2022 WI App 33

COURT OF APPEALS OF WISCONSIN

PUBLISHED OPINION

Case No.: 2020AP1767

Complete Title of Case: 

DORIS BEUTTLER, JEANNE HAAS, VAR KRIKORIAN, MARJORIE 

SPECKHARD, TERRI STEIDL, SPECIAL ADMINISTRATOR FOR THE

ESTATE OF WALTER H. STEIDL, DOLORES TORPHY, ELAINE ZLEVOR,

GLORIA MURPHY AND RALPH ANDERSON,

 PLAINTIFFS-APPELLANTS,

NAZALY BAGDASIAN, GERI BAUMBLATT, BERNARD BRAUN, PATRICIA 

BRAUN, ROBERT CALLAWAY, MARSHALL CUSHMAN, MARILYN 

ISELIN, MARIAN KORNWOLF, IRENE MILLER, MARY MUELLER, BOB 

OTTUM, HOLLY OTTUM, JOYCE OTTUM, LORRAINE PAVELCIK, JOAN 

PETERSON, MARLENE WEICHMANN AND WOOD FAMILY 2003 TRUST,

 PLAINTIFFS,

 V.

MARQUARDT MANAGEMENT SERVICES, INC.,

 DEFENDANT-RESPONDENT.

Opinion Filed: June 22, 2022

Submitted on Briefs: March 16, 2022

Oral Argument: 

JUDGES: Gundrum, P.J., Grogan and Kornblum, JJ.

Concurred:

Dissented:
2

Appellant

ATTORNEYS: On behalf of the plaintiffs-appellants, the cause was submitted on the 

briefs of Thomas Devine of Devine Hahn, S.C., Racine. 

Respondent

ATTORNEYS: On behalf of the defendant-respondent, the cause was submitted on the 

brief of Monica A. Mark of Reinhard, Boerner Van Deuren, S.C., 

Milwaukee. 
2022 WI App 33

COURT OF APPEALS

DECISION

DATED AND FILED

June 22, 2022

Sheila T. Reiff

Clerk of Court of Appeals

NOTICE

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. 

Appeal No. 2020AP1767 Cir. Ct. No. 2018CV1709

STATE OF WISCONSIN IN COURT OF APPEALS

DORIS BEUTTLER, JEANNE HAAS, VAR KRIKORIAN, MARJORIE 

SPECKHARD, TERRI STEIDL, SPECIAL ADMINISTRATOR FOR THE

ESTATE OF WALTER H. STEIDL, DOLORES TORPHY, ELAINE ZLEVOR,

GLORIA MURPHY AND RALPH ANDERSON,

 PLAINTIFFS-APPELLANTS,

NAZALY BAGDASIAN, GERI BAUMBLATT, BERNARD BRAUN, PATRICIA 

BRAUN, ROBERT CALLAWAY, MARSHALL CUSHMAN, MARILYN ISELIN,

MARIAN KORNWOLF,IRENE MILLER, MARY MUELLER, BOB OTTUM,

HOLLY OTTUM, JOYCE OTTUM, LORRAINE PAVELCIK, JOAN 

PETERSON, MARLENE WEICHMANN AND WOOD FAMILY 2003 TRUST,

 PLAINTIFFS,

 V.

MARQUARDT MANAGEMENT SERVICES, INC.,

 DEFENDANT-RESPONDENT.
No. 2020AP1767

2

APPEAL from a judgment of the circuit court for Racine County: 

EUGENE A. GASIORKIEWICZ, Judge. Affirmed in part and reversed in part; 

cause remanded for further proceedings consistent with this opinion. 

Before Gundrum, P.J., Grogan and Kornblum, JJ. 

¶1 KORNBLUM, J. The appellants (collectively referred to as the 

Residents) are individuals who paid a 90% refundable entrance fee to reside at The 

Atrium, a senior living facility managed and operated by Marquardt Management 

Services, Inc. The Residents appeal from the circuit court’s grant of summary 

judgment to Marquardt. They argue that the court erred when it concluded that an 

element of their misrepresentation claims, reliance on the alleged misrepresentation, 

cannot be proved using circumstantial evidence. We conclude that circumstantial 

evidence may be used to prove reliance and, therefore, reverse the judgment in part 

and remand to the circuit court to reconsider the summary judgment decision with 

respect to the three residents whose affidavits contain allegations or a reasonable 

inference of statements by the Residents to a family member. If the circuit court 

determines the reliance statements alleged to have been made by Residents Gloria 

Murphy, Walter Steidl, and Doris Beuttler to their family members constitute 

admissible evidence, these three affidavits raise genuine issues of material fact 

sufficient to defeat summary judgment. We affirm the judgment as to the remaining 

Residents. 

I. BACKGROUND

¶2 The Atrium of Racine, Inc. was a nonprofit corporation that owned a 

senior housing campus located in Racine, Wisconsin, comprised of a seventy-sixunit elderly congregate housing facility known as The Atrium and a forty-unit 

assisted living facility known as Bay Pointe. The Atrium was marketed to 
No. 2020AP1767

3

individuals aged seventy-five and older. In addition to monthly rent, residents of 

The Atrium were required to pay an entrance fee before occupying a unit. Residents 

were to be refunded a portion of the entrance fee within two years of terminating 

occupancy at The Atrium. 

¶3 Prior to March of 2015, The Atrium was operated by Lincoln

Lutheran of Racine, Wisconsin, Inc., which struggled financially. Lincoln Lutheran 

filed for receivership at the end of 2014, and Marquardt took over management of 

The Atrium. 

¶4 As part of its efforts to make The Atrium financially sustainable, 

Marquardt increased the entrance fees required for certain units and created an 

“aggressive marketing plan.” Marquardt additionally sought to alleviate concerns 

over the security of entrance fee payments by changing the terms of the entrance fee 

refund promised to prospective residents. Previously, residents were promised a 

refund of their entrance fee upon terminating occupancy only if their unit was rerented. Under Marquardt’s management, “the refund [would] be payable upon The 

Atrium’s receipt of a new entrance fee on the residence vacated, or by no later than 

24-months from the date the residence was vacated, providing a 24-month cap on 

the liability.” 

¶5 The Residents all signed contracts with The Atrium under 

Marquardt’s management. They allege that they are individuals who each paid a 

90% refundable entrance fee ranging between $84,000 and $111,500 to reside at 

The Atrium. Prior to entering into a residency agreement with The Atrium and 

paying the required entrance fee, each of the Residents met with Joe Reischl, 

Director of Marketing for The Atrium. With the exception of Doris Beuttler, each 

of the Residents was accompanied by a family member when meeting with Reischl 
No. 2020AP1767

4

to discuss the required entrance fee. Reischl represented to each of the Residents 

that he or she would receive a 90% refund of the entrance fee. This representation 

was consistent with the marketing materials, including the brochure, which stated 

that the entrance fee was 90% refundable. Reischl did not disclose the financial 

condition of The Atrium to any of the Residents. 

¶6 Despite Marquardt’s efforts to turn around its financial condition, The 

Atrium went into receivership in May 2017. The circuit court in the receivership 

action entered an order declaring that all rights of the residents of The Atrium to 

payment of entrance fee refunds from the proceeds of the sale of the assets of The 

Atrium were subordinate to the rights of the Bank of New York Mellon Trust 

Company, trustee for bondholders of The Atrium.1 

¶7 The Residents subsequently filed the underlying lawsuit against 

Marquardt alleging, as relevant for purposes of this appeal, that Marquardt 

 

1

 We note that a separate appeal was taken in the receivership action. In that action, this 

court reversed and remanded, concluding that “the Residents’ entrance fees and security deposits 

have priority over the interests of the Bondholders.” Casanova v. Polsky, Nos. 2019AP1728 and 

2019AP2063, unpublished slip op. ¶1 (WI App July 30, 2021). On October 18, 2021, our supreme 

court granted Michael S. Polsky, Esq., Receiver and The Bank of New York Mellon Trust 

Company, N.A.’s petition for review. That case remains pending. 

In their joint petition for review in Casanova, the Bank of New York Mellon Trust 

Company and the court-appointed receiver requested that our supreme court take judicial notice of 

the underlying action in this case and in Larson v. Marquardt Management Services, Inc., Racine 

County case No. 2020CV1386. The petitioners contend: “In the La[r]son case, The Reverend 

Doctor Ross Larson asserts an intentional misrepresentation claim against Marquardt and seeks 

compensatory and punitive damages.” Information found on the Wisconsin Consolidated Court 

Automation Program’s website, commonly referred to as “CCAP,” reflects that Marquardt’s 

motion for summary judgment in that case was denied and its subsequently filed motion to stay 

was granted. See Kirk v. Credit Acceptance Corp., 2013 WI App 32, ¶5 n.1, 346 Wis. 2d 635, 829 

N.W.2d 522 (explaining that CCAP is an online website that contains information entered by court 

staff of which this court may take judicial notice).

The Residents involved in this appeal do not appear to overlap with the parties in the other 

actions, and the parties before us have not requested a stay pending the outcome of the other 

matters. 
No. 2020AP1767

5

misrepresented the financial condition of The Atrium and The Atrium’s ability to 

repay the 90% entrance fee refund to induce them to enter into residency agreements 

and pay the required entrance fees. Marquardt moved for summary judgment

arguing that it had no duty to disclose the financial condition of The Atrium to 

prospective residents. Marquardt also argued that summary judgment was 

warranted because the Residents, due to their diminished capacity or death, could 

not prove that they relied on any alleged misrepresentations because none of these 

Residents could testify that they relied on the representations. 

¶8 The circuit court conducted a hearing on the motion for summary 

judgment. After oral argument, the circuit court determined that the agreements 

signed by the Residents and their payment of the entrance fees constituted “business 

transaction[s] between a legal entity and unsophisticated elderly individuals.” The 

court additionally determined that the Residents were promised that 90% of the 

entrance fees would be repaid within two years, which was a substantial reduction 

in time from the previous promise made to prospective residents, possibly inferring 

that The Atrium was on firmer financial footing. The court noted that the entrance 

fees represented “large sums of money by anyone’s standards” and that as a matter 

of public policy, Wisconsin has passed laws protecting the elderly from financial 

exploitation. 

¶9 The circuit court found that the Residents did not have access to 

certain information that Marquardt had showing its true financial position. The 

court rejected Marquardt’s argument that publicly available tax forms, called 990s,2

would have given Residents sufficient detail that they could have gathered the 

 

2

 The Atrium, as a nonprofit organization, was statutorily required to file public tax returns, 

called Form 990s. These forms are publicly available to anyone who requests them. See 26 U.S.C. 

§ 6104(d)(1).
No. 2020AP1767

6

information themselves. The court also found that the Residents did not have 

information about The Atrium’s technical default on its bond obligations and “the 

precarious nature of the cash flow.” 

¶10 The circuit court held that as a party to a business transaction, pursuant 

to Kaloti Enterprises, Inc. v. Kellogg Sales Co., 2005 WI 111, 283 

Wis. 2d 555, 699 N.W.2d 205, Marquardt had a duty “to disclose to prospective 

residents the precarious financial posture of The Atrium, and its plan to reverse that 

situation.” The court further concluded that it would be up to the jury “to decide if 

such disclosures and information available to potential residents was sufficient to 

decide to enter into this business relationship.” 

¶11 Despite finding that Marquardt had a duty to disclose its financial 

position and plan to reverse this, the circuit court granted summary judgment in 

favor of Marquardt as to the Residents’ claims.3 The court concluded that, due to 

their inability to testify, the Residents were unable to prove actual reliance on 

Marquardt’s alleged misrepresentation regarding the financial stability of The 

Atrium. According to the court, such reliance could not “be proven circumstantially 

or by any exception to Wisconsin evidence statutes.” 

 

3

 There were more than twenty plaintiffs when this case was initiated. Only the nine 

Residents in this appeal had their claims dismissed on summary judgment. The other plaintiffs 

settled their claims. 
No. 2020AP1767

7

II. DISCUSSION

A. Standard of Review

¶12 A circuit court grants summary judgment when “there is no genuine 

issue as to any material fact” and “the moving party is entitled to a judgment as a 

matter of law.” WIS. STAT. § 802.08(2) (2019-20).4 We review de novo the circuit 

court’s summary judgment decision, and apply the governing standards “just as the 

[circuit] court applied those standards.” Green Spring Farms v. Kersten, 136 Wis. 

2d 304, 315, 401 N.W.2d 816 (1987). In so doing, we may benefit from the circuit

court’s reasoning and analysis. AccuWeb, Inc. v. Foley & Lardner, 2008 WI 24, 

¶16, 308 Wis. 2d 258, 746 N.W.2d 447. “Because this case is here on summary 

judgment, we recite the facts in the light most favorable to [the Residents], the 

part[ies] opposing summary judgment, and accept as true [the Residents’]

allegations.” See United Concrete & Constr., Inc. v. Red-D-Mix Concrete, Inc.,

2013 WI 72, ¶4, 349 Wis. 2d 587, 836 N.W.2d 807. 

B. Duty to Disclose

¶13 To facilitate our analysis, we have reordered the issues presented in 

the briefs to first determine whether Marquardt had a duty to disclose its precarious 

financial position. Whether a duty exists is a question of law subject to our 

independent review. See Kaloti, 283 Wis. 2d 555, ¶10.

¶14 The Kaloti court explained that before a defendant can be liable for 

misrepresentation based on the failure to disclose a material fact, the defendant must 

have a duty to disclose. Id., ¶13. In its summary judgment briefing, Marquardt 

 

4

 All references to the Wisconsin Statutes are to the 2019-20 version unless otherwise 

noted.
No. 2020AP1767

8

agreed with this statement of the law, stating: “A failure to disclose a material fact 

can, under some circumstances, support a claim for misrepresentation.” “When 

there is a duty to disclose a fact, the law has treated the failure to disclose that fact 

‘as equivalent to a representation of the nonexistence of the fact.’” Id. (citations 

omitted). 

¶15 The alleged misrepresentation at issue here falls squarely within 

Kaloti. The misrepresentation consists of a failure to disclose The Atrium’s 

precarious financial position. Marquardt contends that it had no duty to disclose in 

this case and that, on this basis, we should affirm the circuit court’s dismissal of the 

Residents’ claims.5 The Residents, however, assert that Marquardt’s failure to 

disclose The Atrium’s precarious financial condition before they entered into the 

business transactions and paid the required entrance fees amounts to an affirmative 

misrepresentation that The Atrium’s financial issues did not exist. 

¶16 In determining whether there is a legal duty and the scope of that duty, 

many factors come into play, including “our ideas of morals and justice ... and our 

social ideas as to where the loss should fall. In the end the court will decide whether 

there is a duty on the basis of the mores of the community.” Id., ¶16 (citation 

omitted). Regarding the mores in the commercial world, “[t]he type of interest 

protected by the law of misrepresentation in business transactions is the interest in 

formulating business judgments without being misled by others—that is, an interest 

 

5

 While briefing in this matter was underway, the Residents moved to strike Marquardt’s 

argument in this regard. The Residents asserted that if Marquardt wanted to challenge the circuit 

court’s ruling that it had a duty to disclose, it should have filed a cross-appeal. See WIS. STAT.

RULE 809.10(2)(b). We denied the motion and concluded that the argument was being advanced 

by Marquardt as a permissible alternative basis for affirming the circuit court and did not require a 

cross-appeal. See Doe v. General Motors Acceptance Corp., 2001 WI App 199, ¶7, 247 Wis. 2d 

564, 635 N.W.2d 7 (“A respondent may advance on appeal, and we may consider, any basis for 

sustaining the [circuit] court’s order or judgment.”). 
No. 2020AP1767

9

in not being cheated.” Id. (citation omitted). The specific factors that a court must 

consider when determining whether a party to a business transaction has a duty to 

disclose a fact are as follows:

(1) the fact is material to the transaction; (2) the party with 

knowledge of that fact knows that the other party is about to 

enter into the transaction under a mistake as to the fact; (3) 

the fact is peculiarly and exclusively within the knowledge 

of one party, and the mistaken party could not reasonably be 

expected to discover it; and (4) on account of the objective 

circumstances, the mistaken party would reasonably expect 

disclosure of the fact.

Id., ¶20. 

¶17 Marquardt argues that “Kaloti does not support imposing a duty to 

disclose in this case.” Marquardt concedes the first factor of the analysis, i.e., that 

the fact of its precarious financial position is material. However, it challenges the 

remaining three. According to Marquardt: (1) it “had no reason to know that [the 

Residents] were about to enter into their [agreements] under the mistaken 

impression that [T]he Atrium was in better financial condition than it actually was, 

or under a mistaken impression as to whether [The Atrium] had a plan to remedy 

that status”; (2) “[T]he Atrium’s financial condition was not ‘peculiarly and 

exclusively’ within [its] knowledge” given that The Atrium’s “990s were available 

to the public online”; and (3) it was “not reasonable for [the Residents] to have 

expected a sweeping, preemptive disclosure of all of [T]he Atrium’s financial 

information and its plans to improve its finances.” 

¶18 We start by analyzing whether Marquardt knew the Residents were 

about to enter into their business transactions under a mistake as to the fact of The 

Atrium’s precarious financial position. See id. The record includes affidavits and 
No. 2020AP1767

10

other evidence suggesting that Marquardt knew that The Atrium’s financial position 

was precarious but the Residents themselves did not. 

¶19 The CEO of Marquardt, Matthew Mauthe, acknowledged during his 

deposition that he had received information showing that The Atrium was in a bad 

financial situation when Marquardt undertook management of it around 2015. 

Mauthe testified that he received a 2015 audit report for the 2014 fiscal year, which 

was prepared by an independent auditor. That report had an item called “Emphasis 

of Matter,” which stated that The Atrium “has incurred losses and has a net deficit 

that raise substantial doubt about its ability to continue as a going concern.”6 

Subsequent audits contained the same Emphasis of Matter. 

¶20 In an effort to alleviate concerns over the security of entrance fee 

payments, Mauthe stated that the terms of the agreement that the Residents signed 

were changed to guarantee repayment of the entrance fee within two years of 

termination of occupancy to instill a sense of certainty in prospective purchasers 

that the money would be repaid. Rather than converting from an entrance fee model 

to a rental model, per the consultant H2 Healthcare, LLC’s recommendation, 

Marquardt increased entrance fees charged for various units. Marquardt also put 

into place an “aggressive marketing plan” to “test[] the market to determine whether 

or not an entrance fee model will work.” 

¶21 Marquardt did not disclose its financial position to the Residents and 

did not disclose that it had changed its marketing plan to attempt to address its 

precarious financial position. The Residents knew only that they were promised a 

 

6

 Marquardt’s counsel explained to the circuit court that “substantial doubt about [an 

entity’s] ability to continue as a going concern” exists “when conditions and events, considered in 

the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as 

they become due within one year after the date that the financial statements are issued.” 
No. 2020AP1767

11

90% refund of their entrance fees within two years of vacating their units. 

Marquardt agreed that it had made a promise to the Residents that they would 

receive a 90% refund. During the motion hearing, the circuit court expressed 

concern that “from every analysis,” Marquardt was making the promise to the 

Residents that they would get their money back while simultaneously “sitting on a 

failing institution.” The second factor supports imposing a duty to disclose. 

¶22 We additionally conclude that the fact of The Atrium’s precarious 

financial position and the plan to remedy that status was peculiarly and exclusively 

within Marquardt’s knowledge. Marquardt conceded that it did not provide all of 

the information available as to its precarious financial position. Marquardt 

nevertheless contends that disclosure was unnecessary because the 990s were 

available to prospective Residents, which according to Marquardt had all of the 

information necessary to understand The Atrium’s financial condition. We 

disagree.

¶23 As the circuit court explained, the 990s lacked the details that were

available in the financial statements of The Atrium and were insufficient to reveal 

the precarious financial situation. For instance, the circuit court noted that the 990s 

did not reveal The Atrium’s technical default on bond payment requirements or the 

precarious nature of The Atrium’s cash flow. We have independently reviewed the 

990s that are in the record and agree with the circuit court’s assessment. Contrary 

to Marquardt’s assertion that the H2 report and the audit reports were cumulative to 

the financial information that was publicly available to the Residents, we conclude 

that The Atrium’s precarious financial position and the plan to remedy that status 

were peculiarly and exclusively within Marquardt’s knowledge. The third factor 

supports imposing a duty to disclose. See id., ¶19 (noting that courts tend to 

conclude that a duty to disclose exists “where the defendant has special knowledge 
No. 2020AP1767

12

or means of knowledge not open to the plaintiff and is aware that the plaintiff is 

acting under a misapprehension as to facts which could be of importance to him, 

and would probably affect his decision”) (citation omitted). 

¶24 We turn to the fourth factor, which is whether, on account of the 

objective circumstances, the Residents would reasonably expect disclosure of The 

Atrium’s precarious financial position and the plan to remedy that status. During 

the summary judgment motion hearing, the Residents asserted that as investors to a 

business transaction, they would have expected disclosure before investing their life 

savings. Specifically, the Residents argued they would have reasonably expected 

to know that Marquardt had “substantial doubt” as to The Atrium’s ability to 

continue as a going concern. We agree, particularly in light of this State’s strong 

public policy interest in protecting older adults, which is reflected in legislation. See 

generally WIS. STAT. § 46.90 (pertaining to Wisconsin’s elder abuse mandatory 

reporting and investigation system). We conclude that it was reasonable for the 

Residents to expect disclosure of the risks associated with the underlying business 

transactions. Kaloti supports the imposition of a duty to disclose, and we agree with 
No. 2020AP1767

13

the circuit court’s ruling that Marquardt had a duty to disclose that it was in a 

precarious financial state.

7

C. Availability of Circumstantial Evidence to Prove Reliance

¶25 Our conclusion that Marquardt had a duty to disclose the information 

relating to its precarious financial position does not end our inquiry. See Ollerman

v. O’Rourke Co. Inc., 94 Wis. 2d 17, 26-27, 288 N.W.2d 95 (1980) (explaining that 

if there is a duty to disclose, the defendant incurs tort liability for misrepresentation, 

i.e., the representation of the nonexistence of the fact, if the elements of the tort of 

misrepresentation are proved). A claim for misrepresentation requires proof of 

reliance on the misrepresentation. Id. at 43. The circuit court granted summary 

judgment to Marquardt after concluding that due to their inability to testify, the 

Residents were unable to prove actual reliance on Marquardt’s alleged 

misrepresentation regarding the financial stability of The Atrium. 

 

7

 Marquardt argued that Bellon v. Ripon College, 2005 WI App 29, 278 Wis. 2d 790, 693 

N.W.2d 330, applies. In that case, we concluded that all of the information that Ripon College 

relayed to an associate professor was true at the time of her interview when the alleged 

misrepresentations occurred. Id., ¶9. To the extent the professor argued that Ripon had a duty to 

say more, we held that she sought “to impose a duty on Ripon to supply predictions, not facts.” Id., 

¶10. The record in that case demonstrated that the professor’s “teaching position, along with others, 

was eliminated due to unforeseen economic circumstances.” Id. We concluded that “Ripon had 

no duty to predict future economic realities.” Id. Bellon does not apply here because it is 

distinguishable. Despite Marquardt’s efforts to frame the argument as its failure to predict the 

future, the Residents are not seeking to hold Marquardt to an “amorphous, unbounded duty” to 

disclose endless financial context. They sought actual information as to The Atrium’s financial 

condition and its plan to remedy that status as of the times they signed their agreements—

information that was readily available to Marquardt. The promise to refund 90% of the entry fee 

was not an amorphous hope, but a specific promise with a time limit—within two years after the 

Resident vacated.
No. 2020AP1767

14

¶26 Both parties agree that the Residents’ misrepresentation claims 

require proof of actual reliance.8 See Malzewski v. Rapkin, 2006 WI App 183, 

¶¶17-20, 296 Wis. 2d 98, 723 N.W.2d 156 (providing that all common law 

misrepresentation claims include as an element that the plaintiff believed the 

defendant’s misrepresentation was true and actually relied on it); see also WIS JI—

CIVIL 2401, 2402, & 2403. The jury instructions explain:

In determining whether [plaintiff] actually relied upon the 

representation, the test is whether [(he) (she)] would have 

acted in the absence of the representation. It is not necessary 

that you find that such reliance was the sole and only motive 

inducing [(him) (her)] to enter into the transaction. If the 

representation was relied upon and constitute[s] a material 

inducement, that is sufficient. 

WIS JI—CIVIL 2401, 2402, & 2403 (underlining and footnotes omitted).9

¶27 Because the Residents have the burden of proof in connection with 

their misrepresentation claims, to overcome summary judgment, the Residents must

show that there is a genuine issue of material fact as to their actual reliance on 

Marquardt’s misrepresentation regarding The Atrium’s financial condition. See 

Techworks, LLC v. Wille, 2009 WI App 101, ¶2, 318 Wis. 2d 488, 770 N.W.2d 

 

8

 Throughout their briefing, the Residents refer to their claims as common law 

misrepresentation claims. Common law misrepresentation encompasses three categories of claims: 

(1) intentional; (2) negligent; and (3) strict liability misrepresentation. Kaloti Enters., Inc. v. 

Kellogg Sales Co., 2005 WI 111, ¶12, 283 Wis. 2d 555, 699 N.W.2d 205. The Residents avoid 

committing to one category. They argue that whether a claim for strict liability misrepresentation 

or negligent misrepresentation can arise from a failure to disclose remains an open question. See

id., ¶13 n.3. 

Marquardt, however, contends that the only claim at issue is the Residents’ claim for 

intentional misrepresentation arising from the failure to disclose. We need not resolve this question 

to resolve this appeal. See Water Well Sols. Serv. Grp. Inc. v. Consolidated Ins. Co., 2016 WI 54, 

¶33 n.18, 369 Wis. 2d 607, 881 N.W.2d 285 (“We decide cases on the narrowest grounds 

possible.”).

9

 WIS JI—CIVIL 2401 uses (plaintiff) throughout rather than (he)(she) and (him)(her). WIS

JI—CIVIL 2402 and 2403 use (he)(she) and (him)(her).
No. 2020AP1767

15

727. The circuit court determined that the Residents could not meet this burden 

because none of the Residents could provide direct testimony because they were 

either incapacitated or deceased. The court based its conclusion on its mistaken 

legal conclusion that only direct testimony, not circumstantial evidence, could prove 

reliance. 

¶28 Wisconsin law does not require direct evidence to prove elements of 

every cause of action. “It is not necessary that every fact be proved directly by a 

witness or an exhibit. A fact may be proved indirectly by circumstantial evidence. 

Circumstantial evidence is evidence from which a jury may logically find other facts 

according to common knowledge and experience.” WIS JI—CIVIL 230; see also

Lambrecht v. Estate of Kaczmarczyk, 2001 WI 25, ¶3, 241 Wis. 2d 804, 623 

N.W.2d 751 (explaining that circumstantial evidence “is evidence of one fact from 

which the existence of the fact to be determined may reasonably be inferred”). The 

circuit court has considerable latitude to admit circumstantial evidence. Oseman v.

State, 32 Wis. 2d 523, 527, 145 N.W.2d 766 (1966). Wisconsin law also is well 

established that circumstantial evidence is available to meet the burden of proof 

even on summary judgment. “That burden can be met by reasonable inferences 

drawn from circumstantial evidence.” Techworks, 318 Wis. 2d 488, ¶2.

¶29 Nothing in the case law prohibits using circumstantial evidence to 

prove misrepresentation, contrary to the circuit court’s conclusion. Wisconsin cases 

dating back to 1891 show that the courts have admitted circumstantial evidence to 

prove fraud without excepting the reliance element. See, e.g., Weadock v. Kennedy, 

80 Wis. 449, 451, 50 N.W. 393 (1891); Goodell v. Poller, 204 Wis. 127, 130, 235 

N.W. 542 (1931). We conclude that the circuit court erred as a matter of law in 

determining that the Residents could not use circumstantial evidence to prove 

reliance. 
No. 2020AP1767

16

¶30 When the circuit court determined reliance could not be proven 

through circumstantial evidence, it granted Marquardt’s motion for summary 

judgment because the Residents failed to submit any direct evidence opposing the 

motion. Because the law permits the Residents to establish the reliance element 

with circumstantial evidence, we reviewed the materials filed in opposition to 

summary judgment to see whether the Residents’ submissions contain any such

evidence that raises a genuine issue of material fact as to reliance. We conclude that 

three of the affidavits—Beuttler, Steidl, and Murphy—contain allegations or a 

reasonable inference of conversations the affiant had with the Resident that, if 

admissible, would constitute sufficient circumstantial evidence to defeat summary 

judgment. 

¶31 Although all of the Residents except Beuttler had a family member 

accompanying them to the meetings with Reischl in which they discussed the 

entrance fee required to reside at The Atrium and the right to a refund within two 

years of terminating occupancy, attendance at the meeting is not sufficient to raise 

a material issue of fact. As the Residents note in their brief, the family members 

would need to be able to testify both about the “representations made ... regarding 

The Atrium’s financial condition, and each [Resident’s] reliance thereon when 

deciding to enter into the transaction and pay the ‘refundable’ entrance fee.” 

¶32 Marquardt correctly contends that the affidavits must show that the 

Residents relied on the omission that forms the core of the Residents’ 

misrepresentation claims; namely, Reischl’s silence as to The Atrium’s financial 

condition. Additionally, Marquardt contends that the affidavits are inadmissible 

because the family members do not have personal knowledge of the Residents’

thoughts and motivations. See WIS. STAT. § 802.08(3) (Affidavits in support of and 

opposition to a motion for summary judgment must “be made on personal 
No. 2020AP1767

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knowledge” and “set forth such evidentiary facts as would be admissible in 

evidence.”).

¶33 Our careful review of all of the affidavits and interrogatories shows

that if the circuit court determines on remand that the statements in the affidavits 

would be admissible at trial pursuant to the rules of evidence, averments in support 

of the claims of Murphy, Beuttler, and Steidl create a genuine issue of material fact 

as to the Residents’ actual reliance. The affidavits submitted on behalf of these 

residents indicate that the affiants had personal knowledge based on conversations 

with the Resident and could testify about the source of their personal knowledge 

that the Resident relied on the promise of the entrance fee being 90% refundable. 

Gloria Murphy’s daughter, Lauren Payne, attested that her parents10 were concerned 

about paying the entrance fee and that her mother stated to her that “she believed, 

based upon [Reischl’s] representations, that she was making a good investment by 

paying the Entrance Fee required to reside at The Atrium.” Doris Beuttler’s son, 

Fred Beuttler, attested that “Doris E. Beuttler stated to me that she decided to pay 

the Entrance Fee required to reside at The Atrium because Joe Reischl represented 

that she would receive a refund of 90%.” Walter Steidl’s daughter, Terri Steidl, 

attested to both the representations made by Reischl to Walter Steidl as to The 

Atrium’s financial stability and her father choosing The Atrium over another 

residence because of the promised 90% refund of the entrance fee, specifically 

averring that her father “liked that he would be able to leave the refunded portion of 

the Entrance Fee to his family when he passed away, rather than spending the money 

on increased rent at Primrose.” 

 

10

 Both of Lauren Payne’s parents were signatories to the contract. According to the 

Affidavit, her father is now deceased and only Gloria Murphy is listed as a plaintiff.
No. 2020AP1767

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¶34 The affidavits on behalf of the other residents make more general 

statements about reliance but do not lay a sufficient foundation as to show a genuine 

issue of material fact. Key on this point is that the affiants do not indicate that they 

had a conversation with the Resident in which they discussed reliance or even heard 

the Resident specifically discuss the refundability question. Some of the affiants 

merely attest that they would have advised their loved one not to pay the entrance 

fee had they known about The Atrium’s precarious financial position or otherwise 

speculate about why the Resident might have paid the entrance fee.11 Others 

expressed an opinion about why the Resident paid the entrance fee but did not give 

a foundation for their knowledge.12 We are not looking for magic words, but for a 

foundation for admissible evidence based on the affiants’ personal knowledge. No 

doubt if the affiants possessed personal knowledge of the Residents’ intentions the 

affidavits would have clearly reflected that knowledge. Because the 

affidavits/interrogatories with respect to the remaining six Residents did not contain 

any assertions or reasonable inferences that the affiant possesses personal 

knowledge about which they can testify about the Resident’s reliance, the circuit 

court correctly granted summary judgment on the claims of Residents Jeanne Haas, 

Delores Torphy, Elaine Zlevor, Ralph Anderson, Var Krikorian, and Marjorie 

Speckhard. We affirm the judgment as to these six Residents. 

 

11

 Affidavit of David Haluska on behalf of Resident Jeanne Haas; Affidavit of Kathleen 

McMahon on behalf of Resident Delores Torphy; Interrogatories of Estate of Elaine Zlevor; 

Interrogatories of Estate of Ralph Anderson.

12

 Affidavit of Dan Bagdasarian on behalf of Resident Var Krikorian; Affidavit of Sandy 

Gage on behalf of Resident Marjorie Speckhard.
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III. CONCLUSION

¶35 In conclusion, while the Residents’ evidence submitted was 

circumstantial, if deemed admissible under the rules of evidence, the submissions

on behalf of Murphy, Steidl, and Beuttler are sufficient to defeat Marquardt’s 

motion for summary judgment on the issue of reliance. For these three Residents, 

the signing of residency agreements and payment of entrance fees, together with the 

affidavits of their family members regarding representations made by The Atrium 

and indications given by Murphy, Steidl, and Beuttler as to their reliance on those 

representations, if determined upon remand to be admissible, create a genuine issue 

of material fact for trial. Accordingly, we reverse the circuit court’s judgment as to 

Murphy, Beuttler and Steidl, and remand for further proceedings consistent with 

this opinion, including the circuit court reconsidering the summary judgment 

decision with respect to these three Residents in light of this decision. We affirm 

the circuit court’s judgment as to the remainder of the Residents, as their affidavits 

and interrogatories are insufficient to defeat Marquardt’s motion for summary 

judgment as to reliance.

By the Court.—Judgment affirmed in part and reversed in part; cause 

remanded for further proceedings consistent with this opinion.