Patterson & Richardson Properties, LLC v. Neng Hua Chen

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
November 22, 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. 2023AP1219 Cir. Ct. No. 2023SC3295
STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT IV
PATTERSON & RICHARDSON PROPERTIES, LLC,
PLAINTIFF-RESPONDENT,
V.
NENG HUA CHEN,
DEFENDANT-APPELLANT.
APPEAL from a judgment of the circuit court for Dane County:
JOSANN M. REYNOLDS, Judge. Reversed.
¶1 KLOPPENBURG, J.1 Neng Hua Chen appeals a circuit court
judgment of eviction. Chen’s landlord, Patterson & Richardson Properties, LLC
1
This appeal is decided by one judge pursuant to WIS. STAT. § 752.31(2)(a) (2021-22).
All references to the Wisconsin Statutes are to the 2021-22 version unless otherwise noted.
No. 2023AP1219
(“Patterson & Richardson”), brought this eviction action, alleging that Chen
breached a lease provision prohibiting residential use of the property. After a
hearing at which the lease itself was not produced, the court granted the judgment
for eviction. I conclude that Patterson & Richardson did not introduce any
evidence that the lease prohibits residential use, and, therefore, I reverse.
BACKGROUND
¶2 In May 2023, Patterson & Richardson filed a complaint seeking to
evict its tenant Chen from property it owns in Madison, Wisconsin (“the
property”). According to the complaint, Chen was “in violation of [his] lease and
city zoning ordinances” because he was using the property “as a residence,” and
“the only allowable use for the property is as a massage business.” No written
lease was attached to the complaint.
¶3 A return date was set before the court commissioner, but Chen did
not appear, and the court commissioner entered default judgment. That same day,
Chen moved to reopen the judgment. At the ensuing motion hearing before the
circuit court three days later, Chen appeared pro se and told the court that he spoke
little English and had misread the time stated on the notice of hearing. The court
granted Chen’s motion to reopen and immediately held an evidentiary hearing on
the merits of the eviction action.2
2
The circuit court did not ask the parties whether they were prepared to proceed with an
evidentiary hearing at that time, instead telling the parties, “We’ll proceed to the merits right
now.” Patterson & Richardson’s trial counsel responded that she was “not prepared for the
merits”; the court then offered to set the evidentiary hearing for a later date; and counsel declined
the offer. Neither party argues that the court erred by proceeding with the evidentiary hearing
immediately after granting Chen’s motion to reopen, and so I address this issue no further.
2
No. 2023AP1219
¶4 During the hearing, Patterson & Richardson’s trial counsel told the
circuit court that Patterson & Richardson purchased the property from the previous
owner in 2021. Counsel offered and the court received as an exhibit a notice dated
April 17, 2023, issued by the City of Madison to Patterson & Richardson. This
notice states that the property occupied by Chen had been used as a residence in
violation of the City zoning code and that the violation must be corrected by the
end of May. Counsel told the court that Patterson & Richardson then “served” a
“thirty-day notice of default to cure” on Chen on April 28. Counsel offered and
the court received as another exhibit a citation for the zoning violation issued by
the City following the City’s re-inspection, which revealed that the violation had
not been corrected by June 5.
¶5 Patterson & Richardson’s owner, Elissa Richardson, testified that
“there has been a lease in place” with Chen and that the lease “allows” Chen to
operate a massage business. Richardson testified that the property “is a
commercial property with three office buildings on it” and “the zoning for the
property is for commercial use only.”
¶6 Chen testified that he had signed a three-year lease with the previous
owner of the property but did not testify as to the contents of this lease. Chen
admitted that he had permitted employees of his massage business to reside at the
property but testified that the previous property owner had told him that residential
use was permitted. Chen testified that he had found a new residence for these
employees, and as proof he offered and the circuit court received as an exhibit a
residential lease showing a commencement date of June 16 (eleven days after the
City issued the citation for the zoning violation).
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No. 2023AP1219
¶7 Neither party introduced the lease for the property as an exhibit. The
circuit court explained that, although the lease allegedly breached was not in the
record, Patterson & Richardson was entitled to evict Chen based solely on the
zoning violation, saying that “[t]he issue here is not whether or not [Chen] signed
a lease. The issue here is [Chen] not complying with the zoning codes ….”
¶8 The circuit court granted the judgment for eviction and subsequently
stayed issuance of the writ of restitution pending this appeal.
DISCUSSION
¶9 Chen argues that the circuit court erred by entering the judgment of
eviction for breach of the lease when “no lease was put into evidence.” Chen also
challenges the judgment on numerous other grounds, including defective notice of
the alleged breach. I need not reach these other issues, because I conclude that
Patterson & Richardson failed to meet its burden to show that Chen violated the
lease.3 See Sweet v. Berge, 113 Wis. 2d 61, 67, 334 N.W.2d 559 (Ct. App. 1983)
(this court needs not address other issues when one is dispositive).
¶10 “The burden of establishing the existence of a contractual obligation
is on the party attempting to establish its breach.” Kozich v. Employe Tr. Funds
Bd., 203 Wis. 2d 363, 377, 553 N.W.2d 830 (Ct. App. 1996); see also WIS JI—
3
Although I do not reach these other issues, there appears to be at least a significant
question as to whether Patterson & Richardson met its burden to show proper notice of the
alleged breach. The breach notice itself was never entered into evidence—instead, Patterson &
Richardson introduced a breach notice addressed to a different tenant at a different address.
Patterson & Richardson asserts that it did enter the correct notice into evidence, but the record it
cites does not support this assertion. Additionally, no evidence was introduced as to the specific
method used to deliver the breach notice. See WIS. STAT. § 704.21(1) (enumerating specific
methods by which notice must be given by a landlord).
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No. 2023AP1219
CIVIL 3094 (in an eviction action, the landlord must prove “that there was a valid
lease” with the tenant, and that the tenant “breached the lease.”). “Whether a party
has met its burden of proof is a question of law” reviewed de novo. Hallin v.
Hallin, 228 Wis. 2d 250, 258, 596 N.W.2d 818 (Ct. App. 1999).
¶11 Patterson & Richardson brought this eviction action on grounds that
Chen breached the lease by using the property as a residence. To prevail,
Patterson & Richardson was required to show, as a starting point, that the lease
prohibits residential use. However, no evidence to that effect was introduced at
the hearing.
¶12 As noted above, the lease that Patterson & Richardson seeks to
enforce was never offered at trial, nor does it appear anywhere in the record.
Patterson & Richardson offers no explanation for the absence of the lease. I pause
to identify certain incidental issues related to the absence of the lease before
proceeding with my analysis of the dispositive issue.
¶13 First, the lease that Chen testified he had with the previous owner
appears to be the lease that Patterson & Richardson seeks to enforce in this action.
However, Patterson & Richardson has not made any argument that the previous
owner’s rights under this lease were subsequently assigned to Patterson &
Richardson upon change of ownership. For the purposes of this opinion, I will
assume that all rights under the lease were properly assigned.
¶14 Second, the record lacks direct evidence about whether the lease was
oral or written. Chen testified that he “signed” a lease with the previous owner,
signifying that the lease was in writing, and that the lease was for a three-year
term. The parties on appeal agree that the lease was for longer than one year. A
lease for a term longer than one year must be in writing. See WIS. STAT.
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No. 2023AP1219
§ 706.001(2)(c) (leases longer than one year are subject to the formal requirements
of WIS. STAT. ch. 706, including the writing requirement set forth in WIS. STAT.
§ 706.02). For purposes of this opinion, I will assume that the lease was in
writing.
¶15 Third, Chen argues in his initial brief that failure to “comply[] with
zoning codes” is not itself a sufficient basis for eviction absent a violation of the
lease. Patterson & Richardson does not respond to this argument in its
respondent’s brief, and I deem the argument conceded. 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).
¶16 I now proceed to explain my conclusion that Patterson & Richardson
fails to point to evidence of the only grounds that it asserts for the eviction,
namely, Chen’s breach of the lease.
¶17 Patterson & Richardson contends that Elissa Richardson’s testimony
established that the lease prohibits residential use. Patterson & Richardson cites
the following testimony by Elissa Richardson, which appears to be the only record
evidence directly relating to the lease term that Chen purportedly breached:
Trial counsel: … [C]an you tell me the nature of the
tenant’s business and their allowed use?
Richardson: The nature of the tenant’s business is as a
massage service.
Trial counsel: And that’s what their lease allows them to
do?
Richardson: Yes.
¶18 This testimony appears to be at most a conclusory statement about
the legal effect of the lease. See Pagel v. Kees, 23 Wis. 2d 462, 470, 127 N.W.2d
6No. 2023AP1219
816 (1964) (a witness may not testify as to a “conclusion of law”). But setting that
aside, if the lease “allows” use of the property as a massage business, it does not
necessarily follow that the lease prohibits any other use. For example, the lease
might specify multiple permissible uses, or it might impose no restrictions on the
use of the property. Thus, Richardson’s testimony is not evidence that the lease
prohibits residential use.
¶19 Richardson also testified that the property “is a commercial
property” and is “zoned for commercial use only.” However, the fact that zoning
ordinances prohibit residential use of the property does not mean that the lease
prohibits residential use. To be sure, a landlord might insist that a lease for
commercial property contain standard commercial lease terms, such as terms
restricting how the tenant may use the property, or terms deeming any violation of
a zoning ordinance to be a breach of the lease. But Patterson & Richardson
introduced no evidence that such terms are actually in this particular lease.
¶20 In sum, Patterson & Richardson bore the burden at trial to establish
that Chen breached the lease, but it introduced no evidence that the lease actually
prohibited Chen from residential use of the property. Accordingly, Patterson &
Richardson failed to meet its burden, and, therefore, the judgment for eviction was
erroneously granted.
CONCLUSION
¶21 For the reasons set forth above, I reverse the judgment for eviction.
By the Court.—Judgment reversed.
This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)4.
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