Opinion ID: 6352030
Heading Depth: 3
Heading Rank: 1

Heading: The Waiver is Unambiguously Partial

Text: ¶13 In construing the lien waiver document, we first address the inconsistency between the printed terms and the handwritten language. Read in isolation, the printed text of the waiver document, waiving all lien rights to date, constitutes a full lien waiver; it is undisputed that all of the work on the Project had been completed at the time Bruckner signed the waiver form. The handwritten addition of Partial in the document title, replacing the printed words to Date, conflicts with the preprinted language in the body of the document indicating Great Lakes does hereby waive and release any and all lien . . . on account of labor, services, material, fixtures, apparatus or machinery furnished to this date with respect to the Riverworks property. Riverworks argued in its briefing, The lien waiver 6 contains no language relating the $33,448 to a particular portion of the work performed by Great Lakes. The court of appeals invalidated the waiver on this same basis. See Great Lakes Excavating, 397 Wis. 2d 210, ¶¶21–22. Riverworks later conceded at oral argument that a reference to a monetary value can satisfy the statutory requirement to limit the waiver to a particular portion of the work. As we explain further in Section III.B.2, we agree that limiting the lien waiver in this case to a specific dollar amount satisfies Wis. Stat. § 779.05(1) irrespective of Riverworks' concession. 9 No. 2019AP2095 ¶14 Because a lien waiver document is a release, we apply contract principles to resolve this conflict. See Druml Co., 78 Wis. 2d at 311 (holding that a claimant's letter constituted a waiver under the lien waiver statute because it was clear in its intent to release the lien claim); Marx v. Morris, 2019 WI 34, ¶63, 386 Wis. 2d 122, 925 N.W.2d 112 (A release is to be treated as a contract. (quoting Gielow v. Napiorkowski, 2003 WI App 249, ¶14, 268 Wis. 2d 673, 673 N.W.2d 351)). Riverworks contends a construction lien waiver is not a contract because Wis. Stat. § 779.05(1) does not require an offer, acceptance, and consideration. While the statute does not require these elements, nothing in the statutory text strips the release in this case of its contractual nature. The lien waiver satisfies each element of a contract; accordingly, contract principles apply to its interpretation. ¶15 [I]n accord with the general rule that all parts of a contract are to be given effect, the courts must seek to reconcile inconsistencies between the changed or added terms and the printed matter. When, however, the printed contract provisions irreconcilably conflict with the provisions added by the parties, the added provisions will control. 11 Williston on Contracts § 32:13 (4th ed.). The handwritten and printed terms in the waiver document are irreconcilable: the document is either a partial lien waiver or a full lien waiver, but it cannot be both. Where written provisions are inconsistent with printed provisions (of a contract), an interpretation is preferred which gives effect to the written provisions. 10 No. 2019AP2095 Tollefson v. Green Bay Packers, 256 Wis. 318, 322, 41 N.W.2d 201 (1950) (quoting Restatement, Contracts § 236(e)); see also Hicks Pub. Co. v. Wis. Cent. Ry. Co., 138 Wis. 584, 120 N.W. 512, 514 (1909) (It is a canon of construction that where a contract 'is written in part and printed in part, as where it has been filled in upon a printed form, the parties usually pay much more attention to the written parts than to the printed parts. Accordingly, if the written provisions cannot be reconciled with the printed, the written provisions control.'). In accordance with black letter contracts law, we reconcile this inconsistency by giving effect to the handwritten terms.7 7Remarkably, the dissent claims contract principles should not be applied to a contract. Dissent, ¶32. Legislative enactments concerning contracts do not displace the entire body of legal principles governing them. To accomplish a change in the common law, the language of the statute must be clear, unambiguous, and peremptory. Fuchsgruber v. Custom Accessories, Inc., 2001 WI 81, ¶25, 244 Wis. 2d 758, 628 N.W.2d 833. [L]egislation in derogation of the common law should be strictly construed so as to have minimal effect on the common law rule. Augsburger v. Homestead Mut. Ins. Co., 2014 WI 133, ¶40, 359 Wis. 2d 385, 856 N.W.2d 874 (citing Fuchsgruber, 244 Wis. 2d 758, ¶25; NBZ, Inc. v. Pilarski, 185 Wis. 2d 827, 836, 520 N.W.2d 93 (Ct. App. 1994)). Wisconsin Stat. § 779.05(1) directs our treatment of ambiguity in lien waivers, but it does not abrogate the entire suite of common law contract principles. Because the legislature removed a tool, the dissent abandons the whole toolbox. This is not the law. In NBZ, the court of appeals determined covenants not to compete under Wis. Stat. § 103.465 are subject to common law contract principles as well as [statutory] requirements. NBZ, 185 Wis. 2d at 836. Section 103.465 sets forth the requirements for a[] . . . covenant in an employment contract but does not address on its face the question of whether a restrictive covenant must be supported by consideration. Id. at 835. The court concluded such a covenant requires consideration because the statute did not abandon the 11 No. 2019AP2095 ¶16 The existence of an inconsistency between preprinted and handwritten contract terms is distinct from contractual ambiguity; the latter exists if a document is reasonably or fairly susceptible of more than one construction. Borchardt v. Wilk, 156 Wis. 2d 420, 427, 456 N.W.2d 653 (Ct. App. 1990). By contrast, the presence of an inconsistency or conflict between terms precludes a reasonable interpretation of the document; read together, the terms are irreconcilable. See, e.g., Ketay v. Gorenstein, 261 Wis. 332, 334, 53 N.W.2d. 6 (1952) (explaining the court cannot reject certain portions of the contract unless it presents an irreconcilable inconsistency). The lien waiver in this case cannot be construed as a full waiver because the handwritten word Partial must be given principles by which a contract is formed in the first instance. Id. at 837. So too here. The lien waiver we construe in this case is a contract, subject to common law contract principles as well as [statutory] requirements under Wis. Stat. § 779.05(1). See id. at 836. The rule giving controlling effect to handwritten terms over preprinted contract provisions is neither expressly abrogated by § 779.05(1) nor in conflict with it, and the policies underlying the principle are not irrelevant to the legislature's choice to recognize lien waivers as a statutory matter. See Hinrichs v. DOW Chem. Co., 2020 WI 2, ¶55, 389 Wis. 2d 669, 937 N.W.2d 37 (declining to apply common law principles because the policies underlying the economic loss doctrine——the allocation of risk and the distinction between tort and contract law——are irrelevant to the legislature's choice to provide a purely statutory cause of action and remedy by way of § 100.18). That the common law contract rule . . . is irrelevant to a non-contractual waiver does not negate its application to a contractual waiver. See dissent, ¶32. 12 No. 2019AP2095 effect. Because the word Partial is handwritten, it governs over the preprinted language waiving all lien rights to date. ¶17 This principle that handwritten terms control over preprinted provisions is based on the inference that the language inserted by handwriting . . . is a more recent and more reliable expression of [the parties'] intentions than is the language of a printed form. Edwin W. Patterson, The Interpretation and Construction of Contracts, 64 Colum. L. Rev. 833, 855 (1964) (citing Restatement, Contracts § 236(e) (1932)). Since the parties actually chose to add to or modify the printed contract, the written terms presumably better reflect their intention than those contained in a printed contract intended for general use. 11 Williston on Contracts § 32:13 (4th ed.). ¶18 Consistent with the principle that handwritten terms control over the form's printed provisions, the term Partial prevails over the language in the printed body of the document waiving all lien rights to date. Resolving this conflict leaves no ambiguity as to whether the document is a full or partial waiver. Because it can be only one or the other, there is no reasonable alternative construction of the document other than as a partial waiver. 2. The Waiver is Specifically and Expressly Limited to $33,448 ¶19 Concluding that the document is a partial waiver does not alone resolve the case; ambiguity could exist if the lien waiver is not specifically and expressly limited to a particular 13 No. 2019AP2095 portion of work. This is not so in this case. Partial unambiguously applies to the particular portion of such labor, services, materials, plans, or specifications represented by the amount of the $33,448 Dollars written on the waiver form and received in consideration for the partial release.8 Wis. Stat. § 779.05(1). ¶20 Riverworks conceded during oral argument that a waiver could be limited to a dollar amount, and suggested Great Lakes could have satisfied Wis. Stat. § 779.05(1) by agreeing I hereby waive my lien rights to the extent of X dollars. Although this would have been a clearer limitation of the waiver, we decline to adopt such a formulaic reading of 8 The dissent claims our contract construction rests on the false premise that when a party receives a certain amount of money in exchange for a waiver, it must be waiving its lien only up to that dollar amount, and suggests Great Lakes could have accepted the $33,448 in exchange for waiving its lien claims related to the original contract amount of $37,165 or any other dollar amount. Dissent, ¶30. Great Lakes could have chosen to limit its waiver as the dissent describes, which we would have honored had the lien waiver document so indicated. But no such limitation can be reasonably gleaned from the document before us. The dissent posits purely hypothetical intentions possibly underlying Great Lakes' addition of Partial, which, according to the dissent, make the waiver ambiguous. In doing so, the dissent reaches beyond the four corners of the document to introduce ambiguity where it does not exist. There are myriad ways Great Lakes might have intended to limit its lien waiver, but we need not consider any of these speculative iterations because our review is confined to the four corners of the lien waiver document, which——as the dissent acknowledges——is all the property owner has to go on[.] Id., ¶26. Confined to its four corners, the lien waiver document in this case yields but one reasonable interpretation, and while it does not mirror the model forms reproduced by the dissent, it nonetheless meets the statutory bar. 14 No. 2019AP2095 § 779.05(1). The statute specifies only that a partial lien waiver must be specific[] and express[].9 The partial waiver satisfies § 779.05(1) because it is unambiguously partial—— waiving Great Lakes' lien rights only in the amount of $33,448 Dollars——an amount representing the particular portion of the work to which the waiver applies. ¶21 In further support of this reading, as of the date the lien waiver was signed, no one contended that any of the $222,238 allegedly due to Great Lakes did not cover lienable work. Prior to 2006, waivers of construction lien rights were limited to labor and materials furnished or to be furnished by the claimant at any time for the improvement to which the waiver relates[.] Wis. Stat. § 779.05(1) (2003–04). In 2006, the legislature amended § 779.05(1) to include all labor, services, materials, plans, or specifications performed, furnished, or procured, or to be performed, furnished, or procured, by the claimant at any time for the improvement to which the waiver relates[.] 2005 Wis. Act 204; § 779.05(1) (2005–06). Because no party maintains that any portion of the fully completed work is not lienable, limiting the waiver to a specific dollar value does not create any additional ambiguity. Contrary to Riverworks' suggestion at oral argument that 9 we are left to divine what portion of work the waiver attempted to release, no divination is required. Construing the document as a partial waiver limited to $33,448 is the only reasonable interpretation of the contract. Interpreting the waiver before us does not involve the kind of guessing games Riverworks and the dissent assert the statute is designed to avoid. See dissent, ¶31. 15 No. 2019AP2095 ¶22 Because we conclude the lien waiver document within its four corners satisfies the statutory requirements by specifically and expressly limiting the waiver to the $33,448 Great Lakes received in consideration, we need not decide the other issues presented, including the propriety of considering extrinsic evidence of intent, or whether equitable estoppel precludes Riverworks' claim.