Yim C. Hear v. Superior Restaurant Company, LLC ( 2020 )

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.
November 3, 2020
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. 2018AP2230 Cir. Ct. No. 2017SC695
STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT III
YIM C. HEAR,
PLAINTIFF-RESPONDENT,
V.
SUPERIOR RESTAURANT COMPANY, LLC,
DEFENDANT-APPELLANT.
APPEAL from judgments of the circuit court for Douglas County:
KELLY J. THIMM, Judge. Affirmed.
Before Stark, P.J., Hruz and Seidl, JJ.
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. Superior Restaurant Company, LLC, appeals
judgments, entered following a jury’s verdict in a case involving a failed
No. 2018AP2230
restaurant venture. The jury awarded Yim Hear a net amount of $82,934.89 on his
eviction claim after offsetting $97,500 for Superior’s successful prosecution of a
breach of fiduciary duty claim against Hear. Superior challenges many of the
circuit court’s determinations, including its refusal to change the jury’s answers on
the special verdict form to questions regarding Superior’s breach of its lease
agreement with Hear, and Hear’s breach of a preliminary agreement made at the
inception of the restaurant venture. Superior also alleges the court made numerous
evidentiary errors and erred by refusing to award damages based on the jury’s
finding that Hear breached an implied covenant of good faith and fair dealing. We
reject all of Superior’s arguments and affirm.
BACKGROUND
¶2 This case arose out of a failed restaurant venture. Hear owned real
property that formerly housed one of his restaurants. In February 2016, Hear,
Mark Casper, and Kyle Torvinen entered into a “Preliminary Agreement” under
which they sought to open a new restaurant, Epic Restaurant and Lounge, in the
same space.1 The Preliminary Agreement contained provisions regarding the
financial and management arrangements necessary to open Epic. In particular, it
stated “[t]hat [Casper, Torvinen and Hear] will pay for the necessary expenditures
to remodel, decorate, staff, and otherwise prepare the restaurant for opening, ‘up
front’ or as incurred.”
¶3 Hear, Casper, and Torvinen formed Superior as a limited liability
company to operate the restaurant. Superior entered into a “triple net” lease with
1
The partners contemplated that a more formal operating agreement would eventually be
signed, but none ever was.
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Hear to rent the real property on which Epic’s operations would be housed. Under
the lease, Superior was required to pay all property taxes, insurance and utility
bills, in addition to rent at an initial rate of $3,000 per month. As a result, Hear
was both a member of Superior and Superior’s landlord.
¶4 Over time, each of Superior’s members contributed $210,000 to the
restaurant’s renovation. Following the members’ initial investments, when
additional money was necessary, Casper would make a “capital call”—that is, a
request for the members to add more money for the project. On June 29, 2016,
Casper made a capital call for $10,000 each, which Hear paid. Hear testified at
trial that approximately one month later, he notified Casper and Torvinen he
would make no further contributions. In total, Casper and Torvinen contributed an
additional $244,500 each after Hear stopped contributing.
¶5 Hear ultimately hired attorney Roy Christiansen, who on February 7,
2017, informed Casper and Torvinen by e-mail that Hear “will remain the
restaurant’s landlord, but he will not be a business partner in the restaurant any
longer.” Additional correspondence occurred concerning Hear’s alleged
withdrawal. Hear commenced this eviction action in July 2017, alleging Superior
had repeatedly failed to pay rent when due. Superior counterclaimed against Hear,
alleging a variety of claims that included breach of contract, breach of fiduciary
duty, fraud and equitable offset.
¶6 Following pretrial motions, the eviction claim and the remaining
counterclaims were tried to a jury, with the circuit court sitting as co-factfinder on
Superior’s equitable claims. The jury found that Hear had withdrawn from
Superior as of February 7, 2017, which was the later of two dates Hear had
proposed; Superior had argued at trial that Hear had never withdrawn. With
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respect to Hear’s eviction claim, the jury found that Superior had breached the
lease and owed Hear damages totaling approximately $124,600 for unpaid rent,
real property taxes, and utilities.2 The jury rejected Superior’s counterclaims for
fraud in the inducement, unjust enrichment, abuse of process, and breach of the
Preliminary Agreement. It concluded, however, that Hear had breached the
implied covenant of good faith and fair dealing under the Preliminary Agreement,
with damages to be determined by the court. The jury also determined Hear
breached his fiduciary duty to Superior, damaging Superior in the amount of
$97,500. The court then entered a judgment of eviction.
¶7 Superior filed a motion for a new trial, alleging the circuit court had
made two evidentiary errors: (1) admitting a demand letter Torvinen had sent to
an alleged tortfeasor’s insurer while representing Hear in a personal injury lawsuit
prior to the restaurant venture; and (2) refusing to publish to the jury additional
correspondence between Christiansen and Torvinen following Christiansen’s
February 7, 2017 e-mail.
¶8 In a separate filing, Superior sought to change the jury’s answer to
the question regarding Superior’s breach of the lease. Superior asserted that, as a
matter of law, it was entitled to “offset” or “recoup” the capital contributions that
Hear had failed to make against the rent Superior owed to Hear, at the time those
obligations arose. As a result, Superior argued that because Hear was at all
relevant times indebted to it for a greater amount than Superior owed for rent,
Superior had not breached the lease, and the circuit court was required to vacate
2
The jury additionally found that the property could have been rented for $6,000 per
month, which formed the basis for Hear’s request for additional damages based on Superior’s
status as a holdover tenant.
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the judgment of eviction. Superior also asserted that the evidence was insufficient
to support the jury’s determination that Hear had withdrawn from the restaurant
venture as of February 7, 2017. Superior further argued that the undisputed
evidence showed Hear had breached the Preliminary Agreement, and it urged the
court to also change the jury’s answer on that issue.3
¶9 Meanwhile, the parties briefed the issue of damages for Hear’s
breach of the implied covenant of good faith and fair dealing. Following a
hearing, the circuit court declined to award any damages on that claim. The court
determined the appropriate measure of damages for such a breach would be the
capital contributions Hear was expected, but failed, to make until the date of his
withdrawal—$97,500. The court noted that was precisely the amount the jury had
awarded on Superior’s breach of fiduciary duty claim, and it determined that
Superior had failed to demonstrate any separate damages arising from the breach
of the implied covenant of good faith and fair dealing.
¶10 The circuit court addressed the various postverdict motions at a
separate hearing. The court reaffirmed its earlier determinations regarding the
admissibility of evidence and further concluded that none of the alleged
evidentiary errors affected Superior’s substantial rights. The court also declined to
change any of the jury’s answers to the questions on the special verdict form. In
particular, it noted the jury’s verdict was unclear on what acts or omissions the
jury regarded as a material breach of the lease, as well as what acts or omissions
constituted a breach of Hear’s fiduciary duties to Superior. Based upon
uncertainty generated by the special verdict form, the court concluded it would be
3
Superior made additional arguments not relevant to this appeal.
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No. 2018AP2230
improper to apply the doctrines of offset or recoupment to conclude that no breach
of the lease had occurred.
¶11 After the trial, the circuit court did offset the amounts stated in the
jury’s verdict for each party, resulting in a net $27,096.91 damages award in
Hear’s favor. The court concluded Hear was entitled to an additional $48,000 in
damages as a result of Superior’s holdover tenancy, and, after adding statutory
costs, it entered a judgment of $82,943.89 in Hear’s favor. Superior now appeals,
raising generally the same issues advanced in its postverdict motions.
DISCUSSION
I. Superior’s Motion to Change the Jury’s Answers
¶12 Superior argues the circuit court was legally required to change the
jury’s answer to Question 1, which asked whether Superior materially breached
the lease. “A motion to change a jury’s special verdict answer challenges the
sufficiency of the evidence to sustain the answer.” Danner v. Auto-Owners Ins.,
2001 WI 90, ¶72, 245 Wis. 2d 49, 629 N.W.2d 159 (citing WIS. STAT.
§ 805.14(5)(c) (1997-98)).4 A motion challenging the sufficiency of the evidence
to support an answer in a verdict will not be granted “unless the court is satisfied
that, considering all credible evidence and reasonable inferences therefrom in the
light most favorable to the party against whom the motion is made, there is no
credible evidence to sustain a finding in favor of such party.” WIS. STAT.
§ 805.14(1). The application of this standard presents a question of law, but we
4
All references to the Wisconsin Statutes are to the 2017-18 version unless otherwise
noted.
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give substantial deference to the circuit court’s better ability to assess the weight
and relevancy of the evidence. Weiss v. United Fire & Cas. Co., 197 Wis. 2d 365,
388-89, 541 N.W.2d 753 (1995).
¶13 Superior argues there was no credible evidence to support the jury’s
answer regarding Superior’s breach of the lease because the evidence showed
Hear was behind on his capital contributions prior to and throughout the pendency
of this action. As a result, Superior contends the circuit court was required to
exercise its equitable authority and apply the doctrines of offset or recoupment to
conclude, as a matter of law, that Superior did not breach the lease. In other
words, Superior asserts it had the right to apply these doctrines on its own in “real
time,” as money was owed, such that each time rent was due, Superior could retain
that amount and apply it to reduce the amount of Hear’s outstanding debt to the
company. As Superior’s attorney put it during the hearing on its postverdict
motions, the concept is that Superior was “not going to pay [Hear] rent because
[Hear] owe[d] the company a bunch of money.”
¶14 Although the focus of a motion to change the jury’s answer is the
sufficiency of the evidence, here Superior attempts to obtain a de novo standard of
review by essentially urging this court to conclude that the circuit court was
legally required to apply equitable doctrines to grant judgment in Superior’s favor.
We typically review legal issues de novo, but a circuit court’s decision to grant
equitable relief is discretionary and will not be overturned absent an erroneous
exercise of discretion. Pietrowski v. Dufrane, 2001 WI App 175, ¶5, 247 Wis. 2d
232, 634 N.W.2d 109.
¶15 Regardless, even if we view the question as one of law, Superior
offers little in the way of authority to support the proposition that the equitable
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doctrines it invokes—which typically are applied in the context of judicial
proceedings, once the offsetting amounts owed have been established—may be
applied by a party outside of the judicial realm to avoid breaching a contract. “A
set-off is a demand which the defendant has against the plaintiff, arising out of a
transaction extrinsic to the plaintiff’s cause of action. Since it is purely statutory
in origin, all the statutory requirements must be complied with.” Zweck v. D. P.
Way Corp., 70 Wis. 2d 426, 433, 234 N.W.2d 921 (1975).5 Recoupment, on the
other hand, “is a reduction or rebate by the defendant of part of the plaintiff’s
claim because of a right in the defendant arising out of the same transaction.”
Id. at 433-34. Regardless of whether recoupment could even apply in the context
of two separate contractual obligations, neither that doctrine nor offset apply in the
manner Superior claims here—i.e., to forestall an opposing party’s breach-of-
contract claim.
¶16 None of the cases Superior cites establish its entitlement to a jury
finding in its favor on Hear’s breach-of-lease claim. Farmer v. Pick
Manufacturing Co., 227 Wis. 99, 277 N.W. 668 (1938), involved a postjudgment
offset against a damages award in the plaintiff’s favor in an amount equal to the
value of certain of the defendant’s business property that had been retained by the
plaintiff on a separate contract. Id. at 100-01, 103. In Lincoln Crest Realty, Inc.
5
There is no substantive difference between set-off and offset, and the terms are used
interchangeably. Offset, BLACK’S LAW DICTIONARY (11th ed. 2019). In advancing an offset
argument, Superior appears to refer to a common law right as opposed to a statutory right. Even
the common law right, however, “operates much like a counterclaim.” State v. Muth, 2020 WI
65, ¶7 n.3, 392 Wis. 2d 578, 945 N.W.2d 645. A set-off “does not in itself affect the value of the
damages being withheld from the injured party but merely results in the mathematical crediting of
one independent claim against a competing independent claim after each has been fully
established to the satisfaction of the court.” Klug & Smith Co. v. Sommer, 83 Wis. 2d 378,
385-86, 265 N.W.2d 269 (1978) (quoting Wyandotte Chem. Corp. v. Royal Elec. Mfg. Co., 66
Wis. 2d 577, 583-84, 225 N.W.2d 648 (1975)).
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v. Standard Apartment Development, 61 Wis. 2d 4, 211 N.W.2d 501 (1973), the
issue was not whether a breach of contract could be forestalled by a right of offset
arising outside of the judicial context but, rather, whether a depository account of
a tenant belonged to a bank or to the property owner upon termination of a lease.
Id. at 10. Finally, in National Warehouse Corp. v. Banking Commission, 236
Wis. 105, 294 N.W. 538 (1940), the court concluded that the Banking
Commission, which had taken control of an insolvent bank as a receiver under
judicial supervision, could equitably offset a depository account to reduce the
amount owed by the depositor to the bank. Id. at 106, 108-09. Contrary to
Superior’s arguments, none of the cases permit the “unilateral action of one party
against the outstanding debts of another” under circumstances similar to this case.
¶17 Other cases Superior cites similarly fail to demonstrate any such
“unilateral” right to apply offset. In particular, and consistent with the foregoing,
the bankruptcy cases it cites discuss the doctrine of recoupment in terms of an
affirmative defense that reduces the amount of the plaintiff’s claim. See In re
Cranberry Growers Coop., 588 B.R. 50, 55-56 (Bankr. W.D. Wis. 2018), aff’d
sub nom. Maxwell Foods v. Cranberry Growers Coop., No. 2018-CV-538-BBC,
2019 WL 549257 (W.D. Wis. Feb. 12, 2019); In re Thompson, 350 B.R. 842, 852
(Bankr. E.D. Wis. 2006). These cases lend no support to the notion of an
extrajudicial “right” not to make a payment when due based upon the offset of an
amount claimed due under a separate contract.
¶18 Superior argues the circuit court had no choice but to “accept[] the
applicability of the doctrine” and “do the math” to “erase[]” its breach of the lease
as found by the jury. This assertion distorts the circuit court’s role in the
proceedings. Equitable determinations such as recoupment are not necessarily
capable of the mechanical application Superior suggests. Again, “[t]he basis of all
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equitable rules is the principle of discretionary application.” Richards v. Land
Star Grp., Inc., 224 Wis. 2d 829, 847, 593 N.W.2d 103 (Ct. App. 1999). Given
that the authority Superior cites does not support its request to change the jury’s
answer regarding breach of the lease, and that Superior offers no other basis to
challenge the court’s exercise of discretion in denying its request, we conclude
Superior has failed to demonstrate the court erred.
¶19 Superior also argues the circuit court should have changed the jury’s
answer regarding whether Hear breached his obligations under the Preliminary
Agreement. Again, this presents a question of the sufficiency of the evidence to
support the jury’s answer. See WIS. STAT. § 805.14(5)(c). Superior, however,
argues that because the special verdict asked only whether Hear “breach[ed] the
Preliminary Agreement” and did not ask for any specific factual findings, we may
determine de novo whether a breach occurred.
¶20 We decline to apply a de novo standard of review to the jury’s
finding. Superior does not challenge the special verdict form as being inadequate,
nor does it in any way challenge the jury instructions regarding the breach of
contract claim. Rather, it seeks to relitigate the issue of Hear’s alleged breach of
the Preliminary Agreement by emphasizing the evidence that would have
supported a contrary finding.
¶21 Superior misapprehends the proper role of an appellate court
following a trial. “Our task is not to search the record for evidence contrary to the
jury’s verdict; rather, we must search the record for credible evidence in support of
the verdict, accepting any reasonable inferences favorable to the verdict that the
jury could have drawn from that evidence.” Staehler v. Beuthin, 206 Wis. 2d
610, 617, 557 N.W.2d 487 (Ct. App. 1996). We must affirm the verdict if there is
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any credible evidence to support it—and this is even truer when the verdict has the
circuit court’s approval. Id.¶22 As Hear points out, the Preliminary Agreement did not call for a
specific amount of capital contributions, nor did it prohibit the members from
withdrawing. Indeed, the Preliminary Agreement referred vaguely to the
“necessary expenditures to remodel, decorate, staff, and otherwise prepare the
restaurant for opening.” The amount of financing was indefinite and was
designated to “be a source of ongoing communication and consultation between
the parties.” It is undisputed that Hear contributed $210,000 to the venture and
participated in preparing the restaurant for opening.6 Under these circumstances,
we cannot conclude there was insufficient evidence for the jury to find that Hear
satisfied his obligations under the Preliminary Agreement.
¶23 Superior also argues the circuit court erred by refusing to change the
jury’s answer regarding the February 7, 2017 date for Hear’s withdrawal.
Superior argues there was no evidence that any of the parties gave any legal effect
to the February 7 e-mail. Regardless of how the parties understood that e-mail or
responded to it, the contents of the e-mail itself provided a sufficient basis to
support the jury’s determination regarding the withdrawal date. Again, if there is
any credible evidence to support the jury’s determination, we must affirm.
Staehler, 206 Wis. 2d at 617.
II. Adequacy of Statutory Notice for Eviction
6
Indeed, in asserting that the jury’s answer on the special verdict regarding Hear’s
withdrawal date should be changed, Superior maintains that even after February 7, 2017, Hear
“continued to behave as a partner, enjoyed free access to input, meetings, menu development, the
restaurant, the books, Articles, and was in every respect involved in decision making thereafter.”
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¶24 Superior argues the statutory notice identifying the tenant’s
deficiencies was defective because it did not identify a failure to pay certain
utilities as a potential basis for eviction. Without such notice, Superior argues it
was error for Hear to rely on the failure to pay utilities at trial, because such a
failure could not serve as grounds for eviction, nor would Hear be entitled to
corresponding damages.
¶25 We perceive no basis to overturn the jury’s determination on Hear’s
eviction claim based on this alleged insufficiency of the notice. The notice was in
the form of a letter from Hear’s attorney alerting Superior to the fact that rent in
the amount of $33,000 was overdue and there were “other defaults under the lease
agreement,” including the failure to pay property taxes and the removal of
equipment and furnishings. Superior has failed to demonstrate that the type of
specificity it advocates is required by the relevant statute to constitute a valid
notice of default. See WIS. STAT. § 704.17(3)(a) (requiring that the landlord give
notice that the tenant must “pay the rent, repair the waste, or otherwise comply
with the lease”).7
III. The Circuit Court’s Evidentiary Determinations
¶26 The contours of Superior’s next argument are somewhat unclear.
Ostensibly, Superior challenges the circuit court’s decision to admit the contents
of a demand letter Torvinen wrote in 2014 to an insurer during his representation
of Hear on a personal injury matter. Superior’s brief-in-chief argues the court
7
Superior impermissibly cites an unpublished single-judge opinion issued prior to
July 1, 2009, in violation of WIS. STAT. RULE 809.23(3). We admonish Superior’s counsel that
future violations may be punishable under WIS. STAT. RULE 809.83(2).
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No. 2018AP2230
“should have granted a new trial … with clear instructions to both parties that the
letter not be used at all.” In its reply brief, however, Superior focuses mostly on
whether the court erred by allowing a portion of the letter to be sent to the jury
during deliberations—adding that the letter’s admission constituted “actionabl[e]
defam[ation]” by Hear.
¶27 To the extent we can discern Superior’s argument, we conclude the
circuit court did not err by admitting the letter or by allowing the letter to be sent
to the jury during deliberations. Both are discretionary determinations. See
Weborg v. Jenny, 2012 WI 67, ¶41, 341 Wis. 2d 668, 816 N.W.2d 191 (regarding
admission of evidence); Shoemaker v. Marc’s Big Boy, 51 Wis. 2d 611, 619, 187
N.W.2d 815 (1971) (regarding what exhibits are permitted in the jury room).
¶28 As to the admissibility of the demand letter, Superior baldly asserts
the letter was irrelevant and hearsay. It fails to develop any cogent arguments on
these points, and we will not address them. See State v. Pettit, 171 Wis. 2d 627,
646, 492 N.W.2d 633 (Ct. App. 1992) (“We may decline to review issues
inadequately briefed.”). The demand letter was the subject of a pretrial motion in
limine. The circuit court concluded that because the credibility of the various
partners was central to the case, it would allow portions of the demand letter into
evidence as prior inconsistent statements regarding Torvinen’s knowledge of
Hear’s assets.8 The court determined, however, that any attempt to relitigate the
8
Superior suggests Torvinen’s statement at a deposition in 2018 that he did not know
Hear owned rental properties was not, in fact, inconsistent with the contents of the demand letter.
Superior explains that Torvinen did not know in 2018 whether Hear still owned the rental
properties from 2014, so he answered truthfully as to his knowledge in 2018. The question asked
at deposition, however, was whether Torvinen knew Hear owned and managed rental properties
“[p]rior to [Hear] getting involved in Epic.” (Emphasis added.) As a result, his denial at his
deposition in 2018 was inconsistent with the demand letter he authored in 2014.
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earlier personal injury issue by presenting voluminous materials would not be
permitted. Because we can perceive a reasonable basis for the court’s decision,
we will not overturn it. See Weborg, 341 Wis. 2d 668, ¶41.
¶29 We also conclude the circuit court did not erroneously exercise its
discretion by sending a portion of the letter to the jury. The letter was among the
documents the jury requested to see during deliberations. Factors a circuit court
should consider when sending an exhibit to the jury room include “consideration
of whether the exhibit will aid the jury in proper consideration of the case, whether
a party will be unduly prejudiced by submission of the exhibit, and whether the
exhibit could be subjected to improper use by the jury.” State v. Jensen, 147
Wis. 2d 240, 260, 432 N.W.2d 913 (1988). The court addressed these factors here
by redacting the letter to ensure the jury focused only on the asserted prior
inconsistent statement. The court agreed with Superior’s assertion that the matter
should not become “a trial within a trial.” Moreover, Superior makes no argument
regarding prejudice as it pertains to the decision to send a portion of the letter to
the jury. We perceive no basis to overturn the court’s exercise of discretion in this
respect.
¶30 Superior next argues the circuit court “erred when it allowed one
sentence to be taken out of context to be published on a TV screen.” This
argument relates to the February 7, 2017 redacted e-mail from Hear’s counsel,
which contained the statement that Hear would “remain the restaurant’s landlord,
but he will not be a business partner in the restaurant any longer.” The sentence
was apparently shown on visual equipment, and Superior argues this procedure
highlighted the sentence’s importance to the jury. Superior also appears to take
issue with the timing of the presentation, arguing Superior was only permitted to
provide context for the e-mail several days later (in the form of other e-mail
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communications), and it was not permitted to publish those contextual e-mails in
violation of WIS. STAT. § 901.07.
¶31 We agree with Hear’s assertion that Superior failed to preserve this
argument for appellate review. The “rule of completeness,” WIS. STAT. § 901.07,
requires that when a party seeks to introduce a part of a writing or statement, the
adverse party may “at that time” introduce any other writing or statement “which
ought in fairness to be considered contemporaneously with it to provide context or
prevent distortion.” Although the trial transcript shows that Superior requested an
off-the-record sidebar at the time the redacted e-mail was offered, the transcript
does not indicate the contents of that sidebar discussion, nor does it contain any
other indication that an objection was made. Merely requesting a sidebar on an
unspecified topic is insufficient to preserve the issue for appellate review. See
State v. Agnello, 226 Wis. 2d 164, 172-73, 593 N.W.2d 427 (1999).9
IV. The Circuit Court’s Refusal to Award Damages for Hear’s Breach of the
Implied Covenant of Good Faith and Fair Dealing
¶32 Lastly, Superior contends the circuit court erred when it refused to
award damages on its counterclaim for Hear’s breach of the implied covenant of
good faith and fair dealing. This implied covenant is of such a nature that it
imposes a duty of good-faith dealing and cooperation on all parties to a contract.
See Beidel v. Sideline Software, Inc., 2013 WI 56, ¶46, 348 Wis. 2d 360, 842
N.W.2d 240. Importantly, what remedy should be ordered for a breach of the
9
In any event, we would reject Superior’s argument in this regard on its merits. “The
conduct of a trial is largely within the trial court’s discretion.” Family Plan. Health Servs., Inc.
v. T.G., 158 Wis. 2d 100, 111, 461 N.W.2d 794 (Ct. App. 1990). Nothing Superior has presented
persuades us that the circuit court erroneously exercised its discretion regarding the sequencing of
the evidentiary presentation or the manner in which items were displayed to the jury.
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implied covenant of good faith and fair dealing is determined in the exercise of the
circuit court’s equitable authority. See Chayka v. Santini, 47 Wis. 2d 102, 109,
176 N.W.2d 561 (1970) (citing Allen v. Ross, 199 Wis. 162, 164, 225 N.W. 831(1929)).
¶33 Superior identifies the ways in which it believes Hear breached the
implied covenant of good faith and fair dealing relating to the Preliminary
Agreement. It is unclear, however, on what basis the jury found liability in this
regard. As Superior notes, given the jury’s answers, it seems clear it found that
although Hear had adhered to the letter of the Preliminary Agreement, he had not
complied with its spirit. But beyond this inference, the special verdict form did
not ask the jury to identify the acts or omissions that constituted the breach.
¶34 Superior argues that it was the circuit court’s task, following the
jury’s verdict, to identify which unexpressed expectations of the parties Hear
failed to live up to and then provide a remedy corresponding to the benefits
Superior reasonably expected to receive from the Preliminary Agreement. But the
court essentially did this, finding that it would have been appropriate to award
Superior the amount of any outstanding capital contributions prior to Hear’s
withdrawal—$97,500. Recognizing that the jury had already awarded Superior
$97,500 on its breach of fiduciary duty claim against Hear, the court concluded
Superior had failed to demonstrate any additional damages that it suffered.
¶35 Even now, Superior is unclear what additional damages would have
been appropriate. To the extent Superior suggests that it is entitled to damages
equivalent to the capital contributions Torvinen and Casper made after February 7,
2017, it fails to explain how or why the implied covenant of good faith and fair
dealing survived Hear’s withdrawal from the venture. Again, we will not consider
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undeveloped arguments. Pettit, 171 Wis. 2d at 646. In all, we perceive no basis
on which to conclude the circuit court erroneously exercised its discretion by
refusing to award damages on Superior’s claim for breach of the implied covenant
of good faith and fair dealing.
By the Court.—Judgments affirmed.
This opinion will not be published. See WIS. STAT. RULE
809.23(1)(b)5.
17