Court Opinion

ID: 9737744
Source: CourtListenerOpinion
Date Created: 2023-08-26 19:33:37.782793+00
Date Added: 2024-06-11T07:24:01.053154
License: Public Domain

DYKMAN, P.J.
¶ 20. (dissenting). This appeal arises on summary judgment. As a result, our first task is to review the pleadings to determine whether a claim or cause of action has been stated and whether the answer presents a material factual issue. See Preloznik v. City of Madison, 113 Wis. 2d 112, 116, 334 N.W.2d 580 (Ct. App. 1983). It is not clear whether the majority has concluded that the plaintiff fails at this stage of summary judgment methodology. That is one possible interpretation of the majority's opinion. Another possi*538ble interpretation is that the defendant is entitled to judgment on the affidavits and other material as a matter of law. See WlS. STAT. § 802.08 (1997-98). The analysis required is different depending upon the focus of the majority opinion. However, because this is a dissent, and because the first step in summary judgment methodology is to examine the pleadings, I will do so.
¶ 21. There is nothing in Farm Credit Services' complaint which suggests that its 1983 agreement with Wysocki covered three, six, twelve or forty-seven counties. There is nothing in Wysocki's answer which gives this information. Neither the complaint nor the answer tell us the number of counties in which Farm Credit Services was permitted to do business in 1998. The closest Wysocki comes to suggesting any of this are his assertions that: "The restrictive covenant includes geographical areas not contemplated or included in 1983 and is unreasonable in its scope" and "The plaintiffs business operations and customer base is totally changed from that of PCA in 1983." Following summary judgment methodology, one cannot avoid the conclusion that Farm Credit Services' complaint states a claim and Wysocki's answer raises issues of material fact.1 We next examine Wysocki's affidavits and other material to determine whether he has made a prima facie case for summary judgment. The majority concludes that he has, based upon its determination that Farm Credit Services unilaterally changed the terms of Wysocki's contract.
*539¶ 22. We therefore move from procedure to substantive law. The most significant factor here is that this is a contract case. It is affected by statutory factors, most notably WlS. Stat. § 103.465 (1983-84),2 which places significant limitations on the right of parties to contract as they see fit. But before we reach the question of how § 103.465 affects the contract between Farm Credit Services and Wysocki, we must first determine whether the parties contracted with each other, and what that contract requires. The majority notes that Farm Credit Services "entered into a written contract with Wysocki" but goes no further. In particular, the majority does not consider what was required of the parties by their contract. I believe that this is a necessary and dispositive inquiry, and therefore, this is another area where I part company with the majority.
¶ 23. There are some basic concepts of contract, law which have not, until now, been open to question. "[B]oth offer and acceptance are necessary for the creation of a contract." Eisenberg v. Continental Cas. Co., 48 Wis. 2d 637, 652, 180 N.W.2d 726 (1970). When we conclude that parties have entered into a contract, certain rights and obligations flow from that conclusion. One basic conclusion which has been accepted in Wisconsin until now is that a party to a contract is not free to unilaterally change the material terms of that contract without the assent of the other party. See Schaefer v. Dudarenke, 89 Wis. 2d 483, 492, 278 N.W.2d 844 (1979). I cannot enter a contract to purchase 100 widgets at $37.50 per widget and then successfully have a court enforce my unilateral decision to pay only $25.00 per widget.
*540¶ 24. Another concept of contract law unchallenged until now is that a contract is interpreted as of the date the parties entered the contract. This would seem to be a matter of common sense, but it is also the law: "In the construction of contractual provisions the prevailing idea is to glean the intent of the parties at the time such contract was executed." Huntoon v. Capozza, 57 Wis. 2d 447, 460, 204 N.W.2d 649 (1973). And we are to interpret contracts so as to uphold their validity rather than their invalidity.
Many cases can be seen in which, when the words of the contract can be interpreted either in a way which would cause the contract to be valid or in a way which would result in invalidity, courts have chosen the former interpretation. This preference is based upon the judicial belief that the parties intend their agreement to be valid rather than invalid, lawful rather than unlawful, and honest and effective rather than fraudulent and voidable.
Margaret N. Kniffin, Corbin on Contracts §24.22 (Joseph M. Perillo ed., revised ed., LEXIS 1998) (footnotes omitted). The Restatement (Second) OF Contra CTS adopts a similar concept, but in terms of "Standards of Preference in Interpretation:"
In the interpretation of a promise or agreement or a term thereof, the following standards of preference Eire generally applicable:
(a) an interpretation which gives a reasonable, lawful, and effective meaning to all the terms is preferred to an interpretation which leaves a part unreasonable, unlawful, or of no effect....
Restatement (Second) of Contracts § 203 (1981); see also Variance, Inc. v. Losinske, 71 Wis. 2d 31, 36-37, 237 N.W.2d 22 (1976).
*541¶ 25. By examining WlS. STAT. § 103.465 first, before determining what the parties intended in their contract, the majority has put the cart before the horse. It has interpreted a contract before determining whether the parties have entered into a contract. I believe that the proper way to analyze the effect of what the parties did is to begin at the beginning. The dispositive question to me is what the parties intended when they signed the document titled "EMPLOYMENT AGREEMENT" on July 26, 1983. The employment contract is specific in its prohibition of certain post-employment competition:
If the Employee ceases to be a PCA Employee, for any reason, the Employee shall not, for a period of one year immediately following the date of separation from PCA, directly or indirectly, engage in the business of tax preparation, tax consultation, bookkeeping, or accounting, or any other duties performed as a tax consultant for PCA with the person(s) the Employee consulted or serviced in performance of his/her consultant duties at any time during the one year immediately prior to the date of separation.
¶ 26. On July 26, 1983, the parties intended that Wysocki would not compete with PCA (later, Farm Credit Services) by preparing taxes for persons who lived in a geographic area consisting of six counties.
¶ 27. Interpreting their contract as of July 26, 1983, as we must, see Huntoon, 57 Wis. 2d at 460, it is impossible to conclude that the contract covered twelve counties. Wysocki was never prohibited from competing with PCA or Farm Credit Services in the six counties the majority adds to the agreement in order to reach the conclusion that the agreement is void. Wysocki and PCA could have amended their contract *542when PCA's territory was expanded to include twelve counties, but the undisputed fact is that they did not. The contract just remained in some file somewhere, awaiting this lawsuit.
¶ 28. How has the majority reached its conclusion? First, it has decided to interpret the employment contract so as to make it invalid rather than valid, thus violating the rule that we are to attempt an interpretation which leads to a valid contract. See Variance, 71 Wis. 2d at 36-37. Next, it has concluded that the parties' contract "has been unilaterally changed by FCS," thus adopting for the first time in Wisconsin the concept that a party can unilaterally and validly change the terms of a contract without the other party's assent.3 It would not suffice to conclude that PCA attempted to unilaterally amend the contract. It is necessary that the contract actually was amended, and indeed, validly amended. It is necessary to the majority opinion that the employment contract embrace twelve counties. It is therefore necessary that something changed the contract from a contract covering persons living in six counties to one covering persons living in twelve counties. Ergo: the majority's conclusion that P CA was able to do what heretofore no-one has been able to do — unilaterally and validly amend a contract without the assent of the other party.
¶ 29. Farm Credit Services has asked for an injunction and damages for Wysocki's breach of the employment agreement by soliciting Farm Credit Ser*543vices' customers in 1998. Whether Farm Credit Services is entitled to an injunction and the amount of its damages are matters which would have been determined at trial. It is commonplace to plead and argue damages in excess of those which one hopes to receive. I do not agree with the majority that by asking for damages in excess of those to which it might be entitled, Farm Credit Services has forfeited the right to receive damages in any amount. And on summary judgment, the question is not whether a party has made a prima facie case as to one claim, but whether a genuine issue exists as to any material fact, in which case a trial is necessary. See Preloznik, 113 Wis. 2d at 116.1 conclude that there is a genuine issue of material fact as to whether Wysocki's 1983 employment agreement, encompassing the territory then in existence, was made void by Wis. Stat. § 103.465.
¶ 30. This leaves the issue of whether Farm Credit Services can enforce a contract between Wysocki and PCA. There is no question but that the pleadings raise this issue. Farm Credit Services' affidavits assert that Farm Credit Services is really PCA by another name. Wysocki claims that the mergers that occurred after 1983 resulted in Farm Credit Services having no continuing or chain of relationship with P CA. In part, the answer to this question depends upon the intent of the various parties whose actions resulted in the transfer from PCA to Farm Credit Services. The issue of intent is not one that is properly decided on a motion for summary judgment. See Lecus v. American Mut. Ins. Co. of Boston, 81 Wis. 2d 183, 190, 260 N.W.2d 241 (1977). This is an issue that should be tried. See Rollins Burdick Hunter, Inc. v. Hamilton, 101 Wis. 2d 460, 470-72, 304 N.W.2d 752 (1981) (discussing the problems with deciding reasonableness on *544summary judgment in the context of a restrictive covenant).
¶ 31. I conclude that the majority: has interpreted the parties' contract so as to lead to its invalidity; has concluded that one party to a contract can unilaterally change a term in the contract without the assent of the other party; and has interpreted a contract as of a date far in the future from the date on which the parties agreed to the contract terms. I cannot agree to any of this, and therefore respectfully dissent.

 There could be significant debate as to whether Wysocki's answer pleads facts which create a dispute as to material fact. The portions of his answer which I have quoted are probably not material or are conclusions of law. But there are bigger problems with this case, and I will not discuss this issue further.

 All references to the Wisconsin Statutes are to the 1983-84 version unless otherwise noted.

 By "validly" I mean that what PCA did by changing its territory to include twelve counties amended the contract to include a prohibition against competition in twelve counties. I do not mean that had the parties agreed to change the territory to twelve counties, this contract amendment would have been valid. That is a question I do not reach.