Metropolitan-Moreland Plaza, LLC v. Moreland WI, LLC ( 2022 )


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  •        COURT OF APPEALS
    DECISION                                           NOTICE
    DATED AND FILED                       This opinion is subject to further editing. If
    published, the official version will appear in
    the bound volume of the Official Reports.
    December 14, 2022
    A party may file with the Supreme Court a
    Sheila T. Reiff               petition to review an adverse decision by the
    Clerk of Court of Appeals          Court of Appeals. See WIS. STAT. § 808.10
    and RULE 809.62.
    Appeal No.        2020AP1359                                              Cir. Ct. No. 2017CV2086
    STATE OF WISCONSIN                                        IN COURT OF APPEALS
    DISTRICT II
    METROPOLITAN-MORELAND PLAZA, LLC C/O DAVID JORGENSEN,
    PLAINTIFF-RESPONDENT,
    V.
    MORELAND WI, LLC, STEVE BERGHS, MERRILL HALL, MICHAEL
    TRUSCHEL, JEREMY LOWELL AND GREG MURPHY,
    DEFENDANTS-APPELLANTS,
    SUMMIT COMMERCIAL FITNESS, INC.,
    GARNISHEE.
    APPEAL from a judgment of the circuit court for Waukesha County:
    MICHAEL O. BOHREN, Judge. Affirmed.
    Before Gundrum, P.J., Neubauer and Grogan, JJ.
    No. 2020AP1359
    Per curiam opinions may not be cited in any court of this state as precedent
    or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).
    ¶1      PER CURIAM. Moreland WI, LLC, and five individually named
    guarantors (collectively, “Moreland WI”) appeal a money judgment entered in
    favor of Metropolitan-Moreland Plaza, LLC (“Metropolitan”).                  Moreland WI
    argues the stipulated damages provisions in a commercial lease and guaranty are
    unenforceable, the circuit court erred by determining Metropolitan had no duty to
    mitigate damages, and genuine issues of material fact about the timing of the
    guaranty’s exercise and Metropolitan’s conduct when negotiating a potential lease
    assignment precluded summary judgment. We reject Moreland WI’s arguments
    and affirm.
    BACKGROUND
    ¶2      Metropolitan owns and operates a shopping center in Waukesha,
    Wisconsin. In 2009, Moreland WI entered into a lease for a then-vacant property
    in the shopping center (a former grocery store), intending to operate a full-service
    health club (Gold’s Gym) in the space. Per the lease, Metropolitan agreed to
    provide the “building shell,” along with a $2.3 million allowance for tenant
    improvements that would make the building usable as a fitness facility.
    Metropolitan took out a loan to finance the improvements.
    ¶3      The sixteen-year lease called for monthly rent payments of
    approximately $36,000, with payments increasing to approximately $44,000 near
    2
    No. 2020AP1359
    the end of the lease term in 2025.1 The lease permitted Metropolitan to terminate
    the lease in the event of default, at which time Metropolitan could recover from
    Moreland WI three things: (1) any unpaid rent that had accrued at the time of
    termination or re-letting of the premises; (2) any unpaid rent for the balance of the
    lease term, minus such amounts as Metropolitan could have reasonably collected
    by re-letting the premises; (3) “the unamortized amount of all sums expended by
    [Metropolitan] in connection with the preparation and/or improvement” of the
    premises, including any tenant improvement allowance.2 The parties refer to this
    as the “Lease Stipulated Damages Provision.”
    ¶4      To protect itself in the event of default, Metropolitan required
    Moreland WI’s owners to sign a personal guaranty that included a stipulated
    damages provision tied to the amount of the allowance (the “Guaranty Stipulated
    Damages Provision”). Under that provision, the parties agreed to a damages
    schedule that included repayment of the full $2.3 million tenant-improvement
    allowance for default occurring during the first six years of the lease, then
    diminishing amounts in year seven through the end of the lease term (including
    extensions) based upon an eight-percent amortization rate over twenty-five years.3
    1
    As Moreland WI notes, the rent due under the lease is composed of several amounts,
    including this base rent. The total amount due under the lease is immaterial to the issues on
    appeal.
    2
    The lease also contains a provision that permitted Metropolitan to recover “the balance
    of the costs of any buildout performed for Tenant on Exhibit C assuming such costs were
    allocated over the base term of the Lease.” Exhibit C merely states that the building was
    provided in “AS-IS” condition, and any repairs to the building’s roof and structural system would
    be made along with the work contemplated by the tenant improvement allowance. The parties
    have not addressed the applicability of this provision, and we therefore do not further address it.
    3
    Amendments to the guaranty adding or removing guarantors are not relevant to this
    appeal and will not be discussed.
    3
    No. 2020AP1359
    Under the Guaranty Stipulated Damages Provision, Metropolitan was also entitled
    to one full year of rent in effect as of the date the guaranty was exercised.
    ¶5      Following the renovations, Moreland WI successfully operated
    Gold’s Gym in the facility for several years. In early 2016, Moreland WI began
    experiencing financial difficulties.        Moreland WI fell behind on its rental
    payments in the summer of 2016 and was put on notice of its default under the
    lease. Moreland WI proposed a rent reduction to Metropolitan in July 2016, but
    Metropolitan rejected its terms.
    ¶6      Instead, Metropolitan countered with a proposal to temporarily
    reduce rental payments starting September 1, 2016, and ending August 31, 2017, if
    certain conditions were met. The amount of the rent reduction was to be treated as
    a short-term loan by executing a promissory note due and payable on
    December 31, 2017. The parties incorporated these terms into a third amendment
    to the lease agreement, executed October 31, 2016, by which the parties stated
    they intended to “resolve the default.”
    ¶7      On September 1, 2017, Moreland WI was to resume making full
    rental payments under the lease but failed to do so. It also failed to pay the
    amount due under the promissory note. Eventually, an eviction order was entered
    requiring Moreland WI to vacate the premises.4
    ¶8      Metropolitan filed the present lawsuit on November 29, 2017,
    seeking the amounts due under the lease and promissory note. In early 2018,
    4
    The eviction proceedings were held before the Hon. Kathryn W. Foster and are not at
    issue on appeal.
    4
    No. 2020AP1359
    Metropolitan sought partial summary judgment on its claim for default of the
    promissory note, which the circuit court granted. In the interim, Moreland WI
    counterclaimed, asserting Metropolitan had charged excessive management fees
    and had breached its duty of good faith and fair dealing by unreasonably
    withholding its consent to assign the lease to a third party, Town Sports
    International (“TSI”).5 Metropolitan was granted partial summary judgment on its
    claim for breach of the promissory note, and a money judgment was entered.
    ¶9     After further discovery, including experts retained by both parties,
    Metropolitan sought summary judgment on its claim for breach of the lease and
    guaranty. The circuit court rejected Moreland WI’s argument that the guaranty
    had been exercised in August 2016 when the parties were negotiating to cure
    Moreland WI’s default. The court also rejected Moreland WI’s argument that the
    stipulated damages provisions were unenforceable penalty clauses, remarking that
    the provisions were a reasonable allocation of the parties’ respective risks, and the
    damages called for were not disproportionate to the actual harm Metropolitan
    expected to, or did, suffer.
    ¶10    The circuit court then considered Moreland WI’s argument that
    Metropolitan had failed to mitigate its damages by refusing to lease the premises
    to TSI. The court acknowledged evidence that in December 2017 Metropolitan
    engaged in negotiations with TSI and prepared a fourth lease amendment
    reflecting the proposed assignment.        Metropolitan rescinded that proposal in
    January 2018.     Moreland WI argued that the withdrawal of the assignment
    5
    Although we use the collective designation “Moreland WI,” the counterclaims were
    only advanced on behalf of the LLC and not the individual guarantors.
    5
    No. 2020AP1359
    effectively foreclosed Moreland WI from finding a new tenant to assume the lease,
    thereby constituting a failure to mitigate damages on Metropolitan’s part and a
    breach of Metropolitan’s duty of good faith and fair dealing.
    ¶11     The circuit court regarded Moreland WI’s counterclaims as not yet
    being before it for resolution, but it rejected Moreland WI’s arguments regarding a
    failure to mitigate damages. The court noted the TSI assignment was contingent
    upon TSI also being able to negotiate a lease assignment for another gym facility
    in Milwaukee. TSI did not enter into a lease for that facility, and a representative
    of the landlord for that facility told Metropolitan prior to the January 2018
    withdrawal that the parties were too far apart, and he did not believe a deal with
    TSI was close.6 TSI never responded to Metropolitan’s assignment proposal nor
    asked to negotiate any terms. Under these circumstances, the court concluded
    there was no fact issue for trial regarding Moreland WI’s assertion that
    Metropolitan failed to mitigate its damages.
    ¶12     Moreland WI filed a motion for reconsideration, asserting that there
    were reasonable inferences from the facts that precluded summary judgment. As
    relevant here, in addressing Moreland WI’s renewed arguments regarding
    mitigation, the circuit court pointed out that in Wassenaar v. Panos, 
    111 Wis. 2d 518
    , 521, 
    331 N.W.2d 357
     (1983), the supreme court held that “where the
    stipulated damages clause is a valid provision for liquidated damages, the doctrine
    6
    Sheldon Oppermann, the landlord’s representative, stated during a deposition that a
    phone call with a TSI representative in February 2018 left him “not … very positive about” a
    deal, with TSI’s proposal being something of a “take it or leave it” proposition. He further stated
    that after the brief phone call there was no further contact from TSI. According to one of
    Moreland WI’s affiants, TSI did not become aware of Metropolitan’s withdrawal of the proposed
    assignment until after the February 2018 conversation.
    6
    No. 2020AP1359
    of mitigation of damages is not applicable to determine the damages awarded the
    nonbreaching party.” In response, Moreland WI noted Wassenaar concerned an
    employment contract, and it argued the statutory provision imposing a landlord’s
    duty to mitigate, WIS. STAT. § 704.29(2)(b) (2019-20),7 took precedence.
    Nonetheless, the court accepted Wassenaar as controlling and denied Moreland
    WI’s reconsideration motion, concluding Moreland WI had failed to demonstrate
    either newly discovered evidence or a manifest error of fact or law.
    ¶13      Moreland WI’s counterclaims were the subject of further briefing
    and evidentiary submissions.            At a subsequent hearing, Moreland WI again
    asserted that there were genuine issues of material fact that precluded summary
    judgment regarding Metropolitan’s alleged breach of the duty of good faith and
    fair dealing. The court concluded the evidence gave rise to no conclusion other
    than that TSI was not seriously pursuing a lease assignment for Metropolitan’s
    property. The court further concluded there was no evidence that Metropolitan
    breached its duty of good faith and fair dealing by interfering with any potential
    assignment or withdrawing the assignment proposal after hearing nothing from
    TSI. Indeed, the court noted that Metropolitan’s obligations under the lease were
    merely to refrain from unreasonably withholding consent for an assignment. The
    court concluded there was no evidence, nor reasonable inferences from the
    evidence, that would allow a fact finder to conclude that Metropolitan acted in bad
    faith. The court granted Metropolitan summary judgment on the counterclaims
    and entered a judgment in its favor. Moreland WI now appeals.
    7
    All references to the Wisconsin Statutes are to the 2019-20 version unless otherwise
    noted.
    7
    No. 2020AP1359
    DISCUSSION
    ¶14    We independently review a grant of summary judgment using a well
    established methodology. Tews v. NHI, LLC, 
    2010 WI 137
    , ¶¶40-41, 
    330 Wis. 2d 389
    , 
    793 N.W.2d 860
    .       Summary judgment is appropriate where there is no
    genuine dispute of material fact, and the moving party is entitled to judgment as a
    matter of law. WIS. STAT. § 802.08(2). Even if the facts are undisputed, summary
    judgment is not appropriate if reasonable, but differing, inferences can be drawn
    from the undisputed facts. Tews, 
    330 Wis. 2d 389
    , ¶42.
    ¶15    Moreland WI challenges the grant of summary judgment on four
    bases. First, it argues the stipulated damages provisions in the lease and guaranty
    were invalid and unenforceable under Wassenaar. Second, it argues the circuit
    court erred by concluding that the guaranty had not been exercised in 2016 and, as
    a result, by failing to offset the stipulated damages by the amount of rent paid after
    September 2016.
    ¶16    Moreland WI’s third and fourth arguments are interrelated, and we
    address them together. Moreland WI argues that the circuit court erred as a matter
    of law when it determined that Wassenaar controlled on the issue of duty to
    mitigate damages arising from the stipulated damages provisions. Moreland WI
    also argues there was a genuine issue of material fact regarding whether
    Metropolitan breached its duty of good faith and fair dealing relating to the
    assignment of the lease. For the reasons that follow, we reject these arguments.
    I. Validity of the Stipulated Damages Provision
    ¶17    The validity of a stipulated damages provision is determined by
    analyzing “whether the clause is reasonable under the totality of the
    8
    No. 2020AP1359
    circumstances.”8 Wassenaar, 
    111 Wis. 2d at 526
    . Reasonableness is generally
    assessed using three factors: (1) whether the parties intended to provide for
    damages or for a penalty; (2) whether the injury caused by the breach was difficult
    or incapable of accurate estimation at the time of the contract; and (3) whether the
    stipulated damages were a reasonable forecast of the harm caused by the breach.
    
    Id. at 529-30
    .        The party seeking to set aside the bargained-for contractual
    provision—here, Moreland WI—bears the burden of presenting facts showing the
    clause should not be enforced. 
    Id.
    ¶18      Moreland WI emphasizes that the Wassenaar test essentially
    evaluates both the harm anticipated at the time of contract formation and the actual
    harm at the time of breach. See Westhaven Assocs. v. C.C. of Madison, Inc.,
    
    2002 WI App 230
    , ¶17, 
    257 Wis. 2d 789
    , 
    652 N.W.2d 819
    . That being so,
    Moreland WI argues that Metropolitan has fully recovered its tenant improvement
    allowance, as the building is worth more today than it was prior to the renovations.
    Moreland WI also argues that its expert appraiser’s report (the “Vitale report”)
    establishes that the rental value has increased. In essence, Moreland WI argues
    the stipulated damages provisions are retrospectively unreasonable because
    Metropolitan has suffered no harm.
    ¶19      We agree with the circuit court that no reasonable fact finder could
    conclude the stipulated damages provisions were unreasonable in light of the
    8
    Typically, the validity of a stipulated damages provision is reviewed as a mixed
    question of fact and law, with the circuit court’s legal conclusion given some (but not controlling)
    weight by the appellate court given that reasonableness is a highly fact-dependent inquiry.
    Wassenaar v. Panos, 
    111 Wis. 2d 518
    , 525, 
    331 N.W.2d 357
     (1983). On summary judgment,
    however, we are merely ascertaining whether there are facts, or reasonable inferences from those
    facts, that create a dispute for trial. Because there is no fact finding to review, the issue presented
    here is purely one of law, and we do not defer in any manner to the circuit court’s determination.
    9
    No. 2020AP1359
    evidence Moreland WI has submitted.9 The Vitale report’s assessment of market
    rent ignores the key fact that the building is vacant with no appreciable
    prospective tenants.        Yet Vitale was instructed to make the “extraordinary
    assumption” that “the Highest and Best Use of the Gold’s Gym space is for
    continued fitness center use.” And to the extent that Moreland WI argues the
    building itself has appreciated in value, Moreland WI has failed to cite any
    evidence in the record that the post-termination value of the real property was
    front of mind for any of the parties at the time the lease was signed. 10 Contrary to
    Moreland WI’s assertion, Metropolitan is not better off than it would have been
    absent the breach—Metropolitan has lost the ability to generate revenue or recoup
    any of its expenditures for the remainder of the lease term.
    ¶20     Moreland WI nonetheless argues that Wassenaar requires a
    comparison of a property’s prelease and postbreach value “[r]egardless of whether
    the parties considered the potential increase in value to the Property resulting from
    the Tenant Improvements when they entered into the Lease.” This is a dubious
    proposition, as a matter of law; Wassenaar arose in the employment context and
    did not involve issues related to the valuation of real property. While Wassenaar
    certainly endorses a retrospective analysis, it is less than clear that Wassenaar
    9
    Moreland WI argues the circuit court’s comment that “the Vitale appraisal, that shows
    the property really isn’t worth as much as you’d hope it would be worth,” constitutes a clearly
    erroneous factual finding. A court does not make factual findings on summary judgment; it
    merely decides whether there is a genuine issue of material fact for trial. The court’s comment in
    this regard came as it was evaluating the situation that led to the breach and its aftermath,
    including the undisputed fact that Metropolitan was left without a tenant for a considerable period
    of time.
    10
    In any event, as the circuit court recognized, at the time the contract was formed the
    parties were obviously aware that at the end of the lease term Metropolitan would be in
    possession of a building that had been significantly renovated.
    10
    No. 2020AP1359
    dictates that an increase in property value alone renders stipulated damages
    provisions unenforceable under the circumstances here.
    ¶21    That aside, the touchstone concerning the validity of a stipulated
    damages provision is reasonableness. Even if the property is arguably “worth
    more” in the abstract, there was no tenant interested in leasing it. To the extent
    Moreland WI posits that the tenant improvement allowance included some general
    repairs to the building structure that any tenant would benefit from, it has not
    undertaken the difficult task of differentiating these “general” improvements from
    the more specific ones (e.g., “yoga studio, cardio cinema, tanning rooms, child
    care area, … large open gym areas[,] … indoor lap pool and large hot tub”) that
    the Gold’s Gym required.
    ¶22    Indeed, as a general matter Moreland WI glosses over the
    considerable specific improvements Metropolitan made to accommodate
    Moreland WI’s use that may be unsuitable for other prospective tenants. This
    appears to be precisely the uncertainty these parties sought to mitigate when they
    agreed to the stipulated damages provisions. Metropolitan expended a significant
    sum of money to create a turnkey property designed to Moreland WI’s
    specifications. Both the size of the facility and the nature of the improvements
    made it unclear whether another tenant could be found in the event that
    Moreland WI vacated the premises prior to the end of the sixteen-year term.
    ¶23    Moreland WI also summarily argues that enhancements it made to
    the property in 2014 at a cost of over $400,000 demonstrate the unreasonableness
    of the stipulated damages provision. The portion of the Vitale report Moreland WI
    cites to as proof of this expenditure does not indicate that these improvements
    were contemplated under the lease or its amendments. Rather, it appears the space
    11
    No. 2020AP1359
    was originally designed for membership sales and storage, but Moreland WI
    desired to convert it into additional useable fitness space. The mere fact that
    Moreland WI invested additional money in the space—undoubtedly in an effort to
    bolster its business—does not establish the unreasonableness of the stipulated
    damages provisions, either at the time of contracting or postbreach.
    ¶24     Finally, Moreland WI posits that it has demonstrated the
    unreasonableness of the stipulated damages provisions under an alternative
    hypothetical scenario. Moreland WI notes that had it breached the lease on the
    final day, the stipulated damages provisions would still require an approximately
    $1.3 million payment. “We do not consider hypothetical scenarios.” Schumacker
    v. Schumacker, 
    2012 WI App 132
    , ¶9, 
    345 Wis. 2d 60
    , 
    823 N.W.2d 839
    .
    Contrary to Moreland WI’s suggestion, Metropolitan is not attempting to collect
    “millions of dollars in damages in the dying days of a lease.” Moreland WI
    breached the lease with years remaining, and insofar as these facts are concerned,
    the parties reasonably allocated the risk that Metropolitan would expend
    significant sums to build the space to Moreland WI’s specifications without
    having a tenant to occupy it. We perceive no reason in this case to disrupt the
    parties’ allocation of risk.
    II. Exercise of the Guaranty in 2016
    ¶25     Moreland WI next argues the circuit court erroneously determined
    the guaranty had not been exercised in August 2016, a fact of significance given
    that Moreland WI claims it is entitled to offset the amount of the stipulated
    damages by the amount of rent paid after that time. Moreland WI contends that
    whether the guaranty was exercised was a disputed issue of fact for trial,
    particularly in light of the fact that Metropolitan allegedly asserted pre- and post-
    12
    No. 2020AP1359
    signing of the third lease amendment that “these documents did not terminate or
    affect the prior demand on the Guarantors as made in [Metropolitan
    attorney] Don Murn[’s] August 26, 2016 letter.”
    ¶26     We agree with Metropolitan that no reasonable fact finder could
    conclude that the guaranty had been exercised in 2016. The August 26, 2016 letter
    was sent at a time when Moreland WI was in default of the lease and had
    requested a rent reduction as a result of financial hardship. In the letter, Murn
    proposed a solution that would treat the rent shortfall as a short-term loan payable
    on December 31, 2017. The letter provided a date by which Moreland WI had to
    agree to the terms set forth in the letter, then continued:
    If Tenant does not agree to the above, Landlord will pursue
    all rights and remedies allowed per the Lease which include
    the following:
    Pursuant to the terms of a Guaranty of Lease dated the
    3rd day of February, 2009, … please be advised that the
    Landlord hereby exercises its right to proceed directly
    against the Guarantors with regard to the Lease ….
    ¶27     As Metropolitan argues, the plain text of the letter constitutes a
    threat to pursue the remedies available under the lease and guaranty if the parties
    could not reach an agreement to resolve the default. The parties subsequently
    cured the default, including by agreeing to a reduced rental rate and executing the
    note mentioned in Murn’s letter.11 It is undisputed that no guarantor payments
    were requested or received in connection with these negotiations. We agree with
    11
    To the extent Moreland WI argues the guaranty was exercised by the mere passage of
    time following Murn’s letter, the record demonstrates to the contrary. The third lease amendment
    specifically states it was agreed to as a resolution of the default.
    13
    No. 2020AP1359
    the circuit court that the undisputed evidence shows the guaranty was not
    exercised as a result of Murn’s August 2016 letter.
    III. Mitigation/Duty of Good Faith and Fair Dealing
    ¶28    Moreland WI next asserts that the circuit court erroneously
    concluded that Metropolitan had no duty to mitigate damages due under the
    stipulated damages provision.       Moreland WI argues Wassenaar’s holding
    regarding the duty to mitigate in the stipulated damages context has no
    applicability in a commercial lease context given WIS. STAT. § 704.29(2)(b),
    which Moreland WI argues imposes on landlords the obligation to make
    reasonable efforts to re-rent the premises.
    ¶29    We need not determine how Wassenaar and WIS. STAT.
    § 704.29(2)(b) interact with one another given that Moreland WI’s arguments fail
    even if it is correct that Metropolitan had a duty to mitigate damages despite the
    stipulated damages provisions.      Moreland WI’s assertions that Metropolitan
    breached both its duty to mitigate and its duty of good faith and fair dealing are
    predicated upon the notion that Metropolitan was responsible for the failure of the
    proposed lease assignment to TSI. We agree with Metropolitan that on this record
    no reasonable fact finder could reach that conclusion.
    ¶30    “Every contract implies good faith and fair dealing between the
    parties to it, and a duty of cooperation on the part of both parties.” Beidel v.
    Sideline Software, Inc., 
    2013 WI 56
    , ¶27, 
    348 Wis. 2d 360
    , 
    842 N.W.2d 240
    (quoting Chayka v. Santini, 
    47 Wis. 2d 102
    , 107 n.7, 
    176 N.W.2d 561
     (1970)).
    Among those types of bad faith recognized are “evasion of the spirit of the
    bargain, lack of diligence and slacking off, willful rendering of imperfect
    performance, abuse of a power to specify terms, and interference with or failure to
    14
    No. 2020AP1359
    cooperate in the other party’s performance.” Foseid v. State Bank of Cross
    Plains, 
    197 Wis. 2d 772
    , 796-97, 
    541 N.W.2d 203
     (Ct. App. 1995).
    ¶31    Moreland WI argues that the facts of record allow a reasonable fact
    finder to conclude
    that Moreland WI … brought a potential assignee for the
    Property to [Metropolitan], that the parties began
    negotiating the assignment and were reasonably close to
    agreement on a deal, but that even though the TSI
    assignment would extend the Lease term by a period of two
    years, [Metropolitan] realized it might forfeit the “almost
    $3 million” in guarantees if the assignment was
    consummated, so it withdrew from the deal.
    While Moreland WI is correct that the success of its counterclaim is not contingent
    upon it showing that Metropolitan unreasonably withheld its consent to an
    assignment, Moreland WI’s analysis fails to account for the totality of the record
    evidence which adds additional context to these facts it relies on and demonstrates
    that summary judgment was proper.
    ¶32    Notably lacking in this record is any indication that TSI was ready
    and willing to accept an assignment of the lease at any point in time. TSI took no
    action on the Metropolitan assignment proposal for approximately one month
    before Metropolitan withdrew it. Even thereafter, Metropolitan’s agent testified
    Metropolitan was “open to future conversations with TSI.” There is no evidence
    TSI contacted Metropolitan to continue negotiations.
    ¶33    Moreland     WI    nonetheless     argues    that   Metropolitan      bore
    responsibility for the failed assignment because its actions caused the negotiations
    relating to the Milwaukee facility to collapse.        While there is evidence that
    Metropolitan knew TSI’s interest in these facilities was a “package deal,” there is
    no evidence tending to support an inference that the mere withdrawal of the
    15
    No. 2020AP1359
    assignment proposal (which TSI only learned of much later) caused TSI to
    terminate its pursuit of the facilities. Rather, the evidence shows that there was
    little chance that a lease for the Milwaukee facility would be consummated. It
    appeared to the Milwaukee landlord’s agent that TSI was not open to negotiating,
    and although he did not consider a deal dead, there was no movement by TSI on
    reaching an agreement.
    ¶34    At most, the facts presented by Moreland WI do nothing more than
    suggest that negotiations could have continued. That is insufficient to demonstrate
    a failure to mitigate or a breach of Metropolitan’s duty of good faith and fair
    dealing under these facts.
    By the Court.—Judgment affirmed.
    This    opinion   will   not    be   published.   See   WIS. STAT.
    RULE 809.23(1)(b)5.
    16
    

Document Info

Docket Number: 2020AP001359

Filed Date: 12/14/2022

Precedential Status: Non-Precedential

Modified Date: 9/9/2024