Harry B. Mains v. Russ Darrow Group, 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.
August 2, 2023
A party may file with the Supreme Court a
Samuel A. Christensen 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. 2021AP2185 Cir. Ct. No. 2016CV872

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT II

HARRY B. MAINS,

PLAINTIFF-RESPONDENT,

V.

RUSS DARROW GROUP, INC. AND
RUSS DARROW LEASING CO., INC.,

DEFENDANTS-APPELLANTS.

APPEAL from an order of the circuit court for Waukesha County:
MICHAEL O. BOHREN, Judge. Affirmed.

Before Gundrum, P.J., Grogan and Lazar, 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. 2021AP2185

¶1 PER CURIAM. Russ Darrow Group, Inc. and Russ Darrow
Leasing Co., Inc. (collectively, “the Darrow Companies”) appeal an order denying
their motion seeking sanctions against Harry B. Mains and his attorney for
commencing a frivolous action. The Darrow Companies argue the “[d]enial of
sanctions by the circuit court was a coverup of conduct that violated the sanction
statutes by ignoring the law of the case doctrine and the rule of issue preclusion,
and an abuse of discretion because of the circuit court’s erroneous view of the law
and evidence.”1 We conclude the circuit court appropriately exercised its
discretion and affirm.

BACKGROUND2

¶2 This case arises out of the termination of Mains’s employment with
the Darrow Companies. In the aftermath of his termination, Mains filed the
present lawsuit advancing five causes of action. Four of the claims—including
Mains’s primary claim for breach of contract—were dismissed on summary
judgment following extensive discovery.3 A fifth claim proceeded for further
discovery, but was ultimately also dismissed. The Darrow Companies then filed a

1
Our supreme court abandoned the phrase “abuse of discretion” in 1992, replacing it
with the phrase “erroneous exercise of discretion.” See, e.g., Shirk v. Bowling, Inc., 2001 WI 36,
¶9 n.6, 242 Wis. 2d 153, 624 N.W.2d 375.
2
Many of the background facts are set forth in our prior opinion and will not be restated
here. Additionally, further facts are included in the discussion section of this opinion.
3
The Hon. Kathryn W. Foster presided over the case through the initial summary
judgment proceedings.

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motion for sanctions and damages pursuant to WIS. STAT. §§ 802.05 and 895.044
(2021-22).4

¶3 In a prior appeal, we determined that the Darrow Companies’ motion
for sanctions was timely filed. See Mains v. Russ Darrow Group, Inc.,
No. 2019AP870, unpublished slip op. (WI App Aug. 12, 2020) (hereinafter
Darrow I). We therefore held that, because Mains did not withdraw the action
within twenty-one days after service of the motion, the Darrow Companies are

entitled (“shall”) to actual costs and attorney fees pursuant
to § 895.044(2)(b) if the [circuit] court finds upon remand
that the action was “commenced, used, or continued in bad
faith, solely for purposes of harassing or maliciously
injuring another” or Mains or his counsel “knew, or should
have known, that the action … was without any 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.” Sec. 895.044(1)(a)-(b).

Darrow I, ¶20.

¶4 On remand, the circuit court entertained briefing and argument on
the motion for sanctions, which was directed at both Mains and his attorney,
Robert Corris. The court also held an evidentiary hearing at which Corris gave
extensive testimony. The court concluded that Corris had a reasonable basis in the
law and facts for the claims he advanced on Mains’s behalf. Or, as the circuit
court artfully put it, the “ice” on which Mains and Corris chose to walk was

4
All references to the Wisconsin Statutes are to the 2021-22 version unless otherwise
noted. While WIS. STAT. § 802.05 has been amended since the Darrow Companies’ motion, the
amendments relate to e-filing and do not affect the substantive legal standard. Accordingly, we
apply the most recent version of the statute.

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No. 2021AP2185

sufficient “to perhaps not get across the lake but certainly to hold [them] from
falling into it.” The Darrow Companies now appeal.

DISCUSSION

¶5 In the present procedural posture, this case is fairly straightforward. 5
Though the Darrow Companies’ brief-in-chief argues for a wholesale de novo
standard of review, given their arguments it appears a more deferential standard of
review governs the appeal. “We apply two different standards of review to
allegations that a lawsuit is frivolous: one for determining whether actions are
commenced frivolously and a second for determining whether actions are
continued frivolously.” Keller v. Patterson, 2012 WI App 78, ¶21, 343 Wis. 2d
569, 819 N.W.2d 841. Regardless of which standard of review applies, all doubts
regarding whether a claim is frivolous are resolved in favor of the party or attorney
whom it is claimed commenced or continued a frivolous action. Id., ¶22.

¶6 As we understand their briefing, the Darrow Companies primarily
argue that Mains’s claims lacked any evidentiary or legal basis, and the absence of
any factual or legal predicate was known to Corris prior to the time he filed suit on
Mains’s behalf. This appears to be an assertion that the action was commenced
frivolously—a matter we review deferentially for an erroneous exercise of
discretion. See id., ¶21; see also Jandrt ex rel. Brueggeman v. Jerome Foods,

5
As such, it is not necessary that we get tangled in the weeds by responding in detailed
fashion to each assertion of error the Darrow Companies make in their briefs. Suffice it to say
that we have reviewed the appellate record and the briefs, and to the extent we do not explicitly
address any one of the many arguments, sub-issues, or rhetorical questions the Darrow
Companies present, we reject it. See State v. Waste Mgmt. of Wis., Inc., 81 Wis. 2d 555, 564,
261 N.W.2d 147 (“An appellate court is not a performing bear, required to dance to each and
every tune played on an appeal.”).

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Inc., 227 Wis. 2d 531, 548, 597 N.W.2d 744 (1999).6 We will affirm the circuit
court’s discretionary decisions as long as the court examined the relevant facts,
applied the proper legal standard, and used a demonstrated rational process to
reach a reasonable conclusion. Keller, 343 Wis. 2d 569, ¶21.

¶7 The circuit court here thoroughly analyzed the facts that gave rise to
the lawsuit, remarking that they were “convoluted through a number of contacts
and activities between the people, the parties involved.” Specifically, Mains and
representatives from the Darrow Companies were negotiating a marital settlement
agreement involving Mains’s divorce from the daughter of Russ Darrow, the
Darrow Companies’ principal shareholder, at the same time they were discussing
the matter of Mains’s continued employment. The circuit court recognized that
the nature of the parties’ relationships “add[ed] a unique twist to the situation,” in
which Mains’s employment was “intermixed and tied into the divorce settlement.”
In the court’s view, Mains “realized that because of his … employment situation
with the marriage that, at the time of the divorce, it’s likely that he would be let go
from the dealership. And he was trying to cover that situation and these various
negotiations.”

¶8 In response to the foregoing, the Darrow Companies argue the
circuit court erred when it viewed the divorce and Mains’s employment as
interrelated issues. There was ample evidence to support the court’s view, which
Corris described in his affidavit filed in opposition to the Darrow Companies’
motion for sanctions. In addition, emails attached to the complaint demonstrated

6
Notably, the Darrow Companies’ reply brief appears to concede that the more
deferential standard applies, in contrast to their brief-in-chief.

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No. 2021AP2185

that negotiations regarding the divorce settlement were occurring at the same time
as negotiations on an employment agreement.

¶9 At the time he filed suit, Corris knew what his client had told
him: that when the Darrow Companies announced a pay cut for him in January
2016—approximately one month after the marital settlement agreement had been
executed—“they broke promises that had been made by Russ and Mike Darrow
that his pay would not be changed, that they had told him that they had been told
by their attorney not to give him a written employment agreement, but that he
could trust them to honor their agreement.”

¶10 The circuit court observed that there were “a lot of communications
between the parties,” some of which corroborated Mains’s statements to his
attorney. In particular, the court highlighted several emails from May 2015, in
particular an email from Mike Darrow that referenced certain terms of
employment, including “employment and benefits ‘as currently is’ with no
changes to pay.” At an August 2015 meeting with Mains, Russ Darrow sought to
“clarify” the employment matter, saying he preferred the nomenclature
“employment ‘agreement’” rather than “employment ‘contract.’” During that
meeting, Russ and Mike Darrow disclaimed any intention to cut Mains’s pay.

¶11 In denying sanctions, the circuit court recognized there was no
written employment agreement, observing “[t]here was [only] a verbal agreement,
if there was any.” As a result, the court regarded the central question to be
whether there was any colorable argument that an oral employment contract for a

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No. 2021AP2185

term of years—as the parties had plainly discussed—could escape the clutches of
the statute of frauds.7 The court concluded:

In looking at those e-mails, looking at the marital
settlement agreement that was actually entered into and
signed by the parties, I’m satisfied that there was
documentation that arguably would lead an experienced
attorney to believe that he had a case to proceed, that he
had a contract or an enforceable agreement with the
Darrows on behalf of Harry Mains. That one aspect of the
case that has somewhat always … been intriguing is the
Darrows’ position is that they don’t want a contract, they
want an agreement.

…. I’ve never known what the difference is, frankly,
between an agreement and a contract. People use those
terms interchangeably. Another aspect of the case is
whether the Darrows had decided at an early point to
terminate Mr. Mains regardless of what happened, and they
were looking to put him into a situation where that would
happen. That’s not really part of this motion, but it’s
certainly an underlying flavor in the case.

But in looking at the statute [of frauds] in a way
that[] … resolv[es] any doubts that may exist in favor of
the advocate, I’m satisfied that a zealous advocate would
have an opportunity to proceed and test what he had, and if
necessary, take it to court. That doesn’t mean that he
prevails on summary judgment, but it does mean that he
had a reasonable opportunity to prevail and that he would
have a chance to do that.

¶12 To demonstrate that the circuit court’s rationale was inadequate, the
Darrow Companies primarily rely on Judge Foster’s comments and reasoning
when granting their motion for summary judgment. But an action is not frivolous
merely because it did not survive summary judgment. Stern v. Thompson &

7
The statute of frauds, WIS. STAT. § 241.02(1)(a), generally provides that an agreement
that by its terms is not to be performed within one year from its making is void “unless such
agreement or some note or memorandum thereof, expressing the consideration, be in writing and
subscribed by the party charged therewith.”

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Coates, Ltd., 185 Wis. 2d 220, 244 n.9, 517 N.W.2d 658. “The question is not
whether a party can or will prevail, but rather is that party’s position so
indefensible that it is frivolous and should that party or its attorney have known
it.” Sommer v. Carr, 99 Wis. 2d 789, 797, 299 N.W.2d 856 (1981). Contrary to
the Darrow Companies’ contention, mere reference to the circuit court’s summary
judgment reasoning addressing the burden of production does not answer the latter
question.

¶13 The Darrow Companies provide scant other reasons to conclude the
circuit court erroneously exercised its discretion when it held that the action was
not frivolously commenced. In fact, although they acknowledge that “Judge
Foster did not decide the issue of frivolity,” they argue in the very same paragraph
that “her underlying findings and legal analysis are definitive and conclusive
under the law of the case doctrine and point to only one deduction in deciding
sanctions—the case was frivolous.”8 They similarly argue Judge Foster’s
“determinations of issues of fact and law” establish issue preclusion.

¶14 These arguments prompted the circuit court to remark that although
the Darrow Companies “say they don’t base [their motion for sanctions] on the
summary judgment motion, in essence, they actually do.” The court accurately
observed that even though “summary judgment was granted against Harry
Mains[, it] doesn’t mean that the claim was frivolous and that he didn’t have a
chance to prevail.” The court’s analysis reflects a thorough consideration of the
record (which included testimony from Corris specifically on the sanctions issue),

8
We note that a circuit court does not find facts when resolving a summary judgment
motion. See State Bank of La Crosse v. Elsen, 128 Wis. 2d 508, 515-16, 383 N.W.2d 916 (Ct.
App. 1986).

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application of the correct legal standard, and reasoned and reasonable
decisionmaking. See Keller, 343 Wis. 2d 569, ¶23 (upholding a similar exercise
of discretion on the issue of frivolousness).

¶15 Having concluded that the circuit court appropriately exercised its
discretion when it determined that the action was not commenced frivolously, the
Darrow Companies’ briefing makes it unnecessary to reach the issue of whether
the action was continued frivolously. Indeed, the Darrow Companies appear to
have eschewed the latter argument on appeal, asserting that “[t]he focus is on what
the Plaintiff and his attorney knew when they filed the lawsuit on May 10, 2016,
and not what Mains and Corris argued to the court by rummaging through prior
irrelevant negotiations for bits and pieces of communication.”

By the Court.—Order affirmed.

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

9