Court Opinion

ID: 8204208
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:50:36.446813+00
Date Added: 2024-06-11T16:41:06.612391
License: Public Domain

NEUBAUER, J.
¶ 15. (concurring). I write to address (1) Aurora's contention that it is entitled to *202terminate immediately for an incurable material breach,1 and (2) the consequences of Aurora's decision not to provide the thirty-day opportunity to cure in its "for cause" termination letter. I concur because I agree that, under the circumstances presented, Aurora does not have the right to terminate immediately.
¶ 16. As regards the parties' breach of contract claims, I agree that the detailed contractual provisions comprehensively address termination. I also agree that there is no unstated eighth "catch-all" right to terminate immediately in the event of an incurable material breach not listed in the contract. However, I disagree as to the contractual options available to Aurora in that event. The comprehensive contractual scheme addresses unlisted, incurable breaches like the one here. When such a breach occurs, Aurora could discharge Ashker immediately for an incurable material breach, but the effective "for cause" termination date would be the contractually required thirty days. See Sonotone Corp. v. Ladd, 17 Wis. 2d 580, 585-86, 117 N.W.2d 591 (1962) (legal effect of a notice of cancellation that failed to comply with contract requirement that notice be given a specified number of days before the cancellation date is that contract continued in force until lapse of specified period).
¶ 17. However, rather than seeking to limit damages to thirty days, Aurora argues that, absent a right *203to terminate immediately, Ashker's damages should be limited to the ninety-day period provided in the "at-will" termination provision. Given Aurora's position, I agree that because Aurora could terminate Ashker at any time for any reason under the "without cause" provision, Ashker is limited to the ninety days' damages provided in the at-will termination provision in the contract. Freiburger v. Texas Co., 216 Wis. 546, 550, 257 N.W 592 (1934) (when at-will contract is terminated without required notice, damages are limited to the notice period).2
¶ 18. While the majority does not address the foreign rescission cases Aurora cites,3 I agree that they are unavailing here. Aurora neither pled rescission nor did it mention rescission (or cancellation) in its termination letter, before the circuit court or on appeal. Rescission and the right to terminate a contract are distinct remedies. Termination of a contract does not seek to undo the contract, but to terminate obligations going forward, while rescission is the unmaking of a contract. See Seidling v. Unichem, Inc., 52 Wis. 2d 552, 557-58,191 N.W.2d 205 (1971) ("The effect of rescission is to restore the parties to the position they would have occupied if no contract had ever been made between them."); see also Manpower Inc. v. Mason, 377 F. Supp. *2042d 672, 678 (E.D. Wis. 2005) (quoting 13 Sabah Howard Jenkins, Corbin on Contracts § 68.9 (rev. ed. 2003)) ("This power to terminate must... be distinguished from the right an injured party has to cancel the contract for a breach that is a total breach of contract or that goes to the essence of the agreement.").4 Instead of seeking to rescind, Aurora contends that it did not breach the contract when it sought to exercise its right of termination under the contract and advised Ashker that other provisions of the contract remained enforceable.
¶ 19. Under the circumstances, I concur with the majority's conclusion.

 Both parties present the issues as whether, under the contract, Aurora could terminate immediately and what damages Ashker is entitled to, if any. Ashker states that any factual disputes relating to the termination and validity of Aurora's investigation are "irrelevant," and he also effectively concedes that there are no such disputed genuine issues of material fact by failing to develop any arguments to that effect. See Gardner v. Gardner, 190 Wis. 2d 216, 239 n.3, 527 N.W.2d 701 (Ct. App. 1994).

 Aurora cites Entzminger v. Ford Motor Co., 47 Wis. 2d 751, 177 N.W.2d 899 (1970), for the rule that a material breach by one party excuses subsequent performance by the other. Aurora fails to provide us with authority that, in a breach of contract case, such a material breach excuses compliance with contractual termination requirements such as notice.

 See Lyon v. Pollard, 87 U.S. 403 (1874); Larken, Inc. v. Larken Iowa City Ltd. P'ship, 589 N.W.2d 700 (Iowa 1998); Young Travelers Day Camps, Inc. v. Felsen, 287 A.2d 231 (N.J. Dist. Ct. 1972); LJL Transp., Inc. v. Pilot Air Freight Corp., 962 A.2d 639 (Pa. 2009).

 For a discussion on the distinction between termination and rescission/cancellation, see 13 Sarah Howard Jenkins, Corbin on Contracts § 68.9 n.5 (rev. ed. 2003), explaining how courts often misuse the terminology but that the right exercised for a breach that goes to the essence of a contract is that of cancellation, including discussions of Larken, 589 N.W.2d at 700, and Young Travelers, 287 A.2d at 231. In Wisconsin, we use the term rescission when a contract is ended due to a "substantial [breach] so serious as to destroy the essential objects or purposes of the contract." Wis JI — Civil 3076. See also Manpower Inc. v. Mason, 377 F.Supp. 2d 672, 678-79 & n.10 (E.D. Wis. 2005) (discussing difference between two remedies).