Title: McNally v. Capital Cartage, Inc.
Citation: N/A
Docket Number: 2015AP002627
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: May 10, 2018

2018 WI 46 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2015AP2627 
COMPLETE TITLE: 
Mark McNally, 
          Plaintiff-Respondent, 
     v. 
Capital Cartage, Inc. d/b/a Capital Cartage 
Moving & Storage, 
          Defendant-Appellant-Petitioner, 
Mary R. Hermanson, 
          Defendant. 
 
 
 
 
REVIEW OF DECISION OF THE COURT OF APPEALS 
Reported at 375 Wis. 2d 798, 899 N.W.2d 738 
(2017 – unpublished) 
 
 
OPINION FILED: 
May 10, 2018 
SUBMITTED ON BRIEFS: 
      
ORAL ARGUMENT: 
January 17, 2018 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit 
 
COUNTY: 
Dane 
 
JUDGE: 
Juan B. Colas 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
      
 
DISSENTED: 
ZIEGLER, J., dissents (opinion filed). 
 
NOT PARTICIPATING:          
 
 
 
ATTORNEYS: 
 
 
For the defendant-appellant-petitioner, there were briefs 
filed by Nicole S. Schram, Cathleen A. Dettmann, Kevin J. 
Palmersheim, and Haley Palmersheim, S.C., Middleton.  There was 
an oral argument by Cathleen A. Dettmann. 
 
For the plaintiff-respondent, there was a brief filed by 
Robert C. Procter, III, with whom on the brief were Justin H. 
Lessner, and Axley Brynelson, LLP, Madison.  There was an oral 
argument by Robert C. Procter, III. 
 
 
 
2 
An amicus curiae brief was filed on behalf of Wisconsin 
Realtors Association by Debra P. Conrad and Wisconsin Realtors 
Association, Madison. 
 
 
2018 WI 46
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2015AP2627 
(L.C. No. 
2014CV1624) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Mark McNally, 
 
          Plaintiff-Respondent, 
 
     v. 
 
Capital Cartage, Inc. d/b/a Capital Cartage 
Moving & Storage, 
 
          Defendant-Appellant-Petitioner, 
 
Mary R. Hermanson, 
 
          Defendant. 
FILED 
 
May 10, 2018 
 
Sheila T. Reiff 
Clerk of Supreme Court 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed. 
 
¶1 
ANN 
WALSH 
BRADLEY, 
J.   The 
petitioner, 
Capital 
Cartage, Inc. (Capital Cartage), seeks review of an unpublished 
decision of the court of appeals affirming the circuit court's 
determination that real estate broker Mark McNally (McNally) is 
entitled to a commission pursuant to the listing contract 
between the parties.1  Contrary to the court of appeals' 
                                                 
1 McNally 
v. 
Capital 
Cartage, 
Inc., 
No. 
2015AP2627, 
unpublished slip op., (Wis. Ct. App. Apr. 27, 2017) (affirming 
order of circuit court for Dane County, Juan B. Colas, Judge). 
No. 
2015AP2627 
 
2 
 
determination, Capital Cartage asserts that McNally is not 
entitled to a commission because the offer to purchase McNally 
procured contains substantial variances from the seller's terms 
as set forth in the listing contract. 
¶2 
Specifically, Capital Cartage argues that three terms 
in the offer to purchase constitute substantial variances from 
the listing contract.  Among these is a dispositive condition 
that Mary Hermanson, one of Capital Cartage's owners, continue 
to work for the business without pay for an undetermined period 
of time following the sale. 
¶3 
Capital Cartage further asserts that the court of 
appeals erroneously interpreted Libowitz v. Lake Nursing Home, 
Inc., 35 Wis. 2d 74, 150 N.W.2d 439 (1967).  It alleges that 
Libowitz did not, as the court of appeals concluded, alter the 
standard for determining whether a substantial variance exists 
as set forth by Kleven v. Cities Serv. Oil Co., 22 Wis. 2d 437, 
126 N.W.2d 64 (1964).2  Therefore, it contends that McNally is 
                                                 
2 In Kleven, we concluded that "where the variance is a 
substantial one, such as one that is directly in conflict with a 
material provision of the listing contract, there has been no 
substantial performance by the broker which would entitle him to 
his commission, absent acceptance of the offer by the owner."  
Kleven v. Cities Serv. Oil Co., 22 Wis. 2d 437, 444, 126 
N.W.2d 64 (1964) (emphasis added). 
(continued) 
No. 
2015AP2627 
 
3 
 
not entitled to a commission because he did not procure an offer 
to purchase "at the price and on substantially the terms set 
forth" in the listing contract. 
¶4 
We conclude first that Kleven remains the law of this 
state with regard to determining whether a substantial variance 
exists between a listing contract and an offer to purchase.  
Although a term of the offer to purchase that is directly in 
conflict with the listing contract is a substantial variance, it 
is not the sole manner in which substantial variance may be 
shown.  Kleven offered direct contradiction as an example, not 
as a limitation. 
¶5 
Applying this standard, we conclude that in the 
context of the sale of a business with real estate where the 
sale did not go through, the condition in the offer to purchase 
that Mary Hermanson continue to work for Capital Cartage without 
pay constitutes a substantial variance from the listing contract 
as a matter of law.  Consequently, we determine that McNally did 
not procure an offer to purchase "at the price and on 
substantially the terms set forth" in the listing contract and 
therefore is not entitled to a commission. 
                                                                                                                                                             
In Libowitz, we stated that "the complaint would be 
demurrable on the ground of failing to state a cause of action 
if, in spite of liberal construction principles, it alleged 
variations between the terms of the listing contract and the 
offer that were:  [] Substantial variations, i.e., 'directly in 
conflict 
with 
a 
material 
provision 
of 
the 
listing 
contract' . . . "  Libowitz v. Lake Nursing Home, Inc., 35 
Wis. 2d 74, 82, 150 N.W.2d 439 (1967) (emphasis added). 
No. 
2015AP2627 
 
4 
 
¶6 
Accordingly, we reverse the court of appeals. 
I 
¶7 
Mary and Rolyn Hermanson own Capital Cartage, a moving 
and storage business.  Seeking to retire and sell the business 
with real estate, Mary Hermanson (Hermanson) met with McNally, a 
real estate broker.  As a result of this meeting, McNally 
drafted a listing contract.  He used the standard state form 
listing contract, labeled as a WB-6 Business Listing Contract. 
¶8 
The listing contract contained a provision setting 
forth the requirements that must be met for the broker to earn a 
commission.  In relevant part, the contract provides: 
Seller shall pay Broker's commission, which shall be 
earned if, during the term of this Listing . . .[a]n 
offer to purchase is procured for the Business or 
included property by the Broker, by Seller, or by any 
other person, at the price and on substantially the 
terms set forth in this Listing and the standard 
provisions of the current [state form offer to 
purchase.] 
¶9 
The asking price for the business with real estate as 
reflected 
in 
the 
listing 
contract 
was 
$1.2 
million.3  
Approximately three weeks after the listing contract was 
executed, McNally procured an offer to purchase Capital Cartage 
from Steven Erickson (Erickson). 
¶10 Prior to submitting an offer to purchase, Erickson 
presented a letter of intent to Hermanson.  The letter of intent 
                                                 
3 Before the circuit court, Capital Cartage argued that the 
parties modified price in the listing contract from $1.2 million 
to $1.395 million.  The jury rejected this argument, and Capital 
Cartage does not raise it before this court. 
No. 
2015AP2627 
 
5 
 
included, among others, the following three conditions for the 
sale: 
Lender required good faith deposit (approximately 
$7,500 for appraisal and other costs) is split between 
seller and buyer once financing is fully approved, 
commitment 
letter 
issued 
and 
appraisal 
ordered.  
Seller to be reimbursed in full for good faith deposit 
at closing. 
Covenant agreements not to compete signed by Mary and 
Rolyn Hermanson (prior to close)[.] 
Mary and Rolyn Hermanson agree to operate business as 
normal until acquisition takes place and for Mary to 
stay on full time and without pay for period outlined 
in proposed structure.4 
¶11 Hermanson, dissatisfied with the letter of intent, 
sent an email to McNally objecting to the $1.2 million sale 
price.  Instead, Hermanson sought a $1.4 million sale price. 
¶12 As the letter of intent foreshadowed, Erickson's offer 
to purchase was for a price of $1.2 million.  The offer to 
purchase was presented on the standard state form "WB-16 Offer 
to Purchase – Business with Real Estate."  Erickson, however, 
included an additional page, labeled as "Addendum A," which 
consisted of the last page of the letter of intent.  Addendum A 
listed conditions for the sale, which included the three above 
conditions at issue here. 
                                                 
4 The "proposed structure" appears to be a reference to the 
first page of the letter of intent, which stated:  "Seller stays 
on fulltime for period of 3 months to ensure proper transition.  
Operates on part time basis at seller discretion for rest of 
2014.  Part time hourly rate after year 2014 to be negotiated." 
No. 
2015AP2627 
 
6 
 
¶13 After receiving the offer, Mary and Rolyn Hermanson 
rejected the offer in a letter from their counsel to McNally.  
The letter stated in part: 
Capital Cartage, Inc., has just concluded its Special 
Meeting of Shareholders at my office this afternoon.  
The Wisconsin statutes require that a majority vote of 
the shareholders is necessary to sell the business.  
The vote was called and the motion to approve the 
offer to purchase failed to achieve a majority of the 
shareholders' votes.  Capital Cartage has decided not 
to sell its business at this time. 
Hermanson did not provide any other reason for rejecting the 
offer. 
¶14 Subsequently, McNally filed this lawsuit, alleging 
that Capital Cartage owed him a commission of $72,000 pursuant 
to the listing contract.  He asserted that he had procured an 
offer "at the price and on substantially the terms set forth in 
this Listing[.]" 
¶15 Capital 
Cartage 
answered 
the 
complaint 
and 
subsequently moved for judgment on the pleadings.  It argued 
that no commission was due as a matter of law because there were 
substantial variances between the listing contract and the offer 
Erickson 
submitted. 
 
Capital 
Cartage 
cited 
six 
alleged 
variances, including the three conditions at issue.5 
                                                 
5 Capital 
Cartage 
also 
raised 
as 
alleged 
substantial 
variances the following: 
Line 45 of Offer states:  '. . . expenses incurred by 
Buyer in normal course of action.' 
Tenants from Mustang Way property to be transferred to 
Cottonwood Drive property. 
(continued) 
No. 
2015AP2627 
 
7 
 
¶16 The circuit court denied the motion for judgment on 
the pleadings, explaining: 
Whether the offer varies substantially from the terms 
of a listing contract is a question of fact that is in 
dispute in the pleadings.  Though the listing contract 
and the offer are undisputed and are part of the 
pleadings, whether the variances are substantial may 
depend upon other relevant facts concerning the 
transaction or the nature of the business being sold.  
The inclusion of some conditions in an offer may be a 
substantial variance in some circumstances and not in 
others[.] 
¶17 The case proceeded to trial.  As indicated in the 
circuit court's decision denying the motion for judgment on the 
pleadings, one of the issues at trial was whether the offer to 
purchase contained substantial variances from the listing 
contract. 
¶18 At 
the 
jury 
instruction 
conference, 
following 
extensive discussion, the circuit court determined as a matter 
of law that the three conditions at issue were not substantial 
variances from the listing contract.  The circuit court 
reasoned: 
And I think 'substantial variance' has to mean 
inconsistent with or in direct conflict with.  I don't 
think it can just be any variance, even any difference 
at all——any difference at all between the listing 
contract and the offer.  Not every variance is a 
                                                                                                                                                             
Assumption of leases associated with Mustang Way. 
Capital 
Cartage 
does 
not 
raise 
these 
provisions 
as 
substantial variances before this court.  Its argument before 
this court is limited to the three conditions at issue.  See 
supra, ¶10. 
No. 
2015AP2627 
 
8 
 
substantial one.  And where there's nothing in the 
contract on a topic and the offer proposes something, 
that's not a substantial variance as I read the case 
law. 
¶19 Accordingly, the circuit court instructed the jury 
that "[t]he court has determined that as a matter of law that 
the provisions in the offer to purchase that the sellers share 
in the costs of appraisal, that the Hermansons sign non-compete 
agreements and that Ms. Hermanson continue to work for Capital 
Cartage after the sale are not substantial variances."  The jury 
found in McNally's favor, requiring Capital Cartage to pay his 
commission. 
¶20 Capital Cartage appealed, arguing that the circuit 
court erred by denying its motion for judgment on the pleadings.  
It further contended that the circuit court erred at the jury 
instruction conference by concluding, as a matter of law, that 
the three conditions at issue were not substantial variances 
from the listing contract. 
¶21 The court of appeals affirmed the circuit court's 
entry of judgment on the jury's verdict.  McNally v. Capital 
Cartage, Inc., No. 2015AP2627, unpublished slip op. (Wis. Ct. 
App. Apr. 27, 2017).  In an unpublished decision, the court of 
appeals concluded "that a substantial variance in this context 
is limited to variances in offers that directly conflict with 
express terms in the corresponding listing contract."  Id., ¶3. 
II 
¶22 Capital Cartage argues that the circuit court erred by 
denying its motion for judgment on the pleadings and in the 
No. 
2015AP2627 
 
9 
 
alternative, by instructing the jury that the three conditions 
at issue are not substantial variances as a matter of law. 
¶23 A judgment on the pleadings is essentially a summary 
judgment decision without affidavits and other supporting 
documents.  Jares v. Ullrich, 2003 WI App 156, ¶8, 266 
Wis. 2d 322, 667 N.W.2d 843.  We determine first whether the 
complaint has stated a claim.  Id.  If so, we next examine the 
responsive pleading to ascertain whether an issue of material 
fact exists.  Id.  Judgment on the pleadings is proper only if 
there are no genuine issues of material fact.  Town of Windsor 
v. Vill. of DeForest, 2003 WI App 114, ¶5, 265 Wis. 2d 591, 666 
N.W.2d 31. 
¶24 A factual issue is genuine if the evidence is such 
that a reasonable jury could return a verdict for the nonmoving 
party.  Physicians Plus Ins. Corp. v. Midwest Mut. Ins. Co., 
2002 WI 80, ¶18, 254 Wis. 2d 77, 646 N.W.2d 777 (citing Baxter 
v. DNR, 165 Wis. 2d 298, 312, 477 N.W.2d 648 (Ct. App. 1991)).  
Whether judgment on the pleadings should be granted is a 
question of law we review independently of the determination 
made by the circuit court and court of appeals.  Jares, 266 
Wis. 2d 322, ¶8. 
¶25 Likewise, whether jury instructions accurately state 
the applicable law presents a question of law which we review 
independently of the determinations rendered by the circuit 
court and court of appeals.  State v. Beamon, 2013 WI 47, ¶18, 
347 Wis. 2d 559, 830 N.W.2d 681. 
No. 
2015AP2627 
 
10 
 
¶26 The court of appeals correctly observed that the 
resolution of these two issues hinges on the same legal 
question:  whether the three conditions in the offer to purchase 
are substantial variances from the terms of the listing 
contract.  McNally, No. 2015AP2627, ¶17.  Thus, as did the court 
of appeals, we address this single question.  We answer the 
question only in the context of a sale of a business with real 
estate where the sale did not go through.6 
III 
¶27 We begin our analysis by setting forth the evolution 
of the law regarding "substantial variance" between a listing 
contract and an offer to purchase.  Next, we clarify the 
standard under which courts are to determine questions of 
substantial variance.  Finally, we examine the conditions in the 
offer to purchase, applying the law as set forth. 
A 
¶28 Our examination of the law begins in 1944, with this 
court's decision in Moss v. Warns, 245 Wis. 587, 15 N.W.2d 786 
(1944).  In Moss, a seller of residential property entered into 
a listing contract with a broker.  Id. at 588-89.  The broker 
procured an offer to purchase the property.  Id. at 589.  
                                                 
6 The facts of this case present the sale of a business with 
real estate where the sale did not go through.  Our conclusion 
here is circumscribed because the ramifications for other types 
of property sales with other factual scenarios are not before 
us.  Accordingly, we limit our holding to the sale of a business 
with real estate where the sale did not go through. 
No. 
2015AP2627 
 
11 
 
Stating only, "[w]e decided not to sell.  [A co-owner] would not 
consent to it," the seller rejected the offer.  Id. 
¶29 After the broker brought suit seeking a commission 
pursuant to the terms of the listing contract, the seller raised 
as a defense alleged "discrepancies between some of the terms of 
sale specified in the listing agreement and the terms stated in 
[the] offer to purchase[.]"  Id. at 590-91.  The court concluded 
that the seller had waived any objection to the alleged 
discrepancies because the seller did not bring the discrepancies 
to the broker's attention when initially rejecting the offer.  
Id. at 591-92. 
¶30 Moss thus established a rule that "[r]egardless of 
whether the principal, at the time of his refusal to consummate 
the transaction, states some grounds or no grounds for such 
refusal, a particular ground not specified by him at the time is 
waived and cannot be urged by him when sued [by a broker] for a 
commission."  Id. at 591 (citing 12 C.J.S., Brokers, p. 224, 
§ 95).  In other words, the Moss court concluded that, in order 
for sellers to rely on discrepancies between the terms of an 
offer to purchase and the terms of a listing contract to relieve 
them from paying a broker's commission, sellers must bring their 
objections to the broker's attention. 
¶31 The holding in Moss was subsequently limited by this 
court's decision in Kleven, 22 Wis. 2d 437.  In Kleven, as in 
Moss, a seller rejected an offer to purchase without giving a 
reason for doing so.  Id. at 441. 
No. 
2015AP2627 
 
12 
 
¶32 The Kleven court concluded that sellers could reject 
an offer to purchase without giving a reason and without 
triggering a broker's entitlement to a commission if there were 
"substantial" variances between the terms of the listing 
contract and the terms of the offer.  Id. at 444.  The court 
reasoned that an insubstantial variance should be brought to a 
broker's attention to give the broker an opportunity to correct 
it.  Id. 
¶33 However, where the variance is substantial, "such as 
one that is directly in conflict with a material provision of 
the listing contract, there has been no substantial performance 
by the broker which would entitle him to his commission, absent 
acceptance of the offer by the owner."  Id.  In that situation, 
the broker is chargeable with knowledge that the substantial 
variance exists when the offer is submitted.  Id.  Therefore, 
"the owner should be under no duty to point this variance out to 
the broker in rejecting the offer."  Id. 
¶34 This court purported to apply Kleven in Libowitz, 35 
Wis. 2d 74.  The Libowitz court summarized the circumstances in 
which a seller will be relieved of paying a broker's commission 
following Kleven as follows: 
Summarizing these rules as they apply to the case at 
hand, the complaint would be demurrable on the ground 
of failing to state a cause of action if, in spite of 
liberal construction principles, it alleged variations 
between the terms of the listing contract and the 
offer that were:  1. Substantial variations, i.e., 
'directly in conflict with a material provision of the 
listing contract;' 2. Insubstantial, but called to the 
attention of the broker; or, 3. Insubstantial, but of 
No. 
2015AP2627 
 
13 
 
such a nature that they could not have been remedied 
by the broker anyway. 
Id. at 82-83. 
¶35 The 
court 
of 
appeals 
in 
this 
case 
observed 
a 
difference in language between Kleven and Libowitz, to which it 
ascribed great import.  Namely, Kleven used the phrase "such as" 
when explaining the meaning of "substantial variation," while 
Libowitz employed "i.e."  McNally, No. 2015AP2627, ¶28; Kleven, 
22 Wis. 2d at 444; Libowitz, 35 Wis. 2d at 82. 
¶36 In the court of appeals' estimation, the case turns on 
this linguistic idiosyncrasy.  It observed, "[t]he Kleven 
court's 
use 
of 
'such 
as' . . . indicated 
that 
there 
are 
variances that are substantial that do not involve a direct 
conflict between an offer and the listing contract.  If the 
Kleven court had intended substantial variances to be limited to 
offer terms in direct conflict with listing terms, the sentence 
would read:  'where the variance is a substantial one, that is, 
one 
that 
is 
directly 
in 
conflict . . . " 
 
McNally, 
No. 
2015AP2627, ¶25. 
¶37 Accordingly, the court of appeals concluded "the 
supreme court in Libowitz modified the Kleven substantial 
variance language by replacing 'such as' with 'i.e.,' thus, in 
our view, doing what Kleven did not do.  That is, Libowitz 
limited 'substantial variances' to those involving a direct 
conflict between the terms of the offer and the terms of the 
listing contract."  Id., ¶26. 
No. 
2015AP2627 
 
14 
 
¶38 We disagree.  There is no indication that the Libowitz 
court intended to modify Kleven.  In contrast, when the Kleven 
court modified Moss, it explicitly stated that it was doing so.  
See 
Kleven, 
22 
Wis. 2d at 
445 
("Upon 
the 
most 
careful 
consideration of the problem we are satisfied that, both with 
respect to the law which prevails in other jurisdictions, and 
our own analysis of what the law should be, that the rule of 
Moss v. Warns [] should be confined to variances which are not 
substantial, and we so determine."). 
¶39 "A court's decision to depart from precedent is not to 
be made casually.  It must be explained carefully and fully to 
insure that the court is not acting in an arbitrary or 
capricious manner.  A court should not depart from precedent 
without sufficient justification."  Johnson Controls, Inc. v. 
Employers Ins. of Wausau, 2003 WI 108, ¶94, 264 Wis. 2d 60, 665 
N.W.2d 257; see Leitinger v. DBart, Inc., 2007 WI 84, ¶59, 302 
Wis. 2d 110, 736 N.W.2d 1. 
¶40 Libowitz provides no justification for departing from 
Kleven.  It contains no explicit pronouncement that Kleven is no 
longer the standard.  The Libowitz court thus evinces no clear 
intent to depart from Kleven.  Instead, the use of "i.e." rather 
than "such as" or "e.g." appears to be an unfortunate and 
mistaken editorial choice. 
¶41 Consequently, we conclude that Kleven remains the law 
of this state with regard to determining whether a substantial 
variance exists between the listing contract and the offer to 
purchase.  Although a term of the offer to purchase that is 
No. 
2015AP2627 
 
15 
 
directly in conflict with the listing contract is a substantial 
variance, it is not the sole manner in which substantial 
variance may be shown.  Kleven offered direct contradiction as 
an example, not as a limitation. 
¶42 Our decision in Peter M. Chalik & Assocs. v. Hermes, 
56 Wis. 2d 151, 201 N.W.2d 514 (1972), is consistent with this 
result.  Chalik was decided post-Libowitz, yet applies the 
standard from Kleven.  Id. at 157-58 (directly quoting Kleven, 
22 Wis. 2d at 444, by stating the "such as" standard).  By 
neglecting to observe any conflict or tension between Kleven and 
Libowitz, the Chalik court implicitly concluded that they 
present the same standard. 
¶43 Further, the pattern jury instruction on the topic 
also incorporates the Kleven standard.  See JI-Civil 3086.7  The 
                                                 
7 JI-Civil 3086 provides in relevant part: 
Before a real estate broker is entitled to any 
commission under a real estate listing contract, the 
broker must procure a purchaser who is ready, willing, 
and able to meet the express terms of the listing 
contract.  (A seller has the right to reject an offer 
that does not conform to the terms specified in the 
listing contract.  When a seller refuses to accept an 
offer which is substantially in accordance with the 
listing contract, but which contains variances from 
the terms of the listing contract, the seller to 
relieve himself or herself from liability for the 
broker's commission must, when rejecting the offer, 
point out the variances to the broker so that the 
broker may be afforded an opportunity to obtain an 
offer that does comply.  However, where the variance 
is a substantial one, such as one that is directly in 
conflict with a material provision in the listing 
contract, 
then 
there 
has 
been 
no 
substantial 
performance by the broker which would entitle the 
(continued) 
No. 
2015AP2627 
 
16 
 
jury instructions committee's comments cite both Chalik and 
Libowitz, again declining to observe any tension between the 
standards they present. 
B 
¶44 Having determined that the Kleven standard applies, we 
examine next the conditions in the offer to purchase at issue, 
applying the law as set forth above.  Our analysis begins and 
ends with the condition that Hermanson work without pay for an 
undetermined period of time following the sale of Capital 
Cartage.  Because we conclude that this condition constitutes a 
substantial variance, it is dispositive, and we need not address 
the other two alleged variances. 
¶45 A review of the pleadings and attachments indicates 
that the offer to purchase contains the following condition:  
"Mary and Rolyn Hermanson agree to operate business as normal 
until acquisition takes place and for Mary to stay on full time 
and without pay for period outlined in proposed structure."  The 
"proposed structure" appears to be a reference to the letter of 
intent, which states:  "Seller stays on fulltime for period of 3 
months to ensure proper transition.  Operates on part time basis 
at seller discretion for rest of 2014.  Part time hourly rate 
after year 2014 to be negotiated." 
¶46 However, the "proposed structure" is not part of the 
offer to purchase.  Addendum A (the last page of the letter of 
                                                                                                                                                             
broker to the commission and the owner is under no 
obligation to specify the reasons for rejection.) 
No. 
2015AP2627 
 
17 
 
intent) is the sole page of the letter of intent attached to the 
offer to purchase.  The "proposed structure" to which it refers 
appears on the first page of the letter of intent and was 
neither attached to nor incorporated into the offer to purchase.8  
By itself the condition in the offer to purchase does not 
provide 
any 
"structure" 
or 
temporal 
limitation 
on 
the 
requirement that Hermanson provide free labor to Capital 
Cartage. 
¶47 We 
recognize 
that 
often 
a 
determination 
of 
"substantiality" is a factual question for the jury.  See JI-
Civil 3086.  However, here we can decide the question as a 
                                                 
8 The offer to purchase contains an integration clause:  
"This Offer . . . contains the entire agreement of the Buyer and 
Seller regarding the transaction."  In the presence of such a 
clause, the court is barred from considering extrinsic evidence 
of any prior or contemporaneous understandings or agreements 
between the parties.  Tufail v. Midwest Hospitality, LLC, 2013 
WI 62, ¶30, 348 Wis. 2d 631, 833 N.W.2d 586.  Such a clause 
indicates that the entire agreement between the parties has been 
reduced to writing in the offer to purchase.  Id., ¶31.  The 
offer to purchase had attached a single page of the letter of 
intent, but not its entirety.  Because of the integration 
clause, any parts of the letter of intent not attached to the 
offer are extrinsic and not to be considered. 
No. 
2015AP2627 
 
18 
 
matter of law by examining the listing contract and offer to 
purchase only.9 
¶48 In this case there is no factual determination for a 
jury to make for two reasons.  First, Chalik establishes that a 
discrepancy in price between the listing contract and the offer 
to purchase may be a substantial variance as a matter of law.  
56 Wis. 2d at 155.  Second, the condition at issue here is so 
extraordinary that no reasonable jury could determine that it is 
not a substantial variance. 
¶49 On the first point, our analysis begins with the long-
recognized premise that Hermanson's labor has monetary value.  
See Garstka v. Russo, 37 Wis. 2d 146, 151, 154 N.W.2d 286 (1967) 
(referring to the "value" of labor); Hoernig v. Hoernig, 109 
Wis. 229, 231, 85 N.W.2d 346 (1901) (explaining that labor was 
"conceded to [be] valuable").  By imposing a condition that 
Hermanson continue to work for Capital Cartage without pay 
following the sale of the business with real estate, Erickson 
saves an amount of money equal to the value of Hermanson's 
labor.  In other words, by saving Erickson an amount of money 
equal to Hermanson's salary for the duration of her unpaid work, 
                                                 
9 Unlike the dissent, we do not consider the negotiations 
between Erickson and Capital Cartage or those parts of the 
letter of intent not incorporated into the offer to purchase.  
Erickson was not a party to the listing contract between Capital 
Cartage and McNally and negotiations between he and Capital 
Cartage cannot alter its terms.  Likewise, the letter of intent 
is not binding.  It is not signed and specifically states, 
"[t]his draft is nonbinding[.]"  See Pinczkowski v. Milwaukee 
Cty., 2005 WI 161, ¶44, 286 Wis. 2d 339, 706 N.W.2d 642. 
No. 
2015AP2627 
 
19 
 
the purchase price of the business with real estate is 
essentially lowered by that same amount. 
¶50 As noted above, a variation in price between a listing 
contract and an offer to purchase may constitute a substantial 
variance as a matter of law.  See Chalik, 56 Wis. 2d at 155.  In 
Chalik, the court observed that the listing contract required a 
$28,000 down payment, yet the offer to purchase incorporated a 
down payment of only $22,000.  Id.  The court determined that 
this discrepancy was a substantial variance.  Id. 
¶51 Likewise here, the condition in the offer to purchase 
that Hermanson work without pay constitutes a substantial 
variance from the terms of the listing contract as a matter of 
law.  By including Hermanson's free labor and thus in totality 
proposing a price lower than that reflected in the listing 
contract, there exists a variance between the desired price as 
reflected in the listing contract and the price offered.  We 
acknowledge that a specific monetary value for Hermanson's labor 
is not in the record.  Whatever the total amount sufficient to 
compensate the holdover owner for her work, it likely would 
No. 
2015AP2627 
 
20 
 
eclipse the $6,000 difference the Chalik court determined to be 
a substantial variance.10 
¶52 Given the case law, this monetary difference by itself 
can represent a substantial variance, but we need not rely 
solely on it.  We observe also that the situation here presented 
Hermanson with a Hobson's choice.  If she wanted to complete the 
transaction, she was left with either working without pay for an 
undefined period of time or paying a $72,000 commission to 
McNally.  This puts Hermanson in an extreme and unwinnable 
position. 
¶53 A condition of sale requiring a business owner to 
provide her full time labor and expertise for an undefined 
period of time without any compensation whatsoever is an 
extraordinary departure from a listing contract that does not 
include any labor at all, paid or otherwise, as part of the 
sale.  Even construing the pleadings liberally, this condition 
that Hermanson provide an unspecified amount of free labor is a 
significant outlier.  There is thus no genuine issue of material 
fact because no reasonable jury could find that this condition 
in the offer to purchase constitutes anything other than a 
                                                 
10 Kleven states that an offer term that is directly in 
conflict with a material provision of the listing contract 
constitutes a substantial variance.  Kleven v. Cities Serv. Oil 
Co., 22 Wis. 2d 437, 444, 126 N.W.2d 64 (1964).  We conclude 
that under the facts of this case, the variance is substantial 
as a matter of law.  We do not address other factual situations 
where the difference in price between the offer to purchase and 
the listing contract may be deemed so de minimus as to not 
constitute a direct conflict with a material provision. 
No. 
2015AP2627 
 
21 
 
substantial variance from the terms of the listing contract.  
See Town of Windsor, 265 Wis. 2d 591, ¶5 (explaining that 
judgment on the pleadings is appropriate where there is no 
genuine issue of material fact). 
¶54 Accordingly, the circuit court erred in denying 
Capital Cartage's motion for judgment on the pleadings.11  By 
procuring an offer in substantial variance from the terms of the 
listing contract, there has been no substantial performance by 
McNally which would entitle him to a commission, absent Capital 
Cartage's acceptance of the offer.  See Kleven, 22 Wis. 2d at 
444. 
¶55 In sum, Kleven remains the law of this state with 
regard to determining whether a substantial variance exists 
between the listing contract and the offer to purchase.  
Applying the Kleven standard, we conclude, as a matter of law, 
that in the context of the sale of a business with real estate 
where the sale did not go through,12 the condition in the offer 
to purchase that Hermanson continue to work for Capital Cartage 
without pay constitutes a substantial variance from the listing 
contract.  Consequently, we determine that McNally did not 
procure an offer to purchase "at the price and on substantially 
                                                 
11 Our determination that judgment on the pleadings should 
have been granted is dispositive and we need not further discuss 
the alternative argument addressing the jury instruction. 
12 We emphasize that our determination in this case is 
narrowly circumscribed by the particular facts at issue. 
No. 
2015AP2627 
 
22 
 
the terms set forth" in the listing contract and is not entitled 
to a commission. 
¶56 Accordingly, we reverse the court of appeals. 
By the Court.—The decision of the court of appeals is 
reversed. 
 
No.  2015AP2627.akz 
 
1 
 
¶57 ANNETTE KINGSLAND ZIEGLER, J.   (dissenting).  While 
the court would reverse and conclude that no commission is owed 
as a matter of law, I would reverse and remand for trial.  I 
conclude that it is error for this court, under these facts, to 
determine as a matter of law that no commission could be due 
because, in so doing, the court is acting as fact finder and is 
usurping the role of the jury.   
¶58 Competing inferences and conflicting evidence exist in 
the record as to whether the transition services condition in 
the offer to purchase would constitute a "substantial variance" 
from the listing contract.  The jury never had the opportunity 
to weigh and consider this evidence and reach a conclusion based 
on the law because the trial court took the issue away from the 
jury when it concluded as a matter of law that this provision 
could not constitute a "substantial variance."  The court here, 
reaching the opposite conclusion, also takes the issue away from 
the jury because it concludes, as a matter of law, that this 
provision must constitute a "substantial variance."   
¶59 I disagree with the court because the reality of 
business 
transactions, 
the 
application 
of 
precedent, 
the 
specific contractual language at issue here, and the conflicting 
testimony in the record, all militate in favor of this being a 
jury question.  And, as the court aptly notes, "often a 
determination of 'substantiality' is a factual question for the 
jury."  Majority op., ¶47 (emphasis added); see also Wis JI——
Civil 3086 (1993).  Why not here?  Just as the trial court 
No.  2015AP2627.akz 
 
2 
 
invaded the province of the jury, so too does this court.  
Accordingly, I respectfully dissent.1 
 
I.  THE REALITY OF BUSINESS TRANSACTIONS 
¶60 The court here concludes as a matter of law that the 
transition services condition must have value and therefore it 
must constitute a "substantial variance."  Majority op., ¶51.  
But 
the 
fact 
that 
such 
agreements 
are 
valuable 
cannot 
automatically void the need to pay a commission on the basis 
that they constitute a substantial variance as a matter of law, 
because 
such 
an 
interpretation 
would 
cause 
significant 
uncertainty in business transactions.   
¶61 The reality is that business transactions have many 
moving parts, and the contracts and agreements that are part of 
the sale of a business are no exception.  For example, documents 
such as transition services agreements are quite common, and can 
be of such importance that "[a] buyer may decide that, but for 
transitional support from the seller . . . the deal is not worth 
doing."2  Given this significance, it is no surprise that such 
                                                 
1 I do, however, agree with the court's clarification of our 
precedent that, "[a]lthough a term of the offer to purchase that 
is directly in conflict with the listing contract is a 
substantial variance, it is not the sole manner in which 
substantial variance may be shown."  Majority op., ¶41. 
2 Cathy 
Hwang, 
Unbundled 
Bargains: 
Multi-Agreement 
Dealmaking in Complex Mergers and Acquisitions, 164 U. Pa. L. 
Rev. 1403, 1415 (2016); see also Barbara Melby, Considerations 
in Transition Services Agreements in M&A Transactions, The Legal 
Intelligencer, 
Morgan 
Lewis, 
Mar. 
1, 
2016, 
https://www.morganlewis.com/pubs/considerations-in-transition-
services-agreements-in-ma-transactions. 
No.  2015AP2627.akz 
 
3 
 
documents might be referenced in an offer to purchase as terms 
and conditions that must be addressed prior to closing the deal.  
But they are, and should be, separate and distinct legal 
documents, and lawyers rather than brokers are the ones to draft 
them, as they have specific legal requirements.  See, e.g., 
Betten Co. v. Brauman, 218 Wis. 203, 208, 260 N.W. 456 (1935) 
(holding that restrictive covenants not to compete in connection 
with the sale of a business are enforceable only so long as they 
are "reasonably limited, in respect to time, territory, and 
trade, to the type of business theretofore conducted").  
¶62 Additionally, the terms of such agreements often 
contain enforcement mechanisms and remedies that define the 
rights of the parties for a reasonable time beyond closing.  The 
fact that the purchaser expects these types of agreements to be 
a part of a business deal, and signifies as much in the offer, 
should not, as a matter of law, automatically unwind the deal, 
or relieve the seller of the requirement to pay the real estate 
broker's commission.  To the contrary, placing the expectations 
of the parties in the offer to purchase is a reasonable practice 
because it ensures that there can be a meeting of the minds.  If 
the expectations are acceptable, appropriate documentation can 
be drafted; if the expectations are unacceptable, they can be 
further discussed. 
¶63 In 
the 
case 
at 
issue, 
the 
purchaser 
placed 
a 
transition services condition in the offer to purchase to ensure 
a meeting of the minds.  Then, without any indication that this 
expectation was unacceptable, the seller decided to not proceed 
No.  2015AP2627.akz 
 
4 
 
with the sale.  But, instead of acknowledging the reality of 
business transactions and addressing the thorny factual issue of 
the parties' expectations, the court concludes, without any 
undisputed evidence in the record, that the transition services 
to be provided are of such value that the price offered is not 
really what it says it is. 
¶64 In this regard, I note that there is no evidence in 
the record as to the value of such services, and that the price 
offered was to the very dollar that the seller had indicated to 
the broker was acceptable: $1.2 million.  How can the court 
reach the conclusion that the transition services condition 
alone constitutes a variance, let alone a substantial one, when 
the record is devoid of any evidence or testimony as to the 
value of such services?  Majority op., ¶51 ("We acknowledge that 
a specific monetary value for Hermanson's labor is not in the 
record.").  In my view, the court makes an insupportable leap in 
concluding that, simply because "labor has monetary value," the 
transition services condition constitutes a substantial variance 
in that it serves to offset part of the stated purchase price.  
Majority op., ¶49.   
¶65 As a consequence, the court creates uncertainty in 
business transactions moving forward because, in reality, its 
opinion provides little more than an unworkable "smell test": it 
is virtually impossible to discern when such a condition would 
not be substantial because the court provides no test, no 
factors to consider, and no guidance for future cases.  This, in 
turn, makes it more difficult for parties to communicate and 
No.  2015AP2627.akz 
 
5 
 
negotiate their expectations so as to achieve a meeting of the 
minds.  I cannot accept this conclusion because it breaks with 
the reality of how business is conducted and usurps the role of 
the jury. 
 
II.  THE APPLICATION OF PRECEDENT 
¶66 It also departs from our precedent, and the proper 
application of precedent makes it even more difficult to support 
the manner in which the court reaches its conclusion. 
 
A.  Chalik Is Objectively Distinguishable. 
¶67 In Chalik, the listing contract required a $28,000 
down 
payment 
in 
a 
sale-of-business 
transaction, 
but 
the 
offeror's total down payment was only $22,000.  Peter M. Chalik 
& Assocs. v. Hermes, 56 Wis. 2d 151, 155, 201 N.W.2d 514 (1972).  
These facts demonstrate an offer that is quantifiably less than 
the terms of the listing contract.  Id.  That is not what we 
have here.  Here, the price in the offer to purchase is 
identical to the price required under the terms of the listing 
contract: $1.2 million.   
¶68 Nonetheless, the court surmises that there is a 
substantial variance in the price term, because Hermanson's work 
"likely would eclipse the $6,000 difference the Chalik court 
determined to be a substantial variance."  Majority op., ¶51.  
There are two flaws in this analysis.  First, the court provides 
no support, evidentiary or otherwise, for its conclusion that 
Hermanson's transition services "likely would eclipse [] $6,000" 
in value.  Second, even if we assume that her transition 
services 
"likely 
would 
eclipse 
[] 
$6,000," 
the 
court's 
No.  2015AP2627.akz 
 
6 
 
conclusion establishes that a $6,000 difference, regardless of 
the value of the property at issue, automatically constitutes a 
substantial variance.  Does the court intend the test to be that 
when the value of a condition "likely would eclipse" $6,000 
there must always be a substantial variance?  This cannot be.  
To be clear, I do not disagree that a difference of $6,000, in a 
$28,000 term of listing, in 1965, was objectively significant.  
See Chalik, 56 Wis. 2d at 155.  It not clear, however, that a 
difference of $6,000, in a $1.2 million term of listing, in 
2014, is equally, or objectively, significant.     
¶69 In other words, unlike Chalik, the dollar figure in 
the term of this listing and the dollar figure in this offer to 
purchase were identical; and, unlike Chalik——where there can be 
no real dispute that the dollar figure offered was significantly 
different than the dollar figure required——the court here, 
without evidence or testimony, subjectively determines that it 
knows how to value transitional services and that the value of 
those services is significant.  In so doing, it improperly 
invades the province of the fact finder.   
 
B.  There Is No "Hobson's Choice" Under Kleven. 
¶70 The court goes on to conclude that, although Chalik 
dictates that "this monetary difference by itself can represent 
a substantial variance," it need not rely solely on that.  
Majority op., ¶52.  The court then presents a novel theory that 
the 
variance 
is 
substantial 
because 
"the 
situation 
here 
No.  2015AP2627.akz 
 
7 
 
presented Hermanson with a Hobson's choice."3  Id.  The court 
reasons that the transition services condition "puts Hermanson 
in an extreme and unwinnable position" because she could either 
work without pay, or pay a $72,000 commission.  Id.     
¶71 In Kleven, however, we instructed that the seller 
always 
has 
the 
option——and 
sometimes 
the 
obligation——to 
communicate with the broker to explain that an offer is 
objectionable.  See Kleven v. Cities Serv. Oil Co., 22 
Wis. 2d 437, 443-44, 126 N.W.2d 64 (1964).  Such communication 
provides 
clarity 
with 
regard 
to 
whether 
a 
variance 
is 
substantial 
and 
"afford[s 
the 
broker] 
an 
opportunity 
of 
correcting it."  Id. at 444.  But that is not what happened 
here.  Here, without any communication or explanation, Hermanson 
decided not to sell. 
¶72 Nonetheless, the court surmises that Hermanson had no 
choice but to work for free or pay $72,000.  There are again two 
flaws in this analysis.  First, there is no uncontroverted 
evidence in the record that Hermanson had to take-it-or-leave-
it.  Instead, the court interjects its own assumptions that her 
decision to "not sell at this time" was on this basis, and, in 
so doing, the court again usurps the role of the jury and 
assumes facts that are not in the record.  Second, even if 
Hermanson felt she had to take-it-or-leave-it, she had the 
                                                 
3 A "Hobson's choice" is "an apparent freedom of choice when 
there is no real alternative," such as being put in the position 
of having to accept "one of two or more equally objectionable 
things."  Hobson's choice Webster's Third New International 
Dictionary 1076 (1986). 
No.  2015AP2627.akz 
 
8 
 
option to communicate that she was "leaving it" because she 
found this condition unacceptable. 
¶73 In 
other 
words, 
contrary 
to 
Kleven, 
the 
court 
concludes that Hermanson had no real choices; and, contrary to 
what Kleven instructs, Hermanson decided not to sell without any 
explanation or objection, or offering any opportunity to cure.  
Not selling is the seller's prerogative, but under the terms of 
a listing contract, it might have consequences.  
 
III.  THE SPECIFIC CONTRACT LANGUAGE AT ISSUE 
¶74 Specifically, I now turn to the contractual language 
in the case at issue.  In general, listing contracts——as with 
other contracts——can be, and often are, negotiated.  A seller 
might require that, for a broker's commission to be due, the 
sale must be consummated; others, as here, might use a standard 
form that requires only that "an offer to purchase is 
procured . . . at the price and on substantially the terms set 
forth in [the listing contract] . . . even if Seller does not 
accept [the] offer."  I conclude that the objective terms of the 
listing contract should control and it is those objective terms, 
and the conditions of the offer to purchase, that create the 
issues of fact here. 
¶75 The listing contract here,4 which dictates what McNally 
had to do to earn a commission, states, in relevant part, as 
follows: 
                                                 
4 See Form WB-6, available at http://www.wi.ctic.com/Assets/ 
Wisconsin-RRE-CTIC/pdfs/RealEstateForms/WB-6[1].pdf. 
No.  2015AP2627.akz 
 
9 
 
TERMS OF LISTING: PRICE: One Million Two Hundred 
Thousand Dollars (1,200,000.00). . . . 
COMMISSION: Seller 
shall 
pay 
Broker's 
commission, 
which shall be earned if, during the term of this 
Listing: . . . 5) An offer to purchase is procured for 
the Business or included property by the Broker, by 
Seller, or by any other person, at the price and on 
substantially the terms set forth in this Listing and 
the standard provisions of the current WB-16 OFFER TO 
PURCHASE – BUSINESS WITH REAL ESTATE . . . even if 
Seller does not accept this offer to purchase.  See 
lines [261-264] regarding procurement. . . . Broker's 
commission shall be 6% . . . .   
Lines 261-264 provide as follows: 
PROCURE:  A purchaser is procured when a valid and 
binding contract of sale is entered into between the 
Seller and the purchaser or when a ready, willing and 
able purchaser submits a written offer at the price 
and on substantially the terms specified in this 
Listing.  A purchaser is ready, willing and able when 
the purchaser submitting the written offer has the 
ability to complete the purchaser's obligations under 
the written offer. 
The listing contract is dated January 24, 2014, and is signed by 
Mark McNally (as Agent for Broker) and by Mary Hermanson (as 
Seller).   
¶76 The offer to purchase5 states in relevant part as 
follows: 
GENERAL PROVISIONS The Buyer, Steven Erickson and/or 
assigns, offers to purchase the Business known as 
[Capital] Cartage, Inc. & Capital Moving & Storage. 
PURCHASE PRICE: One Million Two Hundred Thousand 
Dollars ($1,200,000). . . . 
                                                 
5 See form WB-16, available at http://www.wi.ctic.com/Assets 
/Wisconsin-RRE-CTIC/pdfs/RealEstateForms/WB-16[1].pdf. 
No.  2015AP2627.akz 
 
10 
 
DOCUMENT REVIEW/RECEIPT CONTINGENCY . . . This Offer 
is contingent upon Seller delivering the following 
documents to Buyer . . . see Addendum A attached. 
Addendum A states in relevant part as follows: 
• Lender required good faith deposit (approximately 
$7,500 for appraisal and other costs) is split 
between seller and buyer once financing is fully 
approved, commitment letter issued and appraisal 
ordered.  Seller to be reimbursed in full for good 
faith deposit at closing. 
• Covenant agreements not to compete signed by Mary 
and Rolyn Hermanson (prior to close[6]) 
• Mary and Rolyn Hermanson agree to operate business 
as normal until acquisition takes place and for Mary 
to stay on full time and without pay for period 
outlined in proposed structure.[7, 8]  
The offer to purchase was dated February 15, 2014, and was 
signed by Steven Erickson (as Buyer).  Hermanson never signed 
the offer, however, and the deal did not close; she also refused 
to pay McNally's commission.  McNally sued.   
¶77 At trial, and on appeal, Hermanson challenged the 
three conditions contained in Addendum A to the offer to 
purchase as "substantial variances" from the listing contract 
                                                 
6 Closing was set for April 15, 2014.   
7 The "proposed structure" is outlined in the Letter of 
Intent submitted to Hermanson on February 10, 2014, at a meeting 
at The Madison Club.  See infra ¶¶28-30, 33.  The proposed 
structure was as follows: "Seller stays on full time for period 
of 3 months to ensure proper transition.  Operates on part time 
basis at seller discretion for rest of 2014.  Part time hourly 
rate after year 2014 to be negotiated."   
8 Presumably, these contingencies were to be dealt with 
before closing, although the offer to purchase does not identify 
the number of days within which the transition services 
agreement must be delivered.   
No.  2015AP2627.akz 
 
11 
 
that would relieve her of the obligation to pay McNally's 
commission.  The effect of these three conditions, however, has 
been interpreted in three different ways by three different 
courts.   
¶78 Recall that the circuit court concluded as a matter of 
law that these additional conditions of the offer to purchase 
were not substantial variances.  It reasoned that, where a term 
is omitted from a contract (i.e., where the contract is silent 
on a topic), that term is not material to the contract.  Thus, 
because the listing contract was silent as to a deposit, a 
noncompete, 
and 
any 
transition 
services, 
there 
were 
no 
substantial variances because the offer here, which "propose[d] 
something on [those] same topic[s], [is] not affecting a 
material provision of the listing contract because the listing 
contract didn't care enough to include it."  The circuit court 
disallowed argument to the contrary and instructed the jury 
accordingly.9  
                                                 
9 The circuit court instructed the jury, in relevant part, 
as follows:  
 
A contract to constitute a valid business listing 
contract must in writing[,] describe the business, 
express the price for which the same may be sold, the 
commission to be paid and the period during which the 
agent or broker shall procure a buyer.  The contract 
must be complete at the time it is signed by the 
person agreeing to pay the commission.  Before a 
broker is entitled to any commission under a business 
listing contract the broker must procure a purchaser 
who is ready, willing and able to meet the express 
terms of the listing contract.  A seller has the right 
to reject an offer that does not conform to the terms 
specified in the listing contract.   
(continued) 
No.  2015AP2627.akz 
 
12 
 
¶79 The court of appeals affirmed.  McNally v. Capital 
Cartage, Inc., No. 2015AP2627, unpublished slip op., ¶3 (Wis. 
Ct. App. Apr. 27, 2017).  But the appellate court's reasoning 
was that Libowitz v. Lake Nursing Home, Inc., 35 Wis. 2d 74, 150 
N.W.2d 439 (1967), was dispositive, because Libowitz held that 
"a substantial variance in this context is limited to variances 
that directly conflict with express terms in the corresponding 
listing contract."  McNally, No. 2015AP2627, ¶3.  Thus, a 
"substantial 
variance" 
cannot 
"arise 
from 
conflicts 
with 
                                                                                                                                                             
When a seller refuses to accept an offer which is 
substantially in accordance with the listing contract 
but which contains variances from the terms of the 
listing contract, the seller to relieve himself or 
herself from liability for the broker's commission 
must when rejecting the offer point out the variances 
to the broker so that the broker may be afforded an 
opportunity to obtain an offer that does comply.  
However, where the variance is a substantial one, for 
example, one that is directly in conflict with the 
material provision in the listing contract, then there 
has been no substantial performance by the broker 
which would entitle the broker to the commission and 
the owner is under no obligation to specify the 
reasons for rejection.   
The court has determined that as a matter of law 
that the provisions in the offer to purchase that the 
seller share in the costs of appraisal, that the 
Hermansons sign noncompete agreements and that Ms. 
Hermanson continue to work for Capital Cartage after 
the sale are not substantial variances. 
These 
jury 
instructions 
conform 
to 
the 
form 
jury 
instructions, except that "real estate" is replaced with 
"business" before "listing contract" throughout; and "such as" 
is replaced with "for example" to introduce direct conflict as a 
type of a substantial variance.  See Wis JI——Civil 3086 (1993). 
No.  2015AP2627.akz 
 
13 
 
unexpressed but implied terms in a listing contract."  Id., 
¶40.10   
¶80 This court now determines the exact opposite of the 
circuit court and court of appeals, and reverses.  And it relies 
solely on the transition services condition to conclude as a 
matter of law that, "[b]y imposing a condition that Hermanson 
continue to work for Capital Cartage without pay following the 
sale of the business with real estate . . . the purchase price 
of the business with real estate is essentially lowered by that 
same amount."  Majority op., ¶¶49-50 (citing Chalik, 56 
Wis. 2d at 155).  In other words, the value of this provision 
alone results in a substantial variance.  Majority op., ¶5.     
¶81  Where the trial court concluded as a matter of law 
that the additional conditions of the offer to purchase were not 
substantial variances and this court concludes as a matter of 
law that at least one of them is, and for a different reason, it 
becomes clear that it is not clear whether the additional terms 
constitute substantial variances.  As such, determination of 
this issue as a matter of law invades the province of the jury, 
particularly in light of the fact that often "a determination of 
'substantiality' is a factual question for the jury."  Majority 
op., ¶47.   
 
                                                 
10 I agree with the court's fine-tuning of Libowitz v. Lake 
Nursing Home, Inc., 35 Wis. 2d 74, 150 N.W.2d 439 (1967), but 
that does not eliminate the need for further legal analysis.  
No.  2015AP2627.akz 
 
14 
 
IV.  THE CONFLICTING TESTIMONY 
¶82 Finally, I delve into the competing inferences and 
conflicting testimony in this record which establish that there 
are genuine issues of material fact, demonstrating that the 
court's determination that this is a "substantial variance" as a 
matter of law invades the province of the jury.  
 
A.  Trial Testimony 
1.  The buyer: Erickson's testimony 
¶83 Erickson testified that he met with Hermanson on three 
occasions, only two of which are relevant to the analysis here.11  
The first meeting took place in late January or early February 
2014 at Capital Cartage, Inc.'s Cottonwood location; Erickson, 
Hermanson, and McNally were all present.  Erickson testified 
that he arrived a little before McNally, and that, while they 
were waiting, he introduced himself to Hermanson and talked with 
her about her personal story and the business.  He "thought that 
the two of [them] hit it off pretty well."  When McNally 
arrived, they discussed the business financials and how the 
business was run.  They also discussed how long it would take 
Erickson to learn the business from Hermanson and Hermanson's 
intention to retire: 
I asked her a series of questions such as if I was to 
buy this from you, Mary, would this take three months 
for me to figure out with you on board, you kind of 
                                                 
11 The second meeting——not relevant to the analysis——took 
place in early February 2014 where Erickson, Hermanson, and 
McNally discussed the draft copies of the 2013 tax returns 
prepared by Hermanson's certified public accountant, Dennis 
Kleinheinz.   
No.  2015AP2627.akz 
 
15 
 
teaching me the ropes if I came on?  Would it take a 
year?  We talked . . . about Mary's end intentions 
after it sold such as are you going to stay in the 
industry or are you planning on getting out.  We 
talked about that, that she would be selling it and 
moving on, she would not be involved in the moving 
industry at all anymore.  
Erickson testified that "the way we left that meeting was we 
were in a very great spot."   
¶84 The third meeting took place on February 10, 2014, at 
The Madison Club; Erickson, Hermanson, and McNally were all 
present, as was another potential partner of Erickson's, Kevin 
Wichman.  At this meeting, Erickson presented Hermanson with a 
letter of intent and "walked through [it] kind of line by line 
with everybody." The price offered was $1.05 million plus 
$40,000 at the end of 2014 if gross sales were at about 90 
percent of what they were at the end of 2013, a package Erickson 
testified was primarily "an incentive for Mary to . . . come on 
board" to help with the transition.  There were also a number of 
terms and conditions of sale, all of which, Erickson testified, 
"were things that had already been discussed between Mary and I 
and between Mark and I."   
¶85 Regarding the transition services condition, Erickson 
testified that: 
Mary agreed to stay on and to help with the transition 
process.  We needed to flush out the terms of that, 
whether it be my initial idea of if gross sale 
proceeds are over 950,000 I'll give you $45,000 at the 
end of the year.  Mary had said something like I might 
only want to work 20 hours a week or I might want to 
get paid hourly.  And I had said things like I 
understand.  We can figure that piece of it out.   
*** 
No.  2015AP2627.akz 
 
16 
 
I just wanted Mary there long enough to teach me how 
to run the business.  So this issue over the time that 
she was going to be there, it was something that we 
would just have to flush out, work out.  It wasn't a 
deal breaker.  It wasn't something either of us were 
fixated on.   
To the contrary, Erickson testified that, "everything that was 
communicated on from Mary's end at [the Madison Club] meeting 
was solely regarding the [$1.05 million] purchase price." 
Ultimately, Erickson raised his price to $1.2 million in his 
firm offer to purchase dated February 15, 2014.12  But he heard 
nothing from Hermanson on this offer, despite repeated attempts 
to reach out, and on February 18, 2014, he received by email a 
letter from Hermanson's attorney stating that "[t]he vote was 
called and the motion to approve the offer to purchase failed to 
achieve a majority of the shareholders' votes.[13]  Capital 
Cartage has decided not to sell its business at this time."   
                                                 
12 The court notes that the offer to purchase contained an 
integration clause, which the court concludes bars a circuit 
court or jury from "considering extrinsic evidence of any prior 
or contemporaneous understandings or agreements between the 
parties."  Majority op., ¶46 n.8.  To support this conclusion it 
cites Tufail v. Midwest Hospitality, LLC, 2013 WI 62, ¶30, 348 
Wis. 2d 631, 833 N.W.2d 586, which dealt with a dispute between 
a landlord and a commercial lessee regarding the terms of the 
lease contract.  The dispute here is different.  First, there 
are two contracts: (1) the listing contract between McNally and 
Hermanson; and (2) the offer to purchase between Erickson and 
Hermanson.  Second, the offer to purchase is not the contract 
directly in issue in this case; rather, the offer to purchase 
was a contract between Erickson and Hermanson, that Hermanson——
the only person party to both contracts——is attempting to 
leverage to get out of the listing contract with McNally that is 
at issue.  Thus, Tufail is inapposite. 
13 Mary and Rolyn Hermanson are the only shareholders of 
Capital Cartage, Inc.  
No.  2015AP2627.akz 
 
17 
 
 
2.  The seller: Hermanson's testimony 
¶86 Hermanson's 
testimony 
regarding 
their 
meetings 
corroborated Erickson's to the extent that she testified that 
she gave Erickson and Wichman a tour of the Cottonwood location 
in early February 2014, and that she, Erickson, McNally, and 
Wichman met on February 10, 2014, at The Madison Club.  With 
regard to the latter, Hermanson testified that she believed the 
purpose of the meeting was to discuss the value of the building, 
answer any questions on financials that they might have, and 
generally find out what they thought the company was worth and 
if they were really serious about buying it and taking over.  
When she was presented with a letter of intent, she read it 
through and testified that: 
[W]hen I got down to the bottom I looked up across at 
Steve [Erickson] and said, Steve, this will not work 
for Rolyn and I, and he said, What do you want Mary?  
I said, Well, this will not work for Rolyn and I.   
¶87 She testified that she reviewed the letter of intent 
again over the next 24 hours making more detailed, handwritten 
comments and crossing out most of the terms and conditions.  
With regard to the transition services condition, Hermanson 
testified:  
I wasn't willing to stay on full-time and most of all, 
not knowing for how long.  I was willing to help.  I 
was willing to help transition a new buyer but I 
wasn't willing to have a buyer tell me what I was 
going to be doing with my time.   
Next to this term, she said she "made a note that [she] couldn't 
possibly accept" it, but she did not specifically object to any 
term at the Madison Club meeting, she never gave this marked up 
No.  2015AP2627.akz 
 
18 
 
copy to anyone, and she never discussed or asked for changes 
based on her reservations.  The only objection Hermanson made 
was, as Erickson testified, to the purchase price.   
 
3.  The broker: McNally's testimony 
¶88 McNally 
began 
his 
testimony 
by 
providing 
some 
background.  He testified that he has been a mergers and 
acquisitions advisor and a business broker for 28 years, and 
that he has four licenses related to his work: he is a certified 
public accountant, a certified merger and acquisition advisor, a 
certified valuation analyst, and a licensed real estate broker.  
His work involves assisting companies with the sale of their 
businesses, and, in doing so, he has prepared listing contracts 
in 280 successful transactions.  McNally testified that the 
listing contract is a form "available from the Department of 
Regulation & Licensing."  He also testified that "the real 
estate professional doesn't speak with the offer," which is 
worked out collaboratively between the potential buyer and the 
seller.   
¶89 McNally also confirmed that he had been present for 
the tour of the Cottonwood location and for the Madison Club 
meeting where Erickson and Wichman "presented a letter of intent 
that they had written themselves."  He clarified that a "letter 
of intent is——it's an understanding, it's an agreement that a 
buyer would use for a business.  It doesn't follow the 
Department 
of 
Regulation 
& 
Licensing 
requirements. . . . I 
cannot do a letter of intent."  He did, however, receive a copy 
No.  2015AP2627.akz 
 
19 
 
of the letter of intent prepared by Erickson and Wichman and 
thus was privy to the terms and conditions contained therein.   
¶90 With regard to the transition services condition, 
McNally testified that Hermanson never told him that she would 
not help the buyer of the business in transitioning:  
Actually, it was just the opposite.  She struck me as 
one, wanting to see the business continue and she 
would be willing to help out for a reasonable period 
of time given the seasonality of the business.     
*** 
[S]he was very proud of her company, in getting this 
established and recognized as one of the premier 
household storage and moving companies.  She wanted to 
see it successful and she knew that Mr. Erickson 
didn't have a lot of experience in this industry and 
she was willing to assist for a period of time to 
ensure that the business would be properly run.   
He testified that it was his impression that Hermanson's primary 
concern was the price.  Here again, he clarified that "[t]he 
list price is the price that the seller tells the real estate 
professional this is what I'm going to sell my business for.  
The asking price can be considerably more because you have to 
allow for negotiations, so you've rarely come out of the gate 
with the same price."  McNally then testified that:  
[T]he only thing [he and Hermanson] talked about was 
the price and the price was met, was $1,200,000.  
There were no objections with these other provisions.  
Those had been given to Mary.  She did not indicate 
anything on there to me that was a problem other than 
the purchase price and then we successfully were able 
to get the purchase price to $1,200,000.   
 
No.  2015AP2627.akz 
 
20 
 
B.  Genuine Issues Of Material Fact 
¶91 This trial testimony demonstrates that there is a 
genuine issue as to whether assisting Erickson in the transition 
for a period of time was material to Hermanson, that is, whether 
the transition services condition had value to her.  Erickson 
testified that Hermanson had been amenable to staying on, under 
conditions to be determined, to aid in the transition.  McNally 
testified that Hermanson "never told him she would not" be 
amenable to those conditions.  But Hermanson testified that she 
never agreed to staying on for a to-be-determined period of time 
to assist in the transition of ownership.  This competing 
testimony creates a genuine issue of material fact as to 
substantiality 
because, 
absent 
some 
sort 
of 
notice 
from 
Hermanson, there is a genuine issue as to whether McNally should 
have known that she would object to those terms.  See Kleven, 22 
Wis. 2d at 444.  Yet the court concludes that there can be no 
question that a transition services condition amounts to a 
substantial variance, because "labor has 
monetary value."  
Majority op., ¶49.  In doing so, it usurps the role of the jury. 
¶92 Additionally, even assuming that the court correctly 
concluded that Hermanson's transition services had significant 
value, concluding that their value was accounted for in the 
final offer also usurps the role of the jury.  The record 
reflects that that Erickson increased his upfront payment offer 
by $150,000 between the time the letter of intent was 
distributed at the Madison Club meeting on February 10, 2014, 
and submitting the firm offer on February 15, 2014.  The letter 
of intent had proposed an offer of $1.05 million upfront, plus 
No.  2015AP2627.akz 
 
21 
 
$40,000 at the end of 2014 if gross sales were 90 percent of 
what they were at the end of 2013; the firm offer to purchase 
was for $1.2 million upfront.  The record also reflects that 
Erickson testified that the lower upfront amount in the letter 
of intent was primarily "an incentive for Mary to . . . come on 
board" to help with the transition.  And Hermanson testified 
that her only comment on the letter of intent was that "this 
will not work for Rolyn and I."  There are at least two 
inferences that could be drawn from this record: (1) that the 
$150,000 increase was for the business;14 or (2) that this 
$150,000 increase was an upfront payment for Mary's transition 
services.  The court, in determining this as a matter of law, 
selects one of these options over the other.  But we are not the 
fact finder, and the one the court selects is only an inference 
that may be drawn from the facts, not a conclusion compelled as 
a matter of law.  Thus, even assuming that the court correctly 
concluded that Hermanson's labor had material value, and that 
that value is accounted for in the final price offered, it acted 
as jury, not judge, in doing so.  
¶93 In sum, the question of substantiality may not here be 
determined as a matter of law because "the evidence is such that 
a reasonable jury could return a verdict for the nonmoving 
party."  Majority op., ¶24 (citing Physicians Plus Ins. Corp. v. 
Midwest Mut. Ins. Co., 2002 WI 80, ¶18, 254 Wis. 2d 77, 646 
                                                 
14 In this regard, McNally also testified that he never told 
Erickson that the price term of the listing contract was $1.2 
million. 
No.  2015AP2627.akz 
 
22 
 
N.W.2d 777).  As such, the jury should consider this testimony, 
be given the proper jury instructions, and then reach a verdict.  
Thus, I would remand to the circuit court for a jury to 
determine whom to believe about whether the transition services 
condition had value, what that value was, and whether it was so 
valuable that that McNally is rightfully deprived of his 
commission because he was "chargeable with [the] knowledge" that 
an offer submitted with that condition would be unacceptable to 
Hermanson.  Kleven, 22 Wis. 2d at 444. 
 
V.  CONCLUSION 
¶94 I dissent because, in my view, it was error for this 
court to conclude as a matter of law that the transition 
services condition in the offer to purchase constitutes a 
substantial variance from the listing contract such that no 
commission could be due.   
¶95 First, concluding as a matter of law that the 
transition services condition is a substantial variance because 
a valuable condition effectively lowers an offered purchase 
price ignores the reality that, in business transactions, 
valuable terms and conditions are regularly included in offers 
to purchase as a means of communicating the expectations of the 
parties moving forward.  Second, reliance on Chalik and Kleven 
to support this conclusion is misplaced because unlike Chalik, 
the majority has no quantifiable evidence of a difference in 
value 
and 
no 
objective 
evidence 
that 
any 
difference 
is 
substantial.  Additionally, contrary to Kleven, Hermanson had 
options other than working for free or paying $72,000, namely, 
No.  2015AP2627.akz 
 
23 
 
she had the option of communicating the unacceptableness of the 
transition services condition to McNally. 
¶96 Third, the disagreement among the courts as to whether 
and why the transition services condition is a substantial 
variance under the specific terms of this listing contract 
counsels that a conclusion as a matter of law improperly invades 
the province of the fact finder, particularly considering that 
determinations of substantiality are often a matter for the 
jury.  Fourth, that this is more properly a matter for the jury 
is confirmed by the competing inferences and conflicting 
testimony apparent in the record.   
¶97 In sum, I fear that the conclusion of the court could 
cause increased difficulty in determining when a dispute is 
properly an issue for the jury, when a commission might ever be 
due, and how a court should analyze conditions common to 
business transactions when they have been referenced in an offer 
to purchase.  Thus, although, like the court, I would reverse, I 
would 
reverse 
on 
other 
grounds 
and 
remand 
for 
trial.  
Accordingly, I respectfully dissent. 
No.  2015AP2627.akz 
 
 
 
1