Installment Contracts; Leases

Burke v Braizer, 2006AP2640 (Wis Ct App, unpublished, 2007).

Facts: In 1992, Delaine Burke and Virginia Baumann purchased a parcel of property in Tomahawk, Wisconsin. The property consisted of a primary residence and a cottage. Subsequently, their friend, Daisy Braizer, moved into the cottage, agreeing to make monthly payments of $200 for a period of five years and to make contributions toward taxes. Although Braizer was no longer to make monthly payments after the five-year period ended, she was still responsible for making improvements to the cottage. The parties agreed that if Burke and Baumann sold the property, Braizer would be compensated for her investments. However, they never stipulated how much Braizer would receive from the sale.

In August 2005, Burke and Baumann filed an action to evict Braizer from the cottage and Braizer counterclaimed, pleading unjust enrichment. The circuit court held that Braizer was entitled to recover under the equitable theories of unjust enrichment and primary estoppel. The circuit court found that the parties agreed Braizer's "investment would be protected by her being entitled to the fair market value of the property should the property be sold." Additionally, the circuit court found that Braizer invested a total of $32,874.92 into the cottage. Despite this, Burke and Baumann contended that Braizer failed to maintain the property, specifically in regard to a broken septic system which Burke and Baumann ultimately replaced for $6,000.

A 2006 appraisal found the current value of the cottage to be $43,000. Therefore, after subtracting the $6,000 spent on the septic system, the circuit court awarded Braizer $37,000. Burke and Baumann appealed.

Holding: Reversed and remanded. On appeal, Burke and Baumann argued that the circuit court's finding that Braizer was entitled to the market value of the cottage was erroneous and basing the award on that amount was an erroneous exercise of discretion. Regarding the issue of promissory estoppel, the court of appeals agreed with the circuit court and held that Braizer was entitled to the market value of the cottage. However, the court of appeals held that the circuit court failed to provide its reasons for concluding that injustice could only be avoided by awarding the particular amount promised.

For the court of appeals to affirm the circuit court's discretionary determinations, it must be able to ascertain that the court examined the relevant facts, applied a proper standard of law, and used a demonstrated rational process to reach a conclusion that a reasonable judge could reach. However, the court of appeals found that the circuit court failed to explain how it concluded that Burke and Baumann would be unjustly enriched by the full value of the cottage. Therefore, the court of appeals reversed the judgment and remanded to the circuit court in order to determine how much Braizer should be awarded and demonstrate its reasoning for that amount.

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