Wisconsin Real Estate Co. LLC v. Charles W. Huelsbeck ( 2023 )

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 28, 2023
A party may file with the Supreme Court a
Samuel A. Christensen 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. 2022AP372 Cir. Ct. No. 2020SC520
STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT III
WISCONSIN REAL ESTATE CO. LLC,
PLAINTIFF-RESPONDENT,
V.
CHARLES W. HUELSBECK,
DEFENDANT-APPELLANT.
APPEAL from a judgment of the circuit court for Shawano County:
KATHERINE SLOMA, Judge. Reversed.
¶1 STARK, P.J.1 Charles Huelsbeck appeals a money judgment
entered against him and in favor of Wisconsin Real Estate Co. LLC (“WREC”).
Following a bench trial, the circuit court determined that WREC was entitled to
1
This appeal is decided by one judge pursuant to WIS. STAT. § 752.31(2) (2021-22). All
references to the Wisconsin Statutes are to the 2021-22 version unless otherwise noted.
No. 2022AP372
collect a commission from Huelsbeck under the terms of the parties’ vacant land
listing contract because a prospective buyer had accepted Huelsbeck’s
counteroffer for the purchase of the listed property, which created an “enforceable
contract” for the sale the property.
¶2 Huelsbeck argues that the buyer’s acceptance of the counteroffer did
not create an enforceable contract because the buyer signed the counteroffer using
an electronic signature, and Huelsbeck never consented to the use of electronic
signatures. WREC disagrees and asserts that the buyer’s acceptance of the
counteroffer created an enforceable contract, despite the buyer’s use of an
electronic signature. In the alternative, WREC argues that it was entitled to collect
a commission under a different provision of the listing contract because it
produced a ready, willing and able buyer.
¶3 We conclude that because Huelsbeck never consented to the use of
electronic signatures, the buyer’s acceptance of Huelsbeck’s counteroffer did not
create an enforceable contract for the sale of the listed property. Furthermore, the
evidence introduced at trial shows that WREC was not entitled to a commission
under the “ready, willing and able buyer” provision of the listing contract. We
therefore reverse the circuit court’s judgment in favor of WREC.2
2
Huelsbeck also argues that we should reverse the circuit court’s judgment
because: (1) WREC breached the listing contract by representing both Huelsbeck and the
prospective buyer; and (2) WREC’s complaint failed to state a claim on which relief could be
granted because it did not allege that either WREC or its owner was a licensed broker or
salesperson. Because we reverse on other grounds, we need not address these arguments. See
Turner v. Taylor, 2003 WI App 256, ¶1 n.1, 268 Wis. 2d 628, 673 N.W.2d 716 (court of appeals
need not address all issues raised by the parties if one is dispositive).
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BACKGROUND
¶4 In April 2020, Huelsbeck and WREC—by its owner, Scott Wessel—
entered into a vacant land listing contract. The listing contract granted WREC the
exclusive right to sell twenty acres of hunting land that Huelsbeck owned in
Shawano County (“the Property”) at a list price of $100,000. The listing contract
provided that WREC’s commission would be the greater of seven percent of the
selling price or $2,500. As relevant here, the listing contract further provided that
the commission
shall be earned if, during the term of this Listing:
1) Seller sells or accepts an offer which creates an
enforceable contract for the sale of all or any part of the
Property;
….
5) A ready, willing and able buyer submits a bona fide
written offer to Seller or [WREC] for the Property at, or
above, the list price and on substantially the same terms
set forth in this Listing and the current WB-13 Vacant
Land Offer to Purchase, even if Seller does not accept
the buyer’s offer. A buyer is ready, willing and able
when the buyer submitting the written offer has the
ability to complete the buyer’s obligations under the
written offer.
¶5 On May 15, 2020, David Maltbey signed an offer to purchase the
Property for $90,000. Maltbey hand-signed the offer to purchase, which was
drafted by Wessel. The final page of the offer to purchase bears a notation stating
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No. 2022AP372
that Wessel presented it to Huelsbeck on May 15, 2020. Huelsbeck rejected the
offer to purchase.3
¶6 On May 17, 2020, Maltbey electronically signed a counteroffer to
his own initial offer to purchase the Property. Again, the counteroffer was drafted
by Wessel. It included a purchase price of $95,000. Wessel presented the
counteroffer to Huelsbeck on May 19, 2020. The same day, Huelsbeck responded
with his own counteroffer, also drafted by Wessel and hand-signed by Huelsbeck,
which listed a purchase price of $97,500. Maltbey electronically signed
Huelsbeck’s counteroffer later that day. The counteroffer incorporated “[a]ll
terms and conditions” set forth in Maltbey’s original offer to purchase.
¶7 Huelsbeck ultimately decided not to proceed with the sale of the
Property to Maltbey.4 Maltbey’s earnest money was returned to him, and he did
not seek to enforce the sale. However, in October 2020, WREC filed the instant
small claims lawsuit against Huelsbeck, asserting that it was entitled to collect a
commission under the provision of the listing contract stating that a commission is
earned if the seller “sells or accepts an offer which creates an enforceable contract
for the sale of all or any part of the Property.”
¶8 The circuit court held a bench trial on WREC’s claim in
January 2022, at which Huelsbeck and Wessel were the only witnesses.
3
At trial, there was conflicting testimony regarding the timing of Huelsbeck’s rejection
of Maltbey’s initial offer to purchase. Ultimately, however, the precise timing of Huelsbeck’s
rejection is not material to our resolution of this appeal.
4
There was conflicting evidence at trial regarding the reason for Huelsbeck’s decision
not to proceed with the sale. Again, this factual dispute is not material to our resolution of this
appeal.
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Huelsbeck’s position at trial was that WREC had not earned a commission
because Huelsbeck never consented to the use of electronic signatures, and,
accordingly, Maltbey’s electronic signature accepting Huelsbeck’s counteroffer
did not create an enforceable contract for the sale of the Property.
¶9 The circuit court disagreed, reasoning that the “electronic signature
issue” did not “matter” because the only party who used an electronic signature
was Maltbey, and Maltbey “clearly consented to the electronic signature.” The
court explained that Huelsbeck “didn’t sign anything electronically. He signed the
listing agreement personally. He signed or initialed each counter offer
personally.” The court also noted that Maltbey’s use of an electronic signature did
not raise “any sort of consumer protection issue” because Huelsbeck “saw every
document. It was handed to him. It was presented to him by his realtor.” Under
these circumstances, the court stated that the electronic signature issue was a “red
herring” and was not “a valid defense at all.”
¶10 The circuit court therefore determined that, under the terms of the
listing contract, WREC was entitled to recover a commission of $6,825—that is,
seven percent of the agreed-upon sale price of $97,500—plus fees and costs. The
court subsequently entered a money judgment in favor of WREC in the amount of
$7,221.50. Huelsbeck now appeals.
DISCUSSION
¶11 Following a bench trial, a circuit court’s findings of fact will not be
set aside unless they are clearly erroneous. WIS. STAT. § 805.17(2). However, the
interpretation of contracts and statutes—and their application to a given set of
facts—are questions of law that we review independently. See Gustafson v.
Physicians Ins. Co. of Wis., 223 Wis. 2d 164, 172-73, 588 N.W.2d 3635
No. 2022AP372
(Ct. App. 1998) (contracts); State v. Bodoh, 226 Wis. 2d 718, 724, 595 N.W.2d
330 (1999) (statutes).
I. Enforceable contract
¶12 As discussed above, the circuit court concluded that WREC was
entitled to recover a commission under the provision of the parties’ listing contract
stating that a commission is earned if the seller “sells or accepts an offer which
creates an enforceable contract for the sale of all or any part of the Property.”
Huelsbeck argues that the court erred because Maltbey’s acceptance of
Huelsbeck’s counteroffer did not create an “enforceable contract” for the sale of
the Property. More specifically, Huelsbeck contends that Maltbey’s acceptance of
the counteroffer did not comply with the statute of frauds, WIS. STAT. § 706.02,
because Maltbey used an electronic signature to accept the counteroffer, and
Huelsbeck never consented to the use of electronic signatures.
¶13 Under the statute of frauds, a contract to convey an interest in land
“shall not be valid unless evidenced by a conveyance that … [i]s signed by or on
behalf of all parties.” WIS. STAT. § 706.02(1)(e). In this case, it is undisputed that
Huelsbeck hand-signed his counteroffer, and Maltbey affixed an electronic
signature to the counteroffer. Subject to certain exceptions that are not applicable
here, WIS. STAT. ch. 137 “applies to electronic records and electronic signatures
relating to a transaction.” WIS. STAT. § 137.12(1). More specifically, ch. 137
“applies only to transactions between parties each of which has agreed to conduct
transactions by electronic means.” WIS. STAT. § 137.13(2).
¶14 Huelsbeck interprets this language in WIS. STAT. § 137.13(2) to
mean that “both parties [must] agree to the use of electronic signatures before they
are legally valid.” WREC does not dispute that § 137.13(2) requires all parties to
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No. 2022AP372
a transaction to consent to the use of electronic signatures. In fact, WREC
completely fails to address—or even cite—§ 137.13(2) in its appellate brief. We
therefore deem WREC to have conceded Huelsbeck’s argument that § 137.13(2)
requires all parties to a transaction to consent to the use of electronic signatures.
See Charolais Breeding Ranches, Ltd. v. FPC Sec. Corp., 90 Wis. 2d 97, 109,
279 N.W.2d 493 (Ct. App. 1979) (unrefuted arguments may be deemed conceded).
¶15 The circuit court did not find that Huelsbeck had consented to the
use of electronic signatures for the purposes of his transaction with Maltbey. To
the contrary, Huelsbeck testified at trial that Wessel never explained the concept
of electronic signatures to him, that he never agreed to the use of electronic
signatures, and that he did not “even know they existed.”
¶16 In contrast, Wessel testified that Huelsbeck had consented to the use
of electronic signatures because the offer to purchase that Maltbey signed on
May 15, 2020, states:
DELIVERY OF DOCUMENTS AND WRITTEN
NOTICES Unless otherwise stated in this Offer, delivery
of documents and written notices to a Party shall be
effective only when accomplished by one of the methods
specified at lines 38-56.
….
(5) E-Mail: electronically transmitting the document or
written notice to the Party’s e-mail address, if given below
at line 55 or 56. If this is a consumer transaction where the
property being purchased or the sale proceeds are used
primarily for personal, family or household purposes,[5]
5
Wessel testified at trial that Huelsbeck stated he was going to use some of the proceeds
from the sale of the Property to go moose hunting in Alaska. Wessel conceded that this use of the
proceeds was for a “personal” purpose. On appeal, WREC does not dispute that the transaction
qualified as a “consumer transaction,” as that term is used in the offer to purchase.
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No. 2022AP372
each consumer providing an e-mail address below has first
consented electronically to the use of electronic documents,
e-mail delivery and electronic signatures in the transaction,
as required by federal law.
(Emphasis added.) Wessel testified that this language means that “[i]f there is an
e-mail address in [lines] 55 or 56 [of the offer to purchase], and [a party] sign[s]
the offer to purchase, they have consented to [the] electronic use of documents.”
¶17 The problem with Wessel’s rationale is that Huelsbeck did not
provide an e-mail address on the offer to purchase. Instead, Wessel—who
prepared the offer to purchase on behalf of Maltbey—inserted his own e-mail
address on line 55 of the offer to purchase as the e-mail address of the “Seller.”
Under these circumstances, the inclusion of an e-mail address in line 55 does not
show that Huelsbeck “first consented electronically to the use of … electronic
signatures in the transaction, as required by federal law.”6
¶18 Notably, WREC does not argue on appeal that Huelsbeck consented
to the use of electronic signatures. Instead, WREC cites WIS. STAT. § 137.13(5),
which states, “Whether an electronic record or electronic signature has legal
consequences is determined by this chapter and other applicable law.” (Emphasis
added.) WREC then cites Kocinski v. Home Insurance Co., 147 Wis. 2d 728,
735, 433 N.W.2d 654 (Ct. App. 1988) (citation omitted), aff’d as modified and
remanded, 154 Wis. 2d 56, 452 N.W.2d 360 (1990), in which this court cited a
secondary source for the proposition that a signature need not be handwritten in
ink but may instead consist of “initials, thumbprint or an arbitrary code sign” and
6
The circuit court did not address the e-mail address on line 55 of the offer to purchase
or make any factual findings regarding it.
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No. 2022AP372
“may be written in pencil, typed, printed, made with a rubber stamp, or impressed
into the paper.”
¶19 Although the precise contours of WREC’s argument are not entirely
clear, it appears WREC believes that Kocinski constitutes “other applicable law”
showing that Maltbey’s electronic signature in this case was valid for purposes of
the statute of frauds. See WIS. STAT. § 137.13(5). This argument is unpersuasive
for two reasons. First, the issue in Kocinski was the meaning of the term
“subscribed” in WIS. STAT. § 807.05, a term that is not at issue in the instant case.
See Kocinski, 147 Wis. 2d at 734. Second, Kocinski did not address the validity
of an electronic signature. Instead, all of the examples of alternative signature
types listed in Kocinski involved physical marks made on paper. In particular,
Kocinski did not address whether an electronic signature is valid when one of the
parties to the transaction did not consent to the use of electronic signatures.
¶20 WREC also argues that there is “no material difference between a
party typing or printing a signature on a document and a party affixing an
electronic signature to a document.” In addition, WREC asserts that “every piece
of evidence before the circuit court showed that Maltbey—the only party who
used an electronic signature—intended to be bound by his signature and would
have proceeded to closing absent Huelsbeck’s decision to back out of the sale.”
Again, though, WREC does not dispute Huelsbeck’s argument that WIS. STAT.
§ 137.13(2) requires all parties to a transaction to consent to the use of electronic
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No. 2022AP372
signatures, nor does WREC argue that Huelsbeck actually consented to the use of
electronic signatures.7
¶21 Under these circumstances, we agree with Huelsbeck that Maltbey’s
electronic signature on Huelsbeck’s counteroffer did not comply with the statute
of frauds, and, accordingly, no “enforceable contract” for the sale of the Property
was formed. The circuit court therefore erred by determining that WREC was
entitled to collect a commission under the provision of the listing contract stating
that a commission is earned if the seller “accepts an offer which creates an
enforceable contract for the sale of all or any part of the Property.”
II. Ready, willing and able buyer
¶22 In the alternative, WREC argues that it was entitled to collect a
commission under the terms of the listing contract because it produced a ready,
willing and able buyer.8 This argument fails because it ignores the listing
contract’s plain language.
7
We acknowledge that WIS. STAT. § 137.13(2) states that “[w]hether the parties agree to
conduct a transaction by electronic means is determined from the context and surrounding
circumstances, including the parties’ conduct.” However, WREC does not develop any argument
on appeal that the parties’ conduct in this case provides evidence of Huelsbeck’s consent under
§ 137.13(2). We will not abandon our neutrality to develop such an argument on WREC’s
behalf. See Industrial Risk Insurers v. American Eng’g Testing, Inc., 2009 WI App 62, ¶25,
318 Wis. 2d 148, 769 N.W.2d 82. We also note that the circuit court did not make any factual
findings regarding Huelsbeck’s conduct as related to the issue of consent.
8
Huelsbeck argues that WREC forfeited this argument by failing to raise it in the circuit
court. In response, WREC notes that a respondent may generally raise any argument on appeal
that would allow us to affirm the circuit court’s decision, even if the argument was not raised
below. See Finch v. Southside Lincoln-Mercury, Inc., 2004 WI App 110, ¶42, 274 Wis. 2d 719,
685 N.W.2d 154. We assume, without deciding, that WREC did not forfeit its argument
regarding the listing contract’s “ready, willing and able buyer” provision. We note, however, that
by failing to raise that argument below, WREC deprived the circuit court of the opportunity to
make any factual findings regarding whether Maltbey was a ready, willing and able buyer.
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¶23 As noted above, the listing contract states that a commission is
earned if
[a] ready, willing and able buyer submits a bona fide
written offer to Seller or [WREC] for the Property at, or
above, the list price and on substantially the same terms set
forth in this Listing and the current WB-13 Vacant Land
Offer to Purchase, even if Seller does not accept the
buyer’s offer.
(Emphasis added.) Maltbey submitted an initial offer to purchase the Property and
a subsequent counteroffer, both of which were below the list price of $100,000.
Maltbey ultimately accepted Huelsbeck’s counteroffer to purchase the property for
$97,500, but that amount was also below the list price. Thus, Maltbey never
submitted an offer to purchase the Property “at, or above, the list price,” as
required to trigger WREC’s entitlement to a commission under the listing
contract’s “ready, willing and able buyer” provision.
¶24 In addition, the listing contract states that “[a] buyer is ready, willing
and able when the buyer submitting the written offer has the ability to complete
the buyer’s obligations under the written offer.” Maltbey’s offer to purchase
contained a financing contingency. No evidence was introduced at trial to show
that the financing contingency had been satisfied. Consequently, WREC failed to
show that Maltbey had the ability to complete his obligations under the offer to
purchase, and it therefore failed to show that Maltbey was a ready, willing and
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No. 2022AP372
able buyer.9 As such, WREC was not entitled to a commission under the listing
contract’s “ready, willing and able buyer” provision.
By the Court.—Judgment reversed.
This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)4.
9
WREC asserts that the circuit court “made a factual finding that the reason the
transaction did not close was that Huelsbeck, the seller, got ‘cold feet.’” WREC therefore
contends that Maltbey must have been a ready, willing and able buyer because “the evidence
showed that Maltbey could and would have proceeded to closing, but was prevented from doing
[so] by Huelsbeck for reasons unrelated to any contingency.”
What the circuit court actually found, however, was that Huelsbeck backed out of the
transaction because he “had cold feet.” The court did not find that the transaction would have
closed but for Huelsbeck’s cold feet. Stated differently, the court did not find that Maltbey had
the ability to complete his obligations under the offer to purchase and that, as a result, the
transaction necessarily would have closed absent Huelsbeck’s actions. In any event, even if
Maltbey had the ability to complete his obligations under the offer to purchase, WREC was not
entitled to a commission under the listing contract’s “ready, willing and able buyer” provision
because Maltbey did not submit an offer at, or above, the Property’s list price.
12