Howard L. Alt v. Smith & Associates, Inc.

No. 99-0809

STATE OF WISCONSIN IN COURT OF APPEALS

DISTRICT III

Howard L. Alt,

Plaintiff-Respondent,

Smith & Associates, Inc., a foreign

corporation,

Defendant-Appellant,

John E. Mead, personal representative for the

Lela Frisch Estate,

Defendant-Respondent.

APPEAL from an order of the circuit court for Vilas County: mark A. mangerson, Judge. Affirmed.

Before Cane, C.J., Hoover, P.J., and Peterson, J.

¶1 PER CURIAM. Smith & Associates, Inc., appeals a summary judgment that granted Howard Alt’s claim for a declaratory judgment. The trial court declared void a contract between Smith and the personal representative of the Lela Frisch estate to sell real property of the estate. The trial court ruled that the contract was illusory, thereby void from its inception. This ruling permitted the personal representative to accept Alt’s subsequent offer to purchase.

¶2 Smith makes several arguments on appeal: (1) the Smith contract was merely ambiguous, not illusory, with the ambiguity curable by extrinsic evidence; (2) a probate court had earlier approved the Smith contract, thereby collateral estopping Alt’s separate declaratory judgment suit; (3) Alt lacked standing to bring the declaratory judgment suit; (4) Alt tortiously interfered with the Smith contract; and (5) the estate was equitably estopped from repudiating the Smith contract. We reject these arguments and affirm the summary judgment.

¶3 On July 14, 1997, Alt made his first offer to buy the property. The estate counteroffered, and Alt then raised his offer. The estate never accepted Alt’s offer or submitted it to the probate court for approval. Instead, on October 2, 1997, Smith submitted an offer to the estate, with conditions: (1) the property must pass soil tests acceptable to Smith in its “sole determination”; and (2) local governments must grant all approvals needed by Smith in its “sole determination” to permit it to execute its subdividing plans. On October 6, 1997, the estate made a counteroffer to Smith that left Smith’s conditions unchanged. Smith accepted the estate’s counteroffer, and the estate sought and obtained the probate court’s approval of the sale.

¶4 Smith later dropped the soil test condition and submitted its subdividing plan to the town board. At that point, Alt revived his offer to the estate to buy the property. In addition, Alt and other local citizens objected to the town board about Smith’s plan. During this time frame, Alt argued to the estate that Smith’s contract was void on various grounds. The estate was eventually persuaded. It accepted Alt’s revived offer and asked the probate court to approve it, in lieu of the Smith contract that the probate court had earlier approved. A few days later, before the probate court could act on the estate’s request, Alt filed a declaratory judgment action, seeking to have the Smith contract declared void, as indefinite on key conditions and thereby illusory. The circuit court granted Alt summary judgment on this claim.

¶5 The circuit court was correct if Alt demonstrated no dispute of material fact and a right to judgment as a matter of law. See Powalka v. State Life Mut. Assur. Co., 53 Wis. 2d 513, 518, 192 N.W.2d 852 (1972). Summary judgment is not appropriate if the material presented on the motion is subject to conflicting interpretations where reasonable people might differ as to its significance. See Grams v. Boss, 97 Wis. 2d 332, 338-39, 294 N.W.2d 473 (1980). We apply summary judgment standards in the same manner as the circuit court. See Kreinz v. NDII Sec. Corp., 138 Wis. 2d 204, 209, 406 N.W.2d 164 (Ct. App. 1987).

¶6 We agree with the circuit court that the Smith contract was illusory and void. Contracts are illusory if they are impermissibly indefinite, or conditioned on events under the sole control of one party. See Nodolf v. Nelson, 103 Wis. 2d 656, 659-60, 309 N.W.2d 397 (Ct. App. 1981). Here, the Smith contract gave Smith unilateral power to decide whether conditions were met. For example, the contract gave no date for closing, leaving it dependent on Smith obtaining government approvals. It also gave Smith the exclusive right, either express or implied, to judge (1) the adequacy of soil tests, (2) the suitability of building sites, (3) the adequacy of government approvals, and (4) the land’s suitability for Smith’s subdivision plans. If any of these matters fell short of Smith’s own subjective expectations, Smith could withdraw from the deal. This contract went beyond a state of mere ambiguity. It was illusory on linchpin conditions and thereby void from its inception. See id. at 659. We therefore will not consider the extrinsic evidence of the parties’ intent that Smith believes could clarify the contract’s indefiniteness and cure its defects.

¶7 We briefly address Smith’s remaining arguments. First, Smith may not rely on the doctrines of equitable estoppel or tortious interference with contracts. Neither doctrine applies to contracts that are void from their inception. See Production Credit Ass’n v. Kehl, 148 Wis. 2d 225, 230, 434 N.W.2d 816 (Ct. App. 1988) (estoppel); cf. Duct-O-Wire Co. v. U.S. Crane, Inc., 31 F.3d 506, 509 (7th Cir. 1994) (tortious interference). The illusory character of Smith’s contract meant that there was never an operative, binding contract. See Nodolf, 103 Wis. 2d at 659. This vacuum left the estate free to accept Alt’s offer without regard to equitable estoppel. It also left Alt free to make an offer and oppose Smith’s purchase without tortiously interfering with the Smith contract.

¶8 Second, Smith may not use the doctrine of collateral estoppel or attack Alt’s standing to bring the declaratory judgment suit. Smith did not argue either issue in the trial court and has thereby not preserved them for appeal. See Wirth v. Ehly, 93 Wis. 2d 433, 443, 287 N.W.2d 140 (1980). We follow Wisconsin law, not federal law, on issues of waiver, and we therefore need not address the contrary federal case Smith cites. See United States v. Ray Hays, 515 U.S. 737, 742 (1995) (litigants may raise standing issues for the first time on appeal.).

By the Court—Order affirmed.

This opinion will not be published. See Wis. Stat. Rule 809.23(1)(b)5 (1997-98).