Joseph Gene Thompson v. Susanne Rose Ouellette

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
September 9, 2022
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal No. 2021AP1087 Cir. Ct. No. 2018FA205

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT IV

IN RE THE MARRIAGE OF:

JOSEPH GENE THOMPSON,

PETITIONER-RESPONDENT,

V.

SUSANNE ROSE OUELLETTE,

RESPONDENT-APPELLANT,

V.

ELISABETH L. THOMPSON AND SAMUEL F. THOMPSON,

OTHER PARTIES-RESPONDENTS.

APPEAL from a judgment of the circuit court for Waupaca County:
VICKI L. CLUSSMAN, Judge. Affirmed.
No. 2021AP1087

Before Blanchard, P.J., Graham, and Nashold, JJ.

¶1 GRAHAM, J. Susanne Ouellette, who was married to Joseph
Thompson, appeals their judgment of divorce. In her appeal, Susanne challenges
the circuit court’s determination that an alleged oral agreement for the sale of real
property owned by Joseph’s parents, Elisabeth and Samuel Thompson, is not
enforceable under WIS. STAT. § 706.04 (2019-20).1 Susanne argues that she and
Joseph entered into a land contract with Elisabeth and Samuel that is enforceable
in equity. Therefore, she contends, the property is part of the marital estate and is
property subject to division in the divorce pursuant to WIS. STAT. § 767.61(3).
Elisabeth and Samuel argue that Susanne’s appeal is frivolous, and they have filed
a motion for costs, fees, and attorney fees pursuant to WIS. STAT.
RULE 809.25(3).2

¶2 We affirm the circuit court’s judgment, concluding that Susanne was
not entitled to equitable enforcement of the alleged oral land contract under WIS.
STAT. § 706.04 because she did not clearly and satisfactorily prove that the parties
agreed on a purchase price and whether Susanne and Joseph would pay interest.
We deny Elisabeth and Samuel’s motion for costs, fees, and attorney fees based on
our determination that Susanne’s appeal is not entirely frivolous.

1
All references to the Wisconsin Statutes are to the 2019-20 version.

Throughout this opinion, we refer to Joseph, Elisabeth, and Samuel by their first names
because they share a surname. For consistency, we likewise refer to Susanne by her first name,
even though she no longer shares a surname with the Thompsons.
2
Joseph has not filed a brief in this appeal. Through counsel, he submitted a letter
indicating that his interests are not affected by the issues raised in Susanne’s brief and that he
takes no position on the outcome of the appeal.

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BACKGROUND

¶3 Susanne and Joseph were married in 1998. From 2000 until 2018,
they lived in a house in New London, Wisconsin (hereinafter “the property”) that
was at all times titled in Joseph’s parents’ names.

¶4 Joseph filed a petition for divorce in 2018. One significant dispute
in the ensuing divorce action concerned whether the couple had an ownership
interest in the property.

¶5 Specifically, the parties disputed whether Susanne and Joseph had
purchased the property from Joseph’s parents, Elisabeth and Samuel. There was
no written agreement documenting the terms of any sale, let alone a conveyance
that complied with other requirements in WIS. STAT. § 706.02, commonly referred
to as the statute of frauds. However, Susanne took the position that the parties had
agreed upon and entered into an oral land contract years earlier.3 She argued that
the agreement was enforceable under WIS. STAT. § 706.04, which permits a court
to enforce an unwritten agreement for the sale of real estate in equity if the party
requesting enforcement can, among other things, “clearly and satisfactorily” prove
“the elements of the transaction.” Joseph, Elisabeth, and Samuel took the position
that Joseph and Susanne had been renting the property from Elisabeth and Samuel
for all those years, and they disputed that there was any agreement for the sale of
the property.

3
A land contract is a means of financing the sale of real property that does not involve a
conventional mortgage from a bank. See generally City of Milwaukee v. Greenberg, 163 Wis. 2d
28, 471 N.W.2d 33 (1991). In a land contract, the buyer makes direct payments to the seller. The
seller retains legal title to the property until the purchase price is paid in full. The buyer, in
contrast, holds equitable title to the property and enjoys rights, including the right of possession,
over the land from the date of contract. Id. at 37-39.

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¶6 To resolve this dispute, Joseph filed a third-party summons and
complaint impleading Elisabeth and Samuel into the divorce action as third-party
respondents. See Zabel v. Zabel, 210 Wis. 2d 336, 341-44, 565 N.W.2d 240 (Ct.
App. 1997) (providing that a court presiding over a divorce has jurisdiction to hear
equitable claims involving third parties that are necessary for a complete
adjudication of the divorcing parties’ marital property rights). Joseph also sought
a declaratory judgment that the property belonged to Elisabeth and Samuel, and
that Susanne and Joseph had no ownership interest in the property.

¶7 Susanne and Joseph eventually entered into a partial marital
settlement agreement that resolved all issues in the divorce action except for their
dispute about whether they had any ownership interest in the property.4 The
circuit court held a contested hearing to resolve that dispute. At the hearing,
Susanne, Joseph, and Karen Gething (an agent with the insurance company that
provided homeowners and renters insurance to the parties) testified, and Susanne
introduced several exhibits that were admitted into evidence. Samuel and
Elisabeth attended the hearing, and their attorney cross-examined Susanne’s
witnesses. However, for reasons discussed below, Samuel and Elisabeth did not
testify or present evidence at the hearing.

¶8 The following summary of facts is derived from the testimony and
exhibits introduced by Susanne at the hearing. These facts were not meaningfully
disputed, except as noted below.

4
The partial marital settlement agreement provided that “[t]he Court shall decide any
and all claims, controversies, and disputes concerning ownership interests of the property.”

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¶9 Susanne and Joseph moved into the house on the property in 2000.
They lived there rent free until 2002, and then, beginning in 2002, they paid
Elisabeth and Samuel $600 each month.

¶10 In 2005, Susanne and Joseph started to renovate the property.

¶11 In late 2007, Susanne, Joseph, Elisabeth, and Samuel started to
discuss the possibility of Susanne and Joseph purchasing the property. According
to Susanne, these discussions resulted in an oral land contract in January 2008.
During the hearing, Susanne introduced a January 2008 receipt for “rent” on
which Elisabeth had written “start sell of house * 08.” Susanne testified that, from
that point forward, she believed that she and Joseph had purchased the property
and that their monthly payments of $600 were house payments rather than rent.

¶12 When asked about the terms of the 2008 agreement, Susanne
testified that the agreement was that she and Joseph would pay “$600 a month”
and also “the house taxes.” However, Susanne did not consistently testify that the
parties agreed on a purchase price in 2008. When asked about a total purchase
price, Susanne testified that “[t]he $80,000 [figure] did come up,” and that at some
unspecified time she and Joseph agreed to it. However, she also testified that,
prior to 2010, Elisabeth and Samuel had represented that the price would be
between $75,000 and $80,000. Susanne further testified that the parties “didn’t
discuss interest rate” in 2008, nor did they discuss how long Susanne and Joseph
would be required to make payments on the property before they owned it
outright. According to Susanne, “[t]hat was always in question, we didn’t know.
Mr. Thompson, Sam, would always say we’ll discuss it later.”

¶13 Beginning in 2008, Joseph paid the property taxes on the property.

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¶14 Between 2008 and 2010, Joseph and Susanne continued to renovate
the property, making $80,000 to $100,000 worth of improvements. In 2010,
Joseph started paying his parents’ homeowner’s insurance premium, and he then
attempted to obtain his own homeowner’s insurance policy on the property. As of
August 2010, Elisabeth stopped issuing rent receipts to Susanne and Joseph.

¶15 In late 2010, Susanne made the monthly $600 payment by check,
and she wrote “house payment” on the check. Elisabeth refused to cash the check
due to the notation, and an argument ensued regarding Susanne and Joseph’s
ownership interests in the property. During the argument, Samuel insisted that the
price of the property would be $80,000. According to Susanne, the non-negotiable
price of $80,000 “set her off” because Elisabeth and Samuel had previously told
them the price would be between $75,000 and $80,000. She testified that she had
been upset because “there’s kind of no discussion there, [Sam] just said 80, and
that’s it.”

¶16 On December 5, 2010, Susanne drafted and sent to Samuel a letter
seeking “clarity” about her and Joseph’s ownership interests in the property, and
the letter was admitted as an exhibit at the hearing. In the letter, Susanne noted
that her check had been rejected because she had written “house payment” on it,
but Susanne stated “that is what we feel it should be.” She asked, “How can we be
paying rent if this is our house?” In her letter, Susanne also acknowledged that the
parties had not yet agreed on a price: “You and Liz said the house would be
$75,000-$80,000 three years ago but just keep paying and when the time comes
you would figure it out.” Susanne finished the letter by stating, “Joe has put a
huge amount of his money into the house,” and “[w]e need to come up with a
sensible solution for this house so we [can] continue the renovation.”

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No. 2021AP1087

¶17 After she sent the December 2010 letter, Susanne did not speak with
Elisabeth or Samuel until 2012. However, Joseph and Samuel continued
discussing the terms of an agreement to convey the property. Susanne testified
that she believed that Samuel offered to sell the property for the reduced price of
$71,000, as opposed to $80,000, based on discussions with Joseph that occurred
sometime between December 5, and December 14, 2010.

¶18 On December 14, 2010, Samuel drafted a proposed offer to sell the
property, which was admitted into evidence. The offer was not in the form of a
land contract, as the parties had previously discussed. Instead, the offer was
contingent on Susanne and Joseph obtaining a mortgage from a bank “within 60
days of today’s date.” On the first page, Samuel wrote:

Price determined by negotiated price of $80,000 minus
principle paid at 5 3/4% interest at $600 per month… If
you wish to purchase the house and property … the cost is
$71,000 … plus buyers pay all closing costs which your
lender will take care of for you.

At the bottom of the page, Samuel printed and signed his name, and he drew
signature blocks for Joseph and “wife.” The remaining pages of the note contain
an amortization table with certain figures circled and Samuel’s handwritten notes.
On the first page of the table, Samuel wrote that “[c]losing costs and any costs
associated with your loan and title fees [are] all your responsibility! We get a
check for $71,000.”

¶19 Neither Joseph nor Susanne signed Samuel’s offer letter, nor did
they give Elisabeth and Samuel a check for $71,000. Susanne explained that she
did not accept Samuel’s offer because she believed that she had already purchased
the property through a land contract in 2008 and because she and Joseph were
unable to obtain a bank loan.

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No. 2021AP1087

¶20 Susanne testified that negotiations continued until 2012, when
Joseph obtained a homeowner’s insurance policy on the property. As Susanne
described it, the terms of the ultimate agreement were reached as part of an
“evolving process” and “there was always discussion.” However, Susanne
acknowledged that she did not participate in any of those discussions, and she
gave vague and sometimes inconsistent testimony on when the discussions
occurred and her knowledge of any agreed-to terms. She testified that “there’s a
verbal agreement for $600,” and that “one day,” as “part of the continuing
discussion with his father,” “Joe came home … and said there’s going to be no
interest.” At another point, when Susanne was asked whether the interest was a
“modification to the agreement,” she responded: “I don’t know. I don’t know
what [Joseph] and his father discussed.”

¶21 Between 2010 and 2012, Joseph attempted to obtain a homeowner’s
insurance policy on the property. Susanne introduced a call activity log from the
insurance company as evidence during the hearing. The log details numerous
conversations between insurance agents, Joseph, and Samuel, in which Joseph and
Samuel made various changing representations to the agents. In 2010, Joseph
represented to the agents that he was “renting to buy [the] house from [his] dad.”5
That same year, Joseph told agents that his parents were “going to put [him] on the
deed as homeowner,” which would permit the company to issue a homeowner’s

5
A “rent-to-buy” agreement (sometimes called a “lease-purchase agreement”) differs in
some respects from a land contract. A rent-to-buy agreement is a lease agreement in which the
lessee retains an option to purchase the real estate upon the termination of the term of the lease,
provided that the lessee completely performs its obligations under the lease. See generally
Faffensperger v. Van Kooy, 260 Wis. 589, 592-93, 51 N.W.2d 488 (1952) (for an example of a
lease-purchase agreement); Gillespie v. Dunlap, 125 Wis. 2d 461, 462-63, 373 N.W.2d 61 (Ct.
App. 1985) (same).

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No. 2021AP1087

policy in Joseph’s name. Then, in 2010, Joseph called to insure the property under
his parents’ name, rather than his own, “until the deed is transferred to his name
which will be shortly.” (Samuel did not transfer the deed in 2010, or at any other
time.) Finally, in May 2012, an agent made the following notation in the call
activity log, apparently based on representations between Samuel, Joseph, or both:
“There is a land contract between Sam (dad) & Joe (son)” and the homeowner’s
policy should be written “in the name of Joseph & Susanne Thompson with
Additional Insureds to read: Samuel F. & Elisabeth Thompson.”

¶22 The insurance company issued a homeowner’s policy for the
property to Joseph and Susanne in 2012, and they dropped their renter’s insurance.
In his 2012 application for that policy, Joseph listed himself and Susanne as the
owners of the property, represented that they had purchased the property in 2012,
and wrote “Parents, Sam & Elisabeth Thompson selling home on land contract to
their son, Joseph Thompson.” The policy identified Joseph and Susanne as the
primary insureds and his parents as additional insureds.

¶23 Susanne called Gething, an insurance agent who had worked with
Joseph and Samuel, to testify about her recollection of the agreement that was
reached in 2012. Gething testified that, to the best of her recollection, the terms of
the agreement were that “it was going to be a 15-year land contract at five and a
quarter percent interest.” Gething did not testify to any knowledge or recollection
of an agreed-upon purchase price.

¶24 After 2012, there appears to have been no further discussions
between the parties about Susanne and Joseph purchasing the property. Susanne
testified that after 2012, she treated the property as her own.

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No. 2021AP1087

¶25 After presenting testimony by Susanne and Gething, Susanne rested
her case. At that point, the circuit court asked Joseph, who was appearing pro se,
if he had any witnesses, and he called himself to testify. Joseph did not dispute the
authenticity of the exhibits Susanne had offered. He conceded that the parties had
discussions about a sale of the property between 2008 and 2012, but he maintained
that the discussions never resulted in an agreement. He testified that the insurance
agents were either mistaken or lying, and that he had never represented to the
insurance company that he was purchasing, or had purchased, the property.

¶26 After Susanne’s attorney finished cross-examining Joseph, the
circuit court informed the parties that it did not need to hear any further testimony
because it had determined there was no valid land contract. The court explained
that the alleged oral land contract was unenforceable because there was no
conveyance that complied with the requirements set forth in the statute of frauds,
and the facts introduced at the hearing did not satisfy the requirements of WIS.
STAT. § 706.04.

¶27 The circuit court expressed the view that, based on the facts
presented, “there’s no way I could somehow reconstruct a land contract, a valid
land contract, that was entered into by the parties.” According to the court, “I
don’t know when this real estate was purchased, what the interest rate was
supposed to be, the length of the contract, even the purchase price, because there
were so many different things talked about.” The court acknowledged that “there
was a lot of talk” with the insurance company about Joseph and Susanne buying
the property, but it stated: “I don’t think that you can convey real estate by simply
talking to your insurance agency about the fact that that’s your intention.”

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No. 2021AP1087

¶28 Nevertheless, the circuit court indicated that the “intention of the
parties is important,” and that the parties’ intentions would factor into the court’s
resolution of other issues in the divorce. The court found that Susanne “did intend
to be putting money into this house because it was her intent to buy it and … enter
into a land contract at some time, once everyone could decide on the amount.
That she believed … it was a home that she was at some point going to own.” By
contrast, to the extent that Joseph “indicated that it was his position that all along
he was making rent payments,” that meant that at least some of the money he and
Susanne had put into the property constituted “marital waste.” That is, “[Susanne]
is intending to buy the property, and [Joseph’s] not, and yet he’s allowing the
marital funds to be put into improvements for this property, that he doesn’t think
he owns.” The court indicated that Susanne “needs to be reimbursed” for the
money she put “into this house under the belief that she was purchasing it.”

¶29 Going forward, the circuit court said that it would dismiss Elisabeth
and Samuel from the case, and that it would leave open the issue of marital waste
for resolution at a subsequent hearing. Susanne did not object to the court’s stated
intention to dismiss the third-party claim against Elisabeth and Samuel, nor did
she object to the fact that the circuit court issued its ruling prior to hearing their
testimony.

¶30 The circuit court’s oral decision was incorporated into its judgment,
which was entered several months later on March 29, 2021.6 Susanne appeals.

6
It appears that the open issue of Joseph’s alleged marital waste was not resolved prior
to the entry of the divorce judgment, which provides: “The [circuit] court reserves jurisdiction
over the issue of the monetary award to [Susanne] … for the damages/marital waste that was
committed by [Joseph] concerning the property located … [in] New London, Wisconsin, and the
contributions [Joseph] and/or [Susanne] made thereto.”
(continued)

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DISCUSSION

¶31 On appeal, Susanne contends that the circuit court erred by refusing
to enforce the alleged oral land contract. She also takes issue with the manner in
which the court conducted the hearing. For their part, Elisabeth and Samuel
disagree with these positions and request sanctions on the ground that Susanne’s
appeal is frivolous. We address in turn Susanne’s argument that the parties
entered into an enforceable land contract, her procedural arguments about how the
circuit court conducted the hearing, and Elisabeth and Samuel’s arguments for
sanctions.

I

¶32 WISCONSIN STAT. § 706.02, commonly referred to as the statute of
frauds, requires that all sales of land be in writing. See also Krauza v. Mauritz, 78
Wis. 2d 276, 279, 254 N.W.2d 251 (1977). It also imposes other formal
requirements for such conveyances, including (among others) that they be signed,
and that they identify the parties, the land, the interest conveyed, and “any
material term, condition, reservation, exception, or contingency upon which the
interest is to arise, continue, or be extinguished, limited, or encumbered.” WIS.
STAT. § 706.02(1) (emphasis added); Krauza, 78 Wis. 2d at 281.

¶33 In this case, there is no dispute that the alleged land contract between
the parties was never memorialized in a writing, much less a writing that complies
with WIS. STAT. § 706.02. However, that does not settle the issue because,

The parties do not dispute that we have jurisdiction over this appeal, notwithstanding the
fact that the judgment did not dispose of the entire matter in litigation between Susanne and
Joseph, because the judgment did dispose of the entire matter in litigation as to Elisabeth and
Samuel. See WIS. STAT. § 808.03(1).

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No. 2021AP1087

notwithstanding the statute of frauds, a court may enforce an oral land transaction
in equity if it meets the requirements set forth in WIS. STAT. § 706.04. Nelson v.
Albrechtson, 93 Wis. 2d 552, 556, 287 N.W.2d 811 (1980) (citing Krauza, 78
Wis. 2d at 279).

¶34 Susanne’s primary argument on appeal is that the circuit court
erroneously exercised its discretion by refusing to enforce the oral land contract
under WIS. STAT. § 706.04. Based on the evidence in the record, Susanne asserts
that she met her burden of proof under § 706.04 by “clearly and satisfactorily”
proving all the elements of the transaction, as well as the elements of equitable
reformation, unjust enrichment, or equitable estoppel.

¶35 As an initial matter, we disagree with Susanne’s characterization of
the circuit court’s decision as a “discretionary decision.” As we now explain, the
court determined as a matter of law that Susanne had not carried her burden of
proof under WIS. STAT. § 706.04.

¶36 WISCONSIN STAT. § 706.04 provides, in pertinent part, that “[a]
transaction which does not satisfy one or more of the requirements of [WIS. STAT.
§] 706.02 may be enforceable in whole or in part under doctrines of equity,
provided all of the elements of the transaction are clearly and satisfactorily
proved.” Additionally, § 706.04 requires that:

(1) The deficiency of the conveyance may be
supplied by reformation in equity; or

(2) The party against whom enforcement is sought
would be unjustly enriched if enforcement of the
transaction were denied; or

(3) The party against whom enforcement is sought
is equitably estopped from asserting the deficiency.

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No. 2021AP1087

¶37 By its unambiguous language, and according to prior interpretations
of the statute, WIS. STAT. § 706.04 contains two requirements that must be proven
before a court may exercise its discretion to enforce an oral land transaction.
Spensley Feeds, Inc. v. Livingston Feed & Lumber, Inc., 128 Wis. 2d 279,
287-88, 381 N.W.2d 601 (Ct. App. 1985) (observing that two requirements must
be met under the statute to qualify a real estate transaction for “the equitable
alternative” to the statute of frauds). First, “the elements of the transaction must
be clearly and satisfactorily proved.” See § 706.04; see also Spensley Feeds, 128
Wis. 2d at 287-88. And second, the party requesting enforcement must establish
that one of the statutorily enumerated equitable exceptions to the statute of frauds
applies. See § 706.04(1)-(3); Spensley Feeds, 128 Wis. 2d at 287-88. If a party
fails to prove one of the two requirements, then the circuit court does not reach the
question of whether, in its discretion, it should enforce the transaction.
Conversely, even if both requirements are proven, a circuit court may, but need
not, enforce the transaction under the statute. See § 706.04 (providing that the
transaction “may be enforceable in whole or in part” if the statutory requirements
are met); Heritage Farms, Inc. v. Markel Ins. Co., 2012 WI 26, ¶32, 339 Wis. 2d
125, 810 N.W.2d 465 (noting that “we generally construe the word ‘may’ as
permissive”).

¶38 Here, the circuit court concluded that Susanne failed to clearly and
satisfactorily prove “the elements of the transaction.” And, as this court has
previously explained, whether a party satisfies its “burden of proof under WIS.
STAT. § 706.04 is a question of law we review de novo.” Lenhardt v. Lenhardt,
2000 WI App 201, ¶6, 238 Wis. 2d 535, 618 N.W.2d 218. We therefore
independently assess whether Susanne clearly and satisfactorily proved the
elements of the alleged oral land contract under § 706.04, affording no deference

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No. 2021AP1087

to the circuit court’s legal conclusions, but deferring to any factual findings by the
circuit court unless they are clearly erroneous. Id.

¶39 We now consider whether Susanne proved “the elements of the
transaction,” as required by WIS. STAT. § 706.04. Section 706.04 does not
specifically identify what is meant by “elements of the transaction.” However, our
cases establish that these elements “appear to correspond to,” but do not match
precisely, “the formal requisites for a valid conveyance under WIS. STAT.
§ 706.02.” Nelson, 93 Wis. 2d at 560 (citing Krauza, 78 Wis. 2d at 281). In
Nelson, for example, our supreme court concluded that a grantor’s assent, which
corresponds to § 706.02’s requirement that conveyances be signed by the parties,
is one essential element a party seeking to prove the elements of the transaction
must always prove. Id. at 561 (“[L]ack of a grantor’s signature is a formal defect
which can be cured by application of § 706.04,” but “lack of a grantor’s assent to
the transaction, which the signature merely symbolizes, is not.”).

¶40 One of the formal requirements set forth in WIS. STAT. § 706.04 is
that a conveyance identify any “material term” to the transaction. What
constitutes a “material term” is not defined by either WIS. STAT. ch. 706 or case
law, and may vary depending on the type of conveyance at issue. Here, however,
the parties agree that, at the very least, Susanne must prove an agreement on the
purchase price and whether there would be interest on that purchase price. We
agree that purchase price and interest are “material terms” in an agreement to

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No. 2021AP1087

convey real property.7 See Krauza, 78 Wis. 2d at 280-81 (concluding that the
party requesting equitable enforcement under § 706.04 had satisfied the first
requirement of the statute by proving, among other things, that the sellers had
agreed to sell back “what [they] had in [the farm]” for a “repurchase price of
$50,000, plus interest on the [seller’s outstanding] mortgage loan at seven
percent”); see also Headstart Bldg., LLC v. National Centers for Learning
Excellence, Inc., 2017 WI App 81, ¶17, 379 Wis. 2d 346, 905 N.W.2d 147 (“Price
is an essential term for a contract of real estate; a contract is void unless the price
is ‘certain or capable of being ascertained from the agreement itself.’” (quoted
source omitted)).

¶41 We further observe that, as with any contract, the “material terms” of
an oral agreement to convey land must be sufficiently definite to evince an
agreement. See Krauza, 78 Wis. 2d at 280-81 (providing that terms of an oral
agreement that “would not fail for indefiniteness” if reduced to writing “ought not
so fail when tested under” WIS. STAT. § 706.04); Management Computer
Services, Inc. v. Hawkins, Ash, Baptie & Co., 206 Wis. 2d 158, 178, 557 N.W.2d
67 (1996) (providing that “[v]agueness or indefiniteness as to an essential term of
[an] agreement prevents the creation of an enforceable contract, because a contract
must be definite as to the parties’ basic commitments and obligations”). The
definiteness requirement is satisfied when there has been “mutual assent”

7
The circuit court also explained that it could not determine when the land contract was
to begin or end, or the length of the contract. We need not address whether these terms are
“elements of the transaction” that must be proved under WIS. STAT. § 706.04 based on our
conclusion, which is dispositive, that Susanne has not proven the purchase price or interest rate of
the land contract. For the same reason, we do not address the Thompsons’ argument that earnest
money, type of deed, title insurance, duration of amortization, or down payment are “elements of
the transaction” under § 706.04.

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No. 2021AP1087

(sometimes referred to as a “meeting of the minds”) as to the essential terms of a
contract, such that the terms can be ascertained and enforced with “reasonable
certainty.” See Headstart Bldg., LLC, 379 Wis. 2d 346, ¶¶17-19.

¶42 Finally, WIS. STAT. § 706.04 requires that the elements of the
transaction, which include its sufficiently definite material terms, be “clearly and
satisfactorily proved.” This phrase refers to the quantum of evidence needed to
satisfy one’s burden of proof under the statute, and is a higher burden than a mere
preponderance of the evidence. See Security Pacific Nat’l Bank v. Ginkowski,
140 Wis. 2d 332, 336-38, 410 N.W.2d 598 (Ct. App. 1987).

¶43 Here, the circuit court effectively found that, despite ongoing
discussions, the parties did not reach a definite agreement on the purchase price or
interest rate. Although the circuit court’s explicit factual findings were limited, it
appears the court determined that, even if it were to credit every fact that Susanne
introduced in her case in chief, those facts would be insufficient to clearly and
satisfactorily prove that the parties reached any definite agreement on those
material terms.8

8
Susanne asserts that the circuit court erroneously exercised its discretion because its
brief oral ruling contained “essentially no findings or analysis … about the factual basis for the
absence of a land contract or the denial of enforcing or reforming the land contract in equity.” As
such, she requests that, if we do not reverse the circuit court’s judgment outright, we remand for
additional factual findings.

To the extent that Susanne means to argue that the circuit court did not address whether
she had “clearly and satisfactorily proved the element of the transaction” as required by WIS.
STAT. § 706.04, we disagree. Although the court did not use that precise language, it is evident
that the court was considering the statutory standard when it stated that it could not “somehow
reconstruct” a valid land contract because it did not “know when this real estate was purchased,
what the interest rate was supposed to be, the length of the contract, even the purchase price[.]”

(continued)

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No. 2021AP1087

¶44 Before reviewing this conclusion, a brief aside is in order about the
factual position taken by Joseph in the circuit court. It is apparent from the record
that, at least at some points, all parties expected that Susanne and Joseph would
purchase the property from Elisabeth and Samuel, and, at times, some or all of the
parties acted based on that expectation. Specifically, Susanne made payments that
she thought were toward ownership of the property, Joseph renovated the
property, and, unless the insurance agents were mistaken or lying in their
contemporaneous notes, Joseph represented to his insurance company that he had
purchased the property from his parents. It is true that the parties never
memorialized their expectations in writing, and, after Joseph filed for divorce, he
and his parents asserted the statute of frauds as a defense. However, the position
that Joseph took in the circuit court—that he and Susanne never intended to be
anything but renters—appears entirely inconsistent with his actions and his
representations during his marriage to Susanne and others that they owned the
property (or at least that they would someday).

¶45 That said, it remains true that a mutual expectation between putative
buyers and sellers that property would be conveyed is not enough to create a
legally enforceable agreement for the sale of real estate. As discussed above, WIS.
STAT. § 706.04 requires that the elements of an unwritten agreement be clearly and

To the extent that Susanne means to argue that the circuit court was required to address
whether she satisfied one of the equitable exceptions to the statute of frauds enumerated in WIS.
STAT. § 706.04, we likewise disagree. The court’s conclusion that Susanne did not clearly and
satisfactorily prove “the elements of the transaction” rendered unnecessary any discussion of
§ 706.04’s equitable exceptions. See Lenhardt v. Lenhardt, 2000 WI App 201, ¶8, 238 Wis. 2d
535, 618 N.W.2d 218 (stating that it was unnecessary to consider the equitable exceptions
because the elements of the transaction were not clearly and satisfactorily proved).

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satisfactorily proved, which in turn, requires a party to prove sufficiently definite
material terms that can be enforced.

¶46 We now review the circuit court’s factual findings and legal
conclusions to determine whether Susanne has met her burden of proof under WIS.
STAT. § 706.04.

¶47 According to Susanne, the evidence introduced at the hearing shows
that, on January 1, 2008, the parties agreed that Susanne and Joseph would
purchase the property for $80,000; the price was reduced to $71,000 in 2010; and
the parties agreed on a land contract with no interest sometime between 2010 and
2012. Contrary to a suggestion in Elisabeth and Samuel’s brief, we do not think
that it is fatal to Susanne’s argument that she testified to terms that “were arrived
at over the course of approximately four years” through an “evolving process.”
Under other circumstances, it might well be that an enforceable agreement could
be reached through successive discussions at different times. See, e.g., Krauza, 78
Wis. 2d at 280-81 (providing that the “parameters of the agreement were fixed”
when the parties initially met and agreed to certain terms, and their subsequent
agreement on price and interest rate supplied the remaining material terms).

¶48 Here, however, the evidence does not show that there were
successive discussions of discrete terms that eventually resulted in a fully fleshed
out agreement. Rather, the record suggests that the ongoing conversations
Susanne testified about tended to cancel out progress that was purportedly made in
earlier conversations, or in some instances, the later discussions undermine
Susanne’s testimony that any earlier agreement had ever been reached.

¶49 For example, the trial evidence demonstrates that the parties did not
reach any agreement on purchase price in 2008. Susanne argues that the parties

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agreed to an $80,000 purchase price in 2008, but her own letter, dated
December 5, 2010, dispels any such notion. In that letter, Susanne asserted that
Samuel and Elisabeth “said the house would be $75,000-$80,000 three years ago
but just keep paying [$600 a month] and when the time comes you would figure it
out.” Elisabeth’s “start sell of house” notation on the January 2008 rent receipt
suggests that the parties may have reached some sort of understanding in 2008 that
Susanne and Joseph would purchase the property, but Susanne’s letter
demonstrates that, at that time, the understanding shared by the parties was that
they would later “figure … out” the material terms of their agreement “when the
time comes.”

¶50 Nor does the trial evidence clearly and satisfactorily prove that the
parties reached an agreement on purchase price in 2010. As noted, Susanne’s
current position is that the purchase price was “modified” in 2010 to $71,000. She
asserts that this modification resulted from discussions between Samuel and
Joseph that occurred sometime between December 5 and 14, and she points to
Samuel’s December 14, 2010 letter in which he offered to sell the property for
$71,000. However, Samuel’s offer required that the purchase be financed with a
traditional mortgage, not a land contract, and, critically, Susanne and Joseph
rejected Samuel’s offer. Susanne does not point to any evidence in the record to
suggest that the parties maintained or resurrected any portion of the rejected offer,
including the purchase price.

¶51 Finally, the trial evidence does not clearly and satisfactorily prove
that the parties reached an agreement on purchase price or interest between 2010
and 2012. As stated above, Susanne contends that Joseph and Samuel continued
negotiating the terms from 2010 until 2012, when Joseph obtained a homeowner’s
insurance policy on the property, and that the terms of the ultimate agreement

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were for a land contract at the modified purchase price of $71,000 with no interest.
To be sure, Joseph’s and Samuel’s representations to insurance agents during this
period tend to corroborate Susanne’s position that discussions continued, and that
eventually, Joseph and Samuel agreed to “go the land contract route.” However,
the evidence about the terms of that 2012 agreement for a land contract is missing
or contradictory.

¶52 Again, Susanne presented no evidence regarding an agreed-upon
purchase price. The record is devoid of facts suggesting whether Samuel and
Joseph retained the $71,000 purchase price from Samuel’s rejected offer, arrived
at a different purchase price, or did not discuss price at all and instead agreed that
Susanne and Joseph would continue paying $600 a month under an understanding
that they would “figure it out” “when the time comes.”

¶53 As for any agreement on interest being reached sometime between
2010 and 2012, Susanne testified that Joseph came home one day and announced
that there would be no interest. However, Susanne was not present for these
conversations, and on cross-examination she acknowledged that she “[did not]
know what [Joseph] and his father talked about.” Moreover, Gething, who was
Susanne’s own witness, testified to terms that contradict Susanne’s position.
Gething testified that her understanding of the agreement was that it would “be a
15-year land contract at five and a quarter percent interest.” Susanne argues that
Gething’s testimony supports her contention that there was a land contract, but she
ignores the reality that Gething’s testimony—that there would be interest–
undermines her position that the parties reached a definite agreement that there
would not be interest.

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¶54 As discussed above, WIS. STAT. § 706.04 requires that the elements
of the transaction be “clearly and satisfactorily proved.” Here, the circuit court
correctly determined that Susanne did not prove material terms of the alleged oral
land contract that were fixed and sufficiently definite to be enforced.

II

¶55 We now address Susanne’s arguments concerning the manner in
which the circuit court conducted the contested hearing.

¶56 To recap, Susanne and Gething testified at the hearing, the court
accepted Susanne’s exhibits into evidence, and Susanne’s attorney represented to
the court that he had no further evidence to present. Joseph, appearing pro se,
started to present his case by calling himself as a witness. The court questioned
Joseph, Susanne’s attorney cross-examined him, and Elisabeth and Samuel’s
attorney was about to begin his examination of Joseph. The court then indicated
that it did not need any further testimony or evidence. It was at that point that the
court determined that there was no valid land contract and that it would be
dismissing Elisabeth and Samuel from the divorce proceeding. Susanne’s attorney
was given the opportunity to comment but did not object to this procedure or to
Elisabeth and Samuel’s dismissal.

¶57 However, on appeal, Susanne takes issue with the above-described
procedure for two separate reasons.

¶58 Her first claim of procedural error is that the circuit court
erroneously exercised its discretion when it issued its ruling prior to the close of
evidence. Susanne argues that this ruling precluded her from presenting additional
evidence to prove the existence of the land contract, and she faults the court for

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“not provid[ing] findings as to why there was no need for further testimony or
[explanation as to] why the … court was stopping testimony.”

¶59 As an initial matter, contrary to Susanne’s assertions, it is apparent
from the transcript why the circuit court determined that no further testimony was
needed. As we have discussed, it was Susanne’s burden of proof to clearly and
satisfactorily prove the elements of the transaction, and the circuit court concluded
that she had not satisfied that burden during her case in chief. As such, the court
evidently determined on that basis that it would be appropriate to issue a ruling at
the close of Susanne’s evidence under WIS. STAT. § 805.17.

¶60 In any event, we decline to address whether the court’s decision,
made without a motion from any party, was an erroneous exercise of discretion for
two reasons. First, Susanne forfeited her argument about additional evidence by
failing to timely object during the circuit court proceedings. See Schill v.
Wisconsin Rapids Sch. Dist., 2010 WI 86, ¶45 & n.21, 327 Wis. 2d 572, 786
N.W.2d 177 (providing that, as a general rule, a party forfeits an issue for purposes
of appeal when a party fails to raise an issue before the circuit court). Susanne
argues that she was not required to object because “the trial court’s decision
regarding further testimony was made and the dismissal complete,” and “any
objection raised by counsel would have been to the trial court’s ruling, which is
what the appellate process is for.” We disagree. The rule against forfeiture
“enable[s] the circuit court to avoid or correct any error with minimal disruption of
the judicial process, eliminating the need for appeal.” State v. Ndina, 2009 WI 21,
¶30, 315 Wis. 2d 653, 761 N.W.2d 612 (footnotes omitted). The rule also gives
the parties and circuit court “notice of the issue and a fair opportunity to address
the objection,” “encourages attorneys to diligently prepare for and conduct trials,”
and “prevents attorneys from ‘sandbagging’ opposing counsel by failing to object

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to an error for strategic reasons and later claiming that the error is grounds for
reversal.” Id. For all these reasons, a timely objection was required to preserve
any error for appeal.

¶61 Second, even if we were to overlook Susanne’s forfeiture, she fails
to explain why any error by the circuit court should result in a reversal of the
court’s decision. Susanne cites no case or statute that precludes a circuit court
from issuing its ruling at the close of plaintiffs’ evidence under WIS. STAT.
§ 805.17, absent any objection or motion from a party. Industrial Risk Insurers v.
American Eng’g Testing, Inc., 2009 WI App 62, ¶25, 318 Wis. 2d 148, 769
N.W.2d 82 (internal citations omitted) (providing that we need not consider
arguments unsupported by legal authority). But even if it were error to do so,
reversal would not be warranted unless the error affected Susanne’s substantial
rights, meaning that there is a reasonable possibility that the error contributed to
the outcome of the proceedings. WIS. STAT. § 805.18(2); Martindale v. Ripp,
2001 WI 113, ¶32, 246 Wis. 2d 67, 629 N.W.2d 698. Here, Susanne identifies no
evidence that she would have presented for the circuit court’s consideration but
was prevented from doing so by the court’s ruling.

¶62 Susanne’s second claim of error is that it was an erroneous exercise
of discretion for the circuit court to dismiss Elisabeth and Samuel from the case.
However, Susanne’s arguments in favor of this position are difficult to understand.

¶63 In her opening appellate brief, Susanne asserts that the circuit court
could not dismiss Elisabeth and Samuel—even after concluding the property
belonged to them and was not a part of the marital estate—because they did not
file an answer to Joseph’s third-party complaint and never argued that the court
lacked jurisdiction over themselves or the property. According to Susanne, by

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failing to assert that defense, Elisabeth and Samuel waived any defense of lack of
jurisdiction. This argument fails because the court’s dismissal was not based on
jurisdictional grounds. Rather, the court dismissed them because it concluded that
the property belonged to Elizabeth and Samuel and was not part of the marital
estate.

¶64 In her reply brief, Susanne advances a new argument as to why it
was nonetheless improper to dismiss Elisabeth and Samuel. She asserts that the
circuit court’s conclusion under WIS. STAT. § 706.04 did not supply a “sufficient
basis to dismiss” because the circuit court “found that there was marital waste,”
and “recovery could still be sought from Elisabeth and Samuel.” We again
observe that, as with Susanne’s prior argument, she forfeited this argument on
appeal by not timely objecting during the circuit court proceedings. But even if
we were to overlook this forfeiture, we would reject this new argument as
undeveloped. Susanne cites no case or statute that stands for the proposition that
persons other than parties to a marriage can commit marital waste. And the single
case that she does cite undermines her argument that a claim for compensation
from Elisabeth or Samuel could be adjudicated in this divorce action if the
property is not part of the marital estate. See Zabel, 210 Wis. 2d at 338 n.1, 346.

III

¶65 Elisabeth and Samuel contend that Susanne’s appeal is frivolous
under WIS. STAT. RULE 809.25(3)(c)2., and they ask for an award of costs, fees,
and attorney fees under RULE 809.25(3)(a)-(c).

¶66 Whether an appeal is frivolous is a question of law. Howell v.
Denomie, 2005 WI 81, ¶9, 282 Wis. 2d 130, 698 N.W.2d 621. Sanctions for a
frivolous appeal will be imposed if the court concludes that the “‘party or party’s

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attorney knew, or should have known, that the appeal … [had no] reasonable basis
in law or equity and could not be supported by a good faith argument for an
extension, modification or reversal of existing law.’” Id. (quoting WIS. STAT.
RULE 809.25(3)(c)2.). This standard is objective, so we must examine what a
“reasonable party or attorney knew or should have known under the same or
similar circumstances.” Id. Importantly, to award costs and attorney fees, we
“must conclude that the entire appeal is frivolous.” Id. In deciding whether an
appeal is frivolous under RULE 809.25(3)(c)2., we “resolve all doubt in favor of
finding the claim[s] nonfrivolous.” Dietscher v. Pension Bd. of Employees’
Retirement Sys. of Milwaukee, 2019 WI App 37, ¶56, 388 Wis. 2d 225, 932
N.W.2d 446.

¶67 As we have discussed, Susanne’s arguments on appeal are weak, and
she has not persuaded us that the circuit court erred in any way. However, we
cannot conclude that Susanne’s entire appeal lacks any “‘reasonable basis in law
or equity.’” See Howell, 282 Wis. 2d 130, ¶9 (quoting WIS. STAT. RULE
809.25(3)(c)2.). The main issue underlying Susanne’s appeal concerns the
quantum of proof required to “clearly and satisfactorily” prove the “elements of
the transaction.” See WIS. STAT. § 706.04. As we have discussed, Susanne directs
us to evidence in the record suggesting that, at the very least, the parties reached
various mutual understandings between 2008 and 2012, and that Joseph and
Susanne were making payments believing they would someday own the house.
Although we have concluded that those understandings were not sufficiently
definite to amount to anything more than an agreement to agree, some evidence in
the record provides at least the raw material for a potential argument that the
parties’ understandings should be enforced.

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No. 2021AP1087

CONCLUSION

¶68 For the reasons explained above, we conclude that the circuit court
did not err when it determined that Susanne is not entitled to equitable
enforcement of an alleged oral land contract under WIS. STAT. § 706.04, and that
her procedural arguments are forfeited and underdeveloped. Although we affirm
the circuit court’s judgment, we deny the Thompsons’ motion for costs, fees, and
attorney fees under WIS. STAT. RULE 809.25(3)(a)-(c) because Susanne’s primary
argument on appeal is not entirely frivolous.

By the Court.—Judgment affirmed.

Not recommended for publication in the official reports.

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