Title: Gregory Gottsacker v. Julie A. Monnier

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2005 WI 69 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2003AP457 
COMPLETE TITLE: 
 
 
Gregory Gottsacker and New Jersey LLC,  
          Plaintiffs-Respondents, 
     v. 
Julie A. Monnier, Paul Gottsacker and  
2005 New Jersey LLC,  
          Defendants-Appellants-Petitioners. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2004 WI App 25 
Reported at:  269 Wis. 2d 667, 676 N.W.2d 533 
(Ct. App. 2004-Published) 
 
 
OPINION FILED: 
June 8, 2005   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
January 14, 2005   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Sheboygan   
 
JUDGE: 
Gary Langhoff   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
ROGGENSACK, J., concurs (opinion filed). 
WILCOX, J., joins the concurrence.   
 
DISSENTED: 
BUTLER, J., dissents (opinion filed).   
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the defendants-appellants-petitioners there were briefs 
by Paul R. Erickson, Brian W. Guilbeault and Gutglass, Erickson, 
Bonville, Seibel & Falkner, S.C., Milwaukee, and oral argument 
by Paul R. Erickson. 
 
For the plaintiffs-respondents there was a brief by James 
O. Conway, Robert W. Horsch and Olsen, Kloet, Gunderson & 
Conway, Sheboygan, and oral argument by James O. Conway. 
 
 
2005 WI 69 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2003AP457  
(L.C. No. 
01 CV 000636) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Gregory Gottsacker and New Jersey LLC,  
 
          Plaintiffs-Respondents, 
 
     v. 
 
Julie A. Monnier, Paul Gottsacker and  
2005 New Jersey LLC,  
 
          Defendants-Appellants- 
          Petitioners. 
 
FILED 
 
JUN 8, 2005 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed and 
cause remanded.   
 
¶1 
ANN 
WALSH 
BRADLEY, 
J.   The 
petitioners, 
Julie 
Monnier, Paul Gottsacker, and their limited liability company, 
2005 New Jersey LLC, seek review of a published decision of the 
court of appeals affirming a circuit court judgment, which 
determined that they were precluded from transferring real 
estate owned by New Jersey LLC to 2005 New Jersey LLC.1  The 
                                                 
1 Gottsacker v. Monnier, 2004 WI App 25, 269 Wis. 2d 667, 
676 N.W.2d 533 (affirming a decision of the circuit court for 
Sheboygan County, Gary Langhoff, Judge). 
No. 
2003AP457   
 
2 
 
petitioners assert that they were not precluded from voting to 
make the transfer of property under Wis. Stat. §§ 183.0402 and 
183.0404 (2001-02), the limited liability company statutes 
governing duties of managers/members and voting.2  
¶2 
We 
conclude 
that 
the 
petitioners 
possessed 
the 
majority necessary to authorize the transfer in question.  
Furthermore, 
we 
determine 
that 
the 
petitioners' 
material 
conflict of interest did not prohibit them from voting to make 
the transfer so long as they dealt fairly.  However, because 
there was no express determination by the circuit court as to 
whether the petitioners willfully failed to deal fairly with New 
Jersey LLC or its other member, we reverse the decision of the 
court of appeals and remand the cause for further proceedings.     
I 
¶3 
On September 4, 1998, Julie Monnier (hereinafter 
Monnier) formed New Jersey LLC as a vehicle to own investment 
real estate.  Ten days later, the company acquired a 40,000- 
square-foot warehouse located at 2005 New Jersey Avenue in 
Sheboygan, Wisconsin.  The warehouse had a single tenant on a 
year-to-year lease.  New Jersey LLC purchased the property for 
$510,000, with the financing arranged for and guaranteed by 
Monnier. 
¶4 
Brothers 
Paul 
Gottsacker 
(hereinafter 
Paul) 
and 
Gregory Gottsacker (hereinafter Gregory) became members of New 
                                                 
2 All references to the Wisconsin Statutes are to the 2001-
02 version unless otherwise noted. 
No. 
2003AP457   
 
3 
 
Jersey LLC in January 1999.  They entered into a Member's 
Agreement, which expressed their intent to operate under 
Wisconsin's limited liability company laws.  That document 
stated in relevant part: 
(4) Julie A. Monnier shall own a 50% interest in the 
capital, profits and losses of Company and shall have 
50% of the voting rights of Company. 
(5) 
Paul 
Gottsacker 
and 
Gregory 
Gottsacker, 
collectively, shall own a 50% interest in the capital, 
profits and losses of Company and shall have 50% of 
the voting rights of Company.  
 
¶5 
New Jersey LLC later purchased additional property in 
Sheboygan on Wilson Avenue.  When it was sold, the proceeds were 
distributed to the members as follows:  50% to Julie, 25% to 
Paul, and 25% to Gregory.  After the sale of the Wilson Avenue 
property, the only remaining asset of New Jersey LLC was the 
warehouse on New Jersey Avenue. 
¶6 
Relationships among the members of New Jersey LLC 
subsequently became strained.  In May 2000, Paul and Gregory had 
a falling-out, allegedly due to Gregory's lack of contribution 
to the enterprise.  Thereafter, communication between the 
brothers was virtually nonexistent.  Monnier also testified that 
she had not spoken with Gregory since 1998. 
¶7 
On June 7, 2001, Monnier executed a warranty deed 
transferring the warehouse property owned by New Jersey LLC to a 
new limited liability company called 2005 New Jersey LLC for 
$510,000, the same amount as the original purchase price.  The 
new limited liability company consisted of two members:  Monnier 
with a 60% ownership interest and Paul with a 40% ownership 
No. 
2003AP457   
 
4 
 
interest.  Neither one had discussed the transfer with Gregory 
before it occurred.  
¶8 
Following the transfer, Monnier sent a check to 
Gregory for $22,000, which purportedly represented his 25% 
interest in the warehouse property previously owned by New 
Jersey LLC.  Gregory did not cash the check.  Monnier and Paul, 
meanwhile, did not receive any cash payment but instead left 
their equity in the recently created 2005 New Jersey LLC. 
¶9 
Gregory commenced suit against Monnier, Paul, and 2005 
New Jersey LLC, alleging that they had engaged in an illegal 
transaction under Wis. Stat. Ch. 183.  After a bench trial, the 
circuit court agreed, noting that the sole purpose of the 
transfer of the warehouse property was to eliminate Gregory's 
ownership interest in the asset.  
¶10 Because the transfer served no legitimate business 
purpose, and because Monnier and Paul both profited from it, the 
circuit court determined that Monnier and Paul were precluded by 
the conflict of interest rules under Wis. Stat. Ch. 183 from 
voting to authorize the transfer.  In the alternative, it 
concluded that Paul did not have authority to act without the 
assent of Gregory because the two brothers held a "collective" 
interest in the ownership.  Ultimately, the circuit court 
ordered that 2005 New Jersey LLC return the warehouse property 
to New Jersey LLC.  Monnier, Paul, and 2005 New Jersey LLC 
appealed. 
¶11 The court of appeals affirmed the decision of the 
circuit court on different grounds.  Contrary to the circuit 
No. 
2003AP457   
 
5 
 
court, the court of appeals reasoned that the provisions of Wis. 
Stat. Ch. 183, specifically Wis. Stat. §§ 183.0402 and 183.0404, 
do not prevent a member who has a material conflict of interest 
from dealing with matters of the LLC.  Gottsacker v. Monnier, 
2004 WI App 25, ¶19, 269 Wis. 2d 667, 676 N.W.2d 533.  Rather, 
those statutes prohibit a member who has a material conflict of 
interest from dealing unfairly with the LLC or its members.  Id.  
Thus, a member with a material conflict of interest can vote to 
transfer property but is required to do so fairly.  Id. 
¶12  Applying this standard to the present case, the court 
of appeals held that the transfer of property was unfair in two 
respects.  First, the conveyance was not an "arm's length 
transaction" because it did not occur on the open market.  Id., 
¶21.3  Second, the sale made it impracticable for New Jersey LLC 
to carry on with its intended business (i.e., to hold the 
commercial property as a long-term investment).  Id., ¶22.  
Accordingly, the court of appeals did not reach the issue of 
whether Paul and Gregory each held a 25% ownership interest or 
whether the term "collectively" in the Member's Agreement 
required both brothers to jointly vote the entire 50%.  Id., 
¶24.  
                                                 
3 This court has previously defined an "arm's length 
transaction" as "a sale in the open market between an owner 
willing but not obliged to sell and a buyer willing but not 
obliged to buy."  Flood v. Lomira Bd. of Review, 153 
Wis. 2d 428, 436, 451 N.W.2d 422 (1990) (citing Darcel, Inc. v. 
Manitowoc Review Bd., 137 Wis. 2d 623, 628, 405 N.W.2d 344 
(1987)). 
No. 
2003AP457   
 
6 
 
II 
¶13 This case provides us with our first opportunity to 
examine limited liability companies in Wisconsin.  The issues 
presented 
involve 
matters 
of 
contractual 
and 
statutory 
interpretation.  We will initially examine the Member Agreement 
to determine whether the petitioners possessed the majority 
necessary to authorize the transfer in question.  Next we will 
construe statutory provisions in Wis. Stat. Ch. 183 to determine 
whether the petitioners were nonetheless prohibited from voting 
to transfer the property because of a material conflict of 
interest.  Both inquiries are questions of law subject to 
independent appellate review.  DeWitt Ross & Stevens v. Galaxy 
Gaming & Racing, 2004 WI 92, ¶¶19, 20, 273 Wis. 2d 577, 682 
N.W.2d 839 (citing N. States Power Co. v. Nat'l Gas Co., 2000 WI 
App 30, ¶7, 232 Wis. 2d 541, 606 N.W.2d 613; Meyer v. Sch. Dist. 
of Colby, 226 Wis. 2d 704, 708, 595 N.W.2d 339 (1999)).  
III 
 
¶14 We begin our discussion with a brief overview and 
history of limited liability companies.  A limited liability 
company 
(LLC) 
has 
been 
described 
as 
"an 
unincorporated 
association of investors, called members in LLC parlance, whose 
personal liability for obligations of the venture are limited to 
the amount invested."  Joseph W. Boucher et al., LLCs and LLPs:  
A Wisconsin Handbook  § 1.4 (rev. ed. 1999).4  It is a distinct 
                                                 
4 We find this handbook instructive as its authors helped 
draft the Wisconsin Limited Liability Company Law (WLLCL), Wis. 
Stat. Ch. 183, and were active in the legislative process.   
No. 
2003AP457   
 
7 
 
business entity that adopts and combines features of both 
partnership and corporate forms.  Id. 
 
¶15 From 
the 
partnership 
form, 
the 
LLC 
borrows 
characteristics of informality of organization and operation, 
internal governance by contract, direct participation by members 
in the company, and no taxation at the entity level.  Id.  From 
the corporate form, the LLC borrows the characteristic of 
protection of members from investor-level liability.  Id.  
Flexible in nature, the LLC allows direct involvement and 
control 
by 
its 
members 
yet 
also 
permits 
a 
corporate 
representative form of governance if the entity elects to be 
governed by managers.  Id.  
¶16 The first LLC statute was enacted by Wyoming in 1977 
as special interest legislation for an oil and gas exploration 
company.  William Callison & Maureen A. Sullivan, Limited 
Liability Companies:  A State-by-State Guide to Law and Practice 
§ 1.5 (2004).  Florida adopted a similar provision five years 
later.  Id.  Initially, there was relatively little interest in 
these acts because of the uncertainty surrounding the LLC's 
ability to be taxed as a partnership.  Susan Pace Hamill, The 
Origins Behind The Limited Liability Company, 59 Ohio St. L.J. 
1459, 1469 (1998).  However, that would eventually change. 
 
¶17 In 1988, the IRS issued Revenue Ruling 88-76, allowing 
the Wyoming LLC to secure partnership classification for income 
tax purposes, despite the presence of limited liability.  Id. at 
1469-70.  After this landmark decision, states began passing 
legislation allowing for the formation of LLCs.  Id. at 1470.  
No. 
2003AP457   
 
8 
 
By the end of 1996, every U.S. jurisdiction had enacted its own 
LLC statute.  Id. at 1477.  This development has prompted some 
commentators to hail the LLC as "[t]he legal phenomenon of the 
1990s, at least for business practitioners."  Boucher et al, 
LLCs and LLPs, at § 1.1.  See also Larry E. Ribstein, LLCs: Is 
The Future Here?, 13 Business Law Today 11 (November/December 
2003). 
 
¶18 Wisconsin enacted its own LLC law in 1993 with the 
passage of the Wisconsin Limited Liability Company Law (WLLCL), 
Wis. Stat. Ch. 183.  The WLLCL was drafted by members of the 
State 
Bar 
Business 
Committee 
with 
assistance 
from 
the 
Legislative Reference Bureau and the Office of the Secretary of 
State.  See Drafting Records of 1993 A.B. 820.  Although the 
business entity it created was new and distinct, the WLLCL 
borrowed concepts from a number of sources, including the 
Wisconsin Uniform Limited Partnership Act, Wis. Stat. Ch. 179, 
the Wisconsin Business Corporation Law, Wis. Stat. Ch. 180, and 
the 1992 Prototype Limited Liability Company Act, drafted by the 
Subcommittee on Limited Liability Companies of the Committee on 
Partnerships and Unincorporated Business Organizations of the 
ABA Section of Business Law.  Id.5   
                                                 
5 Although drafts of the Uniform Limited Liability Company 
Act were circulating at the time, the drafters of the WLLCL 
found the Prototype Act more helpful.  Joseph W. Boucher et al., 
LLCs and LLPs:  A Wisconsin Handbook § 1.10 (rev. ed. 1999).  
The official Uniform Limited Liability Company Act was approved 
by the National Conference of Commissioners on Uniform State 
Laws in 1995, after the passage of the WLLCL.   
No. 
2003AP457   
 
9 
 
 
¶19 The overriding goal of the WLLCL was "to create a 
business 
entity 
providing 
limited 
liability, 
flow-through 
taxation, and simplicity."  Boucher et al., LLCs and LLPs, at 
Preface.6  The drafters believed it critical that a Wisconsin LLC 
readily be treated as a partnership for tax purposes.  Id. at 
§ 1.11.  Additionally, they emphasized the importance of 
flexibility 
and 
freedom 
of 
contract, 
which 
is 
reflected 
throughout the provisions of the WLLCL.  Finally, they hoped 
that the LLC would provide an inexpensive vehicle that did not 
require legal counsel at every step.  Id.  With this background 
in mind, we turn now to the facts of this case. 
                                                                                                                                                             
To date, only nine jurisdictions in the United States have 
substantially adopted the Uniform Act:  Alabama, Hawaii, 
Illinois, Montana, South Carolina, South Dakota, Vermont, the 
Virgin Islands, and West Virginia.  See Uniform Limited 
Liability Company Act Annotated.  For a discussion of the 
Uniform Act, see Larry E. Ribstein, A Critique of the Uniform 
Limited Liability Company Act, 25 Stetson L. Rev. 311 (Winter 
1995). 
6 This is also evident from the WLLCL's legislative history.  
The first paragraph in the Analysis by the Legislative Reference 
Bureau provides: 
This bill authorizes the organization and operation of 
limited liability companies in this state.  A limited 
liability company (LLC) is a business entity that 
possesses 
both 
corporate 
characteristics 
and 
characteristics associated with a partnership.  The 
most significant of these features is the concept of 
limited liability for LLC owners, or members, a 
corporation attribute, and the potential treatment of 
an LLC as a partnership for state and federal income 
tax purposes. 
See Drafting Records of 1993 Wis. Act 112. 
No. 
2003AP457   
 
10 
 
IV 
 
¶20 The first issue we address is whether the petitioners 
possessed the majority necessary to authorize the transfer in 
question.  Gregory submits that they did not.  He notes that 
under the Member's Agreement for New Jersey LLC, Monnier had 50% 
of the voting rights, while he and his brother "collectively" 
had the other 50%.  Thus, Gregory asserts, Monnier needed the 
approval of both brothers in order to transfer the commercial 
real estate.7  
 
¶21 The petitioners, meanwhile, maintain that Paul and 
Gregory each possessed 25% of the voting rights.  They argue 
that there is nothing in the Member's Agreement to indicate that 
the brothers could not vote independently.  Furthermore, they 
contend that the term "collectively" simply refers to the sum of 
the 
brothers' 
individual 
interests, 
which 
are 
25% 
each.  
According 
to 
the 
petitioners, 
such 
an 
understanding 
is 
consistent with the practice and past experience of the company. 
 
¶22 Resolution of this dispute involves interpretation of 
a contract.  When the terms of a contract are plain and 
unambiguous, we will construe it as it stands.  Borchardt v. 
Wilk, 156 Wis. 2d 420, 427, 456 N.W.2d 653 (Ct. App. 1990) 
(citing Ford Motor Co. v. Lyons, 137 Wis. 2d 397, 460, 405 
N.W.2d 354 (Ct. App. 1987)).  However, a contract is ambiguous 
when its terms are reasonably susceptible to more than one 
                                                 
7 Both parties agree that an affirmative vote of more than 
50% was required to decide any matter connected with the 
business of New Jersey LLC. 
No. 
2003AP457   
 
11 
 
construction.  Id. (citing Just v. Land Reclamation, Ltd., 151 
Wis. 2d 593, 600, 445 N.W.2d 683 (Ct. App. 1989)). 
 
¶23 We conclude that the Member's Agreement here is 
ambiguous as to the voting rights of Paul and Gregory.  To 
begin, the term "collectively" is not defined in the document.  
Moreover, the dictionary definition relied upon by the circuit 
court in its decision is reasonably susceptible of more than one 
construction.8  That definition provided:  "formed by collecting; 
gathered into a whole . . . designating or any enterprise in 
which people work together as a group, especially under a system 
of collectivism . . . ."    Although the definition supports an 
interpretation that the brothers, together, have a 50% voting 
interest, it fails to conclusively answer whether they have to 
act in concert.   
 
¶24 When interpreting an ambiguous contract provision, we 
must 
reject 
a 
construction 
that 
renders 
an 
unfair 
or 
unreasonable result.  Id. at 428 (citing Wausau Joint Venture v. 
Redevelopment Auth., 118 Wis. 2d 50, 58, 347 N.W.2d 604, 608 
(Ct. App. 1984)).  Likewise, we should adopt a construction that 
will render the contract a rational business instrument so far 
as reasonably practicable.  Id. at 427-28 (citing Bruns v. 
Rennebohm Drug Stores, Inc., 151 Wis. 2d 88, 94, 442 N.W.2d 591 
(Ct. App. 1989)). 
                                                 
8 The circuit court relied upon Webster's New World 
Dictionary, Second College Edition. 
No. 
2003AP457   
 
12 
 
 
¶25 Applying these principles to the case at hand, we are 
satisfied that the term "collectively" refers to the sum of the 
brothers' individual 25% interests.  To conclude otherwise would 
require unanimous approval by the members in order to perform 
any act that concerns the business of the company.  Here, there 
is no express language indicating that the parties intended such 
a result.  Construing the Member's Agreement to allow one 
minority member to effectively deadlock the LLC is unreasonable 
absent express language.   
V 
 
¶26 Having determined that the petitioners possessed the 
majority necessary to authorize the transaction, we consider 
next whether they were nonetheless prohibited from voting to 
transfer the property because of a material conflict of 
interest.  Here, the circuit court found that "[t]he conveyance 
of the property by Julie Monnier and Paul Gottsacker to 
themselves in the guise of a newly created LLC, unquestionably, 
represents a material conflict of interest."  This finding is 
supported by the facts of the case.  Not only did Monnier and 
Paul engage in self-dealing, but in doing so they also increased 
their individual interests in the new LLC which received the 
property.  Monnier's ownership improved from 50% to 60%, while 
Paul's interest improved from 25% to 40%. 
 
¶27 The question therefore becomes what, if any, impact 
did this conflict of interest have on Monnier and Paul's ability 
to vote to transfer the property.  Wisconsin Stat. § 183.0404 
governs voting in LLCs and contemplates situations that would 
No. 
2003AP457   
 
13 
 
prevent a member from exercising that voting power.  Subsection 
(3) of the statute explicitly states that members can be 
"precluded from voting."  However, that subsection does not 
address how or when that preclusion would occur.  Wisconsin 
Stat. § 183.0404 provides in relevant part:  
(1) 
Unless 
otherwise 
provided 
in 
an 
operating 
agreement or this chapter . . . an affirmative vote, 
approval or consent as follows shall be required to 
decide any matter connected with the business of a 
limited liability company: 
(a) If management of a limited liability company is 
reserved to the members, an affirmative vote, approval 
or consent by members whose interests in the limited 
liability 
company 
represent 
contributions 
to 
the 
limited liability company of more than 50% of the 
value . . . . 
. . . . 
(3) 
Unless 
otherwise 
provided 
in 
an 
operating 
agreement, if any member is precluded from voting with 
respect to a given matter, then the value of the 
contribution represented 
by the 
interest 
in the 
limited liability company with respect to which the 
member would otherwise have been entitled to vote 
shall be excluded from the total contributions made to 
the 
limited 
liability 
company 
for 
purposes 
of 
determining the 50% threshold under sub. (1)(a) for 
that matter. 
(Emphasis added.)   
¶28 Because Wis. Stat. § 183.0404 does not address how or 
when a member is precluded from voting, Gregory asks that we 
look to Wis. Stat. § 183.1101 for guidance.  Wisconsin Stat. 
§ 183.1101 pertains to the authority to sue on behalf of an LLC.  
It states that, "the vote of any member who has an interest in 
the outcome of the action that is adverse to the interest of the 
No. 
2003AP457   
 
14 
 
limited liability company shall be excluded."  Wis. Stat. 
§ 183.1101(1).  According to Gregory, if one wishes to harmonize 
this section with Wis. Stat. § 183.0404, then it must follow 
that a member who has an interest adverse to the interest of the 
LLC is precluded from voting. 
 
¶29 The petitioners, however, contend that members are not 
precluded from voting on a matter affecting the LLC, even if 
they have a material conflict of interest.  For support, the 
petitioners rely upon Wis. Stat. § 183.0402, the statute 
defining duties of managers and members.9  That statute 
anticipates members having a material conflict of interest and 
requires them to "deal fairly" with the LLC and its other 
members.  Wisconsin Stat. § 183.0402(1)(a) provides: 
Duties of managers and members.  Unless otherwise 
provided in an operating agreement: 
(1) No member or manager shall act or fail to act in a 
manner that constitutes any of the following: 
(a) A willful failure to deal fairly with the limited 
liability company or its members in connection with a 
matter in which the member or manager has a material 
conflict of interest.10 
                                                 
9 We emphasize that these statutory duties may be modified, 
limited, or expanded by the Member's Agreement.  See Wis. Stat. 
§ 183.0402.  Parties may wish to impose greater protections to 
obviate future problems.   
10 
This 
language 
closely 
follows 
Wis. 
Stat. 
§ 180.0828(1)(a), the statute governing limited liability of 
directors of corporations.  That statute is found in Chapter 
180, also known as the "Wisconsin business corporation law," 
which was one of the three primary sources used as a model for 
the WLLCL.  Wisconsin Stat. § 180.0828(1)(a) provides: 
No. 
2003AP457   
 
15 
 
 
¶30 We have previously recognized that statutes relating 
to the same subject matter should be read together and 
harmonized when possible.  State v. Cole, 2003 WI 59, 262 
Wis. 2d 167, ¶13, 663 N.W.2d 700 (citing State v. Leitner, 2002 
WI 77, ¶30, 253 Wis. 2d 449, 646 N.W.2d 341).  Like the court of 
appeals, we discern a stronger relationship between Wis. Stat. 
§§ 183.0404 and 183.0402 than §§ 183.0404 and 183.1101.  
Gottsacker, 269 Wis. 2d 667, ¶18.  Here, Wis. Stat. §§ 183.0404 
and 183.0402 appear in the same subchapter entitled "Rights and 
Duties of Members and Managers."  The position of a statutory 
subsection is significant when construing the statute.  State v. 
Fouse, 120 Wis. 2d 471, 477, 355 N.W.2d 366 (Ct. App. 1984) 
(citing State v. Consolidated Freightways Corp., 72 Wis. 2d 727, 
737, 242 N.W.2d 192 (1976)). 
 
¶31 Reading Wis. Stat. §§ 183.0404 and 183.0402 together 
in harmony, we determine that the WLLCL does not preclude 
                                                                                                                                                             
(1) Except as provided in sub. (2), a director is not 
liable to the corporation, its shareholders, or any 
person asserting rights on behalf of the corporation 
or its shareholders, for damages, settlements, fees, 
fines, penalties or other monetary liabilities arising 
from a breach of, or failure to perform, any duty 
resulting solely from his or her status as a director, 
unless the person asserting liability proves that the 
breach or failure to perform constitutes any of the 
following: 
(a) A willful failure to deal fairly with the 
corporation or its shareholders in connection with a 
matter in which the director has a material conflict 
of interest. 
(Emphasis added.) 
No. 
2003AP457   
 
16 
 
members with a material conflict of interest from voting their 
ownership interest with respect to a given matter.  Rather, it 
prohibits members with a material conflict of interest from 
acting in a manner that constitutes a willful failure to deal 
fairly with the LLC or its other members.  We interpret this 
requirement to mean that members with a material conflict of 
interest may not willfully act or fail to act in a manner that 
will have the effect of injuring the LLC or its other members.  
This inquiry contemplates both the conduct along with the end 
result, which we view as intertwined.  The inquiry also 
contemplates a determination of the purpose of the LLC and the 
justified expectations of the parties.   
 
¶32 Here, the circuit court made no express determination 
as to whether the petitioners willfully failed to deal fairly in 
spite of the conflict of interest.  Under the circuit court's 
analysis, there was no need to reach this issue because the 
court reasoned that a material conflict of interest precluded 
any vote to transfer the property. 
 
¶33 The court of appeals did address the question of 
whether the petitioners dealt fairly.  In doing so, it found 
that the transfer was unfair in two respects.  First, the 
conveyance was not an "arm's length transaction" because it did 
not occur on the open market.  Gottsacker, 269 Wis. 2d 667, ¶21.  
Second, the sale made it impracticable for New Jersey LLC to 
carry on with its intended business (i.e., to hold the 
commercial property as a long-term investment).  Id., ¶22.   
No. 
2003AP457   
 
17 
 
¶34 The petitioners complain that the court of appeals 
exceeded its constitutional authority by making such findings.  
Specifically, they challenge the court of appeals' determination 
that Monnier and Paul's actions made it impracticable for New 
Jersey LLC to carry on its intended business of long-term 
investment.  According to the petitioners, no such intention is 
found in either the Articles of Organization or Member's 
Agreement.  Moreover, such an alleged purpose is contrary to the 
fact that the Wilson Avenue property was purchased and sold by 
New Jersey LLC on a short-term basis.  Additionally, the 
petitioners assert that there has been no determination that 
Gregory received less than fair value for his share of the 
equity of the property.  At oral argument, they noted that the 
purchase price exceeded the assessed value. 
¶35 We agree with the petitioners that the court of 
appeals improperly made findings of fact in this case.  As we 
explained in Wurtz v. Fleischman, 97 Wis. 2d 100, 107, n. 3, 293 
N.W.2d 155 (1980), the court of appeals is not empowered to make 
such determinations:  
The court of appeals is by Constitution limited to 
appellate jurisdiction.  Art. VII, sec. 5(3), Wis. 
Const.  This precludes it from making any factual 
determination where the evidence is in dispute.  This 
is a power reserved to trial courts or to the supreme 
court under appropriate procedures in the exercise of 
its constitutional grant of original jurisdiction.  
The court of appeals has, of course, additional 
constitutional 
jurisdiction 
in 
respect 
to 
its 
supervisory authority over actions and proceedings in 
the trial court.  This grant of jurisdiction does not 
confer the right to make findings of fact where the 
evidence is controverted. 
No. 
2003AP457   
 
18 
 
¶36 Accordingly, we remand the cause to the circuit court 
for further findings and application of the foregoing standard.  
Consistent with Wis. Stat. § 183.0402(2), Monnier and Paul on 
remand shall also "account to the limited liability company and 
hold as trustee . . . any improper personal profit derived by 
that member . . . without the consent of a majority of the 
disinterested members" for the transfer in question.  If it is 
determined by the court that this statute was violated, then the 
court 
will 
determine 
the 
appropriate 
remedy 
under 
the 
circumstances. 
VI 
¶37 In sum, we conclude that the petitioners possessed the 
majority necessary to authorize the transfer in question.  
Furthermore, 
we 
determine 
that 
the 
petitioners' 
material 
conflict of interest did not prohibit them from voting to make 
the transfer so long as they dealt fairly.  However, because 
there was no express determination by the circuit court as to 
whether the petitioners willfully failed to deal fairly with New 
Jersey LLC or its other member, we reverse the decision of the 
court of appeals and remand the cause for further proceedings.     
By the Court.—The decision of the court of appeals is 
reversed and the cause is remanded to the circuit court.   
  
No.  2003AP457.pdr 
 
1 
 
 
¶38 PATIENCE DRAKE ROGGENSACK, J. (concurring).   I write 
in concurrence to further explain the foundation for decisions 
under 
the 
provisions 
of 
Wis. Stat. ch. 
183 
(2001-02),11 
Wisconsin's limited liability company statute.  In so doing, I 
focus on the nature of a member's interest in a limited 
liability company and on the specifics of New Jersey LLC, which 
drive the remedy available to Gregory Gottsacker on remand.  I 
conclude that whether Julie Monnier and Paul Gottsacker dealt 
fairly with Gregory Gottsacker turns on the provisions of ch. 
183 and the majority opinion's interpretation of the Member's 
Agreement of New Jersey LLC.   
¶39 Accordingly, as I explain in more detail below, the 
remedy available on remand is an accounting to accurately 
determine the fair market value12 of the property sold by New 
Jersey LLC, and if Gregory has not been paid his fair share of 
any profit achieved through that sale, Julie and Paul must 
compensate him for any lost profit he sustained when the 
Sheboygan warehouse was sold.  Because it is not apparent from 
the record whether the circuit court conducted a fact-finding to 
determine the fair market value of the Sheboygan warehouse and 
                                                 
11 All further references to the Wisconsin Statutes are to 
the 2001-02 version unless otherwise noted. 
12 The court of appeals made much of its finding that the 
sale of the Sheboygan warehouse was not made in an arms-length 
transaction and therefore the price paid may have been too low.  
However, the name of the purchaser of the warehouse is not 
dispositive of whether Gregory was dealt with fairly.  Rather, 
Julie and Paul were obligated to obtain the fair market value 
for the property, no matter who bought it. 
No.  2003AP457.pdr 
 
2 
 
therefore it is not possible for us to determine as a matter of 
law whether Paul and Julie earned improper personal profits on 
the warehouse sale, I concur in the majority opinion's decision 
to remand, as well as its reversal of the court of appeals 
decision. 
I.  BACKGROUND 
¶40 In September of 1998, Julie filed the Articles of 
Organization for New Jersey LLC; she was its sole member.  Also 
in September of 1998, New Jersey LLC purchased the Sheboygan 
warehouse for $510,000.  Julie personally guaranteed the loan 
that was used to purchase the warehouse.  
¶41 Paul and Gregory became members of New Jersey LLC in 
1999.  There was no 1998 operating agreement establishing terms 
for New Jersey LLC different from those provided in ch. 183.  
However, at the time Paul and Gregory became members of New 
Jersey LLC, they entered into a "Member's Agreement," which 
states in relevant part: 
The Members . . . acknowledge . . . and assent to 
the operation of the Company under the WLLCL without 
amendment by an operating agreement; 
. . .  
4. 
Julie A. Monnier shall own a 50% interest in 
the capital, profits and losses of [New Jersey LLC] 
and shall have 50% of the voting rights of [New Jersey 
LLC]. 
5. 
Paul 
Gottsacker 
and 
Greg 
Gottsacker, 
collectively, shall own a 50% interest in the capital, 
profits and losses of [New Jersey LLC] and shall have 
50% of the voting rights of [New Jersey LLC]. 
¶42 After Paul and Gregory became members of New Jersey 
LLC, it purchased the Wilson Street real estate, which it held 
No.  2003AP457.pdr 
 
3 
 
for a period of time and then sold for a profit.  Julie received 
50% of the profits from that sale, Paul received 25% of the 
profits and Gregory received 25%.   
¶43 In June of 2001, New Jersey LLC sold the Sheboygan 
warehouse to another limited liability company, of which Gregory 
was not a member, for the same price New Jersey LLC paid for it 
in 1998, $510,000.  Although Gregory did not vote in favor of 
the sale, Julie and Paul contend that he received 25% of the 
transaction profits.  Because Gregory did not vote to sell the 
Sheboygan warehouse and because he contends he did not receive 
the profits to which he was entitled, he seeks to rescind the 
sale.   
II.  DISCUSSION 
A. 
Standard of Review 
¶44 I review, as a matter of law, the prior court’s 
decision that due to Julie and Paul’s conflict of interest in 
voting to sell the Sheboygan warehouse they violated Wis. Stat. 
§ 183.0402 and Wis. Stat. § 183.0404, requiring rescission of 
the sale.  Tahtinen v. MSI Ins. Co., 122 Wis. 2d 158, 166, 361 
N.W.2d 673 (1985) (the application of a statute to a set of 
facts presents a question of law). 
B. 
Gregory's Claims 
¶45 A limited liability company is a business entity 
created by statute where those who hold an interest in the 
entity are known as members.  Wis. Stat. §§ 183.0102(15), 
183.0801.  The rights and obligations of a limited liability 
company to its members, of the members to the limited liability 
No.  2003AP457.pdr 
 
4 
 
company and to each other are set by ch. 183.  Common law 
concepts such as the fiduciary duty of a majority shareholder of 
a corporation to a minority shareholder are replaced by 
statutory obligations.13  Wis. Stat. §§ 183.0402, 183.1302(3).  
Those rights and obligations may be adjusted through a contract 
generically known as an operating agreement.  Wis. Stat. 
§ 183.0102(16).  Here, Julie, Paul and Greg, in the Member's 
Agreement, agreed to be bound by the provisions of ch. 183, 
without amendment by an operating agreement.  Therefore, with 
the exception of the allocation of member interests set out in 
the Member's Agreement, the rights and obligations of the 
parties before us are found in ch. 183. 
 
1. 
Gregory's derivative claim 
¶46 Gregory sued Julie and Paul in the name of New Jersey 
LLC, as well as in his own name.  As an affirmative defense to 
that claim of the complaint, Julie and Paul asserted that 
Gregory had no statutory authority and no standing to sue on 
behalf of New Jersey LLC.   
¶47 Not every member of a limited liability company has 
the right to bring an action in the name of the limited 
liability company.  Wis. Stat. § 183.0305.  The requisite 
qualifications to do so are set out in Wis. Stat. § 183.1101.  
Therefore, Gregory must meet those statutory parameters in order 
to sue in the name of New Jersey LLC.  Neither the circuit court 
nor the court of appeals decided whether Gregory had statutory 
                                                 
13 The court of appeals improperly engrafted a common law 
fiduciary duty on Julie and Paul's status as members.  Members' 
obligations are set by statute. 
No.  2003AP457.pdr 
 
5 
 
authority to bring an action on behalf of New Jersey LLC.  The 
majority opinion also does not address the issue, possibly 
because the parties focused their briefs on whether the sale of 
the Sheboygan warehouse was valid without Gregory's consent.  
Because it may be an issue on remand, I point out that it has 
not 
been 
decided 
whether 
Gregory 
has 
met 
the 
statutory 
prerequisites to bring a derivative claim.14 
¶48 The requirements that must be satisfied before a 
member can bring a derivative claim on behalf of a Wisconsin 
limited liability company are set out in Wis. Stat. § 183.1101 
and § 183.0404(1)(a).  Section 183.1101 requires in relevant 
part: 
(1) Unless otherwise provided in an operating 
agreement, an action on behalf of a limited liability 
company may be brought in the name of the limited 
liability company by one or more members of the 
limited liability company, . . . if the members are 
authorized to sue by the affirmative vote as described 
in s. 183.0404(1)(a), except that the vote of any 
member who has an interest in the outcome of the 
action that is adverse to the interest of the limited 
liability company shall be excluded. 
Section 183.0404(1)(a) provides in relevant part: 
                                                 
14 In the context of corporate law, a derivative claim for 
relief permits an individual shareholder to sue to enforce a 
claim for relief that belongs to the corporation by claiming the 
action of another injured the corporation.  See Einhorn v. 
Culea, 2002 WI 65, ¶16, 235 Wis. 2d 646, 612 N.W.2d 78.  There 
are some restrictions on a shareholder's ability to bring a 
derivative action.  See McGivern v. Amasa Lumber Co., 77 Wis. 2d 
241, 252 N.W.2d 371 (1977).  The concept of derivative claims 
has been engrafted into the law of limited liability companies.  
Wis. Stat. § 183.1101; Elf Atochem N. Am., Inc. v. Jaffari, 727 
A.2d 286, 293-94 (Del. 1999).   
No.  2003AP457.pdr 
 
6 
 
(1) Unless otherwise provided in an operating 
agreement . . . an affirmative vote, approval or 
consent as follows shall be required to decide any 
matter connected with the business of a limited 
liability company: 
(a) If management of a limited liability company 
is reserved to the members, an affirmative vote, 
approval or consent by members whose interests in the 
limited liability company represent contributions to 
the limited liability company of more than 50% of the 
value, as stated in the records required to be kept 
under s. 183.0405(1), of the total contributions made 
to the limited liability company. 
¶49 It is undisputed that Gregory's member interest does 
not comprise "more than 50% of the value . . . of the total 
contributions 
made" 
to 
New 
Jersey 
LLC, 
as 
Wis. 
Stat. 
§ 183.0404(1)(a) requires.  However, no Wisconsin appellate 
decision has decided the meaning of "adverse to the interest of 
the 
limited 
liability 
company" 
stated 
in 
Wis. 
Stat. 
§ 183.1101(1).  Perhaps it depends on what the operating 
agreement says; however, there is no operating agreement here.  
Additionally, the purpose of New Jersey LLC is not stated in its 
Articles 
of 
Organization 
or 
in 
the 
Member's 
Agreement.15  
Furthermore, Wisconsin's limited liability company law was 
created to afford a flexible and informal form of doing 
business.  See Joseph W. Boucher, et al., Next Economy 
Legislation: 
 
Allowing 
Complex 
Business 
Reorganizations, 
Wisconsin Lawyer, Aug. 2002, at 19.  And finally, a limited 
liability company that was formed before October 1, 2002 can be 
dissolved if a member dissociates from the limited liability 
                                                 
15 Therefore, there is no basis for the court of appeals 
finding that New Jersey LLC "was formed to hold the [Sheboygan 
warehouse] as a long-term investment." 
No.  2003AP457.pdr 
 
7 
 
company.  Wis. Stat. § 183.0901(4).  New Jersey LLC was formed 
before October 1, 2002.  Therefore, it had no expectation of 
perpetual operation.  Those are some of the questions that a 
derivative claim presents.  However, I leave this issue 
undecided, as does the majority opinion, but I note that the 
parties are not free to do so on remand, if Gregory continues to 
sue in the name of New Jersey LLC, as well as on his own behalf. 
 
2. 
Gregory's individual claim 
¶50 I begin by noting that the nature of a member's 
interest in a limited liability company is personal property.  
Wis. Stat. § 183.0703.  As a member, Gregory has a right to 
receive a share of the profits and losses of New Jersey LLC and 
the right to "vote or participate" in the management of New 
Jersey LLC.  Wis. Stat. § 183.0102(11).  However, Gregory never 
had an interest in real property in regard to the Sheboygan 
warehouse.   
¶51 I agree with the majority opinion that Gregory had the 
right to be dealt with fairly by members of New Jersey LLC who 
had a "material conflict of interest" in regard to the sale of 
the Sheboygan warehouse.16  Majority op., ¶31; Wis. Stat. 
§ 183.0402(1)(a).  I also agree that if Julie and Paul acquired 
any "improper personal profit" in connection with the sale of 
the Sheboygan warehouse, they hold such improper personal profit 
in trust for Gregory.  Wis. Stat. § 183.0402(2).   
                                                 
16 I also agree with the majority opinion that Julie and 
Paul had a material conflict of interest in voting to sell the 
Sheboygan warehouse owned by New Jersey LLC.  Majority op., ¶26. 
No.  2003AP457.pdr 
 
8 
 
¶52 Gregory contends that Julie and Paul could not vote to 
sell the warehouse because they had a conflict of interest in 
the matter.  Again, I agree with the majority opinion's 
conclusion that ch. 183 does not preclude a member who has a 
material conflict of interest in a transaction from casting a 
valid vote on it.  Majority op., ¶31.  Accordingly, the sale is 
valid, but what remains on remand is to assess whether Gregory 
is due a payment different from that which he has received. 
¶53 The majority has concluded that Gregory held a 25% 
interest in profits, losses and votes in New Jersey LLC.  
Majority op., ¶25.  I concur in the majority opinion's 
interpretation of the Member's Agreement.  In addition, the 
majority opinion's interpretation is consistent with the K-1 
form Gregory filed with his federal taxes.  On his K-1, Gregory 
declared that he had a 25% interest in the "profit sharing," 
"loss sharing" and "ownership of capital" for New Jersey LLC. 
¶54 Gregory further claims that his right to vote on the 
proposed sale of the Sheboygan warehouse was violated because 
Julie and Paul did not give him notice of the potential sale and 
ask for his consent to the transaction.  The majority opinion 
does 
not 
address 
this 
contention. 
 
Both 
Wis. 
Stat. 
§ 183.0102(11) and Wis. Stat. § 183.0404(1) address a member's 
vote on matters connected with the business of a limited 
liability company.17  Julie and Paul do not contend that Gregory 
                                                 
17 Wisconsin Stat. § 183.0102(11) provides that a member's 
interest "means a member's rights in the limited liability 
company, including the member's . . . right . . . to vote or 
participate in management of the limited liability company." 
No.  2003AP457.pdr 
 
9 
 
had no right to vote, and I found nothing to support such a 
position.  Accordingly, I conclude that Gregory did have a right 
to vote, give approval or consent on the sale of the Sheboygan 
warehouse, according to these provisions.  Therefore, I compare 
Gregory's 
25% 
member 
interest 
with 
the 
requirements 
of 
§ 183.0404(1)(a) to determine if he had sufficient member 
interest to preclude the sale.   
¶55 Wisconsin Stat. § 183.0404(1)(a) establishes that the 
member vote, approval or consent necessary must be "more than 
50% of the value . . . of the total contributions made to the 
limited liability company." (Emphasis added.)  It is uncontested 
that Julie contributed 50% of the value of the contributions 
made to New Jersey LLC.  The majority opinion concludes that 
Paul contributed 25% of the contributions to New Jersey LLC and 
that Gregory contributed 25% of the contributions.  Majority 
op., ¶25.  Accordingly, Gregory's interest is insufficient to 
satisfy the statutory criteria for member participation that 
will determine whether a transaction occurs.  Therefore, the 
fact that Gregory was not given the opportunity to vote against 
the sale of the Sheboygan warehouse had no effect on whether a 
valid sale occurred. 
No.  2003AP457.pdr 
 
10 
 
III.  CONCLUSION 
¶56 On remand, the circuit court must first address 
whether Gregory is seeking to maintain a derivative action or 
solely an action in his own name.  If he seeks to maintain both 
types of action, the circuit court must determine whether he 
meets the statutory criteria to do so.  In determining whether 
Julie and Paul dealt fairly with Gregory and/or New Jersey LLC, 
the circuit court must determine the fair market value of the 
Sheboygan warehouse on the date of the sale.  There must then be 
an accounting of the profits that resulted from the sale and a 
comparison of that number with the payment Gregory received.  
Because the majority opinion determines that Julie and Paul had 
a conflict of interest in the sale of the warehouse, any profits 
they retained in excess of 75% of the profits will be improper 
personal profits that they hold in trust for Gregory.   
¶57 Accordingly, I concur in the mandate of the majority 
opinion. 
¶58 I am authorized to state that Justice JON P. WILCOX 
joins in this concurrence. 
 
 
No. 2003AP457.lbb 
 
1 
 
 
 
¶59 LOUIS B. BUTLER, JR., J.   (dissenting).  At times, 
issues are complex and therefore are in need of complex 
resolutions.  At times, we tend to see complexity where none 
exists.  This, I conclude, is one of those occasions where the 
issue and its resolution are simple.  Because there was no 
affirmative vote, approval, or consent to transfer the warehouse 
property owned by New Jersey LLC to a new limited liability 
company called 2005 New Jersey LLC, as required by the Member's 
Agreement 
and 
Wis. Stat. § 183.0404(1) 
(2001-02), 
no 
legal 
transfer of the property took place.  As such, I would affirm 
the court of appeals, albeit on different grounds.  I therefore 
respectfully dissent. 
¶60 I agree with the majority's overall analysis of the 
overview and history of limited liability companies.  Majority 
op., ¶¶14-19.  The majority correctly notes that the overriding 
goal of the Wisconsin Limited Liability Company Law (WLLCL) was 
to create a business entity providing, among other things, 
simplicity.  Majority op., ¶19.  The drafters of Wis. Stat. ch. 
183 emphasized the importance of flexibility and freedom of 
contract and hoped that the LLC would provide an inexpensive 
vehicle that did not require legal counsel at every step.  Id.  
See also, Joseph Boucher et al., LLCs and LLPs: A Wisconsin 
Handbook § 1.11 (rev. ed. 1999). 
¶61 The meaning of the Member's Agreement signed on 
January 13, 1999, by Julie Monnier, Paul Gottsacker, and Gregory 
No. 2003AP457.lbb 
 
2 
 
Gottsacker is at issue here.  The relevant portion of the 
agreement is as follows: 
(4) Julie A. Monnier shall own a 50% interest in the 
capital, profits and losses of Company and shall have 
50% of the voting rights of Company. 
(5) 
Paul 
Gottsacker 
and 
Gregory 
Gottsacker, 
collectively, shall own a 50% interest in the capital, 
profits and losses of Company and shall have 50% of 
the voting rights of Company.  
When the terms of a contract are plain and unambiguous, we will 
construe it as it stands.  Borchardt v. Wilk, 156 Wis. 2d 420, 
427, 456 N.W.2d 653 (Ct. App. 1990) (citing Ford Motor Co. v. 
Lyons, 137 Wis. 2d 397, 460, 405 N.W.2d 354 (Ct. App. 1987)).  
Because I see no ambiguity, I would use the terms of the 
agreement to ascertain its meaning. 
 
¶62 Part (4) of the agreement clearly states that Julie 
Monnier owns a 50 percent interest in the Company, and shall 
have 50 percent of the voting rights of Company.  Part (5) 
clearly provides that the Gottsacker brothers collectively own a 
50 percent interest in the Company and "shall have 50% of the 
voting rights of Company."  (emphasis added).  There is no 
ambiguity in the construction of this agreement.  Part (4) 
defines a separate 50 percent interest and voting right, and 
part (5) defines a separate 50 percent interest and voting 
right.  Part (5) could have been written to provide each brother 
with a 25 percent share of the collective interest and voting 
right, but it was not drafted in that manner.  Instead, the 
interest and the voting right were created as a collective.   
No. 2003AP457.lbb 
 
3 
 
 
¶63 The 
term 
"collectively" 
is 
not 
defined 
in 
the 
document.  Majority op., ¶23.  Accepting the definition for 
collectively that the majority adopts which was relied upon by 
the trial court creates no ambiguity.  Id.  That definition 
provided: 
"formed 
by 
collecting; 
gathered 
into 
a 
whole . . . designating or any enterprise in which people work 
together as a group, especially under a system of collectivism 
 . . . ."  Id.  See also Webster's Third New Int'l Dictionary 
445 (unabr. 1986) (defining "collectively" as "in a collective 
sense or manner:  in a mass or body:  in a collected state:  in 
the aggregate:  by collective acts.").  I disagree with the 
conclusion that the definition relied upon, or any definition 
for that matter, supports Monnier and Paul's position that Paul 
and Gregory each had an individual 25 percent voting right in 
the LLC. 
 
¶64 If a "collective" is formed by collecting, it is the 
collective that remains, not the individual collected items.  If 
it is gathered into a whole, it is the whole that remains.  If 
it is an enterprise in which people work together as a group, it 
is the group that remains.  I concur with the majority's 
conclusion that the term "collectively" refers to the sum of the 
brothers' interests, majority op., ¶25, but that does not alter 
the fact that it is the sum that remains, and not the individual 
interests.  Any other construction effectively rewrites the 
agreement entered into by these individuals. 
 
¶65 Of course we must reject a construction resulting in 
unfair or unreasonable results, and give a construction that 
No. 2003AP457.lbb 
 
4 
 
will render the contract a rational business instrument.  
Majority op., ¶24.  There is nothing unfair nor unreasonable 
about construing this agreement as the parties wrote it.  Nor is 
the agreement an irrational business instrument.  It was the 
parties that specified the two separate 50 percent interests in 
New Jersey LLC.  It was the parties that specified the two 
separate voting blocks.  They could have chosen to draft the 
agreement to take into account each person's individual interest 
and voting rights, but the parties chose not to do so.  If the 
parties choose to set forth an agreement that requires the 
brothers to vote together as one interest, this court should not 
stand in their way.  If the drafters of Wis. Stat. ch. 
183 emphasized the importance of flexibility and freedom of 
contract, then we ought to respect the flexibility and freedom 
of this agreement.  In short, the trial court got it right when 
it concluded that Paul Gottsacker lacked the authority to act 
without the assent of his brother. 
 
¶66 Gregory Gottsacker did not agree to or even know about 
the transfer of the warehouse engineered by petitioners in this 
matter.  Thus, the collective provided in part (5) of the 
agreement never voted, approved, or consented to that transfer, 
as is required by Wis. Stat. § 183.0404(1).  I therefore agree 
with the trial court that the warehouse should be returned from 
2005 New Jersey LLC to New Jersey LLC.  Accordingly, I 
respectfully dissent.  
 
 
No. 2003AP457.lbb 
 
 
 
1