author: DEININGER, PJ.

text:
    In re the Marriage of: Linda L. Greene p/k/a Linda L. Hahn, Petitioner-Appellant, v. Richard V. Hahn, Respondent-Respondent.
    Court of Appeals

      No. 03-3311.

      Submitted on briefs June 4, 2004.

    Decided October 28, 2004.

    2004 WI App 214
    (Also reported in 689 N.W.2d 657.)

      On behalf of the petitioner-appellant, the cause was submitted on the briefs of Lisa Goldman and Robert F. Nagel of the Law Offices of Robert Nagel, Madison.
    On behalf of the respondent-respondent, the cause was submitted on the brief of Mary Anne Kircher and Sabina Bosshard of Bosshard & Associates, La Crosse.
    Before Deininger, PJ., Dykman and Higginbotham, JJ.
   DEININGER, PJ.

¶ 1. Linda Greene appeals an order that designated her former husband, Richard Hahn, as "the person responsible for determining. .. school enrollment" for their younger son, Spencer. She claims that the court erred in granting Richard the authority to determine Spencer's place of school enrollment because the order interferes with her right, as the child's primary physical custodian, to determine Spencer's place of residence. Linda also contends that the trial court erroneously exercised its discretion in modifying the parties' joint legal custody of Spencer under Wis. Stat. § 767.325 (2001-02) because (1) the court failed to refer the parties to mediation; (2) the court did not expressly find a substantial change in circumstances from those existing at the time of the previous custody order; and (3) the record lacks eviden-tiary support for a conclusion that Spencer's best interest is served by his attending a private military academy instead of continuing to attend a public high school in La Crosse. We are not persuaded by any of Linda's claims of error, and we therefore affirm the appealed order.

BACKGROUND

¶ 2. Linda and Richard were married in 1981 and they divorced in 1990. Their Minnesota divorce judgment awarded them "permanent joint legal custody" of their two minor sons. Linda, who was awarded "permanent physical custody" of the two boys, moved to Wisconsin and Richard moved to Illinois. At the time of the divorce, the parties' older son, Adam, was four years old and the younger, Spencer, was not yet two.

¶ 3. In conjunction with a motion in 1992 seeking increased child support, Linda filed the parties' Minnesota divorce judgment with the La Crosse County Circuit Court. A second post-judgment proceeding in La Crosse County regarding support was initiated by Richard in 2000. He also moved in 2001 to revise the judgment "so as to award him primary physical placement of the minor children of the parties." No revision was ordered, however, because the parties resolved the placement issue by agreeing "to work together to solve the issues of concern relating to their two sons."

¶ 4. Richard again sought modification of the divorce judgment in July 2003. He moved for a court order "allowing him to enroll both of his sons at St. John's Northwestern Military Academy," which is located in Delafield, Wisconsin, for the academic year beginning in September 2003. The motion was initially heard by a court commissioner, who appointed a guardian ad litem for the now seventeen- and almost fifteen-year-old boys. The guardian ad litem recommended that Adam remain in La Crosse and attend Logan Senior High School for his senior year. A major factor in this recommendation was Adam's statement to the guardian ad litem that he would leave St. John's Academy as soon as he turned eighteen in December. The guardian ad litem also recommended that Adam sign a written contract with his parents regarding his conduct, expectations regarding his schoolwork and related items.

¶ 5. As to Spencer, the guardian ad litem recommended that he enroll at St. John's Academy "for the remainder of his high school years," as Richard requested. This recommendation was based on the guardian ad litem's conclusion that Spencer's failing grade point average as a freshman at Logan Senior High, his use of marijuana and one or more incidents of theft, all indicated that Spencer "was going down the same path as Adam, poor grades and poor choices for friends, at a faster speed than Adam." After hearing evidence at an unreported hearing, the court commissioner entered an order that "it is in the best interests of the children that Richard ... be designated as the person responsible for determining Spencer's school enrollment, and that Linda... be the person responsible for determining Adam's school enrollment."

¶ 6. Pursuant to the court commissioner's order, Richard enrolled Spencer at St. John's Academy for the fall semester. Linda requested the circuit court to hear Richard's motion de novo. The court took testimony over three days in September and early October of 2003. In addition to both parties' testimony, the court heard from a substance abuse counselor, the boys' high school principal, and from a psychologist who had met with the boys at their mother's request. At the conclusion of the testimony, the guardian ad litem informed the court that her recommendation had not changed. She continued to believe that enrollment at St. John's was in Spencer's best interest, in that it provided structure, "he's doing well, and he's also able to avoid drugs."

¶ 7. The court, in a ruling from the bench, found that, at least with respect to educational decision-making, "[t]he parents ... rather than cooperating, are engaging in a pitched battle that puts the two kids in the middle." The court also found that both boys "are in pretty deep trouble, very deep trouble. They've already had some contact with the criminal justice system, and I suspect that unless things change drastically, one or the other, probably both, are going to spend some time in front of a judge." Although the court acknowledged that "[predicting human behavior is difficult at best," it noted that "past performance" is often "the best predictor." Accordingly, the court concluded that the older brother's continuing difficulties — marijuana use, legal difficulties, ineligibility for athletics, poor academic performance — reflected poorly on Spencer's prospects for avoiding similar problems if he remained in La Crosse and in his present school setting.

¶ 8. The court then concluded and ordered as follows:

It looks to me that unless something changes, Spencer is going down the exact same path that Adam has already started.
As to Spencer, there is some time, there is some help. We can do something. And I am going to affirm the order of the family court commissioner and grant to Mr. [Hahn] the authority to determine what educational program he will follow. And if Mr. [Hahn] wants him to go to Saint John's, so be it.

The trial court subsequently entered a written order affirming the court commissioner's order. Linda appeals.

ANALYSIS

¶ 9. Linda appeals the circuit court's post-judgment modification of the custody provision in the parties' divorce judgment. We are thus called upon to review a trial court's discretionary determination, which we will not reverse unless the court incorrectly applied the law, misinterpreted or overlooked relevant facts or otherwise failed to reason its way to a decision that a reasonable judge could reach. See Keller v. Keller, 2002 WI App 161, ¶ 6, 256 Wis. 2d 401, 647 N.W.2d 426. Although our overall standard of review is that applicable to a trial court's discretionary determination, as to any questions of law presented, our review is de novo. See Kerkvliet v. Kerkvliet, 166 Wis. 2d 930, 938-39, 480 N.W.2d 823 (Ct. App. 1992). Finally, to the extent that Linda challenges any of the trial court's factual findings, she must convince us that the findings are clearly erroneous. Wis. Stat. § 805.17(2).

¶ 10. Linda's first and principal claim of error rests on her assertion that the appealed order conflicts with her rights under the parties' Minnesota divorce judgment. St. John's is a residential academy which requires its students to remain on its campus during most school days and nights, as well as on some weekends. Linda points out that by granting Richard the sole right to determine "Spencer's school enrollment," and thus permitting Richard to enroll Spencer at St. John's, the appealed order effectively gives Richard control over where Spencer will reside for a major portion of the year. This, she claims, is contrary to the provision in the parties' divorce judgment awarding her "permanent physical custody" of Spencer.

¶ 11. Linda essentially claims that the trial court lacked authority to enter the order it did, and she relies, in part, on a Minnesota statute. Because the parties' original divorce judgment gave her sole "permanent physical custody" of Spencer, she argues that the judgment permanently grants her the sole right to determine "the routine daily care and control and the residence of the child." See Minn. Stat. § 518.003(3)(c). Thus, in Linda's view, despite Richard's status as Spencer's joint legal custodian, he could not be granted the right to make decisions regarding where Spencer would reside because that would interfere with her sole right, as Spencer's physical custodian, to decide Spencer's residence.

¶ 12. We reject Linda's attempted reliance on a Minnesota statute and the provisions of the parties' original divorce judgment in this fashion. It was Linda who first filed the Minnesota judgment with the La Crosse County Circuit Court in 1992 and requested that court to assume jurisdiction for purposes of deciding a post-judgment motion to increase child support. Richard, likewise, subsequently filed motions in La Crosse County seeking to modify the judgment's support and placement provisions. Wisconsin thus became the forum for proceedings brought by either party to enforce or modify their divorce judgment, which must be treated and given the "same effect" as if it were a Wisconsin judgment. See Wis. Stat. § 806.24(2) ("A judgment so filed has the same effect and is subject to the same procedures, defenses, and proceedings for reopening, vacating or staying as a judgment of a circuit court of this state . . . ."); Wis. Stat. § 822.15(1) (requiring similar treatment for a "certified copy of a custody decree of another state").

¶ 13. Thus, the question before us is not whether the appealed order violates the terms of the original Minnesota divorce judgment, but whether the trial court erred in modifying those terms. In Wisconsin terminology, the parties' divorce judgment provided that Spencer's primary "physical placement" was with Linda, which means that she "has the right to have [Spencer] physically placed with [her] and has the right and responsibility to make, during that placement, routine daily decisions regarding [Spencer's] care, consistent with major decisions made by a person having legal custody." Wis. Stat. § 767.001(5). Prior to the instant order, the parties had "joint legal custody," which means that they shared legal custody and "neither party's legal custody rights are superior, except with respect to specified decisions as set forth by the court or the parties in the final judgment or order." Section 767.001(ls).

¶ 14. Richard's motion did not seek a change in Spencer's primary placement from Linda to him, as did his earlier modification motion filed in 2001. Rather, Richard sought only an order "allowing him to enroll" Spencer at St. John's Academy, an action that Linda opposed. The trial court granted Richard's motion and modified the parties' judgment by allocating to Richard the sole decision-making authority regarding Spencer's school enrollment. A circuit court is specifically empowered under Wis. Stat. § 767.24(6)(b) to make such an allocation between joint legal custodians: "the court may give one party sole power to make specified decisions, while both parties retain equal rights and responsibilities for other decisions."

¶ 15. Thus, the appealed order does not expressly modify the divorce judgment's directive that Spencer's primary physical placement be with Linda. We, of course, recognize that Spencer's change in school enrollment to a residential academy greatly impacts the amount of time that he will actually spend in Linda's home. We do not, however, accept Linda's implicit argument that a court may never allocate sole educational decision-making authority to a parent other than the one having primary physical placement. Here, the precise nature and location of the school in which Richard intended to enroll Spencer if his motion was granted was well known to the parties, the guardian ad litem and the court. All were thus aware that if Richard were given the sole right to determine Spencer's school enrollment, Spencer would be enrolled in a residential academy situated some three hours by car from Linda's home in La Crosse.

¶ 16. We are satisfied that, to the extent the appealed order results in a reduction in the amount of time Spencer will spend in Linda's home, the trial court was aware of that result when it evaluated whether Richard's requested modification to the existing joint custody order would be in Spencer's best interest. We conclude that, because Wis. Stat. § 767.325(1) permits a court to modify both the legal custody and physical placement provisions of a divorce judgment, the court may modify the terms of the parties' joint legal custody in a manner that results in a change in the amount of time the child spends in the home of the parent having primary physical placement.

¶ 17. As we have noted, the trial court did not modify the divorce judgment's provision that Spencer's primary placement be with Linda. Thus, at any times that Spencer is not required to be at St. John's Academy, his primary placement continues with Linda, subject to Richard's right to "reasonable and liberal" periods of physical placement. If the parties are unable to agree on a placement schedule that takes into account Spencer's enrollment at St. John's, either may request the court to establish a set schedule. See, e.g., Wis. Stat. § 767.325(3).

¶ 18. Having concluded that nothing in the parties' divorce judgment precludes the trial court from entering the order it did, and that Wis. Stat. §§ 767.24(6)(b) and 767.325(1) specifically authorize a court to modify a joint legal custody order in the manner the trial court did here, we next consider whether the court erroneously exercised its discretion in granting Richard sole authority to decide Spencer's school enrollment. We first address Linda's claim that the trial court erred by failing to refer the parties to mediation, which she claims was a fatal omission that nullifies the court's subsequent order.

¶ 19. Linda is correct that, under Wis. Stat. § 767.11(5), when a party seeks revisions to a divorce judgment that affect the legal custody or physical placement of a child, "the court or circuit court commissioner shall refer the parties to the director of family court counseling services for possible mediation of those contested issues" (emphasis added). Moreover, the parties are required to "attend at least one session with a mediator," before a court "may hold a trial... or a final hearing on legal custody or physical placement." Section 767.11(8)(a). Linda also correctly points out that this was not done in this case. Richard, however, argues that Linda has waived the issue because she first raises it on appeal. We agree.

¶ 20. Linda had ample opportunity to cite the mediation requirement and demand a referral for mediation, either during the proceedings before the court commissioner or in her request for a hearing de novo, or even at some point during the three days of hearings that followed in the circuit court. She did not do so. We agree with the trial court's observation when denying Linda's request for a stay pending appeal that "as to the mediation issue, it's a little late to bring it up now after we've litigated the case and it's already on the way to the Court of Appeals. The issue wasn't raised at the time of the original hearing, it's been waived . .. ."

¶ 21. Except in rare circumstances that are not present here, we will not address an issue that an appellant raises for the first time on appeal, because doing so undermines judicial economy and creates an incentive for parties to build in error in order to have an adverse outcome in the trial court overturned on appeal. See State v. Huebner, 2000 WI 59, ¶ 12, 235 Wis. 2d 486, 611 N.W.2d 727. Had Linda raised the mediation requirement in the trial court, the court could easily have suspended further proceedings on Richard's motion in order to permit a referral for mediation. Despite her failure to raise the issue in the trial court, she would have us set aside the appealed order after the trial court devoted three days to hearing testimony on Richard's motion and after we have completed a review of the record and the parties' briefs on appeal. This case aptly demonstrates why we will generally invoke the waiver rule in order to prevent the waste of judicial resources in both the circuit court and this one. Linda has waived the right to raise the mandatory mediation issue on appeal, and we do not address it further.

¶ 22. We next examine the requirements of Wis. Stat. § 767.325(l)(b)l., which creates a two-step process for a court to follow in determining whether to substantially modify the terms of a custody or placement order entered at least two years earlier. First, as a threshold matter, whenever a requested modification "would substantially alter the time a parent may spend with his or her child," the moving party must show that there has been "a substantial change of circumstances since the entry of the last order affecting legal custody or the last order substantially affecting physical placement." Section 767.325(l)(b)l.b. If that showing is made, the court then proceeds to consider whether any modification would be "in the best interest of the child." Section 767.325(l)(b)l.a.; see Licary v. Licary, 168 Wis. 2d 686, 694, 484 N.W.2d 371 (Ct. App. 1992) (explaining that before modifying a custody order, a court must find "that two conditions exist," but where no substantial change of circumstances is shown, the question of the child's best interests need not be reached). Finally, when considering the best interest of the child, the court must presume that continuing "the current allocation of decision making under a legal custody order" and continuing "the child's physical placement with the parent with whom the child resides for the greater period of time" are both in the best interest of the child. Section 767.325(l)(b)2. Both presumptions are rebut-table, however. Id.

¶ 23. Whether a party seeking to modify an existing custody order has established a "substantial change in circumstances," as required under Wis. Stat. § 767.325(l)(b)l.b., is a question of law that we decide de novo. Harris v. Harris, 141 Wis. 2d 569, 574-75, 415 N.W.2d 586 (Ct. App. 1987). When doing so, however, we must "give weight to a trial court's decision" because the determination is "heavily dependent upon an interpretation and analysis of underlying facts." Id. Linda argues that the trial court erred by not expressly determining whether Richard had shown a substantial change of circumstances, or alternatively, in implicitly concluding that a substantial change of circumstances had occurred. We agree with Richard, however, that the trial court implicitly concluded that circumstances had changed since the time of the parties' original divorce judgment awarding them joint legal custody, and that the court did not err in so concluding on the present record.

¶ 24. The trial court found that Spencer and his brother were "in pretty deep trouble" at the time Richard filed his motion because both had had "some contact with the criminal justice system." The court noted that the present circumstances had "developed over many, many years." At the time of the original divorce judgment, Spencer was not yet two years old. At the time of the modification hearing, he was fifteen, failing in school and using marijuana, and he had engaged in other illegal or inappropriate behavior. Because of the behavioral and adjustment problems exhibited by both boys, Richard had moved two years earlier for an order transferring their primary physical placement to him. The parties resolved the issue by agreeing to "work together to solve the issues of concern relating to their two sons," but by the summer of 2003, they were in disagreement over where their sons should go to school. Finally, Spencer had spent part of the summer attending a "leadership" camp at St. John's. He had apparently enjoyed the experience and, at least initially, voiced a desire to continue there during the academic year.

¶ 25. We conclude that the circumstances present in the summer of 2003 were substantially different than those existing at the time of the parties' divorce in 1990. At the time of the parties' divorce, no developmental or behavioral issues had surfaced regarding either Spencer or his brother, school enrollment was not an issue and there was presumably no indication that the parties would not be able to agree on major decisions affecting their children's lives. We recognize that the simple fact that a child grows older does not, in and of itself, create a substantial change in circumstances. See Lofthus v. Lofthus, 2004 WI App 65, ¶ 22, 270 Wis. 2d 515, 678 N.W.2d 393. However, when the age change is that from infant to adolescent; it is accompanied by a pattern of adjustment difficulties, educational failure and harmful or illegal behavior on the part of a child; and the parties are unable to agree on a major decision affecting the child's life, we are satisfied that a substantial change in circumstances has been shown.

¶ 26. The trial court thus properly proceeded to consider whether granting Richard sole authority to decide Spencer's school enrollment would be in Spencer's best interest. As to that determination, Linda asserts a "complete absence of any evidence expert or otherwise" to support the trial court's decision. Again we disagree.

¶ 27. A trial court's consideration and weighing of factors to determine what course of action is in a child's best interests is an exercise of discretion, and we may not substitute our own judgment for the trial court's properly exercised discretion. See Long v. Ardestani, 2001 WI App 46, ¶ 48, 241 Wis. 2d 498, 624 N.W.2d 405; Zirngibl v. Zirngibl, 165 Wis. 2d 130, 135, 477 N.W.2d 637 (Ct. App. 1991).

¶ 28. That Spencer's school performance had declined markedly; that he had been using marijuana for some time; that he had committed at least one theft; that his pattern of behavior emulated his older brother's; and that the parties could not agree on Spencer's school enrollment are all facts finding support in the record. From these facts, the trial court could reasonably infer, as it did, that unless something changed in his life, Spencer would continue to be in "deep trouble." The court could also reasonably con-elude, as it did, that a change in Spencer's school and peer group would be in his best interest because it would allow him a fresh start and the opportunity to get his life on a positive track, whereas maintaining the status quo would likely lead to Spencer's following his brother on a downward path. Finally, there is nothing in the record to dispute the trial court's finding that St. John's Academy, Richard's intended place of enrollment for Spencer, is anything other than "a wonderful school" with "an excellent reputation, fine educational system, [that] will hopefully allow [Spencer] to some day get into a college of his choice."

¶ 29. Thus, not only is there sufficient evidence in the record to allow the trial court to conclude that the continuity presumptions of Wis. Stat. § 767.325(1)(b)2. had been overcome, but the court's ruling also demonstrates that the court considered several relevant "best interest" factors set forth in Wxs. Stat. § 767.24(5), as it was required to do under § 767.325(5m). Specifically, the court's comments reflect that it considered Spencer's wishes and those of his parents; his adjustment to home, school and community; his age and educational and developmental needs; the cooperation and communication between the parties; and the input of appropriate professionals. See § 767.24(5)(a), (b), (d), (dm), (fm), and (jm).

¶ 30. We therefore conclude that the trial court applied the correct law and based its decision on what it deemed to be in Spencer's best interest. Moreover, the court considered the relevant facts of record and reasoned its way to a conclusion that a reasonable judge could reach, a conclusion that we must therefore affirm as a proper exercise of discretion. See Keller v. Keller, 2002 WI App 161, ¶ 6, 256 Wis. 2d 401, 647 N.W.2d 426. Finally, the court's disposition was also in accord with the guardian ad litem's recommendation as to Spencer's best interest, and it was not contrary to the "expert testimony," as Linda maintains.

¶ 31. As for the testimony that Linda cites as contradicting the trial court's conclusion that sending Spencer to St. John's was in his best interest, we are not persuaded that the testimony supports only a conclusion that sending Spencer to St. John's would be contrary to his best interest. The three witnesses (a psychologist, a drug abuse counselor and a high school principal) were all invested to some degree in assisting Linda in her efforts to enable Spencer to overcome his behavioral problems while continuing to attend high school in La Crosse. Understandably, each testified to a belief that these efforts could be successful and should be attempted before transferring Spencer to a residential school setting.

¶ 32. Although the psychologist, counselor and principal thus provided support for Linda's position that Spencer could be successful if he remained in La Crosse for high school, none testified that having Spencer attend St. John's for his sophomore year would be contrary to his best interest. The psychologist acknowledged that his recommendation in favor of having Spencer remain at Logan was a "generic recommendation I would give to any child who is having academic problems" because of the preference for moving "in the direction of less restrictive to more restrictive placements." He also testified that, in determining the school "that Spencer is most likely to succeed in," it was appropriate for the court to consider "where he will receive the most motivation, the most structure, the most after-school support, and the most tutoring." The trial court could reasonably find on the present record that St. John's would be better able to meet these criteria than would his former school setting in La Crosse.

¶ 33. Similarly, Spencer's drug abuse counselor testified that Spencer was "a kid that can adapt" and that "change might he a good thing" for him, although how the change was accomplished would be "the important thing." The counselor also acknowledged that he had told Spencer's guardian ad litem on several occasions that he had no "recommendation as to where it is best for [Spencer and Adam] to go to school," and he also testified that "I don't know if it would be a bad thing for [Spencer] to go to the military school." Finally, the principal of Logan High School testified that Spencer would have to repeat several classes but could still graduate with his class, although he "could not afford another year like the freshman year." Unlike the other two witnesses, the principal was not specifically asked to offer an opinion as to whether continuing at Logan or transferring to St. John's would be better for Spencer.

¶ 34. In short, nothing that any of the three non-party witnesses said at the hearing indicated that Spencer's transfer to St. John's would be contrary to his best interest, and each gave at least some testimony that supports the trial court's conclusion that the transfer would foster Spencer's best interest. The trial court specifically credited the testimony of all three, noting in its ruling that these witnesses were "intelligent and dedicated people" who were dedicated to "helping kids." We are thus satisfied by the record that the trial court considered the testimony of the three non-party witnesses and that the court's conclusion is not undermined by their testimony.

CONCLUSION

¶ 35. For the reasons discussed above, we affirm the appealed order.

By the Court. — Order affirmed.

       All references to the Wisconsin Statutes are to the 2001-02 version unless otherwise noted.

       Richard's current motion also asked for authority to enroll Adam at St. John's. As we have described, the guardian ad litem recommended that Adam remain enrolled at Logan Senior High School in La Crosse, and the trial court so ordered. Richard has not cross-appealed the order as it pertains to Adam.

       We emphasize that the record before us shows that the trial court was well aware of the school placement Richard intended for Spencer and its impact on the amount of time Spencer would thereafter spend in Linda's home. We do not intend to suggest that a parent possessing the sole right to determine a child's school enrollment is necessarily free to exercise that right in an unanticipated way that significantly undermines the other parent's allocated placement time.
      We note that, in response to a question from her attorney, Linda testified that she was concerned that Richard "could decide that Spencer should go to school in Chicago or move with him to Seattle when he moves to Seattle." These possibilities do not appear to have been within the court's contemplation when it entered the appealed order, and should either occur and a proper showing be made under Wis. Stat. § 767.325(l)(a) or (b), the trial court may consider whether further modifications to Spencer's custody or placement would be in his best interest.

        On the record before us, Spencer was enrolled and attending St. John's Academy. Our disposition is based, as it must be, on the record as it stands in this appeal, not on what the parties or Spencer might do thereafter.

       Linda testified that, at the conclusion of the hearing before the court commissioner, "everyone agreed that... the placement would stay with the mother." During her testimony, Linda also asked the trial court to include a statement to that effect in its order. Following the trial court's oral ruling at the conclusion of the de novo hearing, Linda's counsel renewed the request that the court's order reflect that "permanent physical placement also remain with" Linda. The court commented that it believed "that was part of the original order," and Richard's counsel responded that "[n]othing changed [in] the judgment other than the school decision." The appealed order, as well as the commissioner's order that the court "affirmed" and "adopted," are silent on the topic of physical placement. Given the foregoing statements by the parties and the court, however, we conclude that there is no dispute that Spencer's primary placement remains with Linda.

       In her reply brief, Linda argues, among other things, that the trial court's decision to grant Richard sole decision-making authority over Spencer's school enrollment is "unreasonable and plainly unfair to Linda and [her husband] who have invested the last 14 years of their lives raising Spencer." This argument, of course, misses the point — the standard for the court's decision was Spencer's best interest, not fairness to the parties. The trial court recognized that Linda would not be happy with its decision and that this was "understandable," but it urged her to support the change as being "what's best for [Spencer]."


source: Caselaw Access Project

author: CURLEY, J.

license: Public Domain

text:
    Ronald C. Williams, Plaintiff, v. Rexworks, Inc., Defendant-Third-Party Defendant-Respondent, Rexnord, Inc., Rexnord Holdings, Inc., Fairchild Corporation, Banner Industries, Defendants-Third-Party Plaintiffs-Appellants, Rex PT, Inc., Rex Chainbelt, Rex Con, Northfield Insurance Company, Defendants, v. Guiffre Bros. Cranes, Inc., Third-Party Defendant-Respondent.
    Court of Appeals

      No. 03-3047.

      Oral argument September 28, 2004.

    Decided November 2, 2004.

    2004 WI App 228
    (Also reported in 691 N.W.2d 897.)

      On behalf of the defendants-third-party plaintiffs-appellants, the cause was submitted on the briefs of Karen M. Schapiro and Benjamin C. Grawe of DeWitt Ross & Stevens, S.C., of Brookfield. There was oral argument by Karen M. Schapiro.

    On behalf of the defendant-third-party-defendant-respondent, the cause was submitted on the brief of Karen L. Tidwall, of Whyte, Hirschboeck, Dudek S. C., of Milwaukee. There was oral argument by Karen L. Tidwall.

      Before Curley, Kessler and Nettesheim, JJ.
   CURLEY, J.

¶ 1. Rexnord, Inc., Rexnord Holdings, Inc., Fairchild Corporation, and Banner Industries, Inc. (collectively "RHI") appeal from the trial court's denial of their motion for partial summary judgment on their cross-claim for reimbursement of attorneys' fees and costs against Rexworks, Inc., a co-defendant in a products liability suit, and the trial court's grant of Rexworks' cross-motion for summary judgment. RHI contends that the trial court erred in determining "that RHI was not entitled to control its own defense and have Rexworks reimburse it for its attorneys' fees and costs." Because Rexworks accepted RHI's tender of defense and RHI failed to establish an actual conflict or provide any valid independent basis for its contention that it was entitled to separate counsel or the reimbursement of its fees, we affirm.

I. Background.

¶ 2. In January 2000, Ronald C. Williams filed a personal injury lawsuit against RHI and Rexworks, among others. Williams alleged that he was injured while operating a defective conveyor machine in 1997. The allegedly defective machine had been manufactured by the Construction Machinery Division of Rex-nord, Inc. In 1982, however, Rexworks purchased the Division from Rexnord. In connection with the sale, Rexworks and Rexnord entered into an agreement, effective March 28, 1982, that included provisions allocating responsibility for products liability, personal injury, and other claims and related litigation that might arise in connection with the Division.

¶ 3. Article 1 of the agreement provided, in relevant part: "Responsibility for product liability claims and litigation will be on an occurrence basis. Those occurring prior to noon C.S.T. on the Closing Date will be for Rexnord's account; occurrences after noon C.S.T. on the Closing Date will be for [Rexworks'] account." Exhibit C of the agreement provided that, as of the closing date, Rexworks assumed Rexnord's liability for, among other things, "[p]ersonal injury and property damage claims arising out of the Construction Machinery ("CM") product lines . .. but only such claims as shall arise out of occurrences after noon C.S.T. on April 23, 1982." Furthermore, the agreement also provided that:

[Rexworks] expressly agrees to make available to Rex-nord and its counsel all those [Rexworks] employees ... who are knowledgeable about any facts relating to a claim or litigation for which Rexnord shall be responsible pursuant to this agreement. [Rexworks] shall make such employees available to Rexnord at such times and for such periods as Rexnord and its counsel shall determine are necessary.
Rexnord shall make available to [Rexworks] and its counsel all those Rexnord employees relating to a claim or litigation for which [Rexworks] shall be responsible pursuant to this Agreement. Rexnord shall make such employees available to [Rexworks] at such times and for such periods as [Rexworks] and its counsel shall determine are necessary.

¶ 4. As such, in August 2000, in response to the lawsuit filed by Williams, RHI notified Rexworks that "to the extent that it is shown the injury is connected to a construction machinery division product," RHI was putting Rexworks "on notice -that [it (Rexworks) was] obligated to defend, indemnify and hold harmless [RHI] from and against any and all liabilities, costs, claims, fees, including attorneys' fees, and the like, with respect to the [Williams] litigation." Several months later, in December 2000, RHI formally tendered the defense of the matter to Rexworks by letter.

¶ 5. As of April 23, 2001, Rexworks had yet to accept RHI's tender. On that date, RHI filed a cross-claim against Rexworks for declaratory relief and breach of contract. The cross-claim alleged that, pursuant to the sale agreement, Rexworks was obligated to assume responsibility for all personal injury and product liability claims arising out of the Construction Machinery Division occurring after the conveyance of the assets, and sought a judgment declaring that Rex-works is liable "for the cost of defending [Williams'] claims to date, any and all future costs and damages to be incurred in connection with [Williams'] claims and damages connected with the breach of the Agreement for Sale."

¶ 6. On June 18, 2001, Rexworks filed its answer to RHI's cross-claims denying that it had breached the 1982 agreement and alleged that it had "not refused the tender of defense or refused to honor its obligations under the Agreement," but instead was conducting a "factual investigation into the intent of the contracting parties" relative to the agreement language referenced in the cross-claim. Shortly thereafter, on June 29, 2001, Rexworks accepted RHI's tender of defense.

¶ 7. After Rexworks accepted RHI's tender of defense, there were several instances of correspondence and communication between them concerning RHI's requests for reimbursement of its attorneys' fees and costs, a potential conflict of interest, whether Rexworks had agreed to indemnify RHI, and Rexworks' financial troubles and eventual dissolution. In November 2001, Rexworks' counsel, Attorney Tidwall, informed RHI's counsel, Attorney Shapiro, that, despite .Rexworks' financial troubles, Rexworks' insurer had agreed to pay for Tidwall's law firm's defense of Rexworks and RHI. Shortly thereafter, the attorneys had a meeting at which time they discussed the potential conflict of interest. However, the potential conflict of interest issue was never brought before the trial court for determination. Tidwall also refused to stipulate to judgment on the first paragraph of the cross-claim.

¶ 8. In December, Shapiro tendered RHI's claims to Rexworks' insurer. Just under two weeks later, RHI filed for partial summary judgment on the cross-claim, and Rexworks opposed the motion. In January 2002, before Rexworks' insurer had responded, RHI withdrew its tender to the insurer. In February 2002, the trial court denied RHI's motion for partial summary judgment.

¶ 9. Both Tidwall and Shapiro continued to defend the action. RHI filed a motion to dismiss Williams' first amended complaint, and in June 2002, the trial court granted the motion dismissing Williams' action in its entirety. After the dismissal of Williams' action, RHI continued to pursue the cross-claim for reimbursement of its attorneys' fees and costs. In January 2003, RHI filed an amended cross-claim/third-party complaint that added Guiffre Bros. Cranes, Inc. as a defendant, based on the theory that it is the "alter ego" of Rex-works. In March, RHI moved for partial summary judgment on the cross-claim, and in opposition to the motion, Rexworks sought judgment in its favor. Among other things, RHI argued that, despite its earlier tender of defense, it never acceded to representation by Rex-works because of the underlying potential conflicts of interest between the parties, the conflicts were never waived, and it had a right to control its defense and be reimbursed for those fees and costs.

¶ 10. On September 11, 2003, the trial court denied RHI's motion and entered judgment in Rexworks' favor, dismissing the cross-claim. It found no legal authority for RHI's claim that it had to consent to representation by Rexworks after tendering the defense, or for the claim that it had a right to control its own defense:

RHI... maintains that it never acceded to representation by Rexworks because there w[ere] potential conflicts of interest between the parties. Any potential conflicts of interest were not brought to the Court's attention at any time for determination.
This Court has considered RHI['s] arguments but could find no case law to support the position that [RHI] had to, or had a right to, accede to representation by Rexworks before Rexworks could represent [RHI], Both counsels have directed the Court to review insurance law - case law and the general business context. ... [TJhey were of no assistance to this Court in making the determination in this case regarding whether or not Rexworks is liable for the attorney's fees and costs incurred by [RHI], ... This Court is unaware of any legal authority that would require Rexworks to pay the attorney's fees and costs incurred by [RHI] subsequent to the acceptance of the tender of defense. Once the tender of defense was accepted by Rexworks, [RHI] was represented by counsel selected and retained by Rexworks. [RHI] did not have the right to choose its own counsel and require Rexworks to pay for that representation. The Court is mindful of Attorney Shapiro's position that there were potential conflicts, but such conflicts were never brought to the Court's attention. The defense was tendered and then it was accepted. To this Court's knowledge, there is no third step that is required under the law.

Thereafter, the trial court ruled that Rexworks was liable for RHI's reasonable attorneys' fees and costs from the date RHI notified Rexworks that it intended to tender the defense through the date Rexworks accepted the tender. The parties stipulated that Rexworks would pay RHI $5,000 to cover the fees and costs for the relevant period, and RHI would dismiss all claims with regarding fees and costs for that time period. A final order was entered, and RHI now appeals.

II. Analysis.

¶ 11. "When called upon to review the denial of a summary judgment motion, we must apply the standards set forth in [Wis. Stat. §] 802.08 ... in the same manner as the trial court." Germanotta v. National Indent. Co., 119 Wis. 2d 293, 296-97, 349 N.W.2d 733 (Ct. App. 1984). That methodology is well known, and need not be repeated here. See § 802.08; Grams v. Boss, 97 Wis. 2d 332, 338-39, 294 N.W.2d 473 (1980). Furthermore, interpretation of a contract is a question of law that appellate courts review de novo. See Deminsky v. Arlington Plastics Mach., 2003 WI 15, ¶ 15, 259 Wis. 2d 587, 657 N.W.2d 411.

¶ 12. Both parties agree that, pursuant to the 1982 agreement, Rexworks was obligated to defend RHI in the underlying suit commenced by Williams. Both parties also agree that Rexworks accepted tender of the defense on June 29, 2001. They disagree, however, as to whether it was necessary for RHI to consent to Rexworks' representation after Rexworks accepted the tender, and how Rexworks was to satisfy its obligations under the 1982 agreement.

¶ 13. RHI contends that the trial court erred in ruling that RHI was not entitled to control its own defense and have Rexworks reimburse it for its attorneys' fees and costs. RHI frames the issue as:

[wjhether an indemnitee may control its legal defense by selecting its own counsel and then having the indemnitor reimburse it for its attorneys' fees and costs in a case when there is a potential or actual conflict of interest between the indemnitee and indemnitor and the underlying indemnification agreement is silent as to the means by which the indemnitor fulfills its duties under the indemnification agreement[.]

RHI insists that the "sole means for Rexworks to discharge its obligations under the Agreement would be to allow RHI to control its own defense and then reimburse it for attorneys' fees and costs." Furthermore, RHI contends that the Supreme Court Rules mandate the outcome it requests because a conflict of interest barred joint representation, and there was no consent or waiver by RHI.

¶ 14. Rexworks argues that it "is not obligated to reimburse RHI's separate counsel's attorneys' fees and costs unilaterally incurred after Rexworks accepted RHI's tender of this lawsuit." Rexworks asserts that Wisconsin follows the American Rule regarding the allocation of attorneys' fees, and insists that the 1982 agreement did not "clearly and unambiguously" require Rexworks to reimburse RHI for its separate fees and costs. Rexworks also contends that RHI has cited no legal authority mandating that RHI has a right to control its own defense and be reimbursed, that the Supreme Court Rules do not provide an independent basis for such a claim, and that RHI is estopped from claiming attorneys' fees based on an alleged conflict of interest that was never brought before the trial court for determination.

¶ 15. At the outset, we note that the parties and the trial court have referred to the relevant language in the contract as an "indemnity" clause. It has no such label, and, in fact, the word indemnification never appears in the clause (s). Indeed, there is very little language in the contract relevant to the issue of who is responsible for which products liability actions and on what terms. While the "who" and "which" are straightforward, the "on what terms" is troubling. The scope of the "responsibility" allocated is, to say the least, not painstakingly defined.

¶ 16. Notably, there is no mention of "reservations of rights" or an explicit explanation of the allocation of attorney fees — a key difference from many insurance cases regarding conflicts of interest and separate counsel, and cases concerning indemnification clauses with the allocation of attorney fees specifically defined. Moreover, this is not a case in which a party has refused to accept the tender of defense. Thus, there appear to be only a few core issues: (1) What did the contract actually say? (2) What effect, if any, does the alleged conflict of interest have on the tender of defense? and (3) Is there any authority for the proposition that RHI is entitled to control its own defense and be reimbursed for its attorneys' fees and costs?

¶ 17. As noted, the contract provided: "Responsibility for product liability claims and litigation will be on an occurrence basis. Those occurring prior to noon C.S.T. on the Closing Date will be for Rexnord's account; occurrences after noon C.S.T. on the Closing Date will be for [Rexworks'] account." Further, it stated that Rexworks assumed Rexnord's liability for "[p]ersonal injury and property damage claims arising out of the Construction Machinery ("CM") product lines . . . hut only such claims as shall arise out of occurrences after noon C.S.T. on April 23, 1982." There is also a clause indicating that "[e]ach party shall bear all attorney fees, accounting fees and any and all finder and brokerage fees, if any, incurred by it in relation to this Agreement or related transaction." As acknowledged by RHI, the agreement is silent as to how either party is to discharge its obligation to defend the other. However, pursuant to the agreement, RHI elected to tender its defense to Rexworks and Rexworks accepted tender of the litigation.

¶ 18. RHI contends that since the agreement is silent as to how one party is to properly discharge its obligation to the other and in "light of the fact that there existed a potential or actual conflict of interest between the parties, the sole way for Rexworks to honor its obligations was to allow RHI to control its own defense and then reimburse RHI for its attorneys' fees and costs." We disagree. RHI never established that a conflict existed, nor did it request the trial court to determine as much. RHI never unequivocally informed Rexworks that it believed there to be a conflict and therefore was proceeding with independent counsel as of right, and fully expected to be reimbursed since, under the agreement, Rexworks was responsible for the defense. Absent a conflict, Rexworks has performed under the contract by accepting the tender of defense and agreeing to pay RHI for the attorneys' fees it incurred from the time it gave notice of its intent to tender and Rexworks acceptance of the tender. RHI also provides no binding and relevant authority to support the proposition that the sole means by which Rexworks could have properly satisfied its obligation to defend RHI was to allow RHI to control its own defense and then reimburse RHI.

¶ 19. Quite simply, if RHI did indeed believe that it was entitled to separate counsel, and accordingly, to the reimbursement of its fees, on the basis of the existence of some conflict, it should have taken the necessary steps to actually establish that a conflict existed, and brought the matter before the trial court for determination. Instead, we have an agreement that is silent as to how either party is to properly discharge its defense duties, an accepted tender of defense, RHI's assertion that they believed there was a conflict and never "acceded" to joint representation, and Rexworks' belief that no conflict existed. Furthermore, RHI has pointed to no authority indicating that once the defense is tendered, and accepted, the tenderor has to "accede" to joint representation. There is no basis in the law or the agreement requiring that third step. Pointing to a potential conflict of interest does not fill that gap, especially considering the fact that the conflict was never actually established or brought before the trial court for determination.

¶ 20. Furthermore, the Supreme Court Rules do not provide an independent basis to support RHI's claim that it was entitled to separate counsel and the reimbursement of its attorneys' fees. Indeed, the preamble to Chapter 20, the Rules of Professional Conduct for Attorneys, provides in relevant part:

Violation of a rule should not give rise to a cause of action nor should it create any presumption that a legal duty has been breached. The rules are designed to provide guidance to lawyers and to provide a structure for regulating conduct through disciplinary agencies. They are not designed to be a basis for civil liability.

Thus, it is clear from the preamble, and from the lack of any authority to the contrary, that the Supreme Court Rules do not provide an independent basis for civil liability, and do not create any presumption that a legal duty has been breached. As such, any reliance RHI places on the Supreme Court Rules for attempting to establish the "sole means" by which Rexworks could discharge its obligation under the agreement — allowing RHI to secure separate counsel and reimbursing RHI for the attorneys' fees incurred therefrom — is misplaced.

¶ 21. When, as here, an agreement is silent as to how one party is to properly discharge its obligation to defend the other, the defense was tendered and accepted, and a conflict of interest has not been established or determined to exist, there is no basis on which to conclude that the party that tendered its defense to the other is entitled to separate representation and reimbursement of the fees that are incurred after tender is accepted. RHI has provided us with no authority, and we have found none, to hold otherwise. As such, we affirm the trial court's grant of summary judgment in favor of Rexworks.

By the Court. — Orders affirmed.

       Rexnord, Inc. was a predecessor corporation to RHI.

       Indeed, it is unclear what the source of the alleged conflict actually was. During oral argument, RHI was unable to identify a clear conflict in relation to the plaintiffs claims. It appears that RHI may have been relying on Rexworks' refusal to accept its demand for a judgment for its attorneys' fees as the source of the conflict, but again, the trial court did not have the opportunity to address this issue.

       RHI sought summary judgment on its claim requesting a judgment declaring that "Rexworks is liable to [RHI] for costs, damages and fees, including reasonable attorneys' fees, that [RHI has] incurred or may incur on account of [Williams'] claims."

       The fees and costs incurred during the time between the tender and acceptance of defense are not a part of this appeal.

       Wisconsin Stat. § 802.08(2) provides, in relevant part: "The judgment sought shall be rendered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

       We also observe that had a conflict been established, and separate counsel ordered by the trial court, it remains to be seen who would be responsible for the attorneys' fees given the paucity of relevant language in the agreement.


author: BROWN, J.

text:
    AKG Real Estate, LLC, a limited liability company, Plaintiff-Appellant-Cross-Respondent, v. Patrick J. Kosterman and Susan A. Kosterman, Defendants-Respondents-Cross-Appellants.

    Court of Appeals

      No. 04-0188.

      Submitted on briefs September 23, 2004.

    Decided November 3, 2004.

    2004 WI App 232
    (Also reported in 691 N.W.2d 711.)

      On behalf of the plaintiff-appellant-cross-respondent, the cause was submitted on the briefs of Robert E. Hankel of Hartig, Bjelajac, Hankel & Koenen of Racine.
    On behalf of the defendants-respondents-cross-appellants, the cause was submitted on the briefs of Daniel Kelly of Reinhart Boerner Van Deuren S.C. of Milwaukee.
    Before Anderson, PJ., Brown and Snyder, JJ.

       Petition to review granted 1-11-2005.

   BROWN, J.

¶ 1. In this easement dispute, the issue is whether an easement may continue to exist even after changed conditions make the purpose of the easement obsolete. In Millen v. Thomas, 201 Wis. 2d 675, 679, 550 N.W.2d 134 (Ct. App. 1996), we said in dicta that an easement may be terminated by completion or cessation of the particular purpose for which it was granted. With the issue squarely before us, we now hold this to be the law. In this case, allowing continued existence of an easement, whose original purpose was ingress and egress to a landlocked property — and which is no longer necessary — would unreasonably restrict the beneficial use of vacant land. As a matter of public policy, courts cannot endorse allowing the easement holder to "hold out" for reasons not contemplated by the easement. To do so would be to sanction economic waste. We affirm the trial court's decision in part and reverse in part.

¶ 2. Some time prior to 1960, Louis and Angeline Chvilicek bought roughly eighty acres of vacant land on Highway 31 in Racine county's town of Caledonia. On August 25, 1960, they deeded four acres of that property (the Homestead) to their son Edward Chvilicek and his wife Audrey. The Homestead is located some 800 feet back from Highway 31 and landlocked. The deed, which Edward and Audrey recorded on September 13, included a thirty-foot-wide easement of right-of-way over the retained parcel (the Vacant Land) for ingress and egress between the Homestead and Highway 31.

¶ 3. The following year, 1961, the elder Chviliceks granted Edward and Audrey a second easement along the same path. This easement was sixty-six feet in width. The parties intended the expansion to allow for conversion of the easement into a public road in the event that they ever wished to dedicate it. Edward and Audrey recorded their deed on May 8. Before the close of 1961, Louis passed away. After his death, Angeline conveyed the Vacant Land to her children and their spouses as tenants in common. Edward and Audrey received a fifty-percent interest in the property. Joyce and Vincent White, Edward's sister and brother-in-law, received the remaining fifty percent.

¶ 4. AKG Real Estate, LLC made an offer to purchase the remainder of the Vacant Land, comprising some 79.736 acres, on September 11, 1997. The Ch-viliceks and Lorraine I. White, trustee of the Vincent J. White trust, countered that offer, offering to sell the Vacant Land subject to three easements. The first was a thirty-foot private road easement located along the path of the 1961 easement, "until such time as public road access is made available to said parcel." It also included a vehicular easement for ingress and egress on Louis Drive, located to the north of the easement path and running roughly parallel to the portion of the easement at issue in this case, and a twenty-foot-wide sanitary sewer easement extending toward Louis Drive.

¶ 5. The deal proceeded, and closing occurred in January 1998. AKG received two deeds: one from the Chviliceks and one from White, each conveying a one-half undivided interest in the property. AKG recorded the deeds on January 16, 1998. The deeds, like the counteroffer, included three easements: one for the sanitary sewer, one for ingress and egress on Louis Drive, and one thirty-foot easement following the path of the 1961 easement. The relevant language in both deeds reads:

Reserving therefrom a private road easement for the benefit of EDWARD T. CHVILICEK and AUDREY M. CHVILICEK, husband and wife, their heirs and assigns, or subsequent owners of 4213 Highway 31, Racine, Wisconsin 53405, [the Homestead], until such time as public road access is made available for said real estate upon the following described easement of right of way, to wit; [legal description of the thirty-foot easement],

¶ 6. The record does not reflect exactly when AKG formulated plans to convert the Vacant Land into a subdivision. However, it is apparent that it had such intentions prior to its purchase of the land. The record reflects that in November 1997, two months prior to the January 1998 closing date, the planning commission for the town of Caledonia put on its meeting agenda the rezoning to R-2S (residential) of 31.049 acres of the Vacant Land. AKG was able to accomplish this rezoning with the cooperation of Edward. Indeed, AKG's offer was contingent upon rezoning the property, and rezoning was also a requirement of the closing.

¶ 7. Between 1998 and 2000, AKG began the initial planning phase for its new subdivision. It contacted both the planning and development commission of Racine county and the town of Caledonia about some of their development ideas to ascertain what sorts of plans would be feasible. During the early part of 2000, AKG hired RSV Engineering, Inc. to perform engineering services related to the proposed development.

¶ 8. As AKG planned, two noteworthy changes occurred during the same time frame. First, ch. 233 of the Department of Transportation regulations in the Wis. Admin. Code, entitled "DIVISION OF LAND ABUTTING A STATE TRUNK HIGHWAY OR CONNECTING HIGHWAY," went into effect on February 1, 1999. Wisconsin Admin. Code § TRANS 233.012(1) (2004) made this chapter applicable to all land divisions created by plat or map, including AKG's proposed subdivision. Section TRANS 233.03(2) authorizes the DOT to review preliminary and final plats. Wisconsin Admin. Code § TRANS 233.06 imposes restrictions on the frequency of connections or access points onto state highways. Its provisions read as follows:

(1) The land division shall be laid out with the least practicable number of highways and private roads or driveways connecting with abutting state trunk highways or connecting highways.
(2) The department shall determine a minimum allowable distance between connections with the state trunk highway or connecting highway, between any 2 highways within the land division and between a highway within the land division and any existing or planned highway. To the extent practicable, the department shall require a distance of at least 1,000 feet between connections with a state trunk highway or connecting highway.

Second, the Homestead changed ownership on March 30, 2000, when the Chviliceks sold the property to Patrick J. and Susan A. Kosterman.

¶ 9. The record reflects that at some point during this initial planning phase in 2001, AKG met with two members of the Racine county planning commission, Arnie Clement and Julie Anderson. At the time, AKG's concept map included four lots where four AKG members intended to make their homes. Clement and Anderson opined that the DOT would not approve the proposed drawing, because it contemplated as an access point to Highway 31 a roadway along the easement path servicing the Homestead. This was problematic, they said, because the easement path was too close to Valley Road to the south. Valley Road is a public road running roughly parallel to the easement path and Louis Drive.

¶ 10. The parties do not tell us how close Valley Road lies to the easement path, but based on a map in the record, we presume it to be less than five hundred feet. The map shows Valley Road, the easement path, and Louis Drive, from left to right. Where the three roads intersect with Highway 31, the easement path lies noticeably closer to Valley Road than to Louis Drive. The record contains conflicting measurements of the distance between the easement path and Louis Drive. We have figures ranging from "less than 300 feet," 400 feet, and roughly 500 feet. In any case, the distance between Valley Road and the easement path must be shorter.

¶ 11. The RSV engineer testified in his deposition that in his experience with the DOT, it prefers 1000 feet between connections but as a rule of thumb generally tolerates as few as 600 feet. He indicated that this general rule for variances appears to be uniform throughout the district.

¶ 12. The engineer first submitted a plat to Racine county in June 2001. He dealt with Anderson from the planning commission, the same person with whom AKG met about the concept map described above. On December 21, 2001, the engineer and a member of AKG met with her about the plat. Because the plat depicted access for Lot 33 onto Highway 31, Anderson instructed them to apply for a Wxs. Admin. Code ch. TRANS 233 permit "to access the highway with one private residential driveway." County approval was conditional upon the DOT'S approval.

¶ 13. We do not know what this first proposed plat looked like, but we assume the location of Lot 33 did not change significantly from this initial plat to later versions. We note that later-dated plats in the record, including one dated January 24, 2002, and one dated August 23, 2002, labeled "final plat," both depict a Lot 33 sitting toward the end of the easement path serving the Homestead. It lies on the north side of the easement path and is separated from Highway 31 by a sliver of land that comprises part of the property deeded in 1995 to the State of Wisconsin. We also know that the DOT eventually did approve a thirty-foot right-of-way for Lot 33 to use the easement for access onto the highway.

¶ 14. The record reveals that AKG had at least two other plats dated 2002 in addition to the January and August plats just mentioned. Given that the first and the final 2002 plats are the same in all respects relevant to these appeals, we will refer to these maps collectively as "the 2002 plat."

¶ 15. The 2002 plat depicts the following plans for AKG's "Quarry Springs" subdivision. It shows the current Louis Drive as Cobblestone Drive. The Koster-mans' easement path has been altered significantly. The subdivision plans do away with the portion of it that abuts the Homestead. Instead, they provide the Homestead access to Highway 31 via a cul-de-sac that begins at the northwest corner of the Homestead parcel and lies over the part of the easement path abutting it. The plat shows a triangular outlot between the cul-de-sac and Lot 24 (Kostermans prospective neighbor to the north) marked, "TO BE ATTACHED TO ADJACENT LOT OWNER TO THE SOUTH," i.e., the Homestead. AKG's engineer confirmed that this outlot represents a parcel AKG plans to dedicate to the Kostermans for necessary frontage on the cul-de-sac. The cul-de-sac services an arc-shaped road called Louis Court, which leads out to meet Cobblestone Drive. Access to Highway 31 requires a left-hand turn onto Cobblestone Drive.

¶ 16. Only a remnant of the easement path survives: that part servicing Lot 33, discussed above. The plat refers to a thirty-foot and a sixty-six-foot easement along a dotted-lined path, corresponding to the decades-old 1960 and 1961 easements, respectively, and marks each "TO BE VACATED." The plat makes no mention of the thirty-foot easement the Chviliceks reserved in their 1998 deed.

¶ 17. AKG met with the town of Caledonia on January 29, 2002, to discuss approval of the 2002 plat for Quarry Springs. The town made clear at that meeting that its approval was conditional upon AKG obtaining a letter from the Homestead owners voluntarily releasing their easement. In negotiating approval with the town, AKG represented that the Kostermans would voluntarily terminate their easement and that the easement would no longer be necessary because of new access to Highway 31 via the cul-de-sac.

¶ 18. AKG was wrong about the Kostermans' anticipated acquiescence. The Kostermans did not like the proposal AKG showed them. The proposal did not contemplate making the easement path, a public road, which is what the Kostermans believe they paid for when they bought the Homestead. After a few conversations between the parties, the Kostermans indicated they were not willing to negotiate further.

¶ 19. The record indicates several reasons the Kostermans cited for why they disapproved of the proposed Quarry Springs plat. First, the Kostermans would have to reconfigure their driveway. Currently, the driveway on the Homestead property connects the easement path and the Kostermans' garage via a straight path. The garage and driveway are located on the east side of the house, which faces north. As the description above indicates, the AKG proposal contemplates access to the cul-de-sac, via a triangular outlot that is not currently part of the property, at a point to the west of where the current driveway comes out.

¶ 20. Moreover, because the house on the Homestead faces north, the Kostermans wanted any neighboring properties to face south and lie in a straight row. They believed new houses would have to follow that arrangement if the easement path was their access route to Highway 31. The cul-de-sac, on the other hand, would have created a ring of small lots, with the Kosterman home behind that ring and looking at the side and rear of the new houses at an odd angle and facing their access road at a forty-five-degree angle.

¶ 21. This particular objection regarding the arrangement of the neighboring homes appears to be partially monetary and partially aesthetic. With respect to their monetary concerns, the Kostermans opined that the value of their property would be impaired by the proposed orientation of AKG's improvements. As far as aesthetics, Susan expressed that when the couple bought the Homestead, she understood the easement path to provide a buffer protecting it from eventually having neighbors because: (1) The eastern half of the Homestead was designated as an environmental corridor, and the Kostermans would own it; (2) wetlands lie just to the west of the property, so a house would be too close to the road.

¶ 22. Other objections included the fact that the Kostermans would have to connect to a sanitary sewer laid by AKG in the event the subdivision plat were to receive final approval, the inconvenience of a curved road as opposed to the straight shot of the easement path, and Patrick's desire to keep his address.

¶ 23. By October 2002, AKG had received approval of the final plat from the Racine county planning and development commission and the town of Caledonia; it also received the DOT's approval. Its engineer spoke with an employee of the DOT in early October about whether the DOT would approve a revision of the plat to make the easement path a public access way. The employee told him it would reject a plat so revised. The engineer informed AKG about this contact.

¶ 24. Having failed to reach agreement with the Kostermans, AKG filed a complaint for declaratory relief on October 17, 2002, which it amended on May 12, 2003. The complaint sought a declaration that AKG had a right to terminate the Kostermans' private road easement upon providing public road access. Referencing the easement in the 1998 deeds from the White trust and the Chviliceks, AKG alleged that the easement was to be effective until public road access became available to the Homestead. In the alternative, it alleged that in the event the court construed the deed to require public access over the easement path, the court should reform the deed, because access limitations precluded AKG from obtaining approval for construction of a public road over the easement path.

¶ 25. The Kostermans answered and affirmatively defended that the condition subsequent in the 1998 deeds required public access on the path of the easement as a condition of termination, and such condition had not yet been fulfilled. They also asserted, among other affirmative defenses, that (1) the easement path was also protected by the ancient 1960 and 1961 easements and (2) to terminate the easements "would work an overly burdensome hardship on Defendants due to the location and orientation of the present improvements on the Defendants' property, and is thus barred by equity."

¶ 26. The Kostermans also brought a counterclaim. First, they sought a declaration that the ancient 1960 and 1961 easements remain in full force and effect and cannot be terminated except by an affirmative act on the part of the Kostermans. Second, they alleged that the diminution in the Homestead's property value required compensation in the event the court did allow for termination.

¶ 27. AKG answered the Kostermans' counterclaim, attesting that the ancient easements were no longer in effect and reincorporating all allegations it made in its complaint. As an affirmative defense, it claimed that the easement the 1998 deeds reserved superceded and merged with all prior easements.

¶ 28. In early June, AKG made some adjustments to its development plans in response to the litigation. First, it withdrew the approved 2002 plat and substituted a new plan that would allow AKG to proceed with the Quarry Springs development in phases. The multiple-phase development temporarily suspended development of the southern portion of the Vacant Land, so as not to impact the Homestead and the easement path.

¶ 29. Second, AKG made another attempt to ascertain whether the DOT would be amenable to allowing public road access on the roadway encompassing the relevant easement as part of the Quarry Springs development. On June 10, 2003, the engineer and a member of AKG met with the DOT's Access Management Coordinator, whose responsibilities included the interpretation and enforcement of Wis. Admin. Code ch. TRANS 233 and approval or disapproval of access to state public highways. She made clear at that meeting that the DOT would not permit an expansion of the thirty-foot easement approved for Lot 33.

¶ 30. On June 30, the Kostermans moved for summary judgment. They requested the circuit court to declare that the easement the 1998 deeds reserved remains in effect until the easement path becomes a public road and that the 1961 easement remains effective and not subject to any sort of qualification. The circuit court held a hearing on the motion on July 31, 2003.

¶ 31. At the hearing, the circuit court made a definitive ruling that the 1998 easement would terminate upon AKG providing a public road for access. It rejected the Kostermans' contention that "upon the following described easement of right of way," the language of the condition for termination, required the easement to become a public road. "I think the condition or argument that somehow the road has to be built on the easement leads to an absurd situation; and, quite frankly, I'm comfortable saying that if there is access to the parcel — that particular easement, the '97 easement would be extinguished."

¶ 32. The circuit court did not rule definitively at the hearing with respect to the 1961 easement. It did, as a preliminary assessment, state that it saw no reason why that easement should terminate. The circuit court rejected AKG's merger argument. It also disagreed with AKG's assertion that the easement should terminate because the DOT's access limitations frustrated the easement's essential purpose. AKG had contended that the sole purpose of the easement was to one day become a public right-of-way, a purpose frustrated by the access limitations. The circuit court found that the purpose was simply ingress and egress, however, and that the easement path could serve this purpose regardless of whether it became public or remained private access. As to AKG's assertion that the DOT would not allow access, it noted that there was nothing showing for certain what the DOT would or would not do.

¶ 33. The circuit court's decision, filed on October 17, 2003, granted relief to the Kostermans with respect to the 1961 easement. Upon denying AKG's motion for reconsideration, which objected that the decision neither addressed AKG's affirmative defense of impossibility of performance/frustration of purpose nor reflected the court's favorable ruling with respect to the 1998 easement, the court filed a final judgment, incorporating its prior judgments as to both easements. Both parties appeal.

¶ 34. Summary judgment is proper when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315, 401 N.W.2d 816 (1987). We review summary judgment decisions de novo, using the same methodology the circuit court employs. Id. at 315-17. That methodology is well known, and we need not repeat it here. See, e.g., Lambrecht v. Estate of Kaczmarczyk, 2001 WI 25, ¶¶ 20-24, 241 Wis. 2d 804, 623 N.W.2d 751.

¶ 35. We first address the later deed. The Koster-mans submit that the deed is unambiguous, renewing their contention below that the "upon" clause in the following language necessarily modifies "public road" and not "private road easement," as AKG contends:

Reserving therefrom a private road easement for the benefit of EDWARD T. CHVILICEK and AUDREY M. CHVILICEK, husband and wife, their heirs and assigns, or subsequent owners of 4213 Highway 31, Racine, Wisconsin 53405, until such time as public road access is made available for said real estate upon the following described easement of right of way, to wit: [legal description of the thirty-foot easement].

Any other interpretation, they assert, is grammatically unsound and renders the clause meaningless.

¶ 36. We agree with the Kostermans that the language contained within the four corners of the 1998 deeds is the primary source of what AKG, the Ch-viliceks, and White intended the condition subsequent to be. See Rikkers v. Ryan, 76 Wis. 2d 185, 188, 251 N.W.2d 25 (1977). We further agree that the terms of the 1998 deeds are unambiguous and their construction is therefore purely a question of law. See id. We do not, however, agree that the unambiguous terms support the Kostermans' interpretation.

¶ 37. Rikkers teaches that the same rules of construction applicable to other instruments apply to interpretation of a deed. Id. ("Deeds are construed as are other instruments . . .." (Citation omitted.)). A cardinal rule of construction is that courts will favor a construction that is reasonable, fair, and practical over one that is unreasonable. See Niske v. Nackman, 273 Wis. 69, 75, 76 N.W.2d 591 (1956); 17A Am. Jur 2d Contracts § 338 (2004). However grammatically palatable the Koster-mans' proposed construction may be, it is substantively preposterous. It contemplates that a right-of-way over the Vacant Land will exist into perpetuity, until the easement path becomes a public road. It does not by its terms terminate even if Highway 31 someday ceases to be a road. Such an interpretation would require AKG to continue to allow the Kostermans to drive over its land, even if they could not go anywhere, an absurd result.

¶ 38. The interpretation AKG advances does not suffer from the same flaw. Moreover, it does not, as the Kostermans assert, read the "upon" clause out of the deed. Rather, it construes the clause to describe the location of the easement. One could reasonably expect the parties to include a term about where to place the easement.

¶ 39. We hold AKG was entitled to judgment as a matter of law. Once it provides public access, the condition subsequent will have been fulfilled. The easement will terminate by its own express terms.

¶ 40. We further hold that, as a matter of law, the doctrine of changed conditions operates to extinguish both easements as soon as public road access becomes available to the Homestead. According to Millen, 201 Wis. 2d at 679, which lists several circumstances under which an easement may come to an end, "an easement may be terminated by the completion or cessation of the particular purpose for which it was granted." A commentator fleshes out this changed conditions doctrine in more detail. See Michael J.D. Sweeney, The Changing Role of Private Land Restrictions: Reforming Servitude Law, 64 Fordham L. Rev. 661 (1995). The doctrine allows the courts to intervene to terminate or modify a servitude when circumstances — the existence of which were an underlying assumption of the parties who created the servitude — change in such a way that the contemplated benefit of the servitude is rendered obsolete or substantially unachievable. See id. at 689. It allows courts to achieve the result the parties would have intended had they considered the possibility of such changes.

¶ 41. This case exemplifies when changed circumstances demand our intervention. We will first examine the contemplated benefit of the easements. Next, we will ascertain the underlying assumptions of the parties to the deeds by looking to what they knew at the time they created the servitudes. Finally, we shall address what circumstances have changed and how they affect the easements' intended benefit.

¶ 42. The contemplated benefit of both easements was the ability of the Homestead owners to get to a public road in order to come and go where they needed. The language in the 1961 deed reveals, as the circuit court determined and as the Kostermans themselves argued below, that the Chviliceks received from Edward's parents a right-of-way for ingress and egress. Ingress and egress by its very nature contemplates going to and returning from some place. It would be incredible to suppose that the Chviliceks and their parents would have memorialized in a deed an invitation to merely come onto the property. The Kostermans cite several other benefits they would lose if they lost the easement. However, nothing in the record reveals that the Chviliceks and their parents contemplated any of these, namely: (1) the convenience of using a straight path over the Vacant Land; (2) not having to change the Homestead's address; (3) preserving property value; (4) protecting against having next-door neighbors; or (5) shielding the Homestead from unsightly improvements on the neighboring property. We cannot protect ex post valuations of the servitude's utility, because they are irrelevant to the original parties' intent.

¶ 43. Similarly, nothing in the more recent deeds between AKG and the cotenants of the Vacant Land reveals that any of those parties contemplated any of these purposes the Kostermans mentioned. That fact, coupled with the fact that the 1998 easement follows the same path as the ancient one, suggests that the parties did not contemplate any new purpose. We conclude that the later deed also intended to provide the benefit of access to a public road — for the purpose of going to and coming from someplace other than the dominant tenement.

¶ 44. Two major assumptions surrounded both the early and the later transactions. First, the facts clearly reveal that the parties thought an easement would be necessary. The Homestead property is landlocked. Land surrounds it on four sides; there is no evidence that in either transaction the Chviliceks engaged or planned to negotiate with anyone else for an easement or that any land abutting their property would be converted to a public road in the foreseeable future.

¶ 45. The parties also contemplated that the path they chose for the easement could someday be suitable for a public road. Edward testified at his deposition that although no one in his family had ever made plans to dedicate the roadway, his parents made the 1961 easement path sixty-six feet so that this purpose could be accomplished if desired. Sixty-six feet is the regulation width for a public way. It is common knowledge that the average homeowner does not have a driveway sixty-six feet wide. The record supports a similar inference that the parties to the 1998 deeds believed public road access would be possible. We know AKG intended to put in a subdivision before it even bought the Vacant Land. It was entirely foreseeable that roads would be necessary, and there were only two possibilities for connection to Highway 31: Louis Drive and the easement path. Nothing in the record suggests that it favored the latter at the time of purchase. Indeed, the first concept map AKG showed the two employees on the county planning commission contemplated using the easement path as a public way.

¶ 46. Circumstances have changed such that neither of these underlying assumptions remains valid. First, there is no longer any danger that the Homestead property will remain perpetually landlocked without the private easement. AKG's proposal contemplates public access via the cul-de-sac from the Kostermans' own parcel. Indeed, it intends to dedicate the small triangular outlot to the Kostermans to make that access possible. The ingress and egress benefit that the parties contemplated derived much of its original value from the fact that ingress and egress weré necessary. That benefit has been severely discounted.

¶ 47. Moreover, the easement roadway is no longer suitable to become a public road. Since the creation of both deeds, Wis. Admin. Code ch. 233 has gone into effect. It limits access points, wherever practicable, to a minimum distance of 1000 feet apart. Wis. Admin. Code § TRANS 233.06(2). We disagree with the Kostermans' assertion that because AKG never formally submitted the 2002 plat to the DOT for approval, there is a genuine question of material fact as to whether or not the DOT would approve it. The evidence does not support an inference that approval would be a realistic possibility. See Belich v. Szymaszek, 224 Wis. 2d 419, 425, 592 N.W.2d 254 (Ct. App. 1999) (competing inferences must be reasonable to create a genuine issue of material fact).

¶ 48. First, we see nothing in the record indicating why AKG's proposal to have a public road only on Louis Drive would be impracticable. Thus, we see no reason why Wis. Admin. Code § TRANS 233.06(2) would not, by its express terms, prohibit a public road lying not only 500 feet or less away from Louis Drive but also a significantly shorter distance from Valley Road to the south. "To the extent practicable, the department shall require a distance of at least 1000 feet between connections with a state trunk highway or connecting highway." Section TRANS 233.06(2) (emphasis added). Second, whether or not the DOT would allow for a variance is purely speculative; we will not attempt to predict what it will do. Third, even if we were to so speculate, the engineer's testimony supports only the inference that a variance of 400 feet from the statutory minimum —i.e., 600 feet between connections — would generally be acceptable. Again, the record reflects that Louis Drive and the easement path are 500 feet apart at most and Valley Road is closer still to the latter. That the DOT would allow a greater variance to either side has no factual basis. It makes no difference whether § TRANS 233.03(2) has been suspended. Whoever reviews these plats is bound by the same regulations.

¶ 49. Finally, at every stage of the planning process for Quarry Springs, the various state and local governments represented to AKG that public road access at that site would not be possible. The county workers warned them when they submitted the first concept map that the DOT would not allow a road at the easement site. It is unreasonable to assume that the principals of AKG would have abandoned lightly a design, as exemplified in the first concept map, that contemplated building a home for each of the AKG principals. Moreover, a DOT employee told the engineer in October 2002 that the DOT would not approve a revised plan contemplating a public road along the easement drive. Finally, the access management coordinator in charge of interpreting and enforcing Wis. Admin. Code ch. TRANS 233 stated the DOT would not approve making the easement a public way or expanding the thirty-foot right-of-way designated for Lot 33. We will not obligate AKG to engage in futile charades in order to prove the impossibility of public access in light of Wis. Admin. Code § TRANS 233.06.

¶ 50. The effects of Wis. Admin. Code ch. TRANS 233 and the availability of alternative access matter. As we have said above, all the Chviliceks wanted to do was to ensure ingress and egress to their property to access a public road. They would not have needed to keep the option open to have this public access closer to their house if they knew a public road — which they would not have to keep graveled and maintained themselves — was already going to be available at no cost to them. In the absence of evidence to the contrary, we cannot assume that the Chvilicek couples would have acted differently from what ordinary people would have done had they anticipated this change in circumstances. See Glen O. Robinson, Explaining Contingent Rights: The Puzzle of "Obsolete" Covenants, 91 Colum L. Rev. 546, 550-51 (1991) (characterizing the doctrine as similar to a default rule that aims to give effect to the parties' intent as objectively determinable).

¶ 51. We emphasize that this court does not lightly override privately ordered decisions; this case represents the exception, not the rule. Wisconsin's public policy favors the free and unencumbered use of property. See, e.g., Crowley v. Knapp, 94 Wis. 2d 421, 434, 288 N.W.2d 815 (1980). In the majority of cases, the free market will adequately allocate land to its most desirable uses. Allowing parties to "hold out" until they derive substantial benefit from their preferred land usage simply helps to establish market value of competing land uses.

¶ 52. In this case, however, the miniscule benefits the Kostermans derive impose aggregate costs far in excess of the sum total of benefits to all concerned parties. Quarry Springs would greatly benefit the community by providing a new residential area. Yet, the Kostermans insist upon preserving an obsolete servitude in order to halt that development. By their own testimony, they intended not to have neighbors when they bought the Homestead. If they have to have neighbors, they want to ensure that the new development conforms to their design. They want straight roads, not curvy ones that they face at an odd forty-five degree angle. They also object to a cock-eyed view of neighboring houses. They want a straight row of houses, and the houses must face south — toward them. The privilege of dictating how to arrange improvements on AKG's property was not among the benefits the Kostermans paid for when they bought the Homestead and its accompanying easements. They are playing the holdout game but not to preserve any substantial benefit.

¶ 53. We cannot countenance this grossly inefficient allocation of resources. We agree with the Koster-mans that they derive a substantial benefit from the easement that deserves protection. It affords ingress and egress to their otherwise landlocked property. We simply do not agree that this benefit lasts past the point of receiving public road access at their own lot line. For that reason, we choose to modify the easements rather than simply terminate them. They will last until AKG provides them with public road access.

¶ 54. Lastly, we note our holding and rationale are consistent with the latest Restatement of Property Law. Restatement (Third) of Prop.: Servitudes § 7.10 (2000) also adopts the doctrine of changed conditions, reasoning in comment a. as follows:

The potentially unlimited duration of servitudes creates substantial risks that, absent mechanisms for nonconsensual modification and termination, obsolete servitudes will interfere with desirable uses of land.
The changed-conditions rule has traditionally been used to terminate servitudes, rather than to modify them, but the less drastic step should be taken if modification would permit the servitude to continue to serve the purpose for which it was designed to an extent that is worthwhile....
The changed-conditions doctrine may be grounded in implied intent of the parties and public policy .... The argument from public policy is that permitting the enforcement of servitudes after they have lost their utility reduces land values and turns the law into an instrument of extortion. Unless modification or termination is permitted, the servitude beneficiary can exact an unreasonably high price for release of an encumbrance that otherwise has no value and interferes with the ability of the servient owner to use his or her property.

This comment nicely summarizes our position in this case.

¶ 55. We affirm the circuit court's grant of declaratory relief for AKG. The 1998 easement terminates upon AKG providing the Homestead with public road access, by its own force or, alternatively, based on the doctrine of changed conditions. In addition, we reverse the circuit court's judgment to the extent that it preserves the 1961 easement into perpetuity without condition. We modify that easement to extinguish when the Kostermans receive access to Highway 31 via the cul-de-sac and Louis Drive. To do otherwise would unreasonably restrict the construction of a beneficial development, at great cost and without countervailing benefit.

By the Court. — Judgment affirmed in part and reversed in part.

       This ancient thirty-foot easement is not the subject of either party's appeal.

       The 2004 version is substantively the same as the original. All subsequent references to the Wisconsin Administrative Code will be to the 2004 version, unless noted otherwise.

       Both parties agree that the DOT has suspended parts of Wis. Admin.,Code ch. TRANS 233, including Wis. Admin. Code § TRANS 233.03(2). However, neither represents that Wis. Admin. Code § TRANS 233.06 is no longer effective.

       It is not clear whether the four homes described in the concept map AKG submitted to Anderson and Clement survived in this preliminary plat, but given that they do not appear in later maps, we know that this aspect of the concept map did not ultimately survive.

       In 1995, Edward and Vincent conveyed a small portion of the Vacant Land abutting Highway 31, including the end of the easement path, to the State of Wisconsin, Department of Transportation.

       The record reveals that AKG received the DOT'S approval by October 2002 but does not pinpoint a date.

       The final version changes the name to Stoney Creek Court.

       Throughout these proceedings, the Kostermans use 1997 when they refer to the 1998 real estate transaction and deeds.

       The circuit court, like the Kostermans, refers to 1997 rather than 1998.

       It also expressed concern about a second type of merger argument that AKG advanced, namely, that the Chviliceks' ownership of both the Homestead and the Vacant Land in fee terminated the easement, because the Chviliceks had only half ownership in the latter as tenants in common with the Whites.

       With respect to the 1998 easement, we put aside for the purposes of our changed conditions analysis our holding above that the easement will terminate by its own terms upon the Homestead receiving public road access.