In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 18-3205

MILWAUKEE CENTER FOR

INDEPENDENCE, INC.,

Plaintiff-Appellee,

v.

MILWAUKEE HEALTH CARE,

LLC, agent of Wellspring of

Milwaukee, et al.,

Defendants-Appellants.

____________________

Appeal from the United States District Court for the

Eastern District of Wisconsin.

No. 15-CV-1479 — Lynn Adelman, Judge.

____________________

ARGUED APRIL 10, 2019 — DECIDED JULY 8, 2019

____________________

Before BAUER, MANION, and ROVNER, Circuit Judges.

MANION, Circuit Judge. Milwaukee Health Care, LLC 

(MHC) and Milwaukee Center for Independence, Inc. (MCFI) 

entered into an agreement in 2014. Per that agreement, MCFI, 

a non-profit organization dedicated to providing medical care 
2 No. 18-3205

for individuals with brain injuries, would operate a brain-injury center in MHC’s nursing facility. MHC would handle all 

billing and collections for the services MCFI provided and, 

through a process outlined in the agreement, remit the funds 

collected to MCFI (after taking a cut for itself).

But MHC failed to follow through on its obligations under 

the contract, redirecting MCFI’s funds to pay its employees 

and other creditors instead. MCFI sued MHC for breaching 

the contract and brought claims against MHC’s principal, 

William Nicholson. The district court, exercising diversity jurisdiction,1 entered summary judgment against MHC for 

breach of contract and against Nicholson for conversion and 

civil theft. The district court awarded MCFI over $2 million 

in damages, interest, and costs against MHC and Nicholson, 

jointly and severally. It also awarded MCFI over $200,000 in 

attorney’s fees and costs against Nicholson alone.

MHC and Nicholson appeal the judgments against Nicholson. Because we agree with the conclusions of the district 

court, we affirm.

I.

William Nicholson was the CEO of “the Congress Companies,” a collection of businesses involved in the construction 

of medical facilities. In 2013, Nicholson and another investor, 

 

1 See 28 U.S.C. § 1332. MCFI is a Wisconsin corporation with its principal place of business in Wisconsin. MHC is a Delaware LLC whose 

members, William Koski and William Nicholson, are both citizens of 

New Jersey. See generally Cosgrove v. Bartolotta, 150 F.3d 729, 731 (7th Cir. 

1998) (“[T]he citizenship of an LLC for purposes of the diversity jurisdiction is the citizenship of its members.”). The amount in controversy well

exceeds $75,000.
No. 18-3205 3

William Koski,2 formed MHC to operate the Wellspring of 

Milwaukee nursing home, with Nicholson serving as the 

managing member. The Wellspring facility was in a building 

owned by Milwaukee Healthcare Properties I, LLC (Milwaukee Properties), another of Nicholson’s companies. The property was subject to a mortgage from Oppenheimer Multifamily Housing and Healthcare Finance, Inc. (Oppenheimer). 

The United States Department of Housing and Urban Development (HUD) insured the mortgage.

In 2014, MCFI and MHC entered into an agreement 

whereby MCFI would operate an 18-bed brain-injury clinic 

within the Wellspring facility, the Nexday Brain Injury Rehab 

Center (BIRC). The agreement outlined a specific process for 

MCFI to obtain compensation for services performed at the 

BIRC. MHC would bill and collect from third parties (e.g.,

Medicaid and private insurance companies) for MCFI’s services in MHC’s own name and on MHC’s own behalf. MHC 

would then place any funds collected for MCFI’s services 

(BIRC Collections) into a general account, which was subject 

to a control agreement with Branch Banking & Trust Company. The agreement then required MHC to maintain a special checking account with a Milwaukee-area bank (the BIRC 

Depository Account) and transfer all BIRC Collections into 

that account. On the third business day of every month, MCFI 

would submit an invoice to MHC. On the 20th of each month,

MHC would remit to MCFI either the amount of the invoice 

or the amount in the BIRC Depository Account, whichever 

 

2 Koski was originally a party to this suit along with Nicholson, but 

after the district court dismissed the claims against them in MCFI’s First 

Amended Complaint, MCFI did not name Koski as a defendant in its 

Second Amended Complaint.
4 No. 18-3205

was less, after taking a cut for itself (the “Wellspring Interim 

Daily Rate”).3

In addition to these terms, the agreement called for MHC 

to approach Oppenheimer and HUD about approval for 

MCFI to acquire a security interest in the receivables of which 

the BIRC Collections would be proceeds. The agreement 

notes any such interest would be subordinate to any security 

interest held by Oppenheimer, HUD, or an accounts-receivable lender. The parties do not indicate what Oppenheimer 

and HUD thought about MCFI acquiring a security interest in 

those receivables, but it is clear MCFI never got one.

In 2015, the parties entered into a renewal agreement containing substantially similar terms.

While the parties operated under these agreements, MHC 

suffered significant cash-flow problems. MHC’s financial 

woes prompted Nicholson to invest his personal funds multiple times, totaling over $4 million. In an effort to manage 

these problems, Nicholson directed the CFO of the Congress 

Companies, Ed Tabor, to get involved to “help manage the 

cash.”

Under Tabor’s direction, MHC began redirecting BIRC 

Collections to make its payroll and pay other creditors, primarily Milwaukee Properties. In 2015, MHC entered into a 

line-of-credit arrangement with SCM Specialty Finance Opportunities Fund, L.P. (SCM), an accounts-receivable lender. 

Under that agreement, MHC placed all the money it collected 

 

3 This round-about way for MCFI to receive its compensation was 

apparently a consequence of Wisconsin law, which did not allow MCFI 

to bill in its own name.
No. 18-3205 5

(including BIRC Collections) into one of two lock-box accounts (one for government payors, the other for private 

payors). Every day, SCM would sweep out all the funds in 

those accounts and apply them toward MHC’s outstanding 

debt to SCM. MHC would then request a new draw on the 

line of credit to obtain operating capital.

MCFI received its last full payment from MHC in March 

2015. By the end of that year, MHC owed MCFI over $1 million.

MCFI sued MHC in December 2015 and ceased operating 

the BIRC in February 2016. In its operative complaint, MCFI 

claimed MHC breached the contract and sought to hold Nicholson liable under theories of veil-piercing (to hold him personally liable for MHC’s breach), conversion, and civil theft. 

MCFI maintained Tabor was Nicholson’s agent, so Nicholson 

was personally responsible for Tabor’s redirection of the BIRC 

Collections.

MHC acknowledged it breached the contract, but Nicholson contested his personal liability. The parties filed crossmotions for summary judgment. In his briefs to the district 

court, Nicholson argued (1) MCFI could not pierce the LLC’s 

veil, (2) MCFI’s claims for conversion and civil theft 

amounted to an impermissible claim for tortious breach of 

contract, and (3) MCFI was just another vendor with no particular interest in the BIRC Collections. However, concerning 

his relationship with Tabor, Nicholson “concede[d] that Nicholson was principal, and Tabor was Nicholson’s agent.”4

 

 

4 Defendants’ Response to Motion for Summary Judgment, Doc. 73, 

at 23.
6 No. 18-3205

Yet, he maintained nothing either he or Tabor did amounted 

to a conversion of the BIRC Collections.

The district court entered summary judgment for MCFI on 

its claims for breach of contract, conversion, and civil theft. 

After noting Nicholson’s concession of his agency relationship with Tabor, the district court observed Nicholson’s only 

defense against MCFI’s tort claims was his argument MCFI 

had no interest in the BIRC Collections. The district court concluded MCFI had such an interest, and therefore held Nicholson liable for conversion and civil theft. The district court also 

held MCFI’s tort claims were not improperly conflated with a 

claim for breach of contract.

The parties submitted additional briefing on damages. In 

his damages brief, Nicholson tried to walk back his earlier 

concession concerning his relationship with Tabor, arguing 

he meant to say he was Tabor’s principal inasmuch as he was 

Tabor’s superior within MHC, not that Tabor was his personal

agent. The district court rejected that argument outright and 

held Nicholson to his concession. The court awarded MCFI 

$1,903,452.47, plus interest and costs, against Nicholson and 

MHC jointly and severally. It also awarded $198,669.50 in attorney’s fees, plus costs, against Nicholson alone.5

II.

We review the grant of summary judgment de novo. 

Spierer v. Rossman, 798 F.3d 502, 507 (7th Cir. 2015). “When 

 

5 The district court also awarded MCFI $33,362.66, plus interest, 

against MHC for unreimbursed improvements MCFI had made to the 

Wellspring facility.
No. 18-3205 7

reviewing cross-motions for summary judgment, ‘we construe all inferences in favor of the party against whom the motion under consideration is made,’” that is, the party appealing the judgment. Med. Protective Co. of Fort Wayne v. Am. Int’l 

Specialty Lines Ins. Co., 911 F.3d 438, 445 (7th Cir. 2018) (quoting Schlaf v. Safeguard Prop., LLC, 899 F.3d 459, 465 (7th Cir. 

2018)). “Summary judgment is appropriate ... if, on the evidence provided, no reasonable juror could return a verdict in 

favor of” that party. Ball v. Kotter, 723 F.3d 813, 821 (7th Cir. 

2013). Because this is a diversity case, “we apply state substantive law.” Med. Protective Co., 911 F.3d at 445. Specifically, 

we apply Wisconsin law because this case comes to us from 

the Eastern District of Wisconsin and neither party disputes 

that Wisconsin law applies. See id.

A. Waiver & Concession

Before getting to the merits of this case, we note Nicholson 

makes a number of arguments in his briefs to this court that, 

as MCFI points out, were not raised to the district court. 

Those arguments are waived, and we will not address them. 

See Wheeler v. Hronopoulos, 891 F.3d 1072, 1073 (7th Cir. 2018) 

(“Failing to bring an argument to the district court means that 

you waive that argument on appeal.”).

In addition, Nicholson spends a significant portion of his 

brief arguing about his relationship with Tabor. Nicholson 

tells us Tabor and he were co-agents, going so far as to argue 

he was not Tabor’s principal at all.6 But all of that is moot 

 

6 “In a relationship of coagency, neither agent is the other’s agent.

Thus, neither is vicariously liable for wrongs committed by the other.

Each coagent owes duties to the common principal.” Restatement (Third) 
8 No. 18-3205

given Nicholson’s express concession in his briefing to the 

district court “that Nicholson was principal, and Tabor was 

Nicholson’s agent.” Nicholson is bound to his admission, 

however much he regrets it now. Cf. Soo Line R.R. Co. v. St. 

Louis Sw. Ry. Co., 125 F.3d 481, 483 (7th Cir. 1997) (“[J]udicial 

efficiency demands that a party not be allowed to controvert 

what it has already unequivocally told a court by the most 

formal and considered means possible.”). The manner of Nicholson’s concession bolsters that conclusion. Nicholson did 

not just concede his relationship with Tabor in some throwaway line buried in the brief. He expressly stated, at the end 

of the section of his brief discussing conversion, that though 

he was Tabor’s principal and Tabor was his agent, it did not 

matter because MCFI had no interest in the BIRC Collections. 

Nowhere in the three briefs Nicholson filed with the district 

court before the damages phase does Nicholson argue he is 

not personally liable because he had an insufficient relationship with Tabor. Thus, Nicholson cannot argue this is just “a 

new twist” on an earlier argument. Cf. United States v. Billups, 

536 F.3d 574, 578 (7th Cir. 2008) (concluding the appellant’s 

reliance on different authority on appeal was not a new argument). This is a blatant attempt to contradict what he already 

admitted, and we will not allow it.

B. Nicholson’s Remaining Arguments

Setting aside the arguments Nicholson conceded or did 

not develop before the district court, we are left with two: (1) 

MCFI cannot pursue its claims for conversion and civil theft 

 

of Agency § 1.04 cmt a. Nicholson argues the “common principal” was 

MHC.
No. 18-3205 9

because it did not have an ownership interest in the BIRC Collections, and (2) MCFI’s tort claims are simply repackaged 

claims for breach of contract. We take each in turn.

1. MCFI’s Ownership Interest

Under Wisconsin law, both conversion and civil theft require the victim to have an ownership interest in the property 

converted or stolen. WIS. STAT. § 895.446(1) (creating a civil 

cause of action for victims of theft); WIS. STAT. § 943.20(1)(b) 

(defining theft to include the intentional use, transfer, concealment, or retention of possession of money “without the 

owner’s consent, contrary to his or her authority, and with intent to convert ... to the use of any other person except the 

owner”); H.A. Friend & Co. v. Prof’l Stationery, Inc., 720 N.W.2d 

96, 100 (Wis. Ct. App. 2006) (listing “intentional control or taking of property belonging to another” as the first element of 

conversion). Nicholson argues MCFI did not have such an 

interest in the BIRC Collections; it merely had a right to payment. See generally Kentuckiana Healthcare, Inc. v. Fourth St. Solutions, LLC, 517 F.3d 446, 447 (7th Cir. 2008) (“If you simply 

owe someone money and fail to pay it, you have broken a 

contract but you have not taken your creditor’s property.”). 

He notes MHC billed and collected in its own name and on 

its own behalf, the BIRC Collections were held in MHC’s bank 

accounts, and MCFI acknowledged other entities could claim 

security interests in the BIRC Collections. All of this, he says, 

shows MCFI did not have an ownership interest in the BIRC 

Collections. We disagree. 7

 

7 In a related argument, Nicholson contends the BIRC Collections 

cannot be subject to a claim for conversion because they were commingled with other funds in MHC’s accounts. In his briefing to the district 
10 No. 18-3205

Our analysis on this point begins, and just about ends, 

with Methodist Manor of Waukesha, Inc. v. Martin, 647 N.W.2d 

409 (Wis. Ct. App. 2002). In that case, Evelyn Martin was a 

resident at a Methodist Manor nursing home. Id. at 410.8 Her 

son, Frederick Martin, was a joint holder on her bank account 

and would receive “on his mother’s behalf her monthly income from Social Security and other unknown sources.” Id.

at 411 (internal quotation marks omitted). Wisconsin law and 

Evelyn’s contract with Methodist Manor required Evelyn to 

pay all but $40 of her monthly Social Security income to Methodist Manor on the 15th of each month. Id. at 411 & n.1; see 

also WIS. STAT. § 49.45(7)(a) (1999–2000). Nevertheless, Frederick did not forward his mother’s Social Security income to 

Methodist Manor, instead using the funds “for himself or others.” Martin, 647 N.W.2d at 411.

 

court, Nicholson’s only argument about commingling in relation to the 

tort claims was one sentence in a paragraph asserting MHC was not 

MCFI’s “fiduciary or trustee” for the purposes of MCFI’s civil-theft 

claim. Whether that was sufficient to avoid waiver of the argument he 

makes here is immaterial because the argument fails in any event. Just 

because money was “mingled” with other money does not defeat a claim 

for conversion. See Regas v. Helios, 186 N.W. 165, 166 (Wis. 1922) (allowing a claim for conversion where the defendant “proceeded to treat the 

money as his own by mingling it with his own funds”); Cotton v. Sharpstein, 14 Wis. 226, 234 (1861) (“[W]hen [the defendant] so mingles 

[money] without authority and then refuses to pay, I am unable to see 

why such refusal should not be just as much evidence of a conversion as 

though the money were still in a separate parcel.”).

8 Martin was an appeal from a motion to dismiss, so the Wisconsin 

Court of Appeals treated the facts alleged in the complaint as true. 647 

N.W.2d at 410.
No. 18-3205 11

Methodist Manor sued Frederick for conversion. Id. The 

trial court dismissed the complaint, but the Wisconsin Court 

of Appeals reversed. The court concluded Methodist Manor, 

pursuant to the law and its contract with Evelyn, was “the one 

rightfully entitled” to the Social Security income. Id. at 412

(internal quotation marks omitted). Therefore, Frederick was 

“under a duty to remit [the Social Security income] to Methodist Manor,” and his failure to do so amounted to a conversion of Methodist Manor’s property. Id. (internal quotation 

marks omitted).

Drawing out the similarities between the case before us

and Martin defeats most of Nicholson’s arguments. Nicholson says MCFI cannot have an ownership interest in the BIRC 

Collections because MHC acquired them in its own name and 

on its own behalf. But that was just as true of Evelyn Martin 

receiving her Social Security income in her own name and on 

her own behalf. Nicholson says MHC owned the BIRC Depository Account where the BIRC Collections were stored before being remitted to MCFI, but the Social Security income in 

Martin presumably was also held in the Martins’ bank account until it was turned over to Methodist Manor. At bottom, the cases are materially indistinguishable. Both in Martin and here, one party received funds from an outside source 

and was required to remit those funds to the other party. If 

that was enough to create an ownership interest in Martin, it 

is enough here.

Despite the evident similarities between this case and Martin, Nicholson fights the analogy, pointing instead to Methodist Manor Health Center, Inc. v. Py, 746 N.W.2d 824 (Wis. Ct. 

App. 2008). Ruth Ann Py was another resident at a Methodist 

Manor nursing home. Id. at 826. According to the terms of 
12 No. 18-3205

her contract, Py was to pay Methodist Manor $2,450 each

month. Id. Py’s granddaughter, Nadine Ray, had control of 

Py’s checkbook and handled her accounts. Id. at 827. At Py’s 

request, Ray would deliver large amounts of cash to her 

grandmother ranging from $500 to $5,000. Id. Meanwhile, Py 

allegedly became deficient in her payments to Methodist 

Manor, accruing an outstanding balance of $32,700. Id. at 826–

27.

The Wisconsin Court of Appeals held Methodist Manor 

did not have a claim for conversion against Ray. The court 

considered Martin “inapposite” because “there [was] no evidence ... that Ray received funds that were to be applied to 

the cost of Py’s care.” Id. at 828. Unlike the situation in Martin, there was no evidence Methodist Manor was entitled to 

any specific money in Py’s accounts; it merely had a right to 

payment. See id. at 830 (citing approvingly the trial court’s 

conclusion “Ruth Ann Py owed money to Methodist Manor 

for what Methodist Manor provided [her] with” but the 

money was Py’s).

The facts of this case are much closer to Martin than they 

are to Py. Here, MCFI had more than a generic right to payment; the agreements entitled MCFI to specific funds MHC 

collected for services at the BIRC. Indeed, the parties point to 

no provision in the agreements under which MCFI could receive any funds MHC collected unrelated to the BIRC. Under 

the reasoning of Martin, MCFI had an ownership interest in 

the BIRC Collections.

We address one other argument Nicholson makes relating 

to MCFI’s ownership interest: MCFI could not have a property interest in the BIRC Collections because it acknowledged 

the receivables from the BIRC, of which the BIRC Collections 
No. 18-3205 13

would be proceeds, could be subject to security interests held 

by MHC’s creditors, including MCFI itself. See generally WIS.

STAT. § 409.203(6) (“The attachment of a security interest in 

collateral gives the secured party the rights to proceeds provided by s. 409.315 ... .”); WIS. STAT. § 409.315(1)(b) (“A security interest attaches to any identifiable proceeds of collateral.”). Nicholson points to Wisconsin law that an enforceable 

security interest requires the party granting the interest to 

have “rights in the collateral or the power to transfer rights in 

the collateral.” WIS. STAT. § 409.203(2)(b). He argues if the 

BIRC Collections were MCFI’s property, MHC would not 

have been able to grant security interests in the receivables.

We are unconvinced. Just because MCFI gave the impression MHC could grant security interests in the receivables

does not mean MCFI did not have an ownership interest in 

the BIRC Collections. If the true owner of property gives the 

impression that another is the owner, the true owner cannot 

later contest a security interest the other granted in the property. See Kloety v. Delles, 45 Wis. 484, 488–89 (Wis. 1878); 68 

Am. Jur. 2d Secured Transactions § 203. However, nothing in 

that rule serves to negate the true owner’s rights in the property—he is just “estopped from showing that a security interest is not valid.” 68 Am. Jur. 2d, supra. Therefore, at most 

MCFI’s acknowledgement of the security interests of MHC’s 

creditors only estops MCFI from contesting the interests of 

those creditors. It does not prevent MCFI from asserting its 

ownership of the property against MHC. See Kloety, 45 Wis. 

at 489 (“Under these circumstances, we think the plaintiff is 

estopped to deny as against [the secured party] that his wife is 

the owner of the property.” (emphasis added)).
14 No. 18-3205

2. Contract and Tort

This leaves only Nicholson’s argument that he is not subject to the tort claims because they conflate tort and contract. 

In that regard, “Wisconsin has a long history of attempting to 

maintain the distinction between contract and tort claims.” 

Butler v. Advanced Drainage Sys., Inc., 717 N.W.2d 760, 773 

(Wis. 2006) (Roggensack, J., concurring). But maintaining that 

distinction does not preclude the bringing of a tort claim 

every time there is a contract between the victim and the tortfeasor. See Cotton v. Sharpstein, 14 Wis. 226, 228 (1861). Wisconsin courts only require “a duty existing independently of 

the performance of the contract for a cause of action in tort to 

exist.” Greenberg v. Stewart Title Guar. Co., 492 N.W.2d 147, 

151 (Wis. 1992) (quoting Landwehr v. Citizens Trust Co., 329 

N.W.2d 411, 414 (Wis. 1983)); accord Cotton, 14 Wis. at 229 

(“[A] party, by entering into a contract with the owner in respect to property, does not thereby incapacitate himself from 

wrongfully invading the rights of the owner which exist independent of the contract.”). To proceed on a tort claim when 

there is a contract, “a contract may create the state of things which 

furnishes the occasion of a tort”; it just cannot create “the underlying duty for the tort.” Landwehr, 329 N.W.2d at 414

(quoting Colton v. Foulkes, 47 N.W.2d 901, 903 (Wis. 1951)).

As the district court concluded, the contract between the 

parties here “created the state of things” which allowed the 

tort to occur; it did not create the duty Nicholson breached. 

By the terms of the parties’ agreement, MCFI obtained an 

ownership interest in the BIRC Collections. The duty to refrain from converting or stealing the BIRC Collections was entirely independent of the contract. It arose from the common 

law and Wisconsin statutes, not the contract between MCFI 
No. 18-3205 15

and MHC. See Atkinson v. Everbrite, Inc., 592 N.W.2d 299, 301–

02 (Wis. Ct. App. 1999) (“[T]ort obligations are in general obligations [that are] imposed by law ... to avoid injury to others.” (quoting W. PAGE KEETON ET AL., PROSSER AND KEETON 

ON THE LAW OF TORTS § 92 (5th ed. 1984))). Accordingly, the 

presence of a contract between MCFI and MHC does not bar 

holding Nicholson liable for the torts. Cf. H.A. Friend & Co., 

720 N.W.2d at 102 (“Van Der Puy had a duty, regardless of 

the existence of the contract, not to retain or use money that 

belonged to Friend without Friend’s consent or authorization.”).

III.

MCFI had an ownership interest in the BIRC Collections 

and was entitled to proceed on its tort claims against Nicholson, who was personally involved in the wrongful redirection 

of those funds through the actions of his agent, Tabor. The 

district court’s grant of summary judgment to MCFI is 

AFFIRMED.