Robert Karl v. Access Title Inc.

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.
April 6, 2023
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. 2022AP427 Cir. Ct. No. 2021CV154

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT IV

ROBERT KARL AND DENISE KARL,

PLAINTIFFS-APPELLANTS,

V.

ACCESS TITLE INC., SONYA KIRSCH AND GEORGE WILBUR,

DEFENDANTS-RESPONDENTS,

TATIANA KATARA,

DEFENDANT.

APPEAL from an order of the circuit court for Grant County:
CRAIG R. DAY, Judge. Affirmed.

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

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).
No. 2022AP427

¶1 PER CURIAM. Robert Karl and Denise Karl appeal a circuit court
order granting a motion filed by Access Title, Inc., Sonya Kirsch, and George
Wilbur to dismiss the Karls’ amended complaint for failure to state a claim upon
which relief can be granted pursuant to WIS. STAT. § 802.06(2)(a)6. (2021-22).1
The case involves a real estate transaction, in which: the Karls were the buyers;
Tatiana Katara, the seller; Access Title, the closing title company; Kirsch, an
employee of Access Title; and Wilbur, an attorney representing Katara. The Karls
sued the defendants Access Title, Kirsch, and Wilbur—as well as Katara2—
alleging multiple claims listed in the discussion below. Access Title and Kirsch,
represented by the same counsel, filed a motion to dismiss all causes of action
against them and Wilbur filed a motion to dismiss all causes of action against him.
The circuit court granted the motions to dismiss all claims against the defendants
for failure to state claims upon which relief can be granted. We affirm based on
our conclusion that the Karls failed to allege facts sufficient to state claims against
the defendants.

¶2 We now summarize pertinent allegations contained in the amended
complaint, which we assume to be true for purposes of this appeal. After that, we
describe the legal standards governing motions to dismiss and our review of circuit
court orders on those motions. We then introduce each dismissed claim in turn

1
All references to the Wisconsin Statutes are to the 2021-22 version unless otherwise
noted.
2
Katara is not a party to this appeal. When we use the phrase “the defendants,” we are
referring collectively to Access Title, Kirsch, and Wilbur, but not to Katara.

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and explain our conclusions before concluding by addressing additional arguments
advanced by the Karls.3

Complaint Allegations

¶3 The Karls’ operative complaint alleges that in January 2019, the
Karls entered into an offer to purchase property in Grant County from Katara,
setting a closing date for April 1, 2019. The Karls intended to operate a farm on
this property.

¶4 The closing was held at the offices of Access Title, although Katara
and Attorney Wilbur attended remotely from another location.

¶5 The Karls financed the purchase through the Farm Service Agency
(“the lender”). In advance of the closing, a representative of the lender informed
the Karls that the representative would let the Karls know on the closing day
whether, as the complaint puts it, “closing would happen at 2:00 PM or 3:00 PM.”
On the day of the closing, the representative informed the Karls that “they should
be to [the] closing at 1:00 PM,” and the Karls responded that they would not be
able to arrive before 2:00 PM.

3
The Karls were represented by counsel in the circuit court, but are pro se on appeal.
This court strives to discern possible arguments that pro se litigants may intend to make in order
to reach the merits of an appeal and we do not lightly decide that briefing is inadequate. Here, we
have had mixed success in discerning some possible arguments by the Karls, including numerous
assertions and references that appear to be irrelevant to any possible basis to reverse the circuit
court based on our de novo review. Any argument that we do not specifically address is denied
because it is inadequately briefed and lacks discernable merit. See State v. Pettit, 171 Wis. 2d
627, 646, 492 N.W.2d 633 (Ct. App. 1992) (we need not consider inadequately developed
arguments).

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¶6 The Karls arrived at Access Title on the day of the closing at about
2:15 PM. Access Title employee Kirsch was not present. The Karls were told that
Kirsch was at a bank, wiring to an account controlled by Wilbur the loan proceeds
for the transaction described in the offer to purchase.

¶7 Kirsch arrived at about 2:30 PM and told the Karls that Wilbur
wanted the funds that day, with a 3:00 PM deadline for the funds to be wired.

¶8 Kirsch wired the loan proceeds to Wilbur before the closing
occurred, and Wilbur “could see the funds,” even though “[t]he Karls did not
authorize the purchase proceeds being delivered to Katara or her agent prior to
closing.”

¶9 Both the Karls and Katara objected to aspects of the Settlement
Statement and Closing Disclosure. Katara indicated orally and in writing that she
was prepared to “walk away” from the transaction. “The Karls also wished to
terminate the purchase transaction due to the condition of the property and issues
with the Settlement Statement.”

¶10 Kirsch indicated that she would have to “undo” the wire transfer of
the loan proceeds. Denise Karl asked Kirsch how long it would take Kirsch “to
reverse the wire transfer” and Kirsch “would not answer the question.”

¶11 The Karls executed the closing documents. They did this after
Kirsch pointed out to the Karls that, under the seller’s Settlement Statement,
Katara and not the Karls was responsible for certain charges, the lender’s
representative made unspecified “statements,” and Kirsch “push[ed]” the Karls to
close the transaction. The Karls executed the closing documents believing that it

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was “too late” to terminate the transaction because the loan proceeds had already
been transferred to Wilbur.

¶12 After the closing, the Karls discovered problems at the property,
such as burst pipes.

¶13 The complaint further alleges the following:

The Karls immediately demanded re[s]cission of the
purchase contract and return of their purchase money. On
April 2, 2019, Katara agreed to this demand and a contract
of re[s]cission was formed. Both Katara and counsel for
the Karls contacted Kirsch and informed her of the
re[s]cission. Kirsch in turn contacted counsel for Katara’s
mortgage holder to inform him of the same….

Later on April 2, 2019, Attorney Wilbur sent an
email to counsel for the Karls denying that an agreement to
rescind the contract existed, and refused to return the funds
that were delivered to his office….

Despite the re[s]cission agreement and the Karls’
demands for return of their purchase funds, Katara and
Wilbur did not rescind the purchase agreement or return the
purchase money.

Legal Standards

¶14 We review de novo a circuit court decision resolving a motion to
dismiss a complaint based on the argument that it does not state a claim upon
which relief can be granted. Data Key Partners v. Permira Advisers LLC, 2014
WI 86, ¶17, 356 Wis. 2d 665, 849 N.W.2d 693. “When we review a motion to
dismiss, factual allegations in the complaint are accepted as true for purposes of
our review.” Id., ¶18. “[A] court cannot add facts in the process of construing a
complaint” and “legal conclusions stated in the complaint are not accepted as true,
and they are insufficient to enable a complaint to withstand a motion to dismiss.”
Id., ¶19.

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Claims

¶15 First claim (all defendants): Violations of the federal Truth in
Lending Act, citing 12 C.F.R. §§ 1026.19(f)(1)(ii), 1026.19(f)(2) (2022) and
15 U.S.C. § 1640. As part of their arguments, the defendants accurately point out
that in the circuit court the Karls explicitly agreed the court should dismiss the first
claim, as the court confirmed on the record, and there was no objection by the
Karls. Further, the Karls fail to dispute this point in their reply brief on appeal.
See Fischer v. Wisconsin Patients Comp. Fund, 2002 WI App 192, ¶1 n.1, 256
Wis. 2d 848, 650 N.W.2d 75 (“An argument asserted by a respondent on appeal
and not disputed by the appellant in the reply brief is taken as admitted.”).

¶16 Second claim: Breach of contract. On its face, the second claim
does not allege any conduct by the defendants (only conduct by Katara). The
circuit court confirmed this obvious fact on the record, without objection by the
Karls. The Karls appear to acknowledge on appeal that this claim was properly
dismissed against the defendants.

¶17 Third claim (Kirsch): Breach of the duty of good faith and fair
dealing. In pertinent part, Kirsch relies on legal authority for the proposition that
one element of the third claim is the existence of a contract between the Karls and
Kirsch from which arose Kirsch’s obligations to assist in the real estate transaction
in good faith. See Metropolitan Ventures, LLC v. GEA Assocs., 2006 WI 71,
¶¶35-36, 291 Wis. 2d 393, 717 N.W.2d 58 (“[C]ontracts impose on the parties” a
duty of good faith, and “[t]he duty of good faith arises because parties to a
contract, once executed, have entered into a cooperative relationship.” (emphasis
omitted)), clarified per curiam on denial of reconsideration, 2007 WI 23, 299
Wis. 2d 174, 727 N.W.2d 502; see also VanHierden v. Swelstad, 2010 WI App

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No. 2022AP427

16, ¶11, 323 Wis. 2d 267, 779 N.W.2d 441 (the party claiming breach of a
contractual duty “must establish the existence of the contract” from which the duty
arises). Operating from this premise, which is not contested by the Karls, Kirsch
argues that the complaint does not include facts from which one could reasonably
infer a contractual relationship between the Karls and Kirsch or her employer that
could have been breached by any alleged conduct of Kirsch on the day of the
closing. The Karls fail to come to grips with this point in any way. They end up
relying solely on WIS. STAT. § 421.108. One problem with this is that § 421.108
addresses “[e]very agreement or duty within chs. 421 to 427,” the Wisconsin
Consumer Credit Act; and the Karls have no reply when Kirsch points out that,
pursuant to WIS. STAT. § 421.202(10), this act does not apply to a transaction that
was “primarily for an agricultural purpose,” namely, the purchase of land for the
purpose of operating a farm.

¶18 Fourth claim: Unjust enrichment. On its face, the fourth claim
does not allege any conduct by the defendants (only by Katara). The circuit court
confirmed this obvious fact on the record, without objection by the Karls. The
Karls appear to acknowledge on appeal that this claim was properly dismissed
against the defendants.

¶19 Fifth claim (all defendants): Conversion. The elements of a
common law conversion claim are (1) intentional control or taking of property
belonging to the plaintiff (2) without the plaintiff’s consent (3) resulting in serious
interference with the plaintiff’s right to possess the property. H.A. Friend & Co.
v. Professional Stationery, Inc., 2006 WI App 141, ¶11, 294 Wis. 2d 754, 720
N.W.2d 96. This claim founders for lack of allegations regarding the first
element, which requires that the property at issue belong to the plaintiff. The
Karls now argue that the complaint alleges that “Kirsch/Wilbur” intentionally

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controlled the loan proceeds, which the Karls contend belonged to them when they
were transferred to Wilbur’s account allegedly without authorization from the
Karls. However, as the defendants point out, even construing all factual
inferences in the complaint in favor of the Karls, the Karls did not have possession
or immediate right to possession of the loan proceeds when they were wired to
Wilbur’s account because the Karls had not yet executed the loan documents.
Based on all of the allegations in the complaint, the only reasonable inference was
that the loan proceeds belonged to the lender before the closing occurred, and that
the Karls then executed the loan documents knowing that the seller’s attorney had
gained control over the loan proceeds before execution. Further, in any case, after
the defendants make this argument, the Karls fail to address its substance,
conceding it.4

¶20 Sixth claim (all defendants): Civil conspiracy to convert. The
defendants point out that, whatever else is required to establish a conspiracy to
convert, it must depend on a theory of conversion that has a factual basis in the
complaint. We have just explained that the Karls silently concede that such a
theory is absent from the complaint. Further, the Karls fail to address this point
regarding the conspiracy claim, also conceding it.

4
The Karls assert that the conversion claim cannot be dismissed because the specific
issue of whether the Karls were entitled to possession of the loan proceeds when Kirsch
transferred them to Wilbur’s account is one that must be submitted to a jury in order to satisfy
WIS. STAT. § 805.01(1) (right to trial by jury), Article I, § 5 of the Wisconsin Constitution, which
provides that the right of trial by jury “shall remain inviolate,” and the right-to-remedy provision
of Article I, § 9. Assuming without deciding that the Karls preserved this argument by presenting
it to the circuit court or that they did not need to do so, we reject it as undeveloped. It is sufficient
to note that the Karls completely ignore the authority of a circuit court to dismiss a complaint for
failure to state a claim pursuant to WIS. STAT. § 802.06(2)(a)6. We can see no basis for the
Karls’ argument, but in any case we would have to develop it in order to address it properly.

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¶21 Seventh claim (all defendants): “Damages pursuant to violation of
WIS. STAT[]. §§ 943.20 and 895.446.” Section 943.20 is Wisconsin’s criminal
theft statute. Section 895.446 provides for statutory civil theft claims. The Karls’
theory of the seventh claim, as best we can discern, is that the defendants
committed acts that constitute criminal theft by participating in the wiring of the
loan proceeds to Wilbur’s account. Access Title and Kirsch argue in pertinent part
that, so far as the complaint alleges,

The Karls simply paid the purchase price they agreed to
pay to receive the Property they agreed to purchase. There
was no theft by Access Title or by Kirsch. In fact, if
Access Title and Kirsch had not wired the loan proceeds
before the bank’s 3:00 p.m. wire cutoff, then the Karls
would have presumably been in breach of contract for
failing to close by April 1.

[In addition,] if there was anything objectionable about the
wiring of the loan proceeds prior to closing, the Karls
waived any “theft” claim by proceeding to close the
transaction with full knowledge that the funds had been
wired. When issues arose at the closing, the Karls concede
[in the complaint that] they were told by Kirsch that she
would have to “undo” the wire transfer.… The Karls had
not yet even signed any loan documents legally obligating
them to repay the loan proceeds.… However, while
represented by counsel and with their lender present at
closing, the Karls elected to close on the transaction and
sign their loan documents.… In doing so, [the] Karls
ratified the wiring of the funds and waived any claim that
the funds had been stolen by “theft,” as they now allege.

(Citations to the complaint omitted.) Wilbur makes similar points. The Karls’
principal brief on appeal does not contain a developed argument on these points
and there is not a single reference to “theft” or “943.20” in their reply brief on
appeal. The Karls in effect concede the points made by the defendants.

¶22 Eighth claim (all defendants): “Punitive damages.” This is not a
standalone claim, as the circuit court noted without objection by the Karls. See

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Hansen v. Texas Roadhouse, Inc., 2013 WI App 2, ¶21, 345 Wis. 2d 669, 827
N.W.2d 99 (“Punitive damages are a remedy, not a cause of action.”).

¶23 Ninth and Tenth claims (Access and Kirsch): Negligent
misrepresentation and intentional misrepresentation. Both claims alleging a type
of misrepresentation must be dismissed for at least the following reason: the
complaint fails to state with particularity the content of one or more specific
misrepresentations. See WIS. STAT. § 802.03(2) (“In all averments of fraud or
mistake, the circumstances constituting fraud or mistake shall be stated with
particularity.” (emphasis added)); Friends of Kenwood v. Green, 2000 WI App
217, ¶14, 239 Wis. 2d 78, 619 N.W.2d 271 (“particularity” in this context requires
“specification of the time, place, and content of an alleged false
misrepresentation” (emphasis added)). It is possible to glean from the complaint
that these claims involve some aspect or aspects of what the complaint refers to as
“the Settlement Statement and Closing Disclosure.” However, it is entirely
unclear from the complaint what specific alleged statement or statements of
Access or Kirsch was a misrepresentation. Further, both in the Karls’ principal
brief and again in their reply brief, after Access and Kirsch point out this problem
in their appellate brief, the Karls fail to identify any particular representation, in
effect conceding the point.

¶24 Eleventh claim (Kirsch): Negligence. Generally, to prove
negligence, a plaintiff must show: “‘(1) A duty of care on the part of the
defendant; (2) a breach of that duty; (3) a causal connection between the conduct
and the injury; and (4) an actual loss or damage as a result of the injury.’” Miller
v. Wal-Mart Stores, Inc., 219 Wis. 2d 250, 260, 580 N.W.2d 233 (1998) (quoted
source omitted). Putting aside a lack of clarity in the complaint about what duty of
care Kirsch might have breached, the eleventh claim must be dismissed for at least

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the reason that the complaint fails to, as it must, “plead what actual loss or damage
[the Karls] suffered as a result of” Kirsch’s breach of a duty. See Midway Motor
Lodge of Brookfield v. Hartford Ins. Group, 226 Wis. 2d 23, 35-36, 593 N.W.2d
852 (Ct. App. 1999). Similar to the fatal defect in the complaint in Midway, the
complaint here merely asserts a claim to “the Karls[’] foreseeable damages in an
amount to be determined by the trier of fact.” In their briefing on appeal, the Karls
direct us to the following three allegations in the complaint, as purported support
for a claim of loss or damage suffered as a result of a breach of a duty by Kirsch:
(1) “The funds of the FSA loan are secured by a lien on, inter alia, other real
property which was owned by the Karls prior to the closing”; (2) “Without
executed loan or closing documents, Kirsch released funds to the seller,
significantly damaging the interests of the Karls as to the Property, closing, their
mortgage funds, and other property they already owned, which now has a lien on
it”; and (3) “Kirsch closed the transaction with inaccurate settlement statements
and/or permitted the settlement statements to be unilaterally modified by the seller
without the consent of the Karls.” We do not discern from these two references a
factual basis that could support a demand for damages on this claim. At one point,
the Karls state, “the property disputed in this matter is the Karls[’] loan funds and
their property that incurred a lien,” but they fail to explain how one could
reasonably infer from the complaint that all of the loan proceeds and property
under an unidentified lien could be “an actual loss or damage as a result of the
injury” caused by alleged negligence of Kirsch.

¶25 The complaint contains the specific allegation that the Karls’ alleged
damages include their coming to own property that “they would not have if they
had not been forced to purchase.” But, as Kirsch now points out and as
summarized above, the Karls’ complaint alleges that Kirsch told the Karls that

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Kirsch “would have to ‘undo’ the wire transfer” in order for the parties to
terminate the transaction. This clearly embodies the premise that it was possible
to terminate the transaction—or at least to “undo” the money transfer and allow
the Karls to take whatever steps they wanted to take to try to unwind the
transaction. Thus, according to the allegations in the complaint, the Karls were
not “forced to purchase,” as they now argue; they elected to proceed with the
transaction to buy this property and not take Kirsch up on the offer to “undo” the
transfer.

¶26 Twelfth claim (All defendants): Tortious interference with
contract. “The elements of a claim for tortious interference with a contract are:
(1) the plaintiff had a current or prospective contractual relationship with a third
party; (2) the defendant interfered with that contractual relationship; (3) the
interference was intentional; (4) a causal connection exists between the
defendant’s interference and the plaintiff’s damages; and (5) the defendant was not
justified or privileged to interfere.” Wolnak v. Cardiovascular & Thoracic
Surgeons of Cent. Wis., S.C., 2005 WI App 217, ¶14, 287 Wis. 2d 560, 574, 706
N.W.2d 667. The complaint here alleges two categories of tortious inference:
(1) by Wilbur, in interfering with an alleged “contract of re[s]cission” between
Katara and the Karls; and (2) by Kirsch, in interfering with the contractual
relationship between the Karls and the lender, which the Karls submit included an
intention that the loan proceeds would be distributed “only upon execution of a
note and other loan documents and closing documents.”

¶27 We conclude that both categories of claims are properly dismissed
for at least the following reason: failure of the complaint to state a basis for “a
causal connection” “between the defendant’s interference and the plaintiff’s
damages.” Regarding the allegation that Wilbur interfered with an alleged

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“contract of re[s]cission” between Katara and Karls, we resolve this issue based on
our inability to discern in the complaint a causation of damages predicated on
Wilbur simply clarifying that his client Katara did not accept an offer to rescind
the transaction. It is the same with respect to the allegation that Kirsch interfered
with an alleged contractual agreement between Karls and the lender regarding the
timing of the transfer of loan proceeds; the complaint does not indicate what
damages were caused by the timing of the transfer of the loan proceeds. Further,
the Karls concede the lack of “a causal connection” regarding each alleged
interference by failing on appeal to reply to arguments to this effect made by the
defendants.

¶28 Thirteenth claim (Kirsch): Breach of fiduciary duty. A claim for
breach of fiduciary duty requires proof that: “(1) the defendant owed the plaintiff
a fiduciary duty; (2) the defendant breached that duty; and (3) the breach of duty
caused the plaintiff damage.” Berner Cheese Corp. v. Krug, 2008 WI 95, ¶40,
312 Wis. 2d 251, 752 N.W.2d 800. The allegation here is that Kirsch had a
fiduciary duty to the Karls and she breached that duty by transferring the loan
proceeds to Wilbur’s account when she did. We assume without deciding that
Kirsch, in her role as a title company employee performing closing services, owed
a fiduciary duty to the buyers. On the thirteenth claim, as with others addressed
above, we conclude that the complaint fails to allege any damages to which the
Karls could be entitled. Further, after Kirsch makes this point in her appellate
brief, the Karls do not address the issue in their reply, and in their principal brief
they make the same references that we have concluded do not coherently describe
damages.

¶29 Fourteenth claim (Kirsch): “Constructive fraud.” In making this
claim, the complaint incorporates all prior allegations and then states: “Kirsch,

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standing in a fiduciary relationship to the Karls, has engaged in a constructive
fraud by failing to disclose material facts to the Karls prior to their executing the
closing documents, thereby causing the Karls to suffer damages in an amount to be
determined by the trier of fact.” It is unclear what a viable civil claim of
constructive fraud could consist of under Wisconsin law. But assuming without
deciding that such a claim is viable in Wisconsin’s courts, the fourteenth claim
fails here for at least the following reasons, as discussed above regarding other
claims: fraud or mistake is not stated with particularity and no clear theory of
damages may be discerned from the complaint.

¶30 Fifteenth claim (Kirsch): Fraud in the inducement. The elements
of a claim of fraudulent inducement to enter a contract are “a statement of fact that
is untrue, made with the intent to defraud, and for the purpose of inducing the
other party to act on it, which the other party relies on to his or her detriment,
where the reliance is reasonable.” Kailin v. Armstrong, 2002 WI App 70, ¶31,
252 Wis. 2d 676, 643 N.W.2d 132. The complaint alleges that Kirsch made “false
representations” “to induce” the Karls “into entering into executing the closing
documents.” The complaint fails to provide the contents of any false
representations and therefore they are not stated with particularity. Further, as
Kirsch now points out, Kirsch’s conduct at the closing in April 2019 could not
have induced the Karls to enter into the offer to purchase in January 2019, which
is the contract that obligated the Karls to purchase the property. See id., ¶29
(acceptance of an offer to purchase creates a binding contract, so that while the
sale does not occur until legal title is transferred at closing, the rights and
obligations of buyer and seller are fixed in the offer to purchase). The Karls
concede this point by failing to address it in their reply brief on appeal.

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¶31 Sixteenth claim: Violation of WIS. STAT. § 100.18. On its face,
this claim does not allege any conduct by the defendants (only by Katara). The
circuit court confirmed this obvious fact on the record, without objection by the
Karls. The Karls do not refer to § 100.18 on appeal, conceding the point.

¶32 We now address arguments that the Karls may intend to make that
are not already addressed above and that are clear enough to merit attention.

¶33 The Karls make a series of arguments based on the false, implied
premise that we are reviewing a discretionary decision of the circuit court to which
we give deference. In each case, the argument misses the mark because it ignores
our standard of review, which is de novo.

¶34 First, the Karls assert that the circuit court made its rulings based
partly on the false understanding that Kirsch transferred the loan proceeds to
Wilbur’s attorney trust account, as opposed to a personal account controlled by
Wilbur. Given our de novo review, it does not matter what understanding the
circuit court did or did not have. Further, the Karls fail to develop an argument
that, even if Wilbur violated SCR 20:1.15(b)(1) by failing to hold in trust funds
belonging to a client or third party, this could have a bearing on any of the issues
that we have resolved above as to each claim. Finally, we agree with the
defendants that the only reasonable inference from the complaint is that Wilbur
would have acted as an attorney is ethically obliged to act, given that the
complaint provides no reason to think otherwise and the clarity and prominence of
the attorney trust account rule.

¶35 Second, the Karls purport to raise an issue regarding the fact that the
circuit court said, in an aside comment, “and I note [that the Karls] were
represented by counsel in connection with this” real estate transaction. Again,

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however, any misunderstanding by the court does not matter under our standard of
review. Further, again, the Karls fail to develop an argument that the fact of
representation would be relevant to any issue that we have resolved above.
Beyond all that, there was a sound basis for the court’s comment. As the
defendants argue, the Karls’ amended complaint attached documents reflecting
that an attorney represented them and documents attached to a complaint may be
relied upon in deciding a motion to dismiss. See Soderlund v. Zibolski, 2016 WI
App 6, ¶¶37-38, 366 Wis. 2d 579, 874 N.W.2d 561 (2015) (discussing the
“incorporation-by-reference” doctrine). The Karls do not draw our attention to
any other references in the complaint or to its attachments that would undermine
the validity of the court’s comment.5

¶36 Third, the Karls’ refer to the fact that the circuit court made the
observations that Kirsch, in her role in handling the loan proceeds, “probably [did]
have a fiduciary duty to … participants [in the transaction] based on the general
principles of fiduciary duty” but that she “was not a contractual escrow agent.” In
addition to the fact that our review is de novo, the Karls do not develop an
argument that Kirsch was, according to the complaint allegations together with
reasonable inferences, in fact “a contractual escrow agent” and that for this reason
any particular claim should not be dismissed, despite our analysis above.

¶37 Fourth, the Karls state that it was “error for the Circuit Court to think
that it is acceptable practice to send loan money before closing occurs.” Again, it

5
The Karls assert, without reference to the contents of the complaint or its attachments,
that the attorney who assisted them with the transaction did not attend the closing. But even if we
were to assume that this allegation of fact were included in the complaint, it would not change our
analysis regarding any claim.

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is irrelevant what the circuit court thought. Further, the Karls fail to develop an
argument that any of their claims should not be dismissed on the grounds that we
delineate above because it is not, as the Karls put it, “acceptable practice” for a
title company representative to transfer loan proceeds to the seller’s attorney
before the moment of closing.

¶38 Fifth, the Karls state that the circuit court erroneously “determined
that even though the loan funds had already been disbursed, it was not too late for
the parties to walk away.” Again, the circuit court’s view is irrelevant. Further, as
we have already explained, the complaint describes a scenario in which the Karls
decided against having Kirsch “undo” the money transfer and then taking
whatever steps they wanted to take to try to unwind the transaction, perhaps with
the assistance of the attorney who represented them in connection with the
transaction. The complaint alleges that the Karls decided to proceed with the
transaction and the complaint does not suggest that anyone informed the Karls that
it was, as they now put it, “too late for the parties to walk away.”

¶39 In a separate vein, the Karls argue that the circuit court “pierced the
veil of judicial impartiality.” This argument has five parts, none of which have
merit. One defect shared by all five subparts is that the Karls fail to explain how
they could have been prejudiced by any alleged impartiality, particularly in light
of our de novo standard of review. We now summarize the arguments and our
further conclusions on this issue.

 Reference to potential WIS. STAT. § 802.05 motion. The Karls fault
the court for referring to the fact that counsel for Access Title and
Kirsch said at a hearing that counsel would consider filing a motion for
sanctions under § 802.05 for initiating or continuing a frivolous action if
the Karls filed another version of the complaint that was frivolous. We
have reviewed the record and conclude that the court’s reference was
completely proper; the court was simply noting counsel’s statement for

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No. 2022AP427

clarification purposes. The court certainly did not “threaten” sanctions,
as the Karls argue.

 “Strategic advice.” The Karls characterize the court as “providing
improper strategic advice” to the defendants. We have reviewed the
cited passages and it is obvious that the court was merely explaining its
reasoning in an open and impartial manner.

 Reliance on submissions. The Karls assert that the court “erroneously
relied on the briefs,” but it is sufficient to note that this completely
misunderstands the basic nature of legal argument and neutral judicial
decision making.

 Reference to prior case. The Karls fault the circuit court for noting in
its final order that the Karls had filed a similar action against the same
defendants one year earlier, which the plaintiffs moved to voluntarily
dismiss after the defendants filed a motion to dismiss for failure to state
a claim. We fail to see any error of any kind in the court’s reference.

 Separate decision regarding Katara. The Karls attempt to suggest
that the court displayed bias by denying their motion for default
judgment against Katara but dismissing the Karls’ claims against the
defendants. These were two separate decisions and the Karls fail to
develop an argument that there is a relationship between the decisions
that even suggests, much less establishes, bias.

CONCLUSION

¶40 For all of these reasons, we affirm the circuit court order.

By the Court.—Order affirmed.

This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.

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