Court Opinion

ID: 4656555
Source: CourtListenerOpinion
Date Created: 2021-02-02 14:43:40.518877+00
Date Added: 2024-06-11T08:00:57.869698
License: Public Domain

2021 WI 8

                  SUPREME COURT                      OF    WISCONSIN
CASE NO.:               2018AP71

COMPLETE TITLE:         Mohns Inc.,
                                  Plaintiff-Respondent,
                             v.
                        BMO Harris Bank National Association,
                                  Defendant-Appellant-Petitioner.

                              REVIEW OF DECISION OF THE COURT OF APPEALS
                              Reported at 388 Wis. 2d 475,934 N.W.2d 572
                                         (2019 – unpublished)

OPINION FILED:          February 2, 2021
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:          October 1, 2020

SOURCE OF APPEAL:
   COURT:               Circuit
   COUNTY:              Waukesha
   JUDGE:               Kathryn W. Foster

JUSTICES:
REBECCA GRASSL BRADLEY, J., delivered the majority opinion for a
unanimous Court.
NOT PARTICIPATING:
ZIEGLER and HAGEDORN, JJ., did not participate.

ATTORNEYS:

       For the defendant-appellant-petitioner, there were briefs
filed by Michael B. Apfeld, Andrew S. Oettinger, and Godfrey &
Kahn    S.C.,        Milwaukke;      with     whom    on   the    brief    was    Linda   T.
Coberly,      pro      hac    vice,     and     Winston    &     Strawn    LLP,   Chicago,
Illinois. There was an oral argument by Linda T. Coberly.

       For the plaintiff-respondent, there was a brief filed by
John     E.       Machulak     and      Machulak,      Robertson      &    Sodos,    S.C.,
Milwaukee.         There     was   an    oral    argument      by   John    E.    Machulak.
                                                                     2021 WI 8

                                                            NOTICE
                                              This opinion is subject to further
                                              editing and modification.   The final
                                              version will appear in the bound
                                              volume of the official reports.
No.       2018AP71
(L.C. No.    2016CV307)

STATE OF WISCONSIN                       :             IN SUPREME COURT

Mohns Inc.,

             Plaintiff-Respondent,                               FILED
      v.                                                     FEB 2, 2021
BMO Harris Bank National Association,                          Sheila T. Reiff
                                                            Clerk of Supreme Court
             Defendant-Appellant-Petitioner.

REBECCA GRASSL BRADLEY, J., delivered the majority opinion for a
unanimous Court.

ZIEGLER and HAGEDORN, JJ., did not participate.

      REVIEW of a decision of the Court of Appeals.               Affirmed in

part, reversed in part, and cause remanded.

      ¶1     REBECCA GRASSL BRADLEY, J.       BMO Harris Bank National

Association seeks review of the court of appeals decision, which

affirmed the circuit court's order for judgment in favor of

Mohns, Inc.1         The circuit court granted judgment on liability in

      1Mohns Inc. v. BMO Harris Bank Nat'l Assoc., No. 2018AP71,
unpublished slip op. (Wis. Ct. App. July 24, 2019) (per curiam).

     The Honorable Kathryn W. Foster of Waukesha County Circuit
Court presided.
                                                                   No.    2018AP71

favor of Mohns as a sanction for BMO's discovery violations

pursuant to Wis. Stat. § 804.12(2)(a)(2017-18)2 and scheduled a

jury trial on damages.            A jury awarded compensatory damages to

Mohns for breach of contract and unjust enrichment as well as

punitive damages.          The circuit court entered judgment in the

amount of $831,687.00, plus costs.

     ¶2     BMO argues the court of appeals should have:                      (1)

reversed    the    circuit       court's   sanction    imposing    judgment    on

liability because the circuit court failed to consider whether

Mohns was prejudiced by BMO's conduct; (2) set aside the damages

award for unjust enrichment because the jury had already awarded

damages    for    breach    of    contract,    and    the   two   are    mutually

exclusive; and (3) overturned the punitive damages award because

it was tied to Mohns's contract claims, which cannot form the

basis for a punitive damages award.

     ¶3     We hold:       (1) the circuit court did not erroneously

exercise its discretion when it imposed judgment on liability as

a sanction for BMO's discovery violations; (2) because the law
does not permit recovery of damages for both breach of contract

and unjust enrichment arising from the same conduct, the award

of damages for unjust enrichment must be set aside; and (3) the

punitive damages award must be overturned because it was based

upon an award of damages for the contract claims, and punitive

damages are recoverable only in tort.            We affirm the decision of

     2 All subsequent references to the Wisconsin Statutes are to
the 2017-18 version unless otherwise indicated.

                                           2
                                                                       No.     2018AP71

the court of appeals as to the discovery sanction; however, we

reverse the decision of the court of appeals on damages and

remand the matter to the circuit court to modify the order for

judgment and judgment consistent with this opinion.

                                 I.    BACKGROUND

    ¶4      This   case     arises      from    a   condominium     construction

venture between Paul Bouraxis, the developer; Mohns, the general

contractor; and BMO (as successor-by-merger to M&I Marshall &

Ilsley    Bank),   the    bank    financing     the     project,   known       as   the

Hickory    Hills   Condominiums.3            Bouraxis    secured   a    commercial

construction and mortgage loan (initially from M&I) to build 26

units, each housing four condominiums, on vacant land Bouraxis

owned in New Berlin, Wisconsin.               As Mohns completed portions of

the project, it submitted paperwork to the bank's title company

in order to draw payment from BMO for materials, subcontractors'

work,     and   Mohns's     own       work,    upon      the   title         company's

confirmation that the work had been completed.

    ¶5      Work on the project progressed from its inception in
2005 until the economic downturn in 2008.                 Mohns paused work on

the project several times.            In 2010 and 2011, Mohns had concerns

about whether it would be paid for its work because Mohns's draw

requests for payment were not being paid promptly.

    ¶6      In 2011, before doing any more work on the project,

Mohns sought reassurance from BMO banker Patrick Caine.                          These

    3  BMO and M&I merged in 2011. For clarity, the opinion uses
BMO throughout the opinion because BMO assumed all of M&I's
obligations related to this matter as a part of the merger.

                                         3
                                                                      No.     2018AP71

conversations began in March 2011 and continued through August

2011.       Although Caine indicated he could not give Mohns any

specific dollar amounts, Caine assured Mohns that it would be

paid.      Caine told Bouraxis' manager that $223,000 was available

to   pay    Mohns,      and   the   manager    shared    this   information        with

Mohns.      Caine also sent a letter dated July 20, 2011 directly to

Mohns's materials supplier, indicating that the supplier would

be paid if it provided the materials to Mohns for the project.

Based      on   these    assurances,      Mohns    continued    construction       and

submitted paperwork for two draws in July and one in August.

      ¶7        Unbeknownst to Mohns, during this time BMO had been

working to sell the Bouraxis construction loan along with some

other loans.         In late July 2011, BMO sold the Bouraxis loan to

MIL Acquisition Venture, LP.              BMO took a loss on the sale as the

purchase price was based on the value of the property, which was

significantly less than the original loan amount.                    Mohns learned

about the sale sometime in August.                   BMO banker Caine assured

Mohns that he would forward the August draw to MIL, the new
owner of the loan, for payment.                   Mohns continued work on the

property until October 2011.

      ¶8        In July 2013, MIL filed a foreclosure action against

Bouraxis, with Mohns named as a third-party defendant because of

Mohns's liens on the property.              See MIL Acquisitions Venture, LP

v.   Bouraxis      Properties,      No.   2014AP1982,     unpublished       slip    op.

(Wis. Ct. App. May 28, 2015) (per curiam).                 Mohns counterclaimed

against     MIL    for   unjust     enrichment     and   equitable    subrogation,
seeking to recover payment for the work it did in 2011 for which
                                           4
                                                                         No.     2018AP71

it   had    not   been     paid.        The       circuit   court    granted     summary

judgment to MIL and the court of appeals affirmed, explaining:

"While it appears there may be evidence that Mohns continued

work in reliance on BMO's assurances of payment, Mohns fails to

direct our attention to evidence supporting a finding that Mohns

continued work in reliance on any MIL assurances."                             Id., ¶23

(emphasis in original).

      ¶9      In February 2016, Mohns filed a complaint against BMO

alleging three causes of action:                   (1) BMO breached its contract

to pay Mohns for its work on the condominium project; (2) BMO

was unjustly enriched by the construction work Mohns provided on

the condominium project, which increased the value of the loan

sold by BMO; and (3) BMO misrepresented to Mohns that funds were

available to pay it for the work it performed on the project,

which   BMO    would      pay   Mohns    if       it   continued    constructing     the

condominiums.          The complaint alleged that if Mohns proved the

misrepresentation "was intentional and/or in reckless disregard

of Mohns's rights," Mohns should receive punitive damages.
      ¶10     BMO filed a motion to dismiss, which the circuit court

denied.           In     September       2016,         Mohns   served      BMO      with

interrogatories, requests to admit, and a request for production

of documents.          BMO served responses in October 2016, but in lieu

of producing any documents, stated that all documents had been

previously produced in the 2014 MIL lawsuit.                       BMO's responses to

the interrogatories and request for admissions contained more

objections than answers.                BMO also objected to producing the

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                                                                          No.     2018AP71

loan    sale         agreement,        claiming     it     was      subject        to    a

confidentiality agreement between BMO and MIL.

       ¶11    In December 2016, Mohns served BMO with a notice for a

deposition of a corporate representative who could explain BMO's

discovery responses.            On January 6, 2017, BMO filed a motion for

summary judgment.           On January 11, 2017, BMO produced Patrick

Caine for the corporate representative deposition.                        Caine could

not explain BMO's responses to discovery.                     He could not answer

questions      related     to    the    merger,    or    topics     listed        in    the

deposition      notice     regarding        the   sale   of   the    loan.          Caine

testified he did not know on July 20, 2011 that the loan was

being sold to MIL despite multiple June 2011 emails discussing

the sale of the loan, including a June 16, 2011 email indicating

Caine knew the loan would be sold.

       ¶12    On January 26, 2017, Mohns filed a motion to compel

discovery and a request for discovery sanctions against BMO.

Mohns's      brief    in   support     of   the   motion    said    its     attempt     to

narrow the issues for trial via written discovery requests had
been thwarted by BMO's "evasive responses" and by its refusal to

produce a corporate representative who had any knowledge about

the topics relevant to Mohns's claims or who could explain BMO's

evasive responses.          Mohns argued:         "BMO should not be entitled

to   interpose       defenses     to    Mohns's    action     and    then       frustrate

discovery calculated to examine those defenses."                     Mohns asserted

that BMO should not be able to seek summary judgment when it

refused to produce discovery that would defeat the motion for
summary judgment.
                                             6
                                                                         No.   2018AP71

    ¶13     In February 2017, the circuit court held a hearing on

pending motions, including Mohns's motion to compel and BMO's

motion for summary judgment.             The circuit court found BMO in

violation     of   discovery     rules   and    granted        Mohns's     motion   to

compel because Mohns certainly had the right to ask for "who

knew what when" and "not get the runaround."                    The circuit court

ordered:

       Another corporate deposition of someone to be produced by

        BMO    with   firsthand    knowledge      of     all    the   things      Mohns

        requested      or   who     could      obtain      that       knowledge     in

        preparation;

       BMO to provide specificity as to what was being denied in

        its    responses    to    Mohns's      request    to     admit     that   were

        "admitted in part and denied in part";

       The two attorneys to "work out" "what documents will be

        exchanged";

       BMO to provide to Mohns an unredacted copy of the loan

        sale agreement and all of its addenda in their entirety.
    ¶14     The circuit court found redaction would be unnecessary

with a protective order, particularly since the confidentiality

of the loan sale agreement runs exclusively in favor of BMO as

the seller.        The circuit court expressed frustration at BMO's

handling of discovery, believing BMO was "stalling" or "playing

a form of a legal shell game."               For example, in the request to

admit that "BMO is the successor-by-merger to M&I Marshall &

Ilsley Bank," BMO responded:         "Admitted in part, denied in part.
BMO is the successor-by-merger to M&I Bank as expressly provided
                                         7
                                                                            No.     2018AP71

in the applicable merger documents and agreements and applicable

law, and BMO denies it otherwise assumed any obligations of M&I

Bank."    After much discussion, BMO ultimately stipulated during

the hearing that:          "BMO assumes responsibility for the alleged

conduct of M&I" asserted in Mohns's Complaint.

    ¶15        The circuit court took Mohns's request for sanctions

under    advisement       and    postponed       ruling       on    BMO's   motion        for

summary    judgment       until      discovery        could    be    completed.           The

circuit court expected the additional discovery would "occur by

April 7th, if not sooner" and gave the parties deadlines to file

supplemental briefs, with the intent of recalling the matter by

May 12th.

    ¶16        On March 2, 2017, the parties appeared in court on the

summary judgment motion of Bouraxis, who had been impleaded by

BMO as a third-party defendant.                 After the circuit court granted

summary judgment to Bouraxis, the circuit court asked BMO and

Mohns whether they wanted it to address BMO's motion for summary

judgment then or wait until after discovery was completed.                              Both
sides agreed to have the circuit court decide BMO's motion for

summary   judgment      immediately.            The    circuit      court     denied      the

motion,     specifically        noting     "that       the    shortcomings         of    the

plaintiff's case related to intentional misrepresentation are a

result    of    [BMO's]    violation       of    the    discovery      rule."           After

denying BMO's motion for summary judgment, the circuit court

warned    BMO    that     if    it   did   not    "alleviate[]"         the       discovery

violation "in the next couple months," it would grant summary

                                           8
                                                                                    No.     2018AP71

judgment     for       Mohns     on    liability           as    a     sanction      for        BMO's

discovery violation and send only damages to the jury.

      ¶17    The       circuit    court       extended           the       discovery       deadline

until     May    5th,        indicating       it     wanted           to    give    BMO     "every

opportunity to comply" and ordered BMO to produce a corporate

representative          for     deposition         "who     can       speak       knowledgeably"

about the matter.              When BMO's lawyer protested that "the most

knowledgeable          people    are    former       employees"             whom    "[w]e       can't

make . . . show         up,"     the    circuit       court          reminded      BMO     that    "a

subpoena works for non-employees the same as employees."                                          The

circuit court's written order denied BMO's motion for summary

judgment        and      found        BMO     in      violation              of     Wis.        Stat.

§ 804.05(2)(e); the order directed BMO "to produce a corporate

representative          in      compliance          with        § 804.05(2)(e)"            or     "be

sanctioned by the [c]ourt as stated on the record."

      ¶18    After the hearings, BMO produced a complete copy of

the   loan      sale    agreement       and     a    copy        of    the    confidentiality

agreement, but no other documents.                         On March 17, 2017, Mohns's
lawyer sent a letter to BMO's lawyer acknowledging receipt of

the loan sale and confidentiality agreements, pointing out that

the confidentiality agreement does not apply, and requesting to

schedule the corporate representative for deposition on March

29th, April 4th, or April 5th.                         Mohns's lawyer specifically

requested BMO to "actively review" its "document production,"

identifying       several       examples      of     documents             mentioned       but    not

produced.       BMO's lawyer responded on March 23, 2017, disputing
several     points      from     the    March       17th        letter,      asserting       he    is
                                               9
                                                                          No.     2018AP71

"working    with     BMO    to     review       the    efforts     that    have      been

undertaken to search for responsive documents" which will be

produced "promptly" if located, and advising that he would "be

in touch about scheduling the deposition as soon as possible."

    ¶19     On March 29, 2017, Mohns's lawyer wrote back to BMO's

lawyer and refuted BMO's position set forth in its March 23rd

letter, asserting:

         BMO had still "not identified, let alone produced, [an]

          appropriate corporate representative" as ordered by the

          court;

         BMO failed to produce any documents, instead relying on

          documents it produced in the 2014 case involving MIL,

          many of which were redacted;

         An appraisal and other documents were missing; and

         BMO misrepresented to the circuit court that it needed a

          waiver from MIL on the confidentiality agreement, even

          though    the    language    of       the    confidentiality          agreement

          proved otherwise.
Mohns's lawyer closed the letter by asking again for dates for

the corporate representative deposition.

    ¶20     Eventually, the corporate deposition was scheduled for

May 2, 2017.        On Friday, April 26, 2017, BMO's lawyer notified

Mohns's    lawyer    by    email    that    BMO       had   just   located      "several

thousand documents that are potentially responsive" to Mohns's

discovery requests.          The email provided a link and a password

that would let Mohns's lawyer access these documents.                                When
Mohns's    lawyer    tried    to    access       the    documents,    however,        the
                                           10
                                                                           No.        2018AP71

password did not work.          Mohns's lawyer contacted BMO's lawyer,

who, the next morning, provided the correct password——allowing

Mohns's    lawyer     to    review    the        newly-disclosed       975       pages     of

documents.       Mohns's lawyer notified BMO's lawyer on May 1, 2017

that he would be ready to proceed with the May 2nd corporate

representative deposition as scheduled.                     When BMO's lawyer said

he found "thousands" of additional discovery documents that his

corporate designee would need additional time to review, Mohns's

lawyers agreed to delay the deposition until May 9, 2017.

    ¶21         Shortly    before    5:00    p.m.      on   Friday,    May       5,    2017,

BMO's lawyer sent Mohns's lawyer a link to access the additional

documents, which contained 4,185 pages.                      BMO produced Natalie

Johnson,    a    Relationship       Manager       on   Special   Assets,          for     the

corporate representative deposition on May 9th.                       Johnson had not

been involved in the loan sale, had not read any of the emails

contained in the newly-produced documents, and could not answer

many of the questions asked of her during the deposition.

    ¶22     In August 2017, the circuit court held an additional
hearing on pending motions, during which it addressed Mohns's

"motion to compel continuing" and BMO's "continuing motion for

summary judgment."         The circuit court, which had read Johnson's

entire deposition, found that BMO failed to comply with the

prior discovery order.         It said:

         Johnson did not have the knowledge the circuit court had

          required,       finding    "so     many      questions      in     [Johnson's

          deposition] transcript . . . [to be] nonresponsive."

                                            11
                                                                                No.    2018AP71

         "I     have    had    root    canals       that    were    less    painful      than

          reading Ms. Johnson's transcript."

         Johnson reviewed only 20 documents in preparation and

          what     she    had     not    reviewed         "seemed    to    be    very,    very

          germane."

         "Ms. Johnson was in as much of the dark as a lot of other

          people."

The circuit court found that based on the recently produced

documents, Patrick Caine lied during his deposition, which the

circuit         court     characterized              as     "a      pretty       significant

misrepresentation to the [c]ourt and to plaintiff's counsel."

The       circuit         court         found        BMO's        discovery           response

"disingenuous[]" and "egregious[]" and that BMO had given Mohns,

its lawyer, and the circuit court "the runaround."                               The circuit

court     found    Mohns       made    straightforward           discovery      requests    to

which     BMO    had     not    provided       proper       responses——suggesting          BMO

withheld the documents because they revealed BMO's "guilt."

      ¶23       Most     significantly,          the      circuit     court       found    BMO
"blatant[ly] disregard[ed]" its orders both as to producing the

corporate        representative          and     otherwise        complying        with    its

discovery       order.         It     said     BMO     "egregiously       ignor[ed]"       its

obligations, and BMO had previously withheld a document that was

"as close to a smoking gun as I have seen in a long time in a

misrepresentation claim."                Based on "the egregious behavior of

the defendants in violating this [c]ourt's order in not being

responsive        to     the     plaintiff's           simple     direct        request    for
discovery," the circuit court denied BMO's motion for summary
                                                12
                                                                          No.     2018AP71

judgment and, as a sanction, granted summary judgment to Mohns.

The circuit court stated:               "So when we have a trial in October,

it is going to be on damages and punitive damages[.]"                                  The

circuit court noted that it had not "granted a summary judgment

motion   based   on    a    discovery        violation      in   the   past,     but   [it

couldn't] think of a more appropriate [case] than the one before

[it]."     The    circuit         court      made    its     "decision    with     every

confidence that [it] is the appropriate and legal sanction for

what has been presented here," and noted that it had re-read all

earlier transcripts, which confirmed the circuit court had "been

more than generous to the defense to get [its] act together."

    ¶24    In    its   August          29,   2017   written      order,   the    circuit

court:

        Reaffirmed        its     earlier        ruling    denying    BMO's     summary

         judgment motion;

        Granted Mohns's requests for discovery sanctions;

        "[G]rant[ed] judgment to the plaintiff Mohns, Inc., as to

         the liability of the defendant BMO Harris Bank National
         Association,           including     the     defendant's      liability       for

         intentional misrepresentation";

        "[B]ecause        of    BMO['s]     conduct       regarding   discovery       and

         disregard     of        the     [c]ourt's     orders . . . ,           grant[ed]

         judgment to the plaintiff Mohns[] for its attorneys' fees

         in an amount to be determined by the [c]ourt."

        Kept the case "scheduled for trial beginning on October

         3, 2017," but stated that "the issues to be tried will be

                                             13
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         the damages and punitive damages to be assessed against

         the defendant BMO[]."

     ¶25   BMO   filed        a    motion    asking      the   circuit      court      to

reconsider its discovery sanction decision.                    The circuit court

denied the motion in a written order, explaining:

        BMO   failed    to       produce    pertinent    documents      until        days

         before the second corporate representative deposition and

         then produced over 4,000 pages of documents, including a

         particularly relevant email from Patrick Caine;

        The circuit court warned BMO about the possibility of a

         sanction in the form of summary judgment but despite that

         warning, BMO failed to produce a representative who could

         provide meaningful testimony;

        Wisconsin      Stat.       § 804.12(2)    authorizes        the       sanction

         imposed by the circuit court, which is "commensurate with

         BMO's misconduct" and supported by the record.

     ¶26   The   case     proceeded         to   trial    in   October         2017    as

scheduled.     The special verdict form contained seven questions.
Because of the circuit court's sanction, the special verdict

form submitted to the jury already had the first three questions

on   liability   answered          "YES,"    leaving     questions       4-7     to    be

answered by the jury.             The special verdict questions sent to the

jury appeared as follows:

                                            14
                                                       No.   2018AP71

1. Did BMO Harris Bank National Association breach an
   agreement to pay Mohns Inc. for labor and materials
   which Mohns Inc. furnished for the Hickory Hills
   Condominiums project?

                                 Answer: YES

                                           Yes or No

2. Was   BMO  Harris   National   Association  unjustly
   enriched by labor and materials which Mohns Inc.
   furnished the Hickory Hills Condominiums project?

                                 Answer:   YES

                                           Yes or No

3. Did BMO Harris National Association make an untrue
   representation of fact, knowing it was untrue, or
   recklessly without caring whether it was untrue, and
   with the intent to deceive and induce Mohns Inc. to
   act upon it?

                                 Answer:    YES

                                            Yes or No

4. What sum of money, if any, will fairly and
   reasonably compensate Mohns Inc. for its damages in
   the following regards:

  (a)   Draw 1                              $_____________

  (b)   Draw 2                              $_____________

  (c)   Draw 3                              $_____________

  (d)   Interest on Draws                   $_____________

  (e)   For Lost Profits and Work Completed

        After the Draw Applications         $_____________

Regardless of how you answered question 4 and without
duplicating amounts from question 4, answer this
question:

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                                                                       No.      2018AP71

      5. What sum of money, if any, will fairly and
         reasonably compensate Mohns Inc. for the unjust
         enrichment experienced by BMO Harris National
         Association?
                                                            $______________

      If you awarded damages to any component of question 4
      or question 5, then answer this question:

      6. Did BMO Harris Bank National Association act
         maliciously toward Mohns Inc. or in an intentional
         disregard of the rights of Mohns Inc.?

                                                      Answer:_________

                                                                 Yes or No

      If you answered           "yes"   to    question      6,    answer     this
      question:

      7. What sum, if any, do you award against BMO Harris
         Bank National Association as punitive damages?
      ¶27   The jury answered question 6 "Yes" and inserted total

dollar amounts on questions 4, 5, and 7 as follows:

      question 4: $106,581;

      question 5: $132,668;

      question 7: $1,000,000.
      ¶28   In November 2017, the circuit court heard BMO's post-

verdict motions seeking judgment notwithstanding the verdict or

a   new   trial    based   in    part   on    law    that   precludes      an   unjust

enrichment award when a plaintiff receives damages for breach of

contract.         BMO   also    challenged     the    jury's      punitive      damages

award, both because it was not based on a tort and because the

award violated the statutory cap in Wis. Stat. § 895.043.                            At

the hearing, Mohns opposed BMO's motions and requested an award

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                                                                                  No.       2018AP71

of attorney's fees the circuit court previously indicated it

would impose as a sanction for BMO's discovery violations.

      ¶29     The    circuit      court      denied    BMO's      motions         and       awarded

Mohns      attorney's      fees    of    $113,940      as   part       of    the        discovery

sanctions.         The circuit court reviewed eight of Mohns's requests

to admit, finding that BMO lied in its responses.                                 The circuit

court noted:

      Consistent with the behavior in this case, BMO
      continues to thumb its nose at the rules of discovery
      in civil proceedings in this case.    Lie, lie, lie,
      shift blame on somebody else, anybody else but
      themselves, and say, nope, didn't happen, when the
      evidence is in their computer system, in their files,
      it is in the minds of their employees who aren't
      produced for deposition, who aren't made available to
      speak the truth.
      ¶30     The    circuit      court       did,    however,     reduce             the   jury's

punitive      damages      award    to       two    times   the    amounts            listed     in

questions 4 and 5, awarding punitive damages in the amount of

$458,484.      Shortly after the hearing, the circuit court entered

a final written order for judgment.

      ¶31     BMO appealed the circuit court's order to the court of
appeals, which affirmed the circuit court.                        The court of appeals

ruled the circuit court properly exercised its discretion in

imposing      judgment      on     liability         against     BMO    as        a     discovery

sanction based on BMO's egregious conduct, but the court of

appeals      did    not    address       the       merits   of    BMO's          arguments       on

contract and unjust enrichment claims being mutually exclusive

or the punitive damages awarded resting entirely on contract.
In   its    view,    BMO    failed      to     adequately      raise        or    brief      these

                                               17
                                                                        No.     2018AP71

issues.        Mohns    Inc.   v.     BMO    Harris     Bank    Nat'l   Assoc.,        No.

2018AP71, unpublished slip op., ¶¶21, 28, 30 (Wis. Ct. App. July

24, 2019) (per curiam).              BMO petitioned this court for review,

which we granted.

                                  II.      DISCUSSION

       ¶32     BMO believes the court of appeals erred in affirming

the circuit court, and seeks reversal on three grounds:                         (1) the

circuit court erroneously exercised its discretion in imposing

discovery       sanctions;     (2)      Wisconsin     law      does   not     permit    a

plaintiff to recover damages for both breach of contract and

unjust enrichment; and (3) the punitive damages award must be

overturned because it was based on contract rather than tort.

We     hold:      (1)   Wis.    Stat.       § 804.12     permits      the     discovery

sanctions imposed in this case and the record demonstrates the

circuit court acted within its discretion; (2) when a contract

exists and the jury awards damages for its breach, the plaintiff

cannot also collect damages for unjust enrichment based on the
same    underlying      conduct      or    subject    matter;     and   (3)     because

compensatory damages were awarded for the breach of contract

claims but not the tort claim, the punitive damages award must

be set aside.       Accordingly, we affirm the decision of the court

of     appeals    permitting         the    circuit     court's       imposition       of

discovery sanctions, but we reverse the decision of the court of

appeals on damages and remand the matter to the circuit court to

amend the order for judgment and judgment consistent with this
opinion.        Mohns may recover the amount the jury awarded for
                                            18
                                                                           No.     2018AP71

breach of contract, but cannot recover for unjust enrichment or

receive punitive damages.4

                             A.    Standard of Review

     ¶33    A     discovery        sanction       represents        a     discretionary

determination of the circuit court and is examined under the

erroneous       exercise    of     discretion      standard        of    review.          See

Industrial Roofing Serv. v. Marquardt, 2007 WI 19,                               ¶41, 299

Wis. 2d 81, 726 N.W.2d 898.             If the circuit court "examined the

relevant facts, applied a proper standard of law, and, using a

demonstrated       rational       process,       reached    a    conclusion        that    a

reasonable judge could reach," we uphold the circuit court's

decision.        Id.     We affirm a circuit court's factual findings

unless they are clearly erroneous.                 Wis. Stat. § 805.17(2).                Our

review of whether a party may recover damages for both breach of

contract and unjust enrichment and whether the punitive damages

award is permitted in this case present questions of law we

review     de    novo.        Miller        v.    Wal-Mart      Stores,        Inc.,      219

Wis. 2d 250, 259, 580 N.W.2d 233 (1998); Brown v. Maxey, 124
Wis. 2d 426,      431,     369    N.W.2d 677      (1985);       Jacque    v.     Steenberg

Homes, Inc., 209 Wis. 2d 605, 614, 563 N.W.2d 154 (1997).

                            B.     Discovery Sanctions

     ¶34    BMO believes the circuit court erred in imposing the

sanction    of    judgment        as   to    liability      both    because       of   the

     4 BMO does not challenge the attorney's fees award, which
the circuit court ordered as part of the sanction for BMO's
discovery violations; therefore, the attorney's fees award
stands and is not affected by the decision of this court.

                                            19
                                                                             No.     2018AP71

severity of the sanction as well as the absence of a specific

finding      that    Mohns    was    prejudiced      by    BMO's     violations.             We

disagree.

                    1.    Prejudice to Mohns is Not Required

       ¶35    BMO contends the circuit court's sanction was improper

because it was imposed without making an explicit finding that

Mohns was prejudiced by BMO's discovery violations.                             Relying on

Split Rock Hardwoods, Inc. v. Lumber Liquidators, Inc., 2002 WI

66, 253 Wis. 2d 238, 646 N.W.2d 19, BMO asserts a circuit court

must    explicitly        assess    prejudice      before    imposing       the      extreme

sanction of default judgment.                     Split Rock, however, does not

apply.    That      case     addressed      prejudice       in    the    context        of    a

defendant timely serving the plaintiff with its answer to the

plaintiff's complaint, but not simultaneously filing the answer

with the circuit court.              Id., ¶¶8-9.          When the clerk of courts

notified Split Rock that the circuit court had not received an

answer to Split Rock's Complaint, Split Rock filed a motion

under Wis. Stat. § 806.02 to strike the defendant's answer and
enter default judgment.              Id., ¶9.       The Split Rock circuit court

granted the motion on the basis that there had been no "joinder

of   issue     under      806.02."         Id.,    ¶10.      This       court      reversed,

concluding that when considering "default judgment as a sanction

for failure to file [an answer] promptly," prejudice should be

considered.         Id., ¶33.

       ¶36    In    contrast,       this    case    involves       BMO's     failure         to

comply    with      the    circuit    court's      discovery       orders       under   Wis.
Stat.     § 804.12(2).              Wisconsin       cases        involving         discovery
                                             20
                                                                                      No.        2018AP71

sanctions       require        a     circuit          court     to    make       a    finding          of

"egregious       conduct"          or     "bad        faith"     without         a    "clear           and

justifiable          excuse"       before     dismissing         a    plaintiff's            case      or

granting       default       judgment,         but      do     not    require         an    explicit

finding of prejudice.                See Brandon Apparel Grp. Inc. v. Pearson

Prop.,       Ltd.,     2001     WI      App      205,     ¶11,       247     Wis. 2d 521,              634

N.W.2d 544; Garfoot v. Fireman's Fund Ins. Co., 228 Wis. 2d 707,

731,     599    N.W.2d 411           (Ct.     App.       1999);       Smith      v.    Gold,           224

Wis. 2d 518,          526,     592      N.W.2d 287            (Ct.    App.      1999).            These

heightened findings are required because utilizing § 804.12(2)'s

most    serious       sanctions         of    dismissal         or    default        judgment          are

"drastic       penalt[ies]         that      should      be     imposed      only      where        such

harsh measures are necessary."                         Hudson Diesel, Inc. v. Kenall,

194 Wis. 2d 531, 542, 535 N.W.2d 65 (Ct. App. 1995).

       ¶37     We have specifically declined to require prejudice to

the    offended        party       when      default      judgment         is    imposed          as    a

discovery       sanction.               See       Industrial          Roofing         Serv.,           299

Wis. 2d 81,          ¶43;      Johnson           v.     Allis        Chalmers         Corp.,           162
Wis. 2d 261, 282, 470 N.W.2d 859 (1991) (overruled in part on

other grounds by Industrial Roofing Serv.).                                     As a result of

their    behavior,          parties       acting        egregiously        or    in        bad    faith

"significant[ly]            prejudice"         "the      circuit       court's         ability         to

efficiently          and     effectively              administer       judicial            business."

Johnson,       162    Wis. 2d at          282.         Each    time    a   court's          order      is

ignored,       "the    administration             of     justice      suffers         because        the

court's time is misused to accommodate the noncomplying party's
dilatoriness at the expense of the other party and all other
                                                  21
                                                                           No.    2018AP71

litigants awaiting the court's attention."                          Id.     "[I]n some

cases the need to punish and deter the flagrant disobedience of

court   orders      requires      the    circuit      court    to    impose      greater

sanctions than monetary ones."                 Id. at 286.       As a prerequisite

to imposing default judgment as a discovery sanction, a circuit

court must find the sanctioned party engaged in egregious or bad

faith conduct, without a clear and justifiable excuse, but need

not determine the opposing party was prejudiced thereby.

                    2.    Exercise of Discretion Analysis

    ¶38      The    circuit    court     did    not   erroneously         exercise    its

discretion when it imposed the sanction of judgment on liability

against BMO because it found that BMO's actions were egregious

and without a clear and justifiable excuse, applied a sanction

authorized        under    Wis.    Stat.       § 804.12(2),         and     reached     a

reasonable determination.               There is no question that the law

permits   this     sanction.       Wisconsin       Stat.      § 804.12(2)        provides

that "the court in which the action is pending may make such

orders in regard to the failure as are just," and authorizes:

         1. An order that the matters regarding which the
    order was made or any other designated facts shall be
    taken to be established for the purposes of the action
    in accordance with the claim of the party obtaining
    the order;

             2.
             An order refusing to allow the disobedient
    party to support or oppose designated claims or
    defenses, or prohibiting the disobedient party from
    introducing designated matters in evidence;

          3. An order striking out pleadings or parts
    thereof, or staying further proceedings until the
    order   is  obeyed, or  dismissing the  action or

                                          22
                                                                    No.    2018AP71

       proceeding or any part thereof, or rendering                         a
       judgment by default against the disobedient party;

            4. In lieu of any of the foregoing orders or in
       addition thereto, an order treating as a contempt of
       court the failure to obey any orders except an order
       to submit to a physical, mental or vocational
       examination.
(Emphasis added.)          The circuit court acted under this statute

and thus applied the correct law.                   Our focus then turns to

whether the circuit court considered the pertinent facts, made

the required findings, and rendered a reasonable determination.

       ¶39   The circuit court found BMO's actions to be egregious,

disingenuous, designed to bury documents and hide a "smoking

gun" email, and in violation of its discovery order.                         Those

findings     are    not   clearly   erroneous       as   the   record     contains

evidence supporting them.            "[F]ailure to comply with circuit

court    scheduling       and   discovery      orders     without    clear      and

justifiable    excuse      is egregious conduct."          Industrial      Roofing

Serv., 299 Wis. 2d 81, ¶43 (quoted source omitted).                       Conduct,

even    if   unintentional,       that    is   "extreme,       substantial      and

persistent"        fits   the   definition     of    egregiousness.         Hudson

Diesel, Inc., 194 Wis. 2d at 543.

       ¶40    As demonstrated by the foregoing recitation of the

facts, BMO engaged in a persistent pattern of avoidance, delay,

and disregard of the circuit court's discovery order.                           The

record demonstrates that BMO initially refused to produce any

documents at all, instead claiming that all relevant documents

had already been turned over in the MIL case in 2014.                        BMO's
responses to interrogatories and requests to admit were evasive

                                         23
                                                                                 No.     2018AP71

at best and contained outright lies at worst.                             BMO produced for

deposition two corporate representatives who had little-to-no

relevant       knowledge        of    the     topics      identified       for    discovery,

despite      the     circuit         court's       direct     order       to     produce      an

individual with the requisite knowledge.

       ¶41     After insisting that all relevant documents had been

turned over in 2014, BMO "discovered" thousands of documents——

over   4,000       pages——at         the    last    hour,    days     before      the    second

corporate      deposition.             BMO    delayed       further     in      making    those

documents available to Mohns's lawyer by giving him a password

that did not work.              Within that batch of thousands of documents

was the "smoking gun" email.

       ¶42     BMO's non-compliance infected the hearing on Mohns's

motion    to    compel         and   every     motion      hearing      thereafter.          The

circuit court warned BMO, both orally and in its written order,

that it would impose sanctions if BMO did not alter its conduct.

It specifically threatened default judgment as a sanction.                                   BMO

continued      to    stall,      disregarded        the     circuit       court's      explicit
warnings, and as the circuit court described:                                "thumb[ed] its

nose at the rules of discovery" from the beginning to the very

end.

       ¶43     The circuit court found BMO's acts to be egregious and

disingenuous.             It   described       BMO's      actions    as    "stonewalling,"

"playing a legal shell game," and giving Mohns and the circuit

court the "runaround."                The circuit court's comments suggest BMO

was intentionally withholding documents and witnesses to avoid
liability.          The    circuit         court   said     BMO   had     "no    excuse"     and
                                               24
                                                                            No.     2018AP71

expressed its belief that BMO tried to get the case dismissed

quickly    on   summary      judgment        without     turning      over        the    very

documents    which     would    have    precluded          the     motion    from       being

granted.

    ¶44     The circuit court found BMO "blatantly disregarded"

its order and "egregiously ignored" its discovery obligations.

It gave BMO every opportunity to comply, even extending the

deadline    imposed    for     discovery.         When       BMO    still    refused       to

comply with the circuit court's order, the circuit court imposed

the sanction about which it had previously cautioned BMO——it

entered judgment on liability.

    ¶45     The circuit court expressed that it had never before

granted judgment "based on a discovery violation" but it could

not "think of a more appropriate one than the one before [it]

today."     The circuit court explained that its decision to grant

default     judgment    against        BMO    was      being       made     "with       every

confidence that that is the appropriate and legal sanction for

what has been presented here."
    ¶46     Based on the circuit court's warnings, its findings of

egregiousness,       BMO's     refusal       to     obey     the     order,       and     the

availability of this sanction under Wis. Stat. § 804.12(2), the

circuit    court's     decision    to    impose        the    sanction       of     default

judgment was a reasoned determination that a reasonable circuit

court   could   make.        Accordingly,         the      circuit    court        did    not

erroneously exercise its discretion, and we affirm the court of

appeals decision regarding the discovery sanctions.
                  A.    Contract and Unjust Enrichment
                                         25
                                                                       No.   2018AP71

      ¶47    BMO argues the court of appeals erred in upholding the

jury's verdict, which awarded damages to Mohns for both breach

of contract and unjust enrichment.                    BMO cites cases barring

recovery under the equitable doctrine of unjust enrichment when

the   parties     entered   into   a   contract.         Mohns       contends   that

because BMO failed to object on this basis in the circuit court,

Schwigel v.       Kohlmann, 2002 WI App 121, 254 Wis. 2d 830, 647

N.W.2d 362, permits the multiple awards, particularly because

liability in this case is based upon a discovery sanction.                       The

law supports BMO's position.

      ¶48    Under   Wisconsin     law,     a   plaintiff      may    not    recover

damages for both breach of contract and unjust enrichment based

on the same conduct.        See Meyer v. The Laser Vision Inst., LLC,

2006 WI App 70, ¶26, 290 Wis. 2d 764, 714 N.W.2d 223.                        Unjust

enrichment is an equitable claim that cannot coexist with a

breach of contract claim.           Id., ¶28.          If the parties entered

into a valid, enforceable contract, then unjust enrichment does

not apply.        Continental Cas. Co. v. Wisconsin Patients Comp.
Fund, 164 Wis.2d 110, 118, 473 N.W.2d 584 (Ct. App. 1991).                       The

availability of damages for unjust enrichment presupposes that a

contract does not exist, necessitating an equitable remedy.                      See

Meyer,      290   Wis. 2d 764,     ¶¶26,        28;    Watts    v.     Watts,    137

Wis. 2d 506, 530, 405 N.W.2d 303 (1987).                  Because the circuit

court found a contract existed and the jury awarded damages for

BMO's breach of the contract, the award for damages based on

unjust enrichment must be set aside.                   Allowing both to stand
would    create    the   legal   equivalent       of    the    Schrödinger's     cat
                                       26
                                                                     No.    2018AP71

paradox.5          Just as a cat cannot be both dead and alive at the

same       time,     a   contract   cannot   both    exist     and    not    exist

simultaneously.          A contract either exists, or it doesn't.             If a

contract exists, a plaintiff can recover damages for its breach.

Only if a contract does not exist may a party recover damages in

equity.

       ¶49     The circuit court recognized this longstanding legal

principle during the jury instruction conference:

       I believe that in the end damages cannot be awarded
       for both a breach [of contract] and unjust enrichment.
       There can't be a double reward.
           . . . .

       Well it occurs to me that we have instructions in
       there   for  contract   right  now,  not   for  unjust
       enrichment . . . I think the Plaintiff can elect, and
       that is usually the way I have seen it and I have
       imposed on Plaintiffs to pick one or the other once we
       get to the jury.       If you want to elect unjust
       enrichment and forego basic contract damages, you can
       do that. And if that is the amount you want to argue
       for, I guess that is your election.

           . . . .

            But I think then we have to go back, if we are
       going to do unjust enrichment then that is the
       instruction I am going to give the jury and not the
       two on contract.
Then the circuit court asked Mohns:               "You want to just go with

the        conventional     contract    damages     and      not     the    unjust

       https://whatis.techtarget.com/definition/Schrodingers-cat
       5

(explaining   Nobel   Prize-winning   Austrian   physicist  Erwin
Schrödinger's thought experiment presenting the paradox of a cat
being both dead and alive at the same time, as a critique of a
particular interpretation of quantum mechanics).

                                        27
                                                                                            No.     2018AP71

enrichment[?]"                 The        circuit       court,        however,            confused      the

principle          of     election          of     remedies          with       pleading           in   the

alternative.

    ¶50        "The       election         of    remedies        doctrine         is      an      equitable

principle barring one from maintaining inconsistent theories or

forms     of       relief."            Head       &     Seemann,          Inc.       v.     Gregg,      104

Wis. 2d 156,            159,    311       N.W.2d       667     (Ct.       App.       1981)        (emphasis

added).       "[In]       [t]he      classic          application          of    the        election     of

remedies doctrine . . . a defrauded party has the election of

either     rescission             or       affirming           the    contract            and       seeking

damages."               Id.     (citation             omitted).             "[This]            choice    is

forced . . . because                 of    inconsistency             of    both       rescinding        and

affirming the contract."                    Id. (citation omitted).                       Rescission is

an equitable remedy allowing the defrauded party to cancel the

contract,          while      affirming          the    contract          allows       the        defrauded

party    to     seek       damages.             "The       election       of    remedies          doctrine

requires       a    litigant         to     choose         a   remedy,      where         the     remedies

sought    are       inconsistent            with       one     another."             Wickenhauser        v.
Lehtinen,          2007    WI     82,       ¶16,       302     Wis. 2d 417,            34      N.W.2d 855

(citation omitted).

    ¶51        As this court has previously explained, the election

of remedies doctrine applies only to remedies, not claims for

relief.        For example, "[a] claim for relief in tort and a claim

for relief in contract are not 'remedies' to which the election

of remedies doctrine applies.                          A remedy is the relief that is

applied       to     a     successful            claim."          Id.,         ¶16     n.2        (citation
omitted).          Accordingly, the election of remedies doctrine does
                                                      28
                                                                                     No.        2018AP71

not   apply       to    a    claim       for   relief        in     equity,      such     as    unjust

enrichment, or a claim for relief in contract because claims are

not remedies.

      ¶52     A        party       may     plead         claims          for     relief        in     the

alternative,           as      Mohns       did      in       this        case.       Wis.           Stat.

§ 802.02(5)(b).6             Specifically, Mohns claimed the existence of a

contract      that       was       breached       by     BMO,      for     which    Mohns       sought

damages.      Mohns also sought damages under the equitable doctrine

of unjust enrichment, a claim for relief available only if a

contract    was        never       formed      or   was      legally          invalid.         Both    of

Mohns's     claims          were    based      on      the   labor        and    materials          Mohns

supplied for the Hickory Hills Condominium construction project.

Claims for breach of contract and unjust enrichment arising out

of the same conduct or subject matter are inconsistent with each

other, one being premised on the existence of a contract and the

other     available          only    in     the     absence         of    a    contract.            Under

§ 802.02(5)(b), however, "claims pleaded in the alternative need

not be consistent with one another."                              Read v. Read, 205 Wis. 2d
558, 575, 556 N.W.2d 768 (Ct. App. 1996) (Fine, J., dissenting).

      6Wisconsin Stat. § 802.02(5)(b) provides: "A party may set
forth 2 or more statements of a claim or defense alternatively
or hypothetically, either in one claim or defense or in separate
claims or defenses.   When 2 or more statements are made in the
alternative and one of them if made independently would be
sufficient, the pleading is not made insufficient by the
insufficiency of one or more of the alternative statements.    A
party may also state as many separate claims or defenses as the
party has regardless of consistency and whether based on legal
or equitable grounds.   All statements shall be made subject to
the obligations set forth in s. 802.05."

                                                    29
                                                                        No.     2018AP71

Nevertheless, the plaintiff may recover under only one of the

claims.        If   there    is     a    contract    between   the   parties,       the

plaintiff may recover in contract but not in equity.                           In this

case,    the    circuit     court       expressly   found   the    existence      of   a

contract between Mohns and BMO, answering the following question

on the special verdict in the affirmative:                  "Did BMO Harris Bank

National Association breach an agreement to pay Mohns Inc. for

labor and materials which Mohns Inc. furnished for the Hickory

Hills Condominium project?"

     ¶53       Ultimately, and over the objection of BMO,7 the circuit

court opted to let the jury award damages on both contract and

unjust enrichment by attempting to frame the verdict questions

to prevent overlapping damages.                 This was error, as the law does

not permit an award for both legal and equitable damages based

on   the   same        conduct.         Meyer,    290    Wis. 2d 764,     ¶¶26,     28;

Continental Cas. Co., 164 Wis. 2d at 118.

     ¶54       While    a   verdict      form    could   include   jury       questions

related to both breach of contract and unjust enrichment, if the
jury finds a contract existed, unjust enrichment will not apply.

Only if the jury finds that no contract existed may it award

damages for unjust enrichment.                  The circuit court departed from

     7 Mohns argues BMO's objections to this issue were deficient
in the circuit court.     We disagree.   The record shows BMO's
lawyer strongly objected, asserting: "[I]t is inconsistent in a
case   to   have   both  a   breach   of   contract  and   unjust
enrichment . . . as a matter of law you either have a contract,
in which case you are entitled to damages, or you have – flowing
from that breach, or if you don't have a contract you can have
unjust enrichment to measure those damages."

                                            30
                                                                               No.     2018AP71

black    letter     law     governing       breach       of     contract       and      unjust

enrichment when the circuit court, as a matter of law, found

that BMO "breached an agreement to pay Mohns Inc. for labor and

materials Mohns Inc. furnished for the Hickory Hills Condominium

project"     and    that    BMO    was   "unjustly         enriched       by     labor     and

materials     which        Mohns    Inc.       furnished         the     Hickory         Hills

Condominium    project."           The   circuit         court    erred      in       granting

judgment on liability for both breach of contract and unjust

enrichment, and in awarding both legal and equitable damages

based on the same conduct.            The two are mutually exclusive.                      See

Continental Cas. Co., 164 Wis. 2d at 118.

       ¶55    Mohns's      reliance      on    Schwigel,        254     Wis. 2d 830,        is

inapposite.        In that case, the court of appeals concluded that

"the    verdict     improperly      asked        a    single     damage      question       on

Schwigel's breach of contract, negligent misrepresentation and

unjust enrichment claims" but the availability of recovery under

claims for both breach of contract and unjust enrichment was not

an issue before the court.               Id., ¶2.          Regardless, Schwigel is
distinguishable       from    Mohns's         case      because       Schwigel        involved

multiple acts arising from a course of conduct, including the

sharing of production space, storage of equipment, purchase of a

machine,     production       of    motor            shafts,     defendant's           alleged

conversion     of    equipment,       and      the      loss     of    the     plaintiff's

customers and, ultimately, his business.                       Id., ¶¶3-8.           While the

facts of a particular case could support both causes of action

if certain conduct was governed by contract and other conduct
was independent of the contractual relationship, in this case,
                                            31
                                                                                         No.     2018AP71

the contract and unjust enrichment claims asserted against BMO

were    both     based       on        the     same       underlying              conduct——Mohns's

provision of labor and materials on a construction project, for

which it was not paid.                   Under Wisconsin law, if there was a

contract, Mohns could recover contract damages for its breach.

Only if there was no contract could Mohns receive the value of

the    benefit      conferred      on        BMO    as    a     result       of    the       labor    and

materials Mohns supplied.

       ¶56    Black       letter       law     precludes             Mohns        from       collecting

unjust enrichment damages based on the same conduct for which he

received      contractual          damages,             irrespective          of       the       court's

liability      determination            arising          in    the    form        of     a     sanction.

Because the circuit court explicitly found that BMO breached an

agreement to pay Mohns for its labor and materials, the damages

awarded for unjust enrichment must be set aside.

                                  B.    Punitive Damages

       ¶57    BMO    argues       the    punitive             damages      award       must      be   set

aside because it is not based upon tort liability.                                           We agree.
The    jury    awarded       compensatory               damages       only        for        breach   of

contract and unjust enrichment, neither of which supports an

award of punitive damages.

       ¶58    Under       Wisconsin           law,        punitive           damages           are    not

available      as     a    remedy        in        a     breach       of     contract            action.

Entzminger v. Ford Motor Co., 47 Wis. 2d 751, 757, 177 N.W.2d

899 (1970) ("Punitive damages are not allowed for a mere breach

of contract[.]"); Hansen v. Texas Roadhouse, Inc., 2013 WI App
2, ¶29, 345 Wis. 2d 669, 827 N.W.2d 99 ("[P]unitive damages are
                                                   32
                                                                   No.   2018AP71

not available as a remedy for breach of contract[.]"); Autumn

Grove Joint Venture v. Rachlin, 138 Wis. 2d 273, 279, 405 N.W.2d

759 (Ct. App. 1987).        A jury's award of punitive damages must be

based    upon    a    finding     of    tort    liability.        Hansen,      345

Wis. 2d 669, ¶29.          The punitive damages awarded in this case

were    not   based   on   tort   liability,     but    rather   on   breach   of

contract and quasi-contract and therefore must be set aside.

       ¶59    The tort liability involved in this case stemmed from

BMO's   misrepresentation,        for   which   the    circuit   court   granted

judgment in favor of Mohns.             The only question on the special

verdict regarding misrepresentation was question 3, which asked

whether BMO made "an untrue representation of fact, knowing it

was untrue, or recklessly without caring whether it was untrue,

and with the intent to deceive and induce Mohns Inc. to act upon

it" to which the circuit court itself answered "YES" as part of

the discovery sanctions.           The special verdict did not contain

any question asking the jury to determine a damage award for

misrepresentation.
       ¶60    Although the circuit court entered judgment against

BMO for misrepresentation as a discovery sanction, the jury was

asked to award damages (if any) only under the contract claims.

While discussing the jury instructions with counsel for each

party, the circuit court decided to omit any damages question

with respect to the misrepresentation claim:                 "As far as the

misrepresentation I think that goes to attorney fees, and so we

are not going to muddy the waters because the damages aren't

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going to be any different on any of those."                                      Mohns did not

object.

      ¶61       The punitive damages questions did not reference tort

liability whatsoever.                Instead, the punitive damages questions

were explicitly dependent upon the jury's responses to question

4, which asked the jury what sum would compensate Mohns for

damages arising from breach of contract, and question 5, which

asked     the    jury       what    sum    would       compensate            Mohns    for   damages

arising from the quasi-contract claim of unjust enrichment.8                                      The

special     verdict         form    instructed         the    jury:            "If    you    awarded

damages     to       any    component      of    question          4   or     question      5,   then

answer this question" with question 6 immediately after:                                         "Did

BMO   Harris         Bank     National     Association             act       maliciously     toward

Mohns Inc. or in an intentional disregard of the rights of Mohns

Inc.?"      The special verdict form then instructed the jury to

answer the following question 7 only if it answered "yes" to

question 6:           "What sum, if any, do you award against BMO Harris

Bank National Association as punitive damages?"                                       The punitive
damages     awarded         by     the    jury       were    based       on     the    amounts    it

inserted        on    the     special      verdict          form       for    BMO's     breach     of

contract and for the quasi-contractual unjust enrichment claim——

neither     of        which      support        an    award        for       punitive       damages.

      8"Because no express or implied in fact agreement exists
between the parties, recovery based upon unjust enrichment is
sometimes referred to as 'quasi contract,' or contract 'implied
in law' rather than 'implied in fact.'       Quasi contracts are
obligations created by law to prevent injustice."       Watts v.
Watts, 137 Wis. 2d 506, 530, 405 N.W.2d 303 (1987).

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Accordingly, the punitive damages award must be overturned and

we reverse the decision of the court of appeals on this issue.

                                    III.    CONCLUSION

       ¶62     Wisconsin        Stat.      § 804.12          permits      the         discovery

sanction       imposed         by   the     circuit          court      and     the      record

demonstrates the circuit court did not erroneously exercise its

discretion when it granted judgment against BMO on liability.

We    affirm       the   court      of    appeals         decision   on       the     discovery

sanction.       However, Wisconsin law does not permit a plaintiff to

recover      simultaneously          for    breach          of   contract       and     unjust

enrichment based on the same conduct or subject matter.                                Because

the circuit court determined that BMO breached an agreement to

pay   Mohns     for      its   labor      and    materials,       for     which       the   jury

awarded Mohns damages, the jury's award of damages for unjust

enrichment based upon the labor and materials supplied by Mohns

must be set aside.              Additionally, Wisconsin law only permits a

punitive damages award to be based upon a tort, not a contract.

Because the special verdict form based the punitive damages on
contract,      not       tort——for       which       no    compensatory        damages      were

sought or awarded——the punitive damages award must also be set

aside.       We reverse the decision of the court of appeals on

damages and remand the matter to the circuit court to amend the

order for judgment and judgment consistent with our opinion.

       By    the    Court.—The       decision         of   the   court     of       appeals   is

affirmed in part, reversed in part, and the cause remanded to

the circuit court for further proceedings consistent with this
opinion.
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    ¶63   ANNETTE KINGSLAND ZIEGLER and BRIAN HAGEDORN, JJ., did

not participate.

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    No.   2018AP71

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