2010 WI App 105
court of appeals of
published opinion
Case No.: |
2009AP1307 |
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Complete Title of Case: |
†Petition For Review Filed |
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In re the estate of James F. Sheppard: Thomas S. Ryan, Appellant,† v. Estate of James F. Sheppard, Respondent. |
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Opinion Filed: |
July 14, 2010 |
Submitted on Briefs: |
May 7, 2010 |
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JUDGES: |
Brown, C.J., Neubauer, P.J., and |
Concurred: |
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Dissented: |
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Appellant |
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ATTORNEYS: |
On behalf of the appellant, the cause was submitted on
the briefs of William V. Gruber of
Glojek Ltd., Attorneys at Law, |
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Respondent |
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ATTORNEYS: |
On behalf of the respondent, the cause was submitted on
the brief of Michael E. McMorrow,
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2010 WI App 105
COURT OF APPEALS DECISION DATED AND FILED July 14, 2010 A.
John Voelker Acting Clerk of Court of Appeals |
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NOTICE |
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This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. § 808.10 and Rule 809.62. |
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Appeal No. |
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STATE OF |
IN COURT OF APPEALS |
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In re the estate of James F. Sheppard: Thomas S. Ryan, Appellant, v. Estate of James F. Sheppard, Respondent. |
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APPEAL
from an order of the circuit court for
Before
Brown, C.J., Neubauer, P.J., and
¶1 ANDERSON, J. Thomas S. Ryan appeals from an order granting summary judgment to the Estate of James F. Sheppard (the Estate) on Ryan’s claim for $105,000 arising from a contract for future personal services that were never rendered. Sheppard’s death substantially frustrated the contract’s principal purpose. We therefore affirm the circuit court’s decision.
¶2 On April 11, 2007, Sheppard and Ryan entered into a two-year agreement for flight instruction services, with the relevant portions of the agreement providing:
(A). I James F. Sheppard agree to pay to Thomas S. Ryan $35,000 (thirty five thousand dollars) per year plus expenses starting on January 1st 2008 and ending on January 1st 2010 for pilot services as my personal instructor and pilot in command.…
(B). I Thomas S. Ryan do hereby agree to and accept the terms and conditions as presented in the above paragraph (A) of this contract.
¶3 The parties had known each other since the late 1970s, and
Sheppard had previously received flight instruction from Ryan. On July 2, 2007, before any flight
instruction related to the April 11 agreement had taken place, Sheppard
died. Ryan filed five claims against
Sheppard’s estate, including a claim for future services under the April 11,
2007 agreement totaling $105,000.[1] The Estate moved for summary judgment on each
claim. The circuit court for
¶4 Where, as here, no material facts are in dispute and the
other requirements of the summary judgment methodology are met, summary
judgment is an appropriate means of raising and deciding the legal issues
presented. See Smith v. State Farm Fire & Cas. Co., 127
¶5 The Estate contends that the April 11, 2007 agreement is unenforceable as a matter of law under the doctrine of frustration of purpose. It argues the agreement was for personal services, requiring physical participation and direction from Sheppard. As a result, Sheppard’s death frustrated the main purpose of the contract. Moreover, the Estate has moved for an order ruling Ryan’s appeal frivolous and granting fees and costs to the Estate.
¶6 Ryan argues the doctrines of frustration of purpose and impossibility do not apply to the agreement. He claims that Sheppard’s obligations in the contract were not personal to him, allowing the Estate to assume Sheppard’s duties—specifically by paying Ryan.
¶7 There are no Wisconsin cases directly on point with respect to frustration of purpose for a personal services contract in which the person—who is to receive instruction for pay—dies before that instruction occurs and the person—who was to provide the instruction—seeks to uphold the agreement.
¶8 The April 11, 2007 agreement is a contract for personal services. Personal services are defined as “economic service[s] involving either the intellectual or manual personal effort of an individual.” Black’s Law Dictionary 1180 (8th ed. 2004). It is also a bilateral contract in which each party is an obligor on his or her own promise and an obligee on the other’s. See id. at 342. Under the terms of the agreement, Sheppard was to pay Ryan in exchange for receiving personal flight instruction and the services of a pilot in command. We agree with the Estate that in either role Sheppard was directly and personally involved either as a student of instruction or as an employer, directing his “pilot in command.”
¶9 The well-settled rule is that death alone does not discharge
contractual obligations. See Volk v. Stowell, 98
¶10 Ryan contends the contract is not for personal service and that Sheppard’s death does not preclude performance. He interprets the agreement as saying Sheppard was not required to specifically and personally perform his promise in the agreement and that the Estate can simply pay Ryan his future salary under the contract. Ryan essentially argues he is able to fulfill his end of the bargain simply by being available to the Estate for flight services and that the Estate is capable of performing Sheppard’s promise by paying Ryan.
¶11 Ryan’s argument is unpersuasive. It completely misinterprets Ryan’s duty under
the agreement, which we must construe as written. See Amcast Indus. Corp. v. Affiliated FM Ins.
Co., 221
¶12 The doctrine of frustration of purpose, referred to generally as “frustration,” or as “discharge by supervening frustration” by the Restatement, is as follows:
Where, after a contract is made, a party’s principal purpose is substantially frustrated without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his remaining duties to render performance are discharged, unless the language or the circumstances indicate the contrary.
Restatement (Second) of Contracts §
265. See
also
¶13 In 1974, the Wisconsin Supreme Court adopted a tentative draft
of this section into the common law. Wm.
Beaudoin & Sons, Inc. v.
¶14 We agree with the circuit court’s conclusion that the purpose
of the agreement has been frustrated, discharging the Estate of its applicable
duties. While Sheppard’s promise in the agreement was only to
pay, his purpose in making the
contract is clear: to obtain personal
flight instruction and pilot services, as evidenced by Ryan’s obligations. In a personal service contract such as this
one, a basic assumption is that both parties will be alive. See
Restatement
(Second) of Contracts §§ 262, 265 cmt. a. Sheppard’s death, then, frustrated the
contract’s purpose—it made personal flight instruction unfeasible. When there is nothing an obligor can do to
fulfill his or her contractual duties, the obligee’s duty to compensate is
excused. See Wm. Beaudoin & Sons, Inc., 63
¶15 Ryan claims the circuit court incorrectly construed the receipt of flight instruction as the sole purpose of the agreement and failed to acknowledge other evidence showing that the purpose of the contract was to obtain Ryan’s “forbearance in pursuing other business enterprises.” This is nowhere to be found in the agreement as written and does not raise a genuine issue of material fact. Ryan was not forbidden from instructing or piloting for others during his prospective employ as Sheppard’s flight instructor or pilot in command. Moreover, the circuit court identified flight instruction as the “main” purpose of the contract and not its “only” purpose, as Ryan claims. This is a correct application of the doctrine, which targets the frustration of a contract’s “principal” purpose. Restatement (Second) of Contracts § 265.
¶16 In essence, the April 11, 2007 agreement is unenforceable due
to a failure of consideration: Ryan can
no longer instruct Sheppard, so the consideration Ryan promised cannot be
provided. While the Estate can still
step into Sheppard’s shoes and pay Ryan, the duty to pay “is nevertheless
discharged because its condition precedent—the rendition of the servant’s
work—has become impossible.” 14-75 Corbin on Contracts § 75.2 (2010);[4]
see also Wilmes, 239
¶17 The Estate has moved for attorney fees and costs on grounds
that this appeal is frivolous pursuant to Wis. Stat. Rule
809.25(3)(c)2. We deny the
motion. To be frivolous, the appeal must
be without any basis in law. Black
v. Metro Title, Inc., 2006 WI App 52, ¶15 n.3, 290
¶18 We affirm the circuit court’s decision granting summary
judgment and hold that the contract is unenforceable under frustration of
purpose as articulated by the Restatement and related
By the Court.—Order affirmed.
[1] In its decision, the circuit court noted, “Since this claim ‘ends’ January 1, 2010, it would seem that the claim should be for $70,000, rather than $105,000.”
[2] All references to the Wisconsin Statutes are to the 2007-08 version unless otherwise noted.
[3] Contrary
to Ryan’s argument, Wis. Stat. Rule 809.23(3) does not prohibit us
from citing to this decision. In Brandt
v. LIRC, we held that the statute does not proscribe citation to
circuit court decisions, noting “the statutory scenario of [Wis. Stat. ch.] 809 concerns appellate
procedure generally and … Rule
809.23(3), read in context, concerns
only court of appeals decisions.” Brandt
v. LIRC, 160
[4] See also 14-75 Corbin on Contracts § 75.2 at 130 (Joseph M. Perillo ed. 2001).
[5] See also 14-75 Corbin on Contracts § 75.2 at 126 (Joseph M. Perillo ed. 2001).