PJL Properties, LLC v. Rick A. Weber

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.
June 23, 2021
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. 2020AP1003 Cir. Ct. No. 2018SC1690

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT II

PETER LONG AND PJL PROPERTIES, LLC,

PLAINTIFFS-APPELLANTS,

V.

RICK A. WEBER AND BRENDA J. WEBER,

DEFENDANTS-RESPONDENTS.

APPEAL from a judgment of the circuit court for Winnebago
County: JOHN A. JORGENSEN, Judge. Affirmed.

¶1 NEUBAUER, C.J.1 Peter Long and PJL Properties, LLC
(collectively PJL) appeal from a judgment of the trial court awarding double

1
This appeal is decided by one judge pursuant to WIS. STAT. § 752.31(2)(a) (2019-20).
All references to the Wisconsin Statutes are to the 2019-20 version.
No. 2020AP1003

damages and attorney fees to Rick A. Weber and Brenda J. Weber in a landlord-
tenant dispute. We conclude that the court properly determined that PJL
wrongfully withheld portions of the Webers’ security deposit and properly
awarded attorney’s fees based on PJL’s violation. We affirm.

BACKGROUND

¶2 The parties do not dispute the following basic facts.

¶3 The Webers rented a residential property from PJL pursuant to a
lease agreement entered into in March 2017. In October 2018, an accidental
cooking fire occurred at the Webers’ rental property. After the Webers vacated
the property following the fire, PJL filed a small claims complaint against the
Webers seeking recovery of alleged unpaid rent and other damages. The Webers
counterclaimed alleging, as is pertinent to this appeal, that PJL wrongfully
withheld their security deposit and seeking damages, attorney fees, and costs as a
result.

¶4 After PJL failed to appear at several court hearings related to its
complaint, a court commissioner dismissed PJL’s complaint and awarded
judgment in favor of the Webers. The trial court subsequently overturned the
dismissal and gave PJL another opportunity to prosecute its claims but, after
another missed appearance by PJL, the court dismissed PJL’s claims for failure to
prosecute. The court did, however, allow PJL a trial to defend against the Webers’
counterclaims.

¶5 The court held a bench trial and, after taking arguments from the
parties, issued an oral ruling. The court made numerous findings, which it
incorporated into its final decision and judgment.

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¶6 The pertinent findings include the following: a fire occurred at the
Webers’ rental property in October 2017; “the fire was unintentional” and
rendered the property “untenantable pursuant to the lease agreement between the
parties;” the Webers terminated their lease with PJL in accordance with their
agreement; PJL “timely filed a security deposit statement” as required by the
administrative code; PJL violated WIS. ADMIN. CODE § ATCP 134.06(3) (June
2018)2 by failing to properly account for the $2000 security deposit the Webers

2
WISCONSIN ADMIN. CODE § ATCP 134.06(3) (June 2018) provides in pertinent part as
follows:

(3) SECURITY DEPOSIT WITHHOLDING; RESTRICTIONS. (a)
Standard withholding provisions. When a landlord returns a
security deposit to a tenant after the tenant vacates the premises,
the landlord may withhold from the full amount of the security
deposit only amounts reasonably necessary to pay for any of the
following:

1. Except as provided in par. (c), tenant damage, waste, or
neglect of the premises.

2. Unpaid rent for which the tenant is legally responsible,
subject to [WIS. STAT. §] 704.29.

3. Payment that the tenant owes under the rental agreement
for utility service provided by the landlord but not included in
the rent.

4. Payment that the tenant owes for direct utility service
provided by a government-owned utility, to the extent that the
landlord becomes liable for the tenant's nonpayment.

5. Unpaid monthly municipal permit fees assessed against the
tenant by a local unit of government under [WIS. STAT.
§] 66.0435 (3), to the extent that the landlord becomes liable for
the tenant’s nonpayment.

6. Any other payment for a reason provided in a nonstandard
rental provision document described in par. (b).

(continued)

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paid to PJL; PJL was not entitled to recover rent under the terms of the lease
agreement for the months after the Webers vacated due to the property being
untenantable; PJL was entitled to recover for re-keying the property and other
damages caused by the tenants in the amount of $325, resulting in $1675 being
improperly withheld from the security deposit; PJL violated the administrative
code by failing to provide nonstandard rental provisions in a separate document,
but the Webers did not suffer any damages as a result of this violation; the Webers
are not due any recovery under WIS. ADMIN. CODE §§ ATCP 134.04 and 134.08;
and the Webers are entitled to two times the amount of the security deposit
improperly withheld and to costs and actual attorney fees pursuant to WIS. STAT.
§§ 100.18(11)(b)2. and 100.20(5).

¶7 Based on its findings, the trial court awarded the Webers a judgment
of $11,432.55 against PJL. PJL appeals. We include additional facts as necessary
below.

(b) Nonstandard rental provisions. Except as provided in
par. (c), a rental agreement may include one or more nonstandard
rental provisions that authorize the landlord to withhold amounts
from the tenant’s security deposit for reasons not specified in
par. (a) 1. to 5. Any such nonstandard rental provisions shall be
provided to the tenant in a separate written document entitled
“NONSTANDARD RENTAL PROVISIONS.” The landlord
shall specifically identify each nonstandard rental provision with
the tenant before the tenant enters into a rental agreement with
the landlord. If the tenant signs his or her name, or writes his or
her initials, by a nonstandard rental provision, it is rebuttably
presumed that the landlord has specifically identified the
nonstandard rental provision with the tenant and that the tenant
has agreed to it.

Note: The separate written document under par. (b) may be pre-
printed.

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DISCUSSION

The Trial Court Did Not Err in Concluding That the Lease Agreement Gave the
Webers the Option to Terminate the Agreement and Vacate the Property After the
Fire

¶8 PJL first argues that the trial court erred in concluding that the
Webers did not have the option to terminate their lease as a result of the fire. The
Webers elected to terminate their tenancy in accordance with Section 15 of their
lease agreement, which states as follows:

Damage by Casualty: If the Premises is damaged by fire
or other casualty to a degree which renders them un-
tenantable, Tenant may terminate this Agreement or vacate
the Premises and rent shall abate until the Premises is
restored to a condition comparable to the prior condition.

The trial court made a finding that the property was untenantable, which neither
party disputed. The court also made findings that Section 15 applied to this
situation and that the Webers were justified in terminating their tenancy under
these circumstances. The court never made any findings that the Webers
themselves were negligent in any manner with respect to the fire and characterized
the fire as causing chaos and being of no benefit to the Webers.

¶9 PJL seems to argue on appeal that the Webers were not permitted to
end their lease agreement before its expiration both because they negligently
supervised their grandson, whose conduct accidentally caused the fire, and
because WIS. STAT. § 704.07(4) precludes rent abatement and the ability to
terminate a lease due to untenantability when the tenants negligently created the
untenantability. We reject these arguments as forfeited because they were not
developed in a clear manner before the trial court, instead being argued for the

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first time on appeal. See Schonscheck v. Paccar, Inc., 2003 WI App 79, ¶¶10-11,
261 Wis. 2d 769, 661 N.W.2d 476.

¶10 In Schonscheck, we explained that the “fundamental” forfeiture
inquiry is whether a legal argument or theory was raised before the trial court, as
opposed to being raised for the first time on appeal in a way that would
“blindside” the trial court. Id., ¶¶10-11. That case and countless others have
reaffirmed that the forfeiture rule focuses on whether particular arguments have
been preserved, not on whether general issues were raised before the trial court.
See, e.g., State v. Rogers, 196 Wis. 2d 817, 827, 539 N.W.2d 897 (Ct. App. 1995)
(explaining that the forfeiture rule requires that, to preserve its arguments, a party
must “make all of their arguments to the trial court”).

¶11 In State v. Ndina, 2009 WI 21, 315 Wis. 2d 653, 761 N.W.2d 612,
our supreme court summarized the reasons for applying the forfeiture rule,
namely, that applying the forfeiture rule promotes efficient and fair litigation:

The purpose of the “forfeiture” rule is to enable the circuit
court to avoid or correct any error with minimal disruption
of the judicial process, eliminating the need for appeal.
The forfeiture rule also gives both parties and the 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 to an
error for strategic reasons and later claiming that the error
is grounds for reversal.

Id., ¶30 (footnotes omitted); see also Rogers, 196 Wis. 2d at 827 (the forfeiture
rule “is based on a policy of judicial efficiency”). It follows that PJL’s new
appellate arguments have been forfeited by its failure to develop them before the
trial court and appropriately so.

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¶12 We see no reason to ignore this forfeiture, nor does PJL attempt to
provide us with any even after the Webers point out the forfeited arguments in
their briefing. We therefore conclude that the trial court did not err in holding that
the Webers had the option to terminate the lease after the fire rendered the
property untenantable.

The Trial Court Did Not Err in Holding That the Webers Were Not Responsible
for Rent or Related Expenses After They Vacated the Property

¶13 PJL next argues that the trial court erred in its ruling that PJL
wrongfully withheld unpaid rent, “free rent recapture,”3 late fees, and utilities from
the Webers’ security deposit. To the extent that PJL again attempts to rely on
WIS. STAT. § 704.07(4) in support of this argument, we note that it failed to
advance this statutory argument in the trial court and, as such, has forfeited the
argument on appeal.

¶14 To the extent that PJL is arguing that the trial court erroneously
exercised its discretion in determining the amount that PJL improperly withheld,
we also reject that argument because the trial court’s findings were methodical,
supported by the facts in evidence, and applied the appropriate legal standards. To
summarize as best as possible, PJL argues that under the terms of the lease the
Webers were liable for any rent deficiency if they abandoned the premises before
expiration of the lease term. PJL asserts that it legally withheld the security
deposit under WIS. ADMIN. CODE § ATCP 134.06(3) as unpaid rent for which the
tenants were legally responsible.

3
The lease agreement that PJL and the Webers entered into had an addendum providing
for the first month of rent free, seemingly to encourage swift rental of the property.

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¶15 The interpretation and application of a statute or code provision are
questions of law subject to a de novo standard of review. Boelter v. Tschantz,
2010 WI App 18, ¶6, 323 Wis. 2d 208, 779 N.W.2d 467 (2009). Similarly,
“[c]onstruction of a written contract is normally a matter of law … but where
words or terms are to be construed by extrinsic evidence, the question is one for
the trier of fact.” Central Auto Co. v. Reichert, 87 Wis. 2d 9, 19, 273 N.W.2d 360
(Ct. App. 1978). When the trial court acts as the finder of fact, it is the ultimate
arbiter of credibility and the trial court, not an appellate court, is charged with
resolving conflicts in the testimony. See Gehr v. City of Sheboygan, 81 Wis. 2d
117, 122, 260 N.W.2d 30 (1977). We will reverse a trial court’s finding of fact
only if it is clearly erroneous. WIS. STAT. § 805.17(2).

¶16 The trial court properly held that the “first month free” rent recovery
deduction was not appropriate, and similarly held that PJL was not entitled to rent
for November, December, and January (up to the date the property was rented to
another tenant) because the Webers had vacated the untenantable property in
accordance with Section 15 of the lease. The trial court found that utility bills
occurring at the rental property were also not recoverable under similar principles.
The trial court did, however, allow for PJL to make deductions for re-keying the
property and for replacement of window handle cranks, skylight handle cranks,
and a missing shelf.

¶17 In all, the trial court determined that $325 had been properly
accounted for and that $1675 was improperly accounted for in violation of WIS.
ADMIN. CODE § ATCP 134.06(3). This amount was doubled in accordance with
WIS. STAT. §§ 100.18(11)(b)2. and 100.20(5). PJL does not explain to us why we
should conclude that the trial court’s considered findings were erroneous, nor does

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PJL argue that the court applied the wrong statutory and code provisions or that
the court misinterpreted the applicable law.

¶18 The trial court also awarded the Webers costs and actual attorney
fees based on its conclusion that PJL wrongfully withheld the security deposit, the
reasonableness of which was decided by the court after notice to PJL. PJL does
not challenge the reasonableness of the attorney fee award on appeal.

The Trial Court Did Not Err in Concluding That PJL’s Nonstandard Rental
Provisions Violated the Administrative Code

¶19 PJL next asserts that the trial court erred in its conclusion that PJL
violated the administrative code by failing to include nonstandard rental provisions
in a separate written document. However, PJL concedes that the administrative
code requires that nonstandard provisions be set forth in a separate document and
that PJL’s agreement with the Webers failed to comply with this requirement. We
therefore conclude that the trial court did not err in this regard.

¶20 We further reject PJL’s contention that the trial court erred because
it awarded attorney fees and costs based on this violation. The only cause of
action the court granted the Webers monetary recovery on was for their claims for
improper deductions from their security deposit. The court did not order judgment
based on violations of WIS. ADMIN. CODE §§ ATCP 134.04 and 134.08, and
further found a lack of pecuniary damages relating to the failure to nonstandard
rental provisions. The court did find that the Webers suffered the sum of $1675 in
pecuniary losses for PJL’s failure to properly account for the Weber’s security
deposit. This amount was properly doubled, and costs and reasonable attorney
fees were also added in accordance with the Wisconsin Statutes. Thus, no proof of

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a pecuniary loss for violation of the nonstandard rental provision section was
required to award fees to the Webers.

CONCLUSION

¶21 For the foregoing reasons, we conclude that the trial court properly
concluded that PJL wrongfully withheld portions of the Webers’ security deposit
and, accordingly, properly awarded the Webers the return of the security deposit,
double damages, and attorney fees.

By the Court.—Judgment affirmed.

This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)4.

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