Debra K. Sands v. John R. Menard, Jr.

2017 WI 110
SUPREME COURT OF WISCONSIN
CASE NO.: 2012AP2377 & 2015AP870
COMPLETE TITLE: Debra K. Sands,
Plaintiff-Appellant-Petitioner,
v.
John R. Menard, Jr., Menard Thoroughbreds, Inc.,
Webster Hart as Trustee of the John R. Menard,
Jr. 2002 Trust and Related Trusts, Angela L.
Bowe as Trustee of the John R. Menard, Jr. 2002
Trust and Related Trusts and Alphons Pitterle as
Trustee of the John R. Menard , Jr. 2002 Trust
and Related Trusts,
Defendants-Respondents,
Midwest Manufacturing Co., Wood Ecology Inc.,
Countertops Inc., Team Menard Inc., Menard
Engine Group, Menard Competition Technologies
LTD, MC Technologies Inc., Menard Engineering
LTD, UltraMotive LTD and Merchant Capital LLC,
Defendants,
Menard, Inc.,
Defendant-Respondent-Cross Petitioner.
------------------------------------------------
Debra K. Sands,
Plaintiff-Appellant-Cross-Respondent-
Petitioner,
v.
John R. Menard, Jr. and Menard Thoroughbreds,
Inc.,
Defendants-Respondents-Cross-
Appellants,
Webster Hart as Trustee of the John R. Menard,
Jr. 2002 Trust and Related Trusts, Angela L.
Bowe as Trustee of the John R. Menard, Jr. 2002
Trust and Related Trusts, Alphons Pitterle as
Trustee of the John R. Menard , Jr. 2002 Trust
and Related Trusts, Midwest Manufacturing Co.,
Wood Ecology Inc., Countertops Inc., Team Menard
Inc., Menard Engine Group, Menard Competition
Technologies LTD, MC Technologies Inc., Menard
Engineering LTD, UltraMotive LTD
and Merchant Capital LLC,
Defendants,
Menard, Inc.,
Defendant-Respondent-Cross-Appellant-
Cross Petitioner.
REVIEW OF A DECISION OF THE COURT OF APPEALS
Reported at 372 Wis. 2d 126, 887 N.W.2d 94
 PDC No: 2016 WI App 76 - Published
OPINION FILED: December 29, 2017
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: September 12, 2017
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Eau Claire
JUDGE: Paul J. Lenz
JUSTICES:
CONCURRED:
DISSENTED:
CONCURRED/DISSENTED: ABRAHAMSON, J. concurs and dissents, joined by
A.W. BRADLEY, J. (opinion filed).
NOT PARTICIPATING:
ATTORNEYS:
For the plaintiff-appellant-cross-respondent-petitioner,
there were briefs filed by Charles K. Maier, Daniel R. Shulman,
Richard C. Landon, and Gray, Plant, Mooty, Mooty & Bennett,
P.A., Minneapolis, Minnesota, with whom on the briefs were Mel
C. Orchard, III, and The Spence Law Firm, LLC, Jackson, Wyoming.
There was an oral argument by Daniel R. Shulman.
For the defendant-respondent-cross-appellant-cross
petitioner, there were briefs filed by G. Richard White and Weld
Riley, S.C., Eau Claire, with whom on the briefs were Michael D.
Freeborn, Brian P. Norton, Andrew C. Nordahl, and Freeborn &
Peters, LLP, Chicago, Illinois. There was an oral argument by
Brian P. Norton.
For the defendants-respondents, there was a brief by G.
Richard White and Weld Riley, S.C., Eau Claire, with whom on the
brief were Todd Wind and Fredrikson & Byron, P.A., Minneapolis,
Minnesota. There was an oral argument by Todd Wind.
2
For the defendants-respondents-cross-appellants, there was
a brief filed by there was a brief filed by G. Richard White and
Weld Riley, S.C., Eau Claire, with whom on the briefs were
Michael D. Freeborn, Brian P. Norton, Andrew C. Nordahl, and
Freeborn & Peters, LLP, Chicago, Illinois.
3
2017 WI 110
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
Nos. 2012AP2377 & 2015AP870
(L.C. No. 2008CV990)
STATE OF WISCONSIN : IN SUPREME COURT
Debra K. Sands,
Plaintiff-Appellant-Petitioner,
v.
John R. Menard, Jr., Menard Thoroughbreds,
Inc., Webster Hart as Trustee of the John R.
Menard, Jr. 2002 Trust and Related Trusts,
Angela L. Bowe as Trustee of the John R.
Menard, Jr. 2002 Trust and Related Trusts and
Alphons Pitterle as Trustee of the John R.
Menard, Jr. 2002 Trust and Related Trusts,
FILED
Defendants-Respondents, DEC 29, 2017
Midwest Manufacturing Co., Wood Ecology Inc., Diane M. Fremgen
Clerk of Supreme Court
Countertops Inc., Team Menard Inc., Menard
Engine Group, Menard Competition Technologies
LTD, MC Technologies Inc., Menard Engineering
LTD, UltraMotive LTD and Merchant Capital LLC,
Defendants,
Menard, Inc.,
Defendant-Respondent-Cross
Petitioner.
Debra K. Sands,
Plaintiff-Appellant-Cross-Respondent-
Petitioner,
v.
John R. Menard, Jr. and Menard Thoroughbreds,
Inc.,
Defendants-Respondents-Cross-
Appellants,
Webster Hart as Trustee of the John R. Menard,
Jr. 2002 Trust and Related Trusts, Angela L.
Bowe as Trustee of the John R. Menard, Jr. 2002
Trust and Related Trusts, Alphons Pitterle as
Trustee of the John R. Menard, Jr. 2002 Trust
and Related Trusts, Midwest Manufacturing Co.,
Wood Ecology Inc., Countertops Inc., Team
Menard Inc., Menard Engine Group, Menard
Competition Technologies LTD, MC Technologies
Inc., Menard Engineering LTD, UltraMotive LTD
and Merchant Capital LLC,
Defendants,
Menard, Inc.,
Defendant-Respondent-Cross-Appellant-
Cross Petitioner.
REVIEW of a decision of the court of appeals. Affirmed.
¶1 PATIENCE DRAKE ROGGENSACK, C.J. We review a decision
of the court of appeals, affirming the circuit court's1 grant of
summary judgment dismissing Debra Sands' claims and Menard,
1
The Honorable Paul J. Lenz of Eau Claire County, presided.
Nos. 2012AP2377 & 2015AP870
Inc.'s counterclaim. Debra Sands and John Menard, Jr., were
involved in a romantic relationship from late 1997 to April
2006.2 Sands alleges that from 1998 until 2006 she cohabitated
with Menard and they engaged in a "joint enterprise" to work
together and grow Menard's businesses for their mutual benefit.
Menard and his affiliated entities argue that by failing to
comply with Supreme Court Rule 20:1.8(a), which regulates
business transactions between lawyers and their clients, Sands
is precluded from seeking an ownership interest in any of
Menard's various business ventures.
¶2 We review four issues. First, we consider whether
Sands has pleaded facts sufficient to establish what she styled
as an unjust enrichment claim under Watts v. Watts, 137
Wis. 2d 506, 405 N.W.2d 305 (1987), thereby necessitating a
remand to the circuit court for a full hearing on the merits.
Second, we consider whether the court of appeals properly
concluded that SCR 20:1.8(a) may be raised as a defense to an
unjust enrichment claim. Third, we consider whether the court
of appeals properly granted summary judgment to Sands on Menard,
Inc.'s counterclaim for breach of fiduciary duty. And fourth,
2
Debra Sands appeals from a judgment of the court of
appeals, affirming the circuit court's grant of summary judgment
dismissing Sands' claims against John Menard, Jr. ("Menard"),
Menard, Inc., and Menard Thoroughbreds, Inc. ("collectively, the
Menard Defendants") and against the trustees of the John R.
Menard, Jr. 2002 Trust and related trusts ("the Trustees"). The
Menard Defendants appeal from an order affirming summary
judgment to Sands on Menard, Inc.'s counterclaim for breach of
fiduciary duty.
3
Nos. 2012AP2377 & 2015AP870
we consider whether the court of appeals properly granted
summary judgment to the Menard Trustees.
¶3 As to the claim she has characterized as a Watts
unjust enrichment claim, we conclude that Sands has failed to
allege facts which, if true, would support her legal conclusion
that she and Menard had a joint enterprise that included
accumulation of assets in which both she and Menard expected to
share equally. On the second issue, for the reasons explained
below, we conclude that SCR 20:1.8(a) may guide courts in
determining required standards of care generally; however, it
may not be used as an absolute defense to a civil claim
involving an attorney.3 And finally, we also conclude that the
court of appeals properly granted summary judgment to Sands on
Menard, Inc.'s counterclaim for breach of fiduciary duty, and to
the Trustees on their motion for summary judgment dismissing
Sands' claim.
¶4 Accordingly, we affirm the court of appeals.
I. BACKGROUND
¶5 Menard is the founder, president, and CEO of Menard,
Inc., a privately held chain of home improvement stores that
began in Eau Claire, Wisconsin. In November 1997, nearly 40
years after starting his business, Menard began dating Sands, a
lawyer licensed to practice in the state of Minnesota, who at
3
We do not consider whether Menard or the Menard Defendants
waived, ratified, or may be estopped to assert Sands' alleged
non-compliance with SCR 20:1.8(a).
4
Nos. 2012AP2377 & 2015AP870
the time was directing several business ventures with her sister
in St. Paul. Sands claims that she moved in with Menard in the
summer of 1998, and they became engaged later that year. Menard
admits that he and Sands were engaged, but denies that they ever
lived together.
¶6 During their relationship, Sands alleges she made a
number of business and personal contributions to both Menard and
his companies, including Menard, Inc. and Menard Thoroughbreds,
Inc. Although the parties agree that Sands made certain
contributions, they do not agree as to the nature of those
contributions, when they began, or who was the recipient at any
given time. Sands describes her contributions to Menard and his
companies as follows:
She was Menard's life partner, social companion, and
manager and hostess of his households. Sands
protected Menard from unwanted approaches by serving
as a "gate-keeper." She supervised his health care
and medical needs; managed the remodeling of three
residences; and advised on the acquisition of
airplanes and their design and décor. She provided
ideas for new products and product lines for the
Menard, Inc., stores, such as garden centers; and
scouted and proposed new store locations, store
layouts, and product displays. She represented
Menard, Inc., as a product buyer. She reviewed and
suggested changes and additions to Menard, Inc.,
marketing plans. She assisted with government and
public relations. She participated in the redesign of
store signs and logos. She helped find new business
and investment opportunities. She assisted in the
management of the Team Menard auto racing venture and
newly-acquired businesses, including two engine design
companies in England, a thoroughbred racing business,
and a $400 million private equity fund. She made her
joint enterprise with Menard her focus, which occupied
her every moment.
5
Nos. 2012AP2377 & 2015AP870
¶7 Sands claims that Menard repeatedly promised her that
in return for these contributions, he would give her an
ownership interest in his various business ventures. Menard
denies ever making such promises, and states only that Sands
provided certain legal services beginning in approximately 1997.
¶8 The parties also disagree as to whether Sands
performed legal work for Menard or the Menard Defendants prior
to the beginning of their romantic relationship. Sands contends
that there was never any attorney-client relationship with the
Menard Defendants prior to 1998. Conversely, the Menard
Defendants assert that Sands began providing legal services in
October 1997, before she and Menard began dating.
¶9 As evidence, the Menard Defendants submitted a May 28,
1998, invoice from Prima Group, a company owned by Sands and her
sister, in the amount of $49,635.84. The invoice referenced a
"client matter," listed as "Wisconsin Dept. of Natural Resources
v. Menard, Inc." The invoice further indicated it was for
"Governmental relations & Legal services rendered Oct. 15, 1997
– May 15, 1998." Sands claims that the invoice was prepared at
Menard's request, in response to his offer to pay off Sands'
remaining student loans of $49,635.84. Sands claims that Menard
told her to send the invoice to Menard, Inc., so that the
payment would be tax deductible as a business expense. Menard,
however, claims this invoice related to legal services that
6
Nos. 2012AP2377 & 2015AP870
Sands provided in connection with a Wisconsin DNR investigation
into Menard, Inc.'s disposal of wood ash.4
¶10 Although the parties disagree as to the nature of the
legal services provided prior to 2003, both concede that
beginning in 2003 Sands began to provide significant legal
services to Menard, Inc.5 Sands billed at an hourly rate of
$145, and Menard, Inc. paid Sands a total of $152,105 for seven
invoices.
¶11 In early 2004, Sands assisted in the creation of a
private equity fund ("the Fund"). Steve Hilbert, a businessman
with money management experience and a long-time friend of
Menard's, began to meet with Menard to discuss the Fund.
According to Sands, Menard asked her to review documentation
used to create the Fund. Menard, Inc., however, asserts that
from at least January 2005 through October 2005, Menard, Inc.
had retained Sands as its outside legal counsel to represent it
in the Fund transaction.
4
A similarly questionable transaction involving race car
driver Robby Gordon began in September 1998. The record
reflects that Menard, Inc. paid Sands $3,000 on September 21,
1999, for her work on the Gordon transaction. Sands concedes
that she performed some work as Menard's business advisor——not
lawyer——but states that the payment was actually a reimbursement
for wedding planning expenses. Sands v. Menard, 2016 WI App 76,
¶¶9-10, 372 Wis. 2d 126, 887 N.W.2d 94.
5
The parties disagree as to whether Sands ever provided
legal services to Menard personally. According to Sands, Menard
himself was never a client.
7
Nos. 2012AP2377 & 2015AP870
¶12 Menard alleges that Sands was responsible for
negotiating the terms of the transaction with Hilbert, in
addition to reviewing and editing the Fund transaction
documents. Sands states that she was never asked and never did
create invoices for her work for Menard, in part because she
believed her efforts were part of her and Menard's "joint
enterprise." It was not until her relationship with Menard
ended in 2006 that Menard instructed her to provide itemized
invoices for all legal services for which she had not been paid,
dating back to 2003. Sands then submitted 190 separate invoices
for work performed between February 2003 and April 2006,
representing 7,487.10 hours of legal work at $145 per hour, for
a total fee of $1,085,629.50.
¶13 Sands met with Menard and Pete Liupakka, Menard,
Inc.'s CFO, to discuss the invoices in October 2006. Liupakka
believed that the number of hours reflected on the invoices was
excessive. Nevertheless, Menard, Inc. offered to pay Sands
$961,518——the amount claimed in the invoices minus payments that
Menard, Inc. believed Sands had already received. However,
Menard, Inc. made receipt of this payment conditioned on Sands
signing a one-page "release of all claims" that included a
waiver of any "quasi-marital claims." Sands refused to sign,
prompting Menard, Inc. to offer an additional $100,000. Sands
again refused, and Menard, Inc. rescinded its offer to pay any
portion of the fees reflected in the invoices.
8
Nos. 2012AP2377 & 2015AP870
¶14 On November 3, 2008, Sands filed suit against Menard,
the Menard Defendants, and eleven other parties owned or
controlled by Menard. She asserted claims for Unjust
Enrichment, Implied Contract, Promissory Estoppel, Intentional
Infliction of Emotional Distress, Negligent Infliction of
Emotional Distress, Fraudulent Misrepresentation, Conversion,
and Breach of Fiduciary Relationship. On November 19, 2009,
Sands filed an amended complaint, re-alleging her claims of
unjust enrichment against Menard, asserting breach of contract
and promissory estoppel claims against Menard, and claims for
unjust enrichment against Menard, Inc., Menard Thoroughbreds,
Inc., and MH Private Equity Fund LLC ("MH Equity"). A second
amended complaint was filed on May 10, 2011, adding the Trustees
as defendants.
¶15 Shortly after Sands filed her second amended
complaint, the Menard Defendants discovered evidence that Sands
had a side agreement with Hilbert, prompting accusations that
Sands had been attempting to obtain an ownership interest or
employment with MH Equity while she was representing them in the
Fund transaction. Therefore, on May 25, 2011, the Menard
Defendants asserted a counterclaim for breach of fiduciary duty
under SCR 20:1.8(a).
¶16 On April 12, 2012, the Menard Defendants moved for
summary judgment to dismiss all of Sands' claims by which she
sought a portion of Menard's "net worth or assets, ownership
interests in the Menard companies, or any part of the increase
9
Nos. 2012AP2377 & 2015AP870
in value of the Menard Companies." The Menard Defendants argued
that SCR 20:1.8(a) barred Sands from recovering any portion of
Menard's assets or an ownership interest in his companies
because she had failed to comply with SCR 20:1.8(a), which
regulates business transactions between attorneys and their
clients.
¶17 The Trustees also moved for summary judgment, arguing
that Sands' theory of unjust enrichment failed as a matter of
law because: (1) even if Sands benefitted Menard or Menard,
Inc., her claim would therefore be against the Menard
Defendants, not the Trustees; (2) she did not allege facts,
which if true, would show any benefit conferred to the Trustees;
and (3) she failed to allege facts showing "unjust
circumstances."
¶18 Following an oral ruling on October 12, 2012, the
circuit court entered summary judgment on October 22, 2012. The
court acknowledged that Sands had violated SCR 20:1.8(a),6 but
declined to adopt a bright-line rule that SCR 20:1.8(a)
prohibits an attorney from bringing what Sands has styled as a
Watts unjust enrichment claim regarding past contributions.
Rather, the court recognized an implicit exception to SCR
20:1.8(a), such that it does not bar an attorney from bringing
6
The court found that: (1) Sands is a lawyer and was a
lawyer at all relevant times; (2) Sands performed legal services
for Menard and the Menard Defendants; and (3) Sands did not
obtain a written agreement to acquire any portion of the Menard
Defendants' assets.
10
Nos. 2012AP2377 & 2015AP870
an equitable claim for contributions provided in a romantic
relationship if: (1) the romantic relationship predates the
attorney-client relationship; and (2) "the legal services
rendered are merely ancillary or incidental to the larger joint
enterprise of the parties."7
¶19 As to the first requirement, the court focused on
whether Sands' May 28, 1998, invoice for "Governmental relations
& Legal services" established that her attorney-client
relationship began before her romantic relationship with Menard.8
Even accepting as true Sands' claim that the invoice was a
fraudulent document submitted at Menard's request, the court
stated that it would deny relief in equity due to Sands'
admitted fraud regarding the invoice, which showed that she was
in pari delicto9 with Menard and, thus, the court would "leave
matters where they stand."10
7
During this hearing Judge Lenz focused on the legal
services as opposed to Sands' general contributions because the
proposed defense, namely, that SCR 20:1.8(a) barred Sands'
claim, applies to attorney-client relationships and their
attendant legal services.
8
See Security Pac. Nat'l Bank v. Ginkowski, 140
Wis. 2d 332, 339, 410 N.W.2d 589, 593 (Ct. App. 1987) (Stating
that for the concept of the clean hands doctrine to be applied,
"it must be shown that the alleged conduct constituting 'unclean
hands' caused the harm from which the plaintiff now seeks
relief.").
9
Latin for "in equal fault." Black's Law Dictionary 911
(10th ed. 2014).
10
The circuit court did not address the waiver,
ratification, or estoppel arguments.
11
Nos. 2012AP2377 & 2015AP870
¶20 Looking to the second element of the exception, the
court found that no reasonable jury could find that Sands' legal
services were "merely ancillary or incidental." Therefore,
because neither exception to its test applied, the court
concluded that Sands' violation of SCR 20:1.8(a) barred her
claims against the Menard Defendants. The court then held that
because Sands could not recover against Menard, she could not
recover against the Trustees. The circuit court then granted
summary judgment to the Trustees. Sands' claim against the
Menard Defendants for compensation for services rendered
remained.
¶21 Sands appealed from the order regarding the Trustees
and petitioned for leave to appeal from the order regarding the
Menard Defendants. The court of appeals denied Sands' motion,
but stayed her appeal of the order regarding the Trustees
pending the disposition of her remaining claims in circuit
court. Sands v. Menard, 2016 WI App 76, ¶21, 372 Wis. 2d 126,
887 N.W.2d 94.
¶22 After the circuit court granted partial summary
judgment, Sands claimed that she was entitled to compensation
for her non-legal services. In support, she submitted extensive
documentation of the various "non-legal" services she had
provided, and for which she alleged she was entitled to receive
compensation. The Menard Defendants moved to strike, pointing
to Sands' previous affidavit in which she stated that she never
12
Nos. 2012AP2377 & 2015AP870
expected to be compensated for personal and family services.
The court granted the motion.
¶23 Refusing to concede that her only remaining claim was
for compensation for legal services "at a rate of $145 per
hour," Sands next asserted that she was entitled to the quantum
meruit value of her legal services, which she claimed was
between $355 and $640 per hour. Again, the Menard Defendants
moved to strike, arguing that Sands could not recover on a
quasi-contract theory when she had an express contract with
Menard to be paid $145 per hour for her legal services. The
court agreed, explaining that "even if [$145 per hour] was
dictated by the client, Mr. Menard, this was clearly the agreed
rate." The circuit court distinguished unjust enrichment claims
from quantum meruit, stating that while a plaintiff asserting a
Watts unjust enrichment claim seeks to recover a fair portion of
the increase in the couple's net worth, a quantum meruit claim
seeks to recover the fair value of services performed based on a
contract implied by law. The dismissal of Sands' quantum meruit
claim therefore did not affect her unjust enrichment claim. The
circuit court also stated that Sands' quantum meruit claims were
barred because of her failure to comply with SCR 20:1.8(a).
¶24 Sands moved for summary judgment on Menard, Inc.'s
counterclaim for breach of fiduciary duty. The circuit court
granted the motion, concluding that the counterclaim was barred
by the applicable statute of limitations and that a reasonable
13
Nos. 2012AP2377 & 2015AP870
person in Menard's situation would have further investigated his
suspicions of Sands' disloyalty at an earlier date.
¶25 On April 24, 2015, Sands filed a notice of appeal from
the circuit court's final order, and Menard, Inc. cross-appealed
from the order dismissing its counterclaim for breach of
fiduciary duty.
¶26 Proceedings at the court of appeals involved the
consolidation of the direct appeal from the 2012 judgment
disposing of all claims between Sands and the Trustees, and a
direct appeal from the 2015 final judgment disposing of all
claims between Sands, Menard, and the Menard Defendants. The
court of appeals affirmed the circuit court, but on different
grounds.
¶27 Sands filed a petition for review on October 19, 2016,
which was followed by a petition for cross-review filed by the
Menard Defendants on November 18, 2016. We granted review, and
now affirm.
II. DISCUSSION
A. Standard of Review
¶28 We review a grant or denial of summary judgment
independently, applying the same standards as employed by the
circuit court, while benefitting from the discussions of the
court of appeals and the circuit court. Dufour v. Progressive
Classic Ins. Co., 2016 WI 59, ¶12, 370 Wis. 2d 313, 881
N.W.2d 678; Preisler v. General Cas. Ins. Co., 2014 WI 135,
¶16, 360 Wis. 2d 129, 857 N.W.2d 136. Summary judgment is
14
Nos. 2012AP2377 & 2015AP870
appropriate in cases where there is no genuine issue of material
fact and the moving party has established his or her right to
judgment as a matter of law. Wis. Stat. § 802.08(2);11 Wadzinski
v. Auto-Owners Ins. Co., 2012 WI 75, ¶10, 342 Wis. 2d 311, 818
N.W.2d 819. We review summary judgment submissions in the light
most favorable to the nonmoving party. Id.
B. Unjust Enrichment Claim
1. General principles
¶29 Sands asserts she has a claim against Menard for
unjust enrichment. She relies on her interpretation of Watts,
where we concluded that public policy does not preclude
unmarried, former cohabitants from raising "claims based upon
unjust enrichment following the termination of their
relationships where one of the parties attempts to retain an
unreasonable amount of the property acquired through the efforts
of both." Watts, 137 Wis. 2d 506 at 532-33.12
11
All subsequent references to the Wisconsin Statutes are
to the 2009-10 version unless otherwise indicated.
12
Plaintiff, Sue Ann Watts, asserted five legal theories to
support her claim: (1) Sue Ann and James, and their children,
constituted a "family," thus entitling Sue Ann to bring an
action for property division under Wis. Stat. § 767.02(1)(h)
(1985-86), and to have the court divide their property pursuant
to Wis. Stat. § 767.255 (1985-86); (2) James's words and conduct
estopped him from asserting the lack of a legal marriage as a
defense under Wis. Stat. § 767.255; (3) Sue Ann and James had a
contract, either express or implied in fact, to share equally
the property accumulated during their relationship; (4) unjust
enrichment; and (5) partition. The Watts court dismissed claims
one and two, holding that divorce statutes were exclusively for
those persons who were legally married, but concluded that all
other legal remedies were available. Watts v. Watts, 137
(continued)
15
Nos. 2012AP2377 & 2015AP870
¶30 The Watts court relied on the usual legal standard for
unjust enrichment:
[A] claim for unjust enrichment does not arise out of
an agreement entered into by the parties. Rather, an
action for recovery based upon unjust enrichment is
grounded on the moral principle that one who has
received a benefit has a duty to make restitution
where retaining such a benefit would be unjust.
Id. at 530. Unjust enrichment requires proof of three elements:
(1) a benefit conferred on the defendant by the plaintiff;
(2) appreciation or knowledge by the defendant of the benefit;
and (3) acceptance or retention of the benefit by the defendant
under circumstances making it inequitable to do so. Id. at 531.
In order to plead an unjust enrichment claim, the party seeking
judicial relief must allege facts that, if true, would be
sufficient to satisfy a court that the above elements are
present. In Watts, we concluded that they were. Id. at 533.
¶31 Watts held that neither public policy nor the
abolition of common-law marriage prohibited an unmarried
cohabitant from asserting a contractual or quasi-contractual
claim against another cohabitant.13 Sue Ann Watts sued James
Watts over their respective interests in property accumulated
Wis. 2d 506, 511-12, 405 N.W.2d 305 (1987). We focus our
analysis on the decision's holding as to unjust enrichment.
13
Common law marriage was abolished in Wisconsin by statute
in 1917. Meyer v. Meyer, 2000 WI 132, ¶63 n.1, 239 Wis. 2d 731,
620 N.W.2d 382 (Sykes, J., dissenting) (citing § 21, ch. 218,
Laws of 1917). Watts did not preclude the remedy of unjust
enrichment for parties——unmarried cohabitants——who may otherwise
have been precluded from seeking judicial relief.
16
Nos. 2012AP2377 & 2015AP870
during their 12-year cohabitation. Id. at 510. Sue Ann assumed
James' last name as her own, and together the couple raised two
children, who also shared the Watts name. They filed joint
income tax returns and maintained joint bank accounts. Sue Ann
and James purchased real and personal property together; Sue Ann
co-signed for the loans James obtained. Watts, 137 Wis. 2d at
513-14.
¶32 During this period Sue Ann managed the home front so
that James could build Watts Landscaping. She was a homemaker
who cared for their children. She cleaned, cooked, laundered,
shopped, ran errands, and maintained the grounds surrounding the
parties' home. Id. at 513. She contributed personal property
that she owned at the beginning of the relationship, served as
hostess for James at both social and business-related events,
and for a time worked 20-25 hours per week at James' office,
performing duties as a receptionist, typist and assistant
bookkeeper. Id. at 513-14.
¶33 Sue Ann alleged that because of her personal and
business contributions, the business and personal wealth of the
couple increased. Id. at 514. Following the termination of
their relationship, however, James refused to compensate Sue Ann
for these contributions despite his indications that she would
share equally in the increased wealth. Id.
¶34 In holding that Sue Ann had stated a claim for relief,
we focused our analysis on principles of equity and fairness.
Id. at 532-33. Specifically, we concluded that regardless of
17
Nos. 2012AP2377 & 2015AP870
the nature of the relationship, the court should enforce
contract, quasi-contract, and property rights where "one party
keeps all or most of the assets accumulated during the
relationship, while the other party, no more or less 'guilty,'
is deprived of property which he or she has helped to
accumulate." Id. at 526.
¶35 In concluding that Sue Ann had stated a claim, we
determined it would be unjust and inequitable to allow James to
retain the entire benefit of their joint enterprise. As to the
three elements of unjust enrichment, we concluded: (1) Sue Ann
contributed property and services to the relationship; (2) the
couple's assets increased as a result of these contributions;
and (3) James' retaining all of the assets was inequitable.
Watts, 137 Wis. 2d at 533.
¶36 Subsequent to our decision in Watts, unjust enrichment
claims in the context of unmarried cohabitants have appeared
before Wisconsin courts on an infrequent basis.14 Nevertheless,
case law does provide some guidance on the scope of unjust
enrichment claims and, in particular, the types of facts that
must be pled in order to survive summary judgment.
¶37 In Waage v. Borer, 188 Wis. 2d 324, 525 N.W.2d 96 (Ct.
App. 1994), the court of appeals held that proof of the elements
of unjust enrichment must be demonstrated by showing: (1) an
14
Indeed, of the 171 cases citing to Watts, only a handful
discuss Sue Ann's unjust enrichment claim, and fewer are
published or authored decisions.
18
Nos. 2012AP2377 & 2015AP870
accumulation of assets; (2) acquired through the efforts of the
claimant and the other party; and (3) retained by the other
party in an unreasonable amount. Id. at 329-30. At trial,
Borer claimed money for her housekeeping efforts after Waage
reneged on an alleged promise to marry her. The court concluded
that despite her cooking, cleaning, and childcare services,
Borer failed to allege facts sufficient to meet the Watts unjust
enrichment standard. Specifically, the court held that only
certain benefits will constitute "assets" or "property" for the
purposes of unjust enrichment. "Watts does not recognize
recompense for housekeeping or other services unless the
services are linked to an accumulation of wealth or assets
during the relationship." Id. at 330. In alleging only that
Waage retained a benefit from Borer's uncompensated housekeeping
efforts made in contemplation of marriage, the court concluded
that Borer had not met the unjust enrichment standard.
Furthermore, the court explained that there is no cause of
action for breaching an alleged promise to marry.
¶38 In Ward v. Jahnke, 220 Wis. 2d 539, 583 N.W.2d 656
(Ct. App. 1998), the court of appeals reemphasized that in order
for a plaintiff to successfully demonstrate unjust enrichment he
or she must present proof that the assets or property acquired
during cohabitation were acquired as a result of a mutual
undertaking or joint effort. Id. at 552. Sandra Ward and
Dennis Jahnke had shared an apartment for nearly four years,
during which time Ward paid rent and all other household
19
Nos. 2012AP2377 & 2015AP870
expenses so that Jahnke could save money for a down payment on a
house. Jahnke eventually purchased a home, making the $11,000
down payment and all mortgage and tax payments on the property.
For the next nine years, Ward lived in the home rent-free,
although she did pay utilities and purchased groceries. All
finances were kept separate. Upon their separation, Ward
claimed that Jahnke was unjustly enriched because he was able to
accumulate a down payment while she paid for nearly all of their
household expenses. Id. at 544. She also argued that because
she moved into Jahnke's house and continued to pay certain
expenses, the house itself was an asset accumulated through
their joint efforts and retained by Jahnke in an unreasonable
amount. Id.
¶39 Applying the elements of unjust enrichment to the
facts, the court of appeals affirmed the circuit court's
conclusion that Jahnke was unjustly enriched by Ward's efforts
during the period of cohabitation in which she paid rent and all
other household expenses. Id. at 550. "We agree that under
these facts, Ward's assumption of the cost of the couple's
living expenses was a benefit conferred on Jahnke which resulted
in an accumulation of the asset — the [$11,000] down payment."
Id. However, the court reversed the circuit court's conclusion
that Jahnke had been unjustly enriched following the purchase of
the home.15 "Not only does Ward's claim lack a single Watts
15
At the circuit court, Ward had received a jury award of
$45,000, or one-half of the equity in the house. Ward v.
Jahnke, 220 Wis. 2d 539, 544, 583 N.W.2d 656 (Ct. App. 1998).
20
Nos. 2012AP2377 & 2015AP870
factor, her testimony as to their financial arrangements shows
only that she and Jahnke were cohabitants who divided their
household expenses in such a way that it made it easy to
maintain separate finances and avoid commingling their
individual resources." Id. at 550-51.
¶40 In so holding, the appeals court stated that it does
not read the list of factors outlined in Watts as a checklist,
but rather as "requiring a plaintiff to put forth facts which
indicate a shared enterprise and some form of proof that the
assets or property in dispute were 'acquired through the efforts
of both.'" Id. at 547-48 (quoting Watts, 137 Wis. 2d at 533)
(emphasis in original).16 It is only after a party can
demonstrate the existence of a joint enterprise that the court
may award equitable relief. See Ulrich v. Zemke, 2002 WI App
246, ¶12, 258 Wis. 2d 180, 654 N.W.2d 458.
The proper legal standard requires the court to . . .
analyze the character of the parties' relationship by
inquiring whether the relationship was a joint
enterprise which encompassed the accumulation of
assets. A court makes this determination by
considering the total circumstances of the parties'
relationship, specifically whether the parties'
contributed property and services to the relationship
producing an increase in wealth.
16
See, e.g., Watts, 137 Wis. 2d at 533 n.21 (listing four
out-of-state decisions in which a cohabitant's unjust enrichment
claim was founded on specific facts that showed a mutual
undertaking or joint effort); Ward, 220 Wis. 2d at 548 n.3
(describing in further detail the footnote found in Watts).
21
Nos. 2012AP2377 & 2015AP870
Id., ¶12.17
¶41 Properly understood, Watts stands for a very simple
proposition: Wisconsin's public policy favoring marriage does
not prohibit unmarried formerly cohabitating couples from
asserting unjust enrichment claims against one another. Watts,
137 Wis. 2d at 532. In such cases, the focus is on the benefit
received by one party from the other party which would be
inequitable to retain. Boldt v. State, 101 Wis. 2d 566, 573,
305 N.W.2d 133 (1981). Therefore, the proper focus is on
property accumulated, not on the type of personal relationship
that existed between the parties. Stated otherwise, a claim for
unjust enrichment may lie when two people work together to
acquire property "through the efforts of both," regardless of
their personal relationship. Watts, 137 Wis. 2d at 533.
¶42 That James and Sue Ann Watts were romantic cohabitants
is not central to the merits of Sue Ann's unjust enrichment
claim. For example, if James, instead, had a joint enterprise
to accumulate wealth with his sister, mom or next door neighbor
who provided necessary child care, domestic services and part-
time office help, an unjust enrichment claim by that person
would require the same proof as Watts required of Sue Ann.
Watts simply provided that cohabitation between unmarried
17
In Ulrich v. Zemke, 2002 WI App 246, 258 Wis. 2d 180, 654
N.W.2d 458, the court concluded that where a couple maintained a
house together, raised four children, shared living expenses,
and continually acquired real and personal property, they had
acted as a joint enterprise.
22
Nos. 2012AP2377 & 2015AP870
romantic partners is not a bar to an otherwise valid claim of
unjust enrichment. It did not provide that the romantic
relationship created the claim for relief. Watts, 137 Wis. 2d
at 532-33.
2. Sands' pleadings
¶43 To plead facts sufficient to support an unjust
enrichment claim, Sands must demonstrate: (1) a benefit
conferred on Menard by Sands; (2) appreciation or knowledge by
Menard of the benefit;18 and (3) acceptance or retention of
assets arising from the benefit by Menard under circumstances
making it inequitable for him to retain all of those assets.
Stated otherwise, Sands' unjust enrichment claim must
demonstrate that, viewed in their entirety, the contributions
she made to a joint enterprise in which she and Menard were
mutually engaged resulted in an accumulation of wealth that
Menard unfairly retained. Ward, 220 Wis. 2d at 552 (explaining
the importance of a mutual undertaking or joint effort).
¶44 Based on her allegations in the pleadings, which we
accept as true for purposes of summary judgment, Sands made a
variety of contributions to Menard, both professionally and
personally. Professionally, she offered business and legal
advice, political consultation services, marketing and research
expertise. She was directly involved in decisions regarding
18
For purposes of our discussion it is undisputed that
Menard was aware of Sands' contributions. We therefore focus
our analysis on the first and third prongs.
23
Nos. 2012AP2377 & 2015AP870
Menards' Indycar and NASCAR racing sponsorships, and she advised
Menard on numerous corporate matters. In their personal
relationship,19 Sands supervised Menard's health care and medical
needs, planned and prepared meals, and assisted with gardening
and other household tasks. Sands advised about refurbishment
and redecoration of three personal residences, acted as hostess
of Menards' households, and provided both personal and family
advice. Sands contends that as a result of these and other
contributions she is entitled to judgment in an amount equal to
the fair and reasonable share of the property, wealth, and
increased net worth acquired by Menard during their
cohabitation. We disagree.
¶45 First, Watts and the cases that followed make clear
that unjust enrichment by a former cohabitant is founded on the
premise of a mutual undertaking or joint enterprise which
results in an accumulation of assets in which the parties
expected to share equally but which are unfairly retained by one
party. In Watts, we emphasized that as a direct result of Sue
Ann's efforts, James' business grew and the parties' assets
increased.
19
We again clarify that unjust enrichment claims do not
require an intimate relationship; the emphasis is on the
property acquired. However, to the extent that Sands claims
these personal contributions allowed Menard to focus his
attention on his companies, they are relevant to her unjust
enrichment claim, namely, whether any assets were acquired
"through the efforts of both." See Ward, 220 Wis. 2d at 549.
24
Nos. 2012AP2377 & 2015AP870
¶46 In Ward, the court distinguished between the couple's
initial, forty-four month cohabitation, during which time they
lived in Ward's apartment where the $11,000 down payment was
accumulated, and the latter period during which they lived in
the house purchased by Jahnke. The court affirmed the circuit
court's finding that Ward's assumption of most household
expenses during the initial forty-four months was "predicated on
a mutual undertaking to accumulate a down payment on a house."
Ward, 220 Wis. 2d at 550. "The length of time this arrangement
persisted, with undisputed testimony that Ward assumed nearly
all of the couple's living expenses, coupled with the fact that
Jahnke then made a substantial down payment on a house lends
credibility to Ward's claim that this was a shared undertaking."
Id.
¶47 However, the court concluded that Ward had failed to
satisfy the unjust enrichment standard for the period following
the purchase of the home. First, Jahnke had paid all closing
costs associated with the house, and all mortgage and tax
payments thereafter. Second, although Ward did the cooking,
cleaning, and laundry, as well as paid for groceries and
utilities while living in the house, these contributions were
offset by the fact that she did not pay rent, and that Jahnke
took care of all maintenance work. Finally, the evidence did
not support the assertion of a joint enterprise after the house
had been purchased. Each maintained separate bank accounts and
had individual insurance policies. Each purchased, paid for,
25
Nos. 2012AP2377 & 2015AP870
and maintained his or her own vehicle. They never held joint
savings or checking accounts, purchased items together, took on
any joint debt, or loaned each other money. Ward, 220
Wis. 2d at 543. Given these facts, the court concluded, "Ward
cannot claim that her assumption of the costs of the utilities
and groceries in a shared living arrangement, while living rent
free, entitles her to share in the equity of a house titled in
another's name. Evidence of a mutual undertaking is completely
lacking." Id. at 552. Comparing the facts and outcomes in
Watts and Ward with the facts alleged by Sands, we conclude that
Sands' and Menard's relationship more closely resembles that of
Ward and Jahnke after the purchase of Jahnke's home.
¶48 First, at the time Sands and Menard met, Menard, Inc.
had been a business for almost forty years, and Menard was
already a multi-millionaire. Sands, meanwhile, was a graduate
of law school operating at least three separate businesses with
her sister in St. Paul, Minnesota. Therefore, while Menard's
net worth was undoubtedly higher than Sands', both parties had
sufficient financial means and business acumen. We therefore
reject any comparison of Sands' contributions to those of Sue
Ann Watts, who helped James Watts begin and grow his landscaping
business, or to those of Sandra Ward, whose contributions
allowed Dennis Jahnke to save $11,000 for the down payment on a
house. In each of those cases, the parties had very little, and
it was only through their joint efforts that their assets or
26
Nos. 2012AP2377 & 2015AP870
property increased. Sands, however, did not support Menard as
he built his empire; he already had it when they met.
¶49 Second, we note the inherent differences between how
Sue Ann and James Watts conducted themselves, and how Sands and
Menard conducted themselves during their respective
relationships. Sands has not alleged that during their
relationship she and Menard commingled finances, filed joint tax
returns, or made joint purchases of real and/or personal
property. Sands did not obligate herself to any business or
personal debt Menard incurred. Given these undisputed facts, we
conclude that Sands and Menard were not engaged in a "joint
enterprise" as required under Watts.20
¶50 Although we conclude that there was no "joint
enterprise," we nonetheless turn to Watts' three-part unjust
enrichment analysis to evaluate the underlying merits of Sands'
unjust enrichment claim. Under the first prong, Sands must
allege sufficient facts which, if true, would prove that her
contributions were material to increasing Menard's wealth.
Here, despite the litany of contributions she made, see, e.g.
20
Once again, the precise nature of the underlying
relationship is not the linchpin of our analysis. However, we
do consider the circumstances of the relationship relevant in
helping us determine whether the elements of unjust enrichment
have been met, particularly the second element under the Waage
test, Waage v. Borer, 188 Wis. 2d 324, 329-30, 525 N.W.2d 96
(Ct. App. 1994) (requiring "(1) an accumulation of assets;
(2) acquired through the efforts of the claimant and the other
party and (3) retained by the other party in an unreasonable
amount.").
27
Nos. 2012AP2377 & 2015AP870
supra ¶6, we cannot conclude that Sands' contributions were
"material" given Menard's wealth and the success of his company
when the parties met. In particular, although Sands has listed
a series of business transactions in which she "participated" or
"assisted," she has alleged no facts from which we could
conclude that her contributions caused an increase in Menard's
assets or property.
¶51 We are similarly disinclined to conclude that Sands
has pled sufficient facts which, if true, would demonstrate that
Menard's acceptance or retention of her contributions would be
inequitable under the circumstances. In particular, Sands must
demonstrate that the benefits she conferred to Menard are not
offset by the benefits she derived from him. First, the record
indicates that Sands enjoyed an expansive lifestyle as the
companion of a wealthy man.21 Second, unlike the plaintiffs in
Watts or Ward, Sands did receive compensation for some of her
services. Over the course of their eight-year relationship,
Sands was paid $49,635.84 for the balance of her student loans,22
$3,000 to compensate her for "wedding expenses," and $152,105
for various legal services.
21
For example, the record reflects that Sands and Menard
took multiple boating and skiing trips, vacations to St. Martin,
London, and Italy, and that Menard gifted Sands with a Ford
Mustang for Christmas in 2005. They went to horse races, NASCAR
events, and fashion shows, and met prominent political figures
at that time.
22
As referenced above, it is disputed whether this payment
was for her student loans or for legal services in regard to the
DNR matter.
28
Nos. 2012AP2377 & 2015AP870
¶52 Sands argues, however, that because Menard
"repeatedly" promised her that she would obtain a certain
ownership interest in Menard, Inc., and because she made
contributions "fully and faithfully and in reliance on the
promises and representations of Menard," it would be inequitable
to deny her an ownership interest in his property. Given that a
specific agreement is unnecessary under Watts, Sands'
allegations that she was promised a certain ownership interest
are not persuasive. In short, we conclude that Sands has failed
to allege facts which, if true, would support her legal
conclusion that she and Menard had a shared enterprise that
included accumulation of assets in which both she and Menard
expected to share equally.23
C. Rules of Professional Conduct
¶53 In light of our conclusion that Sands has failed to
allege facts which, if true, would support what she has styled
as a Watts unjust enrichment claim, analyzing whether her claim
also is barred by SCR 20:1.8(a) may not seem necessary.
Nonetheless, because the question of whether a Supreme Court
Rule can be used as an absolute defense against an attorney in a
civil action is an important issue, we address it here. For the
reasons stated below, we conclude: (1) the court of appeals
23
We do not suggest that a former cohabitant may never
plead facts sufficient to establish a "material benefit"
unjustly obtained by a wealthy partner. We simply hold that in
this case, Sands did not plead facts sufficient to meet the
criteria for unjust enrichment set forth in Watts.
29
Nos. 2012AP2377 & 2015AP870
erred in holding SCR 20:1.8(a) created an absolute bar to Sands'
unjust enrichment claim; and (2) although SCR ch. 20 may not be
used as an absolute defense to a civil claim where an attorney
is a party, SCR 20:1.8(a) may guide courts in determining
whether those standards of care that generally are required of
lawyers have been met.
1. General principles
¶54 Supreme Court Rule ch. 20 sets forth the regulations
governing professional conduct of attorneys licensed to practice
law in the State of Wisconsin. Attorneys not admitted to the
State Bar of Wisconsin may be subject to the disciplinary action
in Wisconsin "if the lawyer provides or offers any legal
services in the state." SCR 20:8.5(a). We have the exclusive
authority to define the "practice of law." See Seitzinger v.
Cmty. Health Network, 2004 WI 28, ¶39, 270 Wis. 2d 1, 676
N.W.2d 426. We have previously concluded that deciding whether
one engaged in the "practice of law" is determined on a case-by-
case basis. State ex rel. Junior Ass'n of Milwaukee Bar v.
Rice, 236 Wis. 38, 53, 294 N.W. 550, 556 (1940).
¶55 At all times relevant to the current litigation,
attorneys licensed outside of Wisconsin who were acting as in-
house counsel in this state were not "practicing law" for the
purposes of bar admission. See Mostkoff v. Bd. of Bar Exam'rs,
2005 WI 33, ¶19, 279 Wis. 2d 249, 693 N.W.2d 748 (concluding
Michigan attorney's legal services as corporate counsel were not
the "practice of law" for purposes of admission to the State Bar
30
Nos. 2012AP2377 & 2015AP870
of Wisconsin). Therefore, because at that time an attorney who
was not licensed to practice in Wisconsin, but who was
nonetheless serving as in-house counsel for a Wisconsin
corporation, was not eligible for bar admission based solely on
in-house counsel services, he also was not subject to regulation
by the State Bar of Wisconsin.
¶56 As to all attorneys practicing law in this state, we
have previously ruled that "[v]iolations of the Code of
Professional Conduct are determined only by means of
disciplinary action." Foley-Ciccantelli v. Bishop's Grove
Condo., 2011 WI 36, ¶2, 333 Wis. 2d 402, 797 N.W.2d 789.
Indeed, as stated in preamble [20]24 to the Rules in effect
during Sands' alleged cohabitation:
Violation of a rule should not itself give rise to a
cause of action against a lawyer nor should it create
any presumption in such a case that a legal duty has
been breached. In addition, violation of a rule does
not necessarily warrant any other nondisciplinary
remedy, such as disqualification of a lawyer in
pending litigation. 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. Furthermore, the purpose of the rules can
be subverted when they are invoked by opposing parties
as procedural weapons. The fact that a rule is a just
basis for a lawyer's self-assessment, or for
sanctioning a lawyer under the administration of a
24
The preamble was amended in 2007 to add the following
concluding sentence: "Nevertheless, since the rules do
establish standards of conduct by lawyers, a lawyer's violation
of a rule may be evidence of breach of the applicable standard
of conduct."
31
Nos. 2012AP2377 & 2015AP870
disciplinary authority, does not imply that an
antagonist in a collateral proceeding or transaction
has standing to seek enforcement of the rule.
¶57 The court of appeals has also endorsed the use of the
Rules of Professional Conduct as guidelines or principles in
civil litigation. Gustafson v. Physicians Ins. Co., 223 Wis. 2d
164, 176-78, 588 N.W.2d 363 (Ct. App. 1998). In Gustafson, the
plaintiffs' attorney in a medical malpractice case also agreed
to represent the interests of the plaintiffs' subrogated health
insurer in exchange for one-third of the health insurer's
recovery. Id. at 168. After a jury rendered a verdict in favor
of the defendants, the plaintiffs' attorney reached a settlement
agreement with the defendants whereby the plaintiffs waived
their right to appeal the judgment in exchange for the
defendants' agreement not to seek taxable costs against them.
Id. at 169. However, the plaintiffs' attorney never consulted
with the subrogated insurer about the settlement and it
expressly left the defendants the option of taxing costs against
the subrogated insurer, which they did. Id. The subrogated
insurer appealed on the basis that the judgment was unfair
because of the attorney's misconduct, whereupon the settlement
was voided. Id.
¶58 In determining whether the judgment for taxable costs
should be reversed due to the attorney's conduct, the court of
appeals considered several of the Rules of Professional Conduct
as guidelines or principles. For example, SCR 20:1.16 was
considered to determine whether the plaintiffs' attorney
32
Nos. 2012AP2377 & 2015AP870
properly withdrew from representing the subrogated insurer; SCR
20:1.2 was considered to determine whether the attorney should
have informed the subrogated insurer of the proposed settlement;
and SCR 20:1.7 was reviewed to determine whether the attorney
had an impermissible conflict of interest when he negotiated the
settlement. Id. at 176-78. Taxable costs were reversed because
the attorney failed to adequately protect his client. Id. at
182.
2. SCR 20:1.8(a) general principles
¶59 Supreme Court Rule 20:1.8(a) applies to financial
conflicts of interest that may arise when an attorney "enter[s]
into a business transaction with a client or knowingly
acquire[s] an ownership, possessory, security or other pecuniary
interest adverse to a client." SCR 20:1.8(a). During the
relevant time period, SCR 20:1.8(a) provided:
A lawyer shall not enter into a business transaction
with a client or knowingly acquire an ownership,
possessory, security or other pecuniary interest
adverse to the client unless:
(1) the transaction and terms on which the lawyer
acquires the interest are fair and reasonable to the
client and are fully disclosed and transmitted in
writing to the client in a manner which can be
reasonably understood by the client;
(2) the client is given a reasonable opportunity
to seek the advice of independent counsel in the
transaction; and
(3) the client consents in writing thereto.
33
Nos. 2012AP2377 & 2015AP870
¶60 Supreme Court Rule 20:1.8(a) is grounded in the
concern that "[a] lawyer's legal skill and training, together
with the relationship of trust and confidence between lawyer and
client, create the possibility of overreaching when the lawyer
participates in a business, property or financial transaction
with a client." See Model Rules of Prof'l Conduct r. 1.8 cmt.
(Am. Bar Ass'n 2015). The rule applies to all attorney-client
relationships, and includes transactions in which an attorney
seeks an ownership interest in the client's business as
compensation for his or her legal services. See id. The
existence of an attorney-client relationship "depends upon the
intent of the parties and is a question of fact." In re
Disciplinary Proceedings Against Kostich, 2010 WI 136, ¶16, 330
Wis. 2d 378, 793 N.W.2d 494.
3. SCR 20:1.8(a) and Sands
¶61 Both the circuit court and the court of appeals
applied SCR 20:1.8(a) to Sands' Watts unjust enrichment claim.
The circuit court formulated a two-part exception to Menard's
proposed bright-line rule, namely, that SCR 20:1.8(a) is an
absolute defense unless two conditions are met: (1) the
attorney and client had a romantic relationship that predated
their attorney-client relationship; and (2) the legal services
rendered by the attorney were "merely ancillary or incidental"
to the larger joint enterprise. The court of appeals went one
step further, holding that a violation of SCR 20:1.8(a) is an
absolute bar to recovery. Sands, 372 Wis. 2d 126, ¶38. As to
34
Nos. 2012AP2377 & 2015AP870
both dispositions, we disagree, and conclude that while Supreme
Court Rules may guide courts in determining required standards
of care generally, they may not be employed as an absolute
defense in a civil action involving an attorney.
¶62 As Sands has repeatedly pointed out, the preamble to
the Supreme Court Rules clearly demonstrates that alleged
violations are to be determined in disciplinary proceedings, not
civil litigation. "The Preamble demonstrates that the purpose
of the rules is not to provide remedies outside the realm of
professional discipline." Foley-Ciccantelli, 333 Wis. 2d 402,
¶173 (Roggensack, J., concurring). See also Nauga, Inc. v.
Westel Milwaukee Co., Inc., 216 Wis. 2d 306, 318 n.5, 576
N.W.2d 573, (Ct. App. 1998) ("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
not designed to be a basis for civil liability.").
¶63 The Menard Defendants argue that they have not invoked
SCR 20:1.8(a) as a basis for civil liability, to obtain
disciplinary sanctions, or as a procedural weapon. Instead,
they look to the language of the amended preamble "because it
establishes the standards of conduct with which Sands needed to
comply if she wanted to enforce such an arrangement." Similar
to Sands, the Menard Defendants ground their argument in the
language of Foley-Ciccantelli. However, while Sands focuses on
the language cited above, the Menard Defendants focus on ¶86,
which reads, in part:
35
Nos. 2012AP2377 & 2015AP870
The resolution of the issue of disqualification in the
present case is thus guided by our prior case law and
the precepts of the Supreme Court Rules of
Professional Conduct for Attorneys regarding an
attorney's duties to former clients. Appellate courts
have often cited the Rules of Professional Conduct for
guidance in non-disciplinary cases, including
disqualification cases.
Foley-Ciccantelli, 333 Wis. 2d 402, ¶86.
¶64 The arguments of the Menard Defendants are not
persuasive. Foley-Ciccantelli arose from a disqualification
motion, not from a claim that the lawyer's conduct violated SCR
ch. 20. Id., ¶91.
¶65 Accordingly, we conclude that SCR ch. 20 does not
apply here for at least two reasons. First, Supreme Court Rules
that regulate the ethical practice of law in Wisconsin cannot be
used as an absolute defense in a civil action in which an
attorney is a party. In that regard, we clarify Foley-
Ciccantelli to so hold. Second, Sands' provision of legal
services was not the practice of law, as we defined the practice
of law in Mostkoff; therefore, she was not entitled to
membership in the State Bar of Wisconsin during the times
relevant to her Watts claim. Accordingly, she was not subject
to SCR 20:1.8(a).
D. Menard, Inc.'s Counterclaim
¶66 The court of appeals concluded that the accrual date
for Menard, Inc.'s counterclaim for breach of fiduciary duty was
September 1, 2005, the date of closing for the Fund transaction.
As we consider the court of appeals' conclusion, we note that
36
Nos. 2012AP2377 & 2015AP870
the question presented is whether on September 1, 2005, Menard,
as the president and CEO of Menard, Inc., knew or should have
known that Sands' loyalty was questionable. Hansen v. A.H.
Robins, Inc., 113 Wis. 2d 550, 560, 335 N.W.2d 578 (1983)
(concluding that a claim accrues "on the date the injury is
discovered or with reasonable diligence should be discovered,
whichever occurs first."). To answer that question, we consider
Menard's personal characteristics.
¶67 Menard was a skilled businessman who had been involved
in countless business transactions in his individual capacity
and as the CEO of Menard, Inc. On September 1, 2005, he had
enough information to be required to investigate further. As he
said in regard to the closing of the transaction that created
the Fund, "it was very difficult to tell whose side [she] was
on, was she on [Hilbert's] side or my side." He also said that
he then believed that Sands was lying to him. Although the
degree of certainty of suspicion is variable, here, Menard was
not a novice. He was in charge of a multi-billion dollar
corporation. He also had outside advisors by his side. His
suspicion triggered the obligation to investigate further, and
he had plenty of assistance to do so. See Goff v. Seldera, 202
Wis. 2d 600, 611, 550 N.W.2d 144 (Ct. App. 1996) (citing Awve v.
Physicians Ins. Co., 181 Wis. 2d 815, 825, 512 N.W.2d 216 (Ct.
App. 1994)). Yet, he did nothing until after Sands sued him.
¶68 Even with the tolling rule of Donaldson v. West Bend
Mut. Ins. Co., 2009 WI App 134, ¶¶23-24, 321 Wis. 2d 244, 773
37
Nos. 2012AP2377 & 2015AP870
N.W.2d 470, which makes the effective filing date November 3,
2008, Menard, Inc.'s counterclaim was well outside the
applicable statute of limitations.25
E. Claim Regarding Trustees
¶69 Sands also appeals the court of appeals' dismissal of
her claim against the Trustees, in which the court of appeals
affirmed the circuit court's grant of summary judgment to the
Trustees based on its earlier ruling granting partial summary
judgment to the Menard Defendants. The court stated, "since
there is no avenue to recover against the Menard principal,
there cannot be recovery against the [Trustees]."
¶70 Before us, Sands' brief-in-chief asserted only what
she styled as a Watts unjust enrichment claim, and in her
combined response brief regarding the Menard Defendants and
Trustees, Sands stated, "This Appeal is Solely a Watts v. Watts
Unjust Enrichment Claim."
¶71 Watts, as we have discussed above in some detail, does
not preclude an unmarried cohabitant from bringing an unjust
enrichment claim on equitable grounds when the cohabitants
engaged in a joint enterprise to work together to accumulate
wealth and one cohabitant has retained the accumulated wealth in
an unjust amount. Watts provides no support for an unjust
enrichment claim made by a third party because unjust enrichment
25
We concur with the conclusion of the court of appeals on
this matter, and largely adopt their factual narration as our
own. Sands, 372 Wis. 2d 126, ¶¶53-59.
38
Nos. 2012AP2377 & 2015AP870
claims are premised on two people working towards a joint
accumulation of property in which they both expect to share
equally.
¶72 However, we understand Sands' claim against the
Trustees to be made under the theory that they are the
repositories of significant property that once belonged to
Menard. Therefore, if Sands were to prevail on what she has
styled as a Watts unjust enrichment claim against Menard, she
would need to reach the Trustees to garner a share of Menard's
property that they hold. We offer no opinion on her theory of
recovery from the Trustees because she has not prevailed on her
unjust enrichment claim against Menard. Accordingly, she can
have no interest in any property that the Trustees hold.
Therefore, Sands' claim against the Trustees was properly
dismissed.
III. CONCLUSION
¶73 There were four issues argued before this court on
appeal. First, we considered whether Sands has pled facts
sufficient to show unjust enrichment. We conclude that she has
not. Sands has failed to demonstrate facts which, if true,
would support her legal conclusion that she and Menard had a
joint enterprise that included accumulation of assets in which
both she and Menard expected to share equally.
¶74 Second, we considered whether the court of appeals
properly concluded that SCR 20:1.8(a) may be raised as an
absolute defense to what Sands has styled as a Watts unjust
39
Nos. 2012AP2377 & 2015AP870
enrichment claim arising from a long-term romantic relationship.
We conclude that SCR 20:1.8(a) may guide courts in determining
required standards of care generally; however, it may not be
employed as an absolute defense to a civil claim involving an
attorney.
¶75 And finally, we also conclude that the court of
appeals properly granted summary judgment to Sands on Menard,
Inc.'s counterclaim for breach of fiduciary duty, and to the
Trustees on their motion for summary judgment dismissing Sands'
claim.
By the Court.—The decision of the court of appeals is
affirmed.
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No. 2012AP2377 & 2015AP870.ssa
¶76 SHIRLEY S. ABRAHAMSON, J. (concurring in part and
dissenting in part). Unlike the majority, I conclude that Debra
Sands pleaded sufficient facts to establish an unjust enrichment
claim under Watts v. Watts, 137 Wis. 2d 506, 405 N.W.2d 303
(1987), against John R. Menard, Jr.1 I would remand Sands'
unjust enrichment claim against Menard to the circuit court for
trial. Accordingly, I dissent from the majority's contrary
conclusion.
I
¶77 I begin by setting forth the applicable standard of
review, which is muddied by the majority. The supreme court
reviews a grant of summary judgment independently, applying the
same standards as employed by the circuit court. Dufour v.
Progressive Classic Ins. Co., 2016 WI 59, ¶12, 370 Wis. 2d 313,
881 N.W.2d 678. "There is a standard methodology which a trial
court follows when faced with a motion for summary judgment."
Green Spring Farms v. Kersten, 136 Wis. 2d 304, 314, 401
N.W.2d 816 (1987).
¶78 "The first step of that methodology requires the court
to examine the pleadings to determine whether a claim for relief
has been stated." Green Spring Farms, 136 Wis. 2d at 315; see
1
I agree with the following conclusions of the majority:
(1) SCR 20:1.8(a) may guide courts in determining required
standards of care for attorneys generally, but may not be used
as an absolute bar in a civil claim involving an attorney; (2)
the court of appeals properly granted summary judgment to Sands
on Menard, Inc.'s counterclaim for breach of fiduciary duty; and
(3) the court of appeals properly granted summary judgment to
the Menard Trustees. Majority op., ¶3.
1
No. 2012AP2377 & 2015AP870.ssa
also Moya v. Aurora Healthcare, Inc., 2017 WI 45, ¶15, 375
Wis. 2d 38, 894 N.W.2d 405. This step tests the "legal
sufficiency of the complaint." Kaloti Enters., Inc. v. Kellogg
Sales Co., 2005 WI 111, ¶11, 283 Wis. 2d 555, 699 N.W.2d 205.
All facts alleged in the complaint, as well as all reasonable
inferences from those facts, are accepted as true, and the
complaint is given a liberal construction. Ollerman v. O'Rourke
Co., 94 Wis. 2d 17, 24, 288 N.W.2d 95 (1980).
¶79 "If a claim for relief has been stated, the inquiry
then shifts to whether any factual issues exist." Green Spring
Farms, 136 Wis. 2d at 315. Summary judgment is only appropriate
"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."
Wis. Stat. § 802.08.2 The evidence is viewed in the light most
favorable to the non-moving party, and all reasonable inferences
are drawn in favor of the non-moving party. Burbank Grease
Servs., LLC v. Sokolowski, 2006 WI 103, ¶40, 294 Wis. 2d 274,
717 N.W.2d 781. It is not the job of the court on summary
judgment to "decide issues of credibility, weigh the evidence,
or choose between differing but reasonable inferences from the
undisputed facts." Fortier v. Flambeau Plastics Co., 164
Wis. 2d 639, 665, 476 N.W.2d 593 (Ct. App. 1991).
II
2
All subsequent references to the Wisconsin Statutes are to
the 2009-10 version unless otherwise indicated.
2
No. 2012AP2377 & 2015AP870.ssa
¶80 I conclude that the facts alleged in Sands' complaint,
taken as true (as we must), adequately state a claim for unjust
enrichment against Menard.3
¶81 An unjust enrichment claim has three elements: "(1) a
benefit conferred on the defendant by the plaintiff, (2)
appreciation or knowledge by the defendant of the benefit, and
(3) acceptance or retention of the benefit by the defendant
under circumstances making it inequitable for the defendant to
retain the benefit." Watts, 137 Wis. 2d at 531.
¶82 Watts did not change the elements of unjust
enrichment. Nor did it create a sub-category of unjust
enrichment claim. It merely recognized that unmarried
cohabitants may state a claim for unjust enrichment where one
party retains an unreasonable amount of property acquired
through the efforts of both. As the Watts court explained:
Many courts have held, and we now so hold, that
unmarried cohabitants may raise claims based upon
unjust enrichment following the termination of their
relationships where one of the parties attempts to
retain an unreasonable amount of the property acquired
through the efforts of both.
In this case, the plaintiff alleges that she
contributed both property and services to the parties'
relationship. She claims that because of these
contributions the parties' assets increased, but that
she was never compensated for her contributions. She
further alleges that the defendant, knowing that the
plaintiff expected to share in the property
accumulated, "accepted the services rendered to him by
the plaintiff" and that it would be unfair under the
3
The operative complaint in the instant case is Sands'
Second Amended Complaint.
3
No. 2012AP2377 & 2015AP870.ssa
circumstances to allow him to retain everything while
she receives nothing.
Watts, 137 Wis. 2d at 532-33.
¶83 Additionally, nothing in Watts limits an unjust
enrichment claim to two persons. A claim for unjust enrichment
may involve more than two persons so long as all those involved
worked towards the joint accumulation of property or wealth in
which they all expected to share. Any contrary suggestion by
the majority is unsupported. See majority op., ¶71.
¶84 In Watts, the plaintiff alleged that during her
relationship with the defendant, she contributed both property
and services to the parties' relationship with the expectation
that she would enjoy equally with the defendant the wealth
accumulated through their joint efforts. Watts, 137 Wis. 2d at
513-14. The plaintiff alleged:
During their relationship, the plaintiff contributed
childcare and homemaking services, including cleaning,
cooking, laundering, shopping, running errands, and
maintaining the grounds surrounding the parties' home.
Additionally, the plaintiff contributed personal
property to the relationship which she owned at the
beginning of the relationship or acquired through
gifts or purchases during the relationship. She
served as hostess for the defendant for social and
business-related events. The amended complaint
further asserts that periodically, between 1969 and
1975, the plaintiff cooked and cleaned for the
defendant and his employees while his business, a
landscaping service, was building and landscaping a
golf course.
From 1973 to 1976, the plaintiff worked 20-25 hours
per week at the defendant's office, performing duties
as a receptionist, typist, and assistant bookkeeper.
From 1976 to 1981, the plaintiff worked 40-60 hours
per week at a business she started with the
defendant's sister-in-law, then continued and managed
4
No. 2012AP2377 & 2015AP870.ssa
the business herself after the dissolution of that
partnership.
Watts, 137 Wis. 2d at 513-14.
¶85 The Watts court held that the plaintiff stated a claim
for unjust enrichment against her former cohabitant:
In this case, the plaintiff alleges that she
contributed both property and services to the parties'
relationship. She claims that because of these
contributions the parties' assets increased, but that
she was never compensated for her contributions. She
further alleges that the defendant, knowing that the
plaintiff expected to share in the property
accumulated, "accepted the services rendered to him by
the plaintiff" and that it would be unfair under the
circumstances to allow him to retain everything while
she receives nothing. We conclude that the facts
alleged are sufficient to state a claim for recovery
based upon unjust enrichment.
Watts, 137 Wis. 2d at 533.
¶86 In the instant case, Sands pleaded extensive facts
spanning approximately eight pages of her complaint supporting
her unjust enrichment claim against Menard. Sands alleges in
her complaint as follows:
[D]uring the eight-year period of Sands's cohabitation
and engagement with Menard, the substantial and
continuing efforts of Sands resulted directly in the
acquisition of valuable property, wealth, and
substantial increase in the net worth of Menard, who
now attempts to retain not merely an unreasonable
amount of property, wealth, and increased net worth
acquired through the efforts of Sands, but all of the
property, wealth, and increased net worth acquired
through the efforts of Sands.
Appendix to Brief of Plaintiff-Appellant-Petitioner Debra K.
Sands, Volume I, at A061.
¶87 Sands summarized her contributions as follows:
Sands relied on Menard's promises, representations,
and conduct, and devoted over eight years to working
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No. 2012AP2377 & 2015AP870.ssa
with and helping him in his business and personal
matters. Sands contributed to their enterprise in
numerous ways. She was Menard's life partner, social
companion, and manager and hostess of his households.
Sands protected Menard from unwanted approaches by
serving as a "gate-keeper." She supervised his health
care and medical needs; managed the remodeling of
three residences; and advised on the acquisition of
airplanes and their design and décor. She provided
ideas for new products and product lines for the
Menard, Inc., stores, such as garden centers; and
scouted and proposed new store locations, store
layouts, and product displays. She represented
Menard, Inc., as a product buyer. She reviewed and
suggested changes and additions to Menard, Inc.,
marketing plans. She assisted with government and
public relations. She participated in the redesign of
store signs and logos. She helped find new business
and investment opportunities. She assisted in the
management of the Team Menard auto racing venture and
newly-acquired businesses, including two engine design
companies in England, a thoroughbred racing business,
and a $400 million private equity fund. She made her
joint enterprise with Menard her focus, which occupied
her every moment.
Brief of Plaintiff-Appellant-Petitioner, Debra K. Sands 14-15.
¶88 Construing Sands' complaint liberally and taking all
factual allegations as true (as the court must), I conclude that
Sands alleged facts sufficient to state a claim for unjust
enrichment.
¶89 The majority concludes that Sands failed to adequately
plead unjust enrichment by relying on inapposite cases and
drawing distinctions that were not essential to the court's
holding in Watts vis-à-vis the plaintiff's unjust enrichment
claim.
¶90 The majority relies on Waage v. Borer, 188
Wis. 2d 324, 525 N.W.2d 96 (Ct. App. 1994), and Ward v. Jahnke,
220 Wis. 2d 539, 583 N.W.2d 656 (Ct. App. 1998), asserting that
6
No. 2012AP2377 & 2015AP870.ssa
these cases shed light on "the types of facts that must be pled
in order to survive summary judgment." Majority op., ¶36. They
do not. These cases do not support the majority's position.
¶91 In Waage, the court of appeals held that under the
particular facts of that case, the complainant could not recover
on her unjust enrichment claim because "Watts does not recognize
recompense for housekeeping or other services unless the
services are linked to an accumulation of wealth or assets
during the relationship." Waage, 188 Wis. 2d at 330.
¶92 Importantly, the Waage court did not conclude that the
complainant had failed to adequately plead unjust enrichment.
Rather, the unjust enrichment claim proceeded to trial, and the
court of appeals held that the complainant did not present
sufficient evidence of any assets accumulated during the
relationship as a result of joint efforts: "[Plaintiff]
arguably alleged but did not set forth any evidence to satisfy
[the elements of her unjust enrichment claim]. . . . [Plaintiff]
presented absolutely no evidence of assets accumulated during
their relationship." Waage, 188 Wis. 2d at 330. Simply stated,
Waage has nothing to say about pleading requirements.
¶93 The Ward case also did not analyze the sufficiency of
the complaint. In Ward, the question presented was the
sufficiency of the evidence produced at trial.
¶94 In Ward, the complainant recovered at trial her fair
share of the down payment on the couple's house, but the court
of appeals held that the defendant had not been unjustly
enriched following the purchase of the home. Ward, 220
7
No. 2012AP2377 & 2015AP870.ssa
Wis. 2d at 544-50. In so holding, the court of appeals pointed
out that the plaintiff's own trial testimony established that
after the couple moved into the home, the couple split household
expenses as evenly as possible, so that a reasonable finder of
fact could not find that the defendant had been unjustly
enriched. See Ward, 220 Wis. 2d at 550-53.
¶95 In addition to relying on inapposite cases, the
majority misunderstands what facts were relevant to the court's
holding in Watts vis-à-vis the plaintiff's unjust enrichment
claim. The majority magnifies differences in Sands' and
Menard's personal relationship and in the personal relationship
of the parties at the center of Watts.4 For example, the
majority points out that unlike in Watts, in which the plaintiff
helped the defendant begin and grow his landscaping business,
Menard was already a multi-millionaire and had been a successful
businessman for almost 40 years when Sands and Menard met.
Majority op., ¶48.
¶96 This reasoning suggests that the court would not have
allowed the unjust enrichment claim in Watts to proceed if the
4
The majority appears to acknowledge that the joint
accumulation of property and wealth, not the nature of the
relationship, is the focus of the unjust enrichment claim, see
majority op., ¶¶33-34, 41-42, 44 n.19, 49 n.20, but nonetheless,
the majority places great emphasis on these relationship
differences, see majority op., ¶¶31, 48-49. The majority
disclaims any reliance on a "checklist" of similarities with the
specific facts of Watts, majority op., ¶40, but that is exactly
what the majority does. What should readers rely upon for
future cases: what the majority opinion says or what the
majority opinion does?
8
No. 2012AP2377 & 2015AP870.ssa
defendant's business had already been established and profitable
at the time the parties cohabitated, as opposed to being built
from scratch by the efforts of both. Watts does not support
this suggestion. The fact that Menard was already successful
does not preclude Sands' unjust enrichment claim if Menard's
assets became more valuable as a result of the parties' joint
efforts.
¶97 The majority also highlights that "Sands has not
alleged that during their relationship she and Menard commingled
finances, filed joint tax returns, or made joint purchases of
real and/or personal property. Sands did not obligate herself
to any business or personal debt Menard incurred." Majority
op., ¶49. These facts are not dispositive of unjust enrichment.
¶98 In Watts, we detailed certain aspects of the parties'
relationship, but those facts were not necessary to our holding
on the unjust enrichment issue. We explained:
Early in 1969, the parties began living together in a
"marriage-like" relationship, holding themselves out
to the public as husband and wife. The plaintiff
assumed the defendant's surname as her own.
Subsequently, she gave birth to two children who were
also given the defendant's surname. The parties filed
joint income tax returns and maintained joint bank
accounts asserting that they were husband and wife.
The defendant insured the plaintiff as his wife on his
medical insurance policy. He also took out a life
insurance policy on her as his wife, naming himself as
the beneficiary. The parties purchased real and
personal property as husband and wife. The plaintiff
executed documents and obligated herself on promissory
notes to lending institutions as the defendant's wife.
Watts, 137 Wis. 2d at 513.
9
No. 2012AP2377 & 2015AP870.ssa
¶99 None of these facts reappears in the analysis of the
plaintiff's unjust enrichment claim. See Watts, 137 Wis. 2d at
530-533. Rather, they were relevant to the plaintiff's claim
that the plaintiff, the defendant, and their children
constituted a "family," thus entitling her to bring an action
for property division under Wisconsin's marriage dissolution
statute. Watts, 137 Wis. 2d at 514-15.5
III
¶100 This matter is here on summary judgment. Although the
majority opinion is confusing, it purports to dismiss Sands'
unjust enrichment claim as inadequately pleaded. It nonetheless
impermissibly ventures outside the pleadings to weigh the
evidence, reaching the conclusion that Sands would not prevail
on the merits of her unjust enrichment claim.6
5
In support, the plaintiff relied upon a Washington court
of appeals case with similar facts, Warden v. Warden, 676 P.2d
1037 (Wash. App. 1984). The Washington court of appeals applied
its marriage dissolution statute to divide property acquired by
unmarried cohabitants in what was tantamount to a marital family
except for a legal marriage. We recognized that "Warden is
remarkably similar on its facts to the instant case. The
parties in Warden had lived together for 11 years, had two
children, held themselves out as husband and wife, acquired
property together, and filed joint tax returns." Watts, 137
Wis. 2d at 516. Thus, the plaintiff in Watts pleaded similar
facts not to support her unjust enrichment claim, but because
she was also arguing that her relationship with the defendant
should be considered a "family" under Wisconsin's marriage
dissolution statute.
6
The majority concludes:
[D]espite the litany of contributions she made, we
cannot conclude that Sands' contributions were
"material" given Menard's wealth and the success of
his company when the parties met. In particular,
(continued)
10
No. 2012AP2377 & 2015AP870.ssa
¶101 In contrast, I conclude that Sands pleaded sufficient
facts to state a claim for unjust enrichment against Menard.
After reviewing the summary judgment record, viewing all the
evidence in the light most favorable to Sands, and drawing all
reasonable inferences in her favor (as I must), I would hold
although Sands has listed a series of business
transactions in which she "participated" or
"assisted," she has alleged no facts from which we
could conclude that her contributions caused an
increase in Menard's assets or property.
We are similarly disinclined to conclude that Sands
has pled sufficient facts which, if true, would
demonstrate that Menard's acceptance or retention of
her contributions would be inequitable under the
circumstances. In particular, Sands must demonstrate
that the benefits she conferred to Menard are not
offset by the benefits she derived from him. First,
the record indicates that Sands enjoyed an expansive
lifestyle as the companion of a wealthy man. Second,
unlike the plaintiffs in Watts or Ward, Sands did
receive compensation for some of her services. Over
the course of their eight-year relationship, Sands was
paid $49,635.84 for the balance of her student loans,
$3,000 to compensate her for "wedding expenses," and
$152,105 for various legal services.
Majority op., ¶50-51 (footnotes omitted). The majority noted
specific examples of luxuries enjoyed by Sands as Menard's
companion including "multiple boating and skiing trips,
vacations to St. Martin, London, and Italy, and . . . a Ford
Mustang for Christmas in 2005. They went to horse races, NASCAR
events, and fashion shows, and met prominent political figures
at that time." Majority op., ¶51 n.21.
Clearly, the majority reaches beyond the pleadings and has
substituted itself as the finder of fact in order to resolve
genuine issues of material fact in favor of Menard. At this
stage, it is not the court's task to "decide issues of
credibility, weigh the evidence, or choose between differing but
reasonable inferences from the undisputed facts." Fortier, 164
Wis. 2d at 665.
11
No. 2012AP2377 & 2015AP870.ssa
that genuine issues of material fact preclude summary judgment.
I would remand Sands' unjust enrichment claim to the circuit
court for trial.
¶102 For the reasons set forth, I write separately.
¶103 I am authorized to state that Justice ANN WALSH
BRADLEY joins this separate writing.
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1