — including, significantly, the buyers of the Raz property, Dave Flores and Greg Montoto — knew that:

• Flores and Montoto could not use the property they contracted to buy unless they had approval to do so by the State Fair Park Board; and
• The contract executed by Flores and Montoto did not condition consummation of the sale on approval by the State Fair Park Board by any date.

Additionally, the contract was drafted and typed by Montoto, with, as he testified, possible input from Flores. Yet, the majority, like the trial court, rewrites the contract to make the sale conditioned on approval of the State Fair Park Board on or before March 15, 1999. I respectfully dissent.

¶ 18. First, it is black-letter law that unambiguous contractual language must be enforced as it is written "even though the parties may have placed a different construction on it." Cernohorsky v. Northern Liquid Gas Co., 268 Wis. 586, 593, 68 N.W.2d 429, 433 (1955). Moreover, contracts are generally construed against those who drafted them, not in their favor. Dairyland Equip. Leasing, Inc. v. Bohen, 94 Wis. 2d 600, 609, 288 N.W.2d 852, 856 (1980). Nevertheless, the majority adds to the Montoto-Flores/Raz contract a provision that Montoto and Flores never sought to have included among its terms, and, presumably, a term for which they did not pay.

¶ 19. Second, although terms can be implied in a contract in order to "accomplish substantial justice" irrespective of the parties' "original intentions," Peterson v. Sinclair Ref. Co., 20 Wis. 2d 576, 581-582, 123 N.W.2d 479, 482-483 (1963) (contract to deliver fuel oil implies promise of safe delivery), implied terms should not be inserted by a court when that "does violence to the language of the agreement," Oremus v. Wynhoff, 20 Wis. 2d 635, 640, 123 N.W.2d 441, 444 (1963) (condition precedent to the sale of a small apartment building that three of the apartments be rented did not impose upon the seller a duty to rent the apartments). In my view, adding a term that neither party sought makes this court a post-hoc legal advisor.

¶ 20. I am not persuaded that "substantial justice" requires that we re-draft the contract to say what, in retrospect, Flores and Montoto may now wish it had said when they wrote and signed it. The Board has approved the sale, and that should end the matter. Flores and Montoto wanted the Raz property, and Jack and Margot Raz wanted to sell it to Flores and Montoto. There is currently no impediment to enforcing the parties' agreement. I would reverse.


author: WEDEMEYER, EJ.

text:
    Johnson Controls, Inc., Plaintiff-Appellant, v. Employers Insurance of Wausau, a mutual company (f/n/a Employers Mutual Liability Insurance Company of Wisconsin), Affiliated FM Insurance Company, AIU Insurance Company, Allstate Insurance Company (as successor to Northbrook Excess and Surplus Insurance Company), American Employers' Insurance Company, American Home Assurance Company, American Motorists Insurance Company, Central National Insurance Company of Omaha, Employers Mutual Casualty Company, Employers Reinsurance Corporation, Federal Insurance Company, First State Insurance Company, Granite State Insurance Company, Highlands Insurance Company, Landmark Insurance Company, London Market (certain underwriters at Lloyd's London and London Market Insurance Companies), National Union Fire Insurance Company of Pittsburgh, PA, Northbrook Excess and Surplus Insurance Company (as predecessor to Allstate Insurance Company), Puritan Insurance Company (f/n/a Manhattan Fire and Marine Insurance Company), Stonewall Insurance Company, Transamerica Premier Insurance Company, Travelers Indemnity Company, United National Insurance Company, Zurich Insurance Company, International Insurance Company, and Westchester Fire Insurance Company, Defendants-Respondents, Allianz Underwriters Insurance Company, American Centennial Insurance Company, American Insurance Company, Associated International Insurance Company, California Union Insurance Company, Continental Insurance Company, Fireman's Fund Insurance Company, Harbor Insurance Company, North Star Reinsurance Corporation, and Republic Insurance Company, Defendants.
    Court of Appeals

      No. 01-1193.

      Submitted on briefs December 4, 2001.

    Decided December 27, 2001.

    2002 WI App 30
    (Also reported in 640 N.W.2d 205.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Matthew J. Flynn, Jeffrey O. Davis and Keith A. Bruett, of Quarles & Brady LLP, Milwaukee and John P. Kennedy of Johnson Controls, Inc., Milwaukee.

      On behalf of the defendant-respondent First State Insurance Company, the cause was submitted on the brief of Paul J. Pytlik and Michelle M. Stoeck of Hills Legal Group, Ltd., Waukesha.
    On behalf of the defendant-respondent Employers Insurance of Wausau, the cause was submitted on the brief of Timothy J. Muldowney and Todd G. Smith oí La Follette Godfrey & Kahn, Madison and Keith A. Dotseth and Patrick J. Boley of Larson King, LLP, St. Paul, Minnesota and Michael J. Cohen of Meissner Tierney Fisher & Nichols, S.C., Milwaukee.
    On behalf of the defendant-respondent Trans-america Premier Insurance Company, the cause was submitted on the brief of Edwin J. Hull, III and David P. Cutler of Cutler & Hull, Chicago, Illinois.
    On behalf of the defendant-respondent American Employers' Insurance Company, the cause was submitted on the brief of Robert C. Moore and Christian D. Ambler of Stone & Moore, Chartered, Chicago, Illinois.
    On behalf of the defendants-respondents American Home Assurance Company, AIU Insurance Company, Granite State Insurance Company, Landmark Insurance Company, and National Union Fire Insurance Company of Pittsburgh, PA, the cause was submitted on the brief of Blaise S. Curet of Sinnott, Dito, Moura & Puebla PC., San Francisco, California and Jeffrey A. Schmeckpeper of Kasdorf, Lewis & Swietlik, S.C., Milwaukee.
    On behalf of the defendant-respondent The Travelers Indemnity Company, the cause was submitted on the brief of Barry R. Ostrager, David J. Woll and Jonathan K. Youngwood of Simpson Thacher & Bartlett, New York, New York and Janice A. Rhodes of Kravit, Gass, Hovel & Leitner, S.C., Milwaukee.

      Before Wedemeyer, EJ., Fine and Curley, JJ.

       Petition to review granted 4-22-02.

   WEDEMEYER, EJ.

¶ 1. Johnson Controls, Inc. appeals from an order and a judgment wherein the trial court found that no insurance coverage existed for twenty-one environmentally contaminated landfill sites. Johnson Controls claims the trial court erred when it ruled that all of the sites at issue do not involve "damages." Johnson Controls concedes that ten of the twenty-one sites do not fall into a category which triggers insurance coverage, but argues that the remaining eleven sites should be covered by insurance. Because the trial court's findings of fact (that all twenty-one sites are not covered by the insurance policies) are not clearly erroneous, we affirm.

I. BACKGROUND

¶ 2. In 1989, Johnson Controls brought suit against Employers Insurance of Wausau and a host of other insurance companies, seeking coverage for costs it incurred relating to the environmental cleanup of twenty-one contaminated landfill sites. Before the suit was resolved, the Wisconsin Supreme Court decided City of Edgerton v. General Casualty Co., 184 Wis. 2d 750, 517 N.W.2d 463 (1994). In Edgerton, the supreme court concluded that there was no coverage provided for an insured who cleans up an environmentally contaminated site which it either owns or does not own, pursuant to a government directive or request under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601, et seq. ("CERCLA"), or its state counterparts. Edgerton, 184 Wis. 2d at 782-86.

¶ 3. As a result, the insurance companies in this case filed motions seeking summary judgment. The trial court granted the motions and dismissed the case as to all sites. Johnson Controls appealed the various judgments and orders.

¶ 4. We decided the appeal on October 13, 1998, and remanded the matter "for the entry of a global judgment, broken down into subparts that recite: (1) the property involved; (2) the insurance company or companies and the relevant dates of their policies that relate to that property; and (3) the result required by this opinion." Johnson Controls, Inc. v. Employers Ins. of Wausau, Nos. 95-1796 & 95-2591, unpublished slip op. at 5 (Wis. Ct. App. Oct. 13, 1998) (.Johnson Controls I). On remand, the trial court complied with our directive and found that elements were present at each of the twenty-one sites so that each fell into a category where no coverage was provided. Johnson Controls appeals from that order.

II. DISCUSSION

¶ 5. In the first appeal of this case, we set forth four categories to describe the sites and related situations involved. The first category consists of an insured who is responsible for cleaning up the contamination at a site pursuant to a directive issued by a government under CERCLA or its state counterparts. The costs of this remediation are not "damages." Edgerton, 184 Wis. 2d at 782-86. Although Johnson Controls believes that Edgerton was decided wrongly, we are obligated to follow its dictates. There is no insurance coverage in connection with remediation of sites that fall under the first category.

¶ 6. The second category consists of an insured who is responsible for at least part of the contamination of a site that it does not own, but has not been directed by a government to remediate the site. A governmental agency has, however, directed others responsible for the contamination — either the site's owner or those who also polluted the property — to clean it up and they, in turn, sue the insured to recover the cleanup costs attributable to the insured. This situation is governed by General Casualty Co. v. Hills, 209 Wis. 2d 167, 561 N.W.2d 718 (1997), which held that an action by a non-governmental entity seeking those costs is a suit for "damages," for which there is coverage under the comprehensive general liability policies. Id. at 180. "[U]nlike Edgerton, neither the [Environmental Protection Agency] nor [Wisconsin Department of Natural Resources] have [sic] requested or directed [the insured/polluter] to develop a remediation plan or incur remediation and response costs under CERCLA or an equivalent state statute." Id. See also Wisconsin Pub. Serv. Corp. v. Heritage Mut. Ins. Co., 209 Wis. 2d 160, 561 N.W.2d 726 (1997) (site contaminated by subcontractor's negligence; subcontractor not directed by government to remediate site; direct action against subcontractor's insurance carrier by party remediating the property pursuant to government cleanup directive; held: suit for "damages"); Spic & Span, Inc. v. Continental Cas. Co., 203 Wis. 2d 118, 552 N.W.2d 435 (Ct. App. 1996) (site contaminated by insured; insured not directed by government to remediate site; action against insured by those remediating the property pursuant to government cleanup directive; held: suit for "damages"). Under Hills, there is insurance coverage in connection with this second category of sites.

¶ 7. The third category presents a situation where the insured is responsible for at least part of the contamination of a site that it does not own, and has been directed by a government to remediate the site, but has not done so. The insured is sued by the government to recover money it spent to clean up the site. There is no insurance coverage in connection with the scenarios encompassed by category three. Regent Ins. Co. v. City of Manitowoc, 205 Wis. 2d 450, 463, 556 N.W.2d 405 (Ct. App. 1996) (holding that where the government sues "an insured to recover incurred cleanup costs under § 107(a)(4)(A) of the [CERCLA] ... or to impose a plan for remediation, that action is not a 'suit for damages' but is, rather, a suit for 'equitable monetary relief.'"). Johnson Controls argues that the supreme court's decision in Hills overruled Regent. We rejected this argument when we first considered the appeal, and we reject it again here for the reasons explained in our earlier opinion. As noted, the vitality of Regent was reaffirmed post- Hills by Hydrite Chemical Co. v. Aetna Casualty & Surety Co., 220 Wis. 2d 26, 39 n.5, 582 N.W.2d 423 (Ct. App. 1998).

¶ 8. The fourth category encompasses situations where the insured is responsible for at least part of the contamination of a site that it does not own, and has been directed by a government entity to remediate the site, but has not done so. The insured is sued by the site's owner or others also responsible for the contamination who cleaned up the site at the government's direction. There is no insurance coverage for sites that are classified as category four.

¶ 9. In categories three and four, unlike in two, a property owner is not seeking "legal damages" for injury to its property by one who has either caused or contributed to the pollution. Rather, the government and property owners forced by the government to clean up contamination allegedly caused by Johnson Controls are seeking what Edgerton noted was "equitable monetary relief," that is, recompense for monies spent in complying with the nation's environmental-protection laws — money that would have been spent by Johnson Controls if it had complied with the government's cleanup directives. Edgerton, 184 Wis. 2d at 784 ("Response costs assigned either under CERCLA or secs. 144.442(8) and (9), Stats., are, by definition, considered to be equitable relief and reflect a congressional intent to differentiate between cleanup or response costs under 42 U.S.C. sec. 9607(a)(4)(A) and damages for injury, destruction, or the loss of natural resources under 42 U.S.C. sec. 9607(a)(4)(C).").

¶ 10. On remand from this court, the trial court found that all twenty-one sites at issue fall into categories one, three or four. The trial court found that none of the sites fell into category two, and thus, there was no insurance coverage. Our review is limited to whether the trial court's findings of fact are clearly erroneous. Wis. Stat. § 805.17(2) (1999-2000).

A. Category One.

¶ 11. The trial court found that the following sites fell under category one because Johnson Controls received a government directive and then either complied or paid its portion of the cleanup costs: (1) Bergsoe Metal Corporation; (2) NL-Dallas; (3) Tonolli Corporation; (4) NL-Pedricktown; (5) National Steel & Tube Distributors, Compton, CA; (6) Lakeland Disposal Services, Inc.; (7) JCI-Atlanta; (8) Bay Drums; (9) Maxey Flats Nuclear Disposal; (10) JCI-Owosso; (11) NL-Atlanta (National Smelting & Refining); (12) USS Lead Refinery, Inc.; (13) Bennington Landfill; and (14) JCI-Goshen. Johnson Controls argues that the trial court mischaracterized only four sites: Bay Drums, Ben-nington Landfill, Tonolli Corporation and NL-Pedricktown.

1. Bay Drums.

¶ 12. Johnson Controls argues that the trial court erred in finding that Bay Drums fell under category one. It contends that the only reason Bay Drums was found to be a category one site was because no lawsuit was filed. According to the trial court's order, it found Bay Drums fell into category one because "[a] notice of potential liability was sent from the EPA to [Johnson Control's subsidiary] dated February 2, 1988. No lawsuit has been filed." Johnson Controls contends that because other parties cleaned up the site in response to the government directives, and then negotiated a settlement with it before suit was filed, it becomes a category two site. We disagree. The trial court's findings here are not clearly erroneous. Johnson Controls received a governmental directive to clean up the site, and eventually shared in its portion of the cleanup costs.

¶ 13. If we were to categorize this factual scenario as category two, Johnson Controls would be rewarded for standing back and allowing other parties to clean up a site that the government indicated Johnson Controls was, in part, responsible for cleaning. Such a ruling would produce the absurd result of rewarding one who does nothing (with insurance coverage), and punishing the vigilant who undertake to comply with the environmental authorities.

2. Bennington Landfill.

¶ 14. Johnson Controls argues that Bennington Landfill is actually a category two site, and that the reason the trial court found it to be a category one is that no suit was filed. The trial court's order indicated Bennington is a category one site because a "[gjeneral request for information was sent to JCI from the EPA on August 29,1990. JCI entered into an Administrative Consent Order in 1991. No lawsuit has been filed." The record supports these findings and, therefore, the trial court did not err when it found Bennington most appropriately fell under category one.

3. Tonolli Corporation.

¶ 15. Johnson Controls makes a similar argument with respect to the Tonolli site; i.e., the trial court mistakenly found it to be category one because no lawsuit was filed. Again, we turn to the trial court's order, wherein it states: "JCI was informed by the EPA in various letters dated April 9, 1987, January 27, 1988 and August 12,1988, that it had been identified as a potentially responsible party. No lawsuit has been filed against JCI." The record supports these findings.

4. NL-Pedricktown.

¶ 16. Finally, Johnson Controls argues that the trial court made the same mistake with regard to NL-Pedricktown. Again, the trial court was not mistaken. In its order, the trial court found:

Globe Union received a letter requesting information on site use from the EPA, dated October 6, 1987. Although a lawsuit was filed by NL Industries, Inc., that lawsuit was voluntarily dismissed by NL in the fall of 1991. JCI did not pay NL for any response costs and Wausau provided a defense, under a reservation of rights agreement, to the claim. An Administrative Order was issued by the EPA on April 1,1992 to various PRPs, including JCI, to implement remediation plans. No lawsuits have been filed after NL's abandonment of its lawsuit.

The trial court's findings are supported by the record.

¶ 17. In all of these instances, Johnson Controls tries to ignore the contact from the EPA or governmental agency, by trying to argue that the contact was not a "directive," or that § 107 CERCLA cost recovery actions do involve covered damages. In support of this argument, Johnson Controls points out that although City of Manitowoc held that a § 107 action did not involve a legal "damages" case, the suit in Hills was initiated via § 107 and thus, must have overruled City of Mani-towoc. We do not agree. The distinction in Hills was that the gas station owner had not received any directive from a government agency as to his potential liability. The suit against Hills was, among other things, one for contribution from other third parties who had been sued by the government, which sought declaratory judgment and response costs. Hills, 209 Wis. 2d at 172. The distinguishing factor that our supreme court prescribed in this decision was simple: if the government has contacted you with respect to your potential liability for contamination at a landfill site, whether you clean it up immediately or wait to be sued to do so, you cannot make a claim for "damages." Id. at 182. Rather, this claim is for "equitable monetary relief." Regent, 205 Wis. 2d at 463. There is no insurance coverage. Although this may seem like somewhat of an arbitrary distinction to some, this is the law set by our supreme court and we are obligated to apply this law.

B. Category Three.

¶ 18. The trial court found that the following sites fell into category three because Johnson Controls received a government directive, failed to fully comply, and then was sued by the government: (1) Keefe Environmental Services, Inc.; (2) Auto-Ion; (3) NL-Granite City; (4) Union Scrap Iron & Metal Company, Inc.; and (5) Delaware Sand & Gravel.

1. Keefe Environmental Services, Inc.

¶ 19. Johnson Controls contends that Keefe is a category two site because a group of private parties who had been sued by the United States for recovery of response costs sued Johnson Controls. Thus, Johnson Controls argues this is akin to Hills. The trial court found otherwise:

A letter from the Attorney General of the State of New Hampshire to Globe Union, Inc., dated March 17, 1982 identified JCI as a potentially responsible party at the site which is owned by a third party. A complaint, filed May 5,1989 ... seeks enforcement of the PRPs' already existing equitable obligations to participate in remediation efforts.

These facts are supported by the record. Unlike Hills, Johnson Controls received a PRP letter from the State of New Hampshire. Thus, the Keefe site is not akin to the Hills site.

2. Auto-Ion.

¶ 20. Johnson Controls contends that it never ignored a government directive to clean up this site; thus, it cannot be a category three site. The trial court found:

A PRP letter was sent from the EPA to Penn Controls, Inc. c/o Johnson Controls, dated November 28, 1984. The government filed a complaint on August 23, 1990 raising a direct claim against JCI for reimbursement of response costs and seeking reimbursement for response costs and seeking enforcement of a remediation plan. The site is owned by a third party.

These facts are supported by the record. These facts make Auto-Ion a category three site.

3. NL-Granite City.

¶ 21. Johnson Controls argues that NL-Granite City is both a category three site and a category two site. Johnson Controls concedes that it did receive a § 106 UAO in 1990 and failed to comply with it. Subsequently, the EPA filed suit against Johnson Controls and the matter was resolved. Johnson Controls contends that $26,458.07 of the costs was incurred prior to the date of the UAO, and that amount should be covered by insurance. The trial court found otherwise:

A General Notice of potential liability letter was sent from the EPA to JCI, dated November 28, 1989, and a Special Notice letter was sent from the EPA to JCI dated June 25,1990. A Section 106 order was issued on November 30, 1990 and on July 31, 1991 U.S. filed suit directly against JCI and various other parties ... for cost recovery and enforcement of the Administrative Order.

(Emphasis added). These findings are supported by the record. Johnson Controls cannot be expected to be rewarded with insurance coverage for costs incurred before the UAO simply because it ignored other letters from the government.

4. Union Scrap Iron & Metal Company, Inc, and Delaware Sand & Gravel.

¶ 22. The trial court found that both of these sites fell into category three because the United States joined Johnson Controls as a party in an ongoing CERCLA cost recovery action. The record supports these findings.

C. Category Four.

¶ 23. The trial court found that the following sites were category four sites because Johnson Controls received a government directive, failed to fully comply, and then was sued: (1) Hunt's Disposal Landfill; and (2) NL-Portland (Gould).

¶ 24. Johnson Controls argues that Hunt's Disposal should be a covered site because the costs it paid constituted legal damages as "substitutionary, monetary relief." The trial court found otherwise:

A Special Notice Letter dated July 31, 1991 was sent from the EPA to JCI requesting that JCI participate in the cleanup. JCI's potential liability arose separately from the use of the site by its Controls Group and its Globe Union operations. JCI participated and paid for response costs on behalf of its Controls Group but refused to pay on behalf of Globe Union. The PRP's [sic] brought a lawsuit against JCI for the Globe Union share in April, 1993 seeking to enforce Globe Union's already existing obligation to participate in the remediation efforts.

These facts are supported in the record. This is a category four site.

¶ 25. Johnson Controls argues that NL-Portland (Gould) is both a category one site and a category two site. The trial court found it fell into category four because:

A notice of potential liability was sent from the EPA to JCI, in January 1991 and a Special Notice Letter was sent from the EPA to JCI in July 1991. In January 1992, JCI received an Administrative Order from the EPA requiring it and the other PRP's to implement the cleanup plan selected by the EPA. JCI allegedly refused to participate in the cleanup as required by the Administrative Order. As a result, one of the PRP's [sic] (Gould) filed a lawsuit to enforce the PRP's already existing equitable obligation to participate in the remediation plan.

The trial court's findings are supported by the record.

III. CONCLUSION

¶ 26. In sum, we conclude that the trial court did not err in finding that all twenty-one sites involved in this case fall into categories one, three, or four, and as a result, costs incurred at the sites are not "legal damages" entitled to insurance coverage under the CGL policies involved. Because we have so concluded, it is not necessary for us to address Wausau's counterclaim based on the pollution exclusion. Further, we need not address specifically the arguments of the additional (excess) insurance companies involved because we have affirmed the trial court's order that none of the sites involved here trigger coverage.

By the Court. — Judgment and order affirmed.

       The insurance policies involved are either primary or excess comprehensive general liability policies, and promise to defend and indemnify Johnson Controls as a result of its liability for "damages."

       We borrow liberally from our earlier opinion in this matter.

       We also admonish Johnson Controls for raising many of the same issues which this court already decided in Johnson Controls, Inc. v. Employers Ins. of Wausau, Nos. 95-1796 & 95-2591, unpublished slip op. (Wis. Ct. App. Oct. 13,1998). Our resolution of those issues was final for purposes of the litigation in this matter as law of the case.

       It is interesting to note that the difference in outcome between City of Edgerton v. General Casualty Co., 184 Wis. 2d 750, 517 N.W.2d 463 (1994) and General Casualty Co. v. Hills, 209 Wis. 2d 167, 561 N.W.2d 718 (1997) may have resulted in part because in Edgerton, the supreme court failed to consider the expectations of the insured; whereas in Hills, such expectation was afforded generous consideration. Hills, 209 Wis. 2d at 183.


author: LUNDSTEN, J.

text:
    Ag Services of America, Inc., an Iowa corporation, and Ag Acceptance Corporation, a Delaware corporation, Plaintiffs-Appellants, v. Roger C. Krejchik and Maxine Krejchik d/b/a Rolling Meadows Farm, Defendants-Respondents, Firstar Bank - Portage, Garnishee-Defendant-Respondent, Joseph D. Krejchik, Karen Krejchik and Matthew J. Krejchik, Garnishees-Defendants.
    Court of Appeals

      No. 00-3430.

      Submitted on briefs July 9, 2001.

    Decided December 28, 2001.

    2002 WI App 6
    (Also reported in 640 N.W.2d 125.)

      On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Charles F. Church of Smiley Law Office, Portage.
    On behalf of the defendant-respondent Firstar Bank, the cause was submitted on the brief of James D. Peterson of LaFollette, Godrey & Kahn, Madison.

      On behalf of the defendants-respondents Roger C. Krejchik and Maxine Krejchik d/b/a Rolling Meadows Farm, the cause was submitted on the brief of Roger C. Krejchik.

    Before Vergeront, EJ., Deininger and Lundsten, JJ.
   LUNDSTEN, J.

¶ 1. Ag Services of America, Inc. and Ag Acceptance Corporation (collectively Ag Services) appeal an order dismissing a claim against Firstar Bank. Ag Services served a "Garnishment Summons and Complaint" on Firstar Bank seeking to garnish the assets of Roger C. Krejchik and Maxine Kre-jchik. Firstar Bank responded that it did not have control or possession of property belonging to Roger or Maxine Krejchik and, therefore, it did not freeze any accounts or assets. Ag Services asserts that Firstar Bank should have frozen the checking account of a partnership, Rolling Meadows Farm, wholly owned by Roger and Maxine Krejchik. For the following reasons, we affirm.

Facts

¶ 2. This action began when Ag Services brought suit against Roger C. Krejchik and Maxine Krejchik d/b/a Rolling Meadows Farm to collect outstanding principal and interest under a promissory note. The note was executed by Roger C. Krejchik and Maxine Krejchik d/b/a Rolling Meadows Farm. Rolling Meadows Farm is a partnership that is solely owned by Roger and Maxine Krejchik.

¶ 3. The suit resulted in an order finding that Ag Services was entitled to $71,691.43 as due and owing on the loan, and $1,911.50 for attorney fees. Judgment was entered against "Roger C. Krejchik and Maxine Kre-jchik d/b/a Rolling Meadows Farm."

¶ 4. On June 22, 2000, Ag Services served a "Garnishment Summons and Complaint" on Firstar Bank, naming only Roger C. Krejchik and Maxine Krejchik as judgment debtors. The summons and complaint made no reference to Rolling Meadows Farm. Firstar Bank was the named garnishee. A copy of the summons and complaint was also served on Roger Krejchik on June 23, 2000.

¶ 5. On July 6, 2000, an accounts associate at Firstar Bank answered the complaint, indicating that the bank did not have under its control or in its possession any accounts belonging to Roger or Maxine Krejchik. Ag Services filed a reply, contesting Firstar Bank's answer.

¶ 6. A hearing was conducted on August 23, 2000. At the hearing, Roger Krejchik testified that Rolling Meadows Farm was established as a partnership among three brothers. The Rolling Meadows Farm partnership opened an account at Firstar Bank in 1968, and the three brothers were authorized signatories on the account. In 1990, the farm was divided, and Roger and Maxine purchased the Rolling Meadows Farm partnership. They did not formally notify Firstar Bank of the change in ownership, but the signatories on the partnership account were changed to Roger and Maxine.

¶ 7. Judith Collins, the vice president and branch manager at Firstar Bank, testified that on June 22, 2000, Rolling Meadows Farm had an account with the bank in the amount of $57,921.05. On June 23, 2000, the funds in the account totaled $1,000. During the month of July, the account balance fluctuated between $33,765.86 and $1,436.98.

¶ 8. Cindy King, an accounts associate at Firstar Bank, testified concerning the procedure for responding to garnishment complaints. Using what is called a "Hogan system," bank employees look for any accounts held in the name or names listed on the garnishment complaint. King stated that employees specifically look for the account holder's name, address, tax ID number, or account number. Two items must match between the account retrieved by the Hogan system and the garnishment complaint before Firstar Bank will place a hold on the account. King testified that the listing of a debtor as only a signatory on a retrieved account would not constitute a proper basis for putting a hold on the account because a signatory on an account is not necessarily the owner of the account; rather, that person may merely have authority to sign checks.

¶ 9. Beth Nestheide then testified that she handled the garnishment complaint in the Krejchik matter. Nestheide indicated that when she searched the Hogan system under Roger C. Krejchik and Maxine Krejchik, it retrieved the Rolling Meadows Farm account because Roger and Maxine were listed as signatories on the account. Nestheide testified that because nothing in the garnishment complaint identified Rolling Meadows Farm as an entity subject to garnishment, and because Firstar Bank held no personal accounts in the names of Roger or Maxine, she wrote the words "no accounts" on the answer to the complaint. Nestheide then gave the complaint and answer to another Firstar Bank employee to corroborate the accuracy of her work.

¶ 10. The circuit court issued a decision dismissing Ag Services' claim against Firstar Bank. The court concluded that it was Ag Services' responsibility to properly designate the debtor on the garnishment complaint and Ag Services failed to do so. Relying on German National Bank of Denver v. National State Bank of Boulder, 39 E 71 (Colo. Ct. App. 1895), the court stated that Firstar Bank did not have actual knowledge that Roger and Maxine were the owners of the Rolling Meadows Farm account. Accordingly, the circuit court held that Firstar Bank properly answered the garnishment complaint indicating that it was not indebted or under any liability to Roger and Maxine, the debtors listed in the complaint. Ag Services appealed.

Discussion

¶ 11. The sole issue on appeal is whether the circuit court properly dismissed Ag Services' claim against Firstar Bank. This issue requires us to construe Wis. Stat. § 812.11 (1997-98), pertaining to garnishee answers, and decide whether the circuit court properly applied it to the facts of this case. We will uphold a circuit court's factual findings unless they are clearly erroneous. See Flejter v. Estate ofFlejter, 2001 WI App 26, ¶ 34, 240 Wis. 2d 401, 623 N.W.2d 552. The construction of a statute or its application to a particular set of facts is a question of law that we review de novo. Lane v. Williams, 2000 WI App 263, ¶ 7, 240 Wis. 2d 255, 621 N.W.2d 922.

¶ 12. Pursuant to Wis. Stat. § 812.11, a garnishee is required to answer the garnishment complaint by stating the following:

(1) Whether the garnishee was, at the time of the service of the garnishee summons, indebted or under any liability to the defendant, naming the defendant, in any manner or upon any account, specifying, if indebted or liable, the amount, the interest thereon, the manner in which evidenced, when payable, whether an absolute or contingent liability and the facts necessary to a complete understanding of such indebtedness or liability. When the garnishee is in doubt respecting any liability or indebtedness to the defendant, the garnishee may set forth the facts concerning the possible liability or indebtedness.
(2) Whether the garnishee held, at the time of the service of the garnishee summons, title to, possession of or any other interest in any land or personal property or any instruments or papers relating to any such land or personal property belonging to the defendant or in which the defendant is interested. If the garnishee admits holding any interest in property described in this subsection or is in doubt respecting whether the garnishee holds an interest in property described in this subsection, the garnishee shall set forth a description of the property and the facts concerning the property, and the title, interest or claim of the defendant in or to the property.

In this case, Firstar Bank answered the complaint indicating that it was "not indebted to the debtor" for any reason and it did "not have control or possession of property belonging to the debtor." A handwritten notation on the answer stated, "No accounts."

¶ 13. The circuit court concluded that Ag Services improperly designated the debtor and, as a result, Firstar Bank correctly answered the garnishment complaint when it responded that it was not indebted to Roger or Maxine Krejchik. We agree.

¶ 14. Pursuant to Wis. Stat. § 812.11(1) and (2), Firstar Bank was required to indicate in its answer whether it was indebted to or under any liability to "the defendant" and whether it held any interest in personal property belonging to "the defendant" or in which the defendant was interested. Roger and Maxine Krejchik were the only listed debtors on the garnishment complaint. The name "Rolling Meadows Farm" was wholly absent from the complaint. Accordingly, on its face, the garnishment complaint indicated that Roger and Maxine were indebted to Ag Services in their individual capacities only.

¶ 15. Wisconsin Stat. § 178.21(3)(e) provides that "[a] partner's right in specific partnership property is not subject to attachment or execution, except on a claim against the partnership." Ag Services does not dispute that this means, as a general proposition, that partnership assets are not subject to garnishment to satisfy the debts of individual partners. See Hallmark v. Haenni, 947 S.W.2d 452, 454 (Mo. Ct. App. 1997) (holding that partnership funds were not attachable through garnishment for the debts of an individual partner). Thus, it is of no consequence that the Rolling Meadows Farm partnership account was retrieved by the Hogan system because nothing in the garnishment complaint indicated that the partnership was indebted to Ag Services or that Ag Services was seeking to garnish the partnership account.

¶ 16. We find persuasive the following language of the Colorado Court of Appeals: "In the intricate and complicated business of banking, absolute exactness and particularity in regard to names is absolutely indispensable, not only for the security of the bank, but of those doing business with it." German Nat'l Bank, 39 E at 72. The Colorado court went on to opine that creditors should know the names of their debtors, especially when the indebtedness is evidenced by a promissory note, and should bring a garnishment proceeding against the proper persons or suffer the consequences of their own negligence. Id. Moreover, a garnishee is not required to search its accounts under names other than those listed as debtors in the garnishment complaint, or "to make a detailed inquiry of accounts not listed in the writ to determine whether some part of the funds 'belonged' to the judgment debtor." 6 Am. Jim 2d Attachment and Garnishment § 526, at 809 (1999).

¶ 17. Therefore, Firstar Bank properly responded to the garnishment complaint by denying indebtedness or liability to the Krejchiks because the garnishment complaint only listed Roger and Maxine as debtors and because neither person had a personal account at Firstar.

¶ 18. Ag Services argues that because it loaned the Krejchiks money for the operation of Rolling Meadows Farm, "the Krejchiks acted as agents of the partnership, and consequently, partnership assets can be garnished to pay the debt." The issue, however, is not whether the Rolling Meadows Farm partnership account could be garnished, but whether Firstar properly refused to freeze that account based on Ag Services' failure to name Rolling Meadows Farm partnership as a judgment debtor in the garnishment complaint.

¶ 19. Ag Services also contends that Firstar Bank knew or should have known that Roger and Maxine were the sole owners of the Rolling Meadows Farm account. Ag Services apparently believes that if the bank was aware that Roger and Maxine were the only partners in the Rolling Meadows Farm partnership and, therefore, wholly owned the partnership account, then the partnership account could have been garnished based on the information supplied by Ag Services on the garnishment complaint. We conclude that whether Firstar Bank actually knew or should have known that the Krejchiks were the sole owners of the Rolling Meadows Farm account is irrelevant.

¶ 20. As previously discussed, a partner's assets in the partnership are not subject to attachment except on a claim against the partnership. Wis. Stat. § 178.21(3)(c). Because Firstar Bank had no reason to know that the judgment obtained by Ag Services was against the partnership, it had no reason to garnish the partnership account for a debt that appeared to be against the Krejchiks in their individual capacities. See McHugh & Assocs. v. Commercial & Farmers Bank, 476 A.2d 736, 740 (Md. Ct. Spec. App. 1984) (bank may have liability for pecuniary damages if it wrongfully seizes the assets of a partnership based upon a writ naming only an individual partner as the judgment debtor).

¶ 21. Ag Services does not, in any cogent manner, suggest that Firstar Bank either knew or should have known that Rolling Meadows Farm was a judgment debtor in this case. Nor does Ag Services cite any authority holding that there is an exception to the rule that partnership assets are not subject to attachment for the personal debts of the partners when the debtors are also the only partners in the firm. Accordingly, we conclude that the circuit court properly dismissed Ag Services' claim against Firstar Bank.

By the Court — Judgment affirmed.

       The circuit court's order indicates that Roger was one of the three brothers who established Rolling Meadows Farm.

       Roger filed a letter with this court on behalf of himself and Maxine, d/b/a Rolling Meadows Farm, indicating that they "make no comment or recommendation in this matter."

       All further references to the Wisconsin Statutes are to the 1997-98 version unless otherwise noted.

       The circuit court, in relying upon German National Bank of Denver v. National State Bank of Boulder, 39 E 71 (Colo. Ct. App. 1895), applied an "actual knowledge" requirement to the question of whether Firstar Bank was aware that Roger and Maxine were the sole owners of the Rolling Meadows Farm account. As will become clear from the reasoning of this opinion, we need not decide whether an "actual knowledge" or "should have known" standard applies.