Mid America Steel Drum Properties, LLC v. Container Life Cycle Management LLC

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.
January 18, 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. 2021AP1603 Cir. Ct. No. 2019CV644

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT I

MID AMERICA STEEL DRUM PROPERTIES, LLC AND 17H LLC,

PLAINTIFFS-RESPONDENTS-CROSS-APPELLANTS,

V.

CONTAINER LIFE CYCLE MANAGEMENT LLC,

DEFENDANT-APPELLANT-CROSS-RESPONDENT.

APPEAL and CROSS-APPEAL from a judgment and an order of the
circuit court for Milwaukee County: LAURA GRAMLING PEREZ, Judge.
Affirmed.

Before Brash, C.J., Donald, P.J., and White, J.

¶1 BRASH, C.J. Container Life Cycle Management LLC appeals the
judgment and order entered in favor of Mid America Steel Drum Properties, LLC
and 17H LLC (collectively, Mid America), upon a jury verdict which found that
No. 2021AP1603

Container Life had committed trespass and unlawfully withheld possession of
several parcels owned by Mid America, and was unjustly enriched by that conduct.
Container Life argued that it thought those parcels were included in a lease it had
entered into with Mid America. It therefore filed a counterclaim for reformation of
that lease to include one parcel in particular, referred to as the “Trailer Yard,” in the
lease; that counterclaim was dismissed by the trial court.

¶2 On appeal, Container Life contends that the trial court erred in
dismissing its counterclaim to reform the lease. Container Life also asserts that the
trial court erroneously exercised its discretion with regard to several issues relating
to jury instructions and the special verdict, as well as its denial of Container Life’s
motion to bifurcate the trial to address the equitable issue of lease reformation prior
to addressing the legal claims presented by Mid America.

¶3 Additionally, Mid America cross-appeals regarding its claim for
punitive damages. It asserts that the trial court applied the wrong legal standard
when it refused to allow the jury to consider whether punitive damages were
warranted, based on Container Life’s unauthorized use of the parcels.

¶4 Upon review, we conclude that the trial court did not erroneously
exercise its discretion in any of the decisions being challenged by Container Life.
We also reject Mid America’s argument in its cross-appeal that the trial court
applied the wrong legal standard in considering its punitive damages claim.
Therefore, we affirm.

BACKGROUND

¶5 Mid America is owned by Michael Higgins and his brother, Timothy.
Mid America’s business operation involved the reconditioning of steel drums, a

2
No. 2021AP1603

process which included stripping, reforming, repainting, and adding new parts to
the used containers, and then testing those reconditioned containers. The main
operating site where this process was performed is located at 8570 South Chicago
Road in Oak Creek.

¶6 To the immediate south of the main operating site is a parcel located
on East Puetz Road—the Trailer Yard parcel—which is also owned by Mid
America. The Trailer Yard parcel was used by Mid America to store used drums
until they could be reconditioned at the main operating site. Additionally, Mid
America owned another parcel on South Chicago Road also utilized by the business,
known as the “Drop Off Lot.”1

¶7 Container Life was formed in 2010, and sought to build a national
network of drum reconditioners. To that end, it approached the Higginses about
purchasing Mid America. In a letter of intent sent to the Higginses in March 2011,
Container Life indicated that it wished to purchase the business assets but not the
real property associated with the business; rather, the purchase agreement was to
include a lease for the real property used by the business. The letter referred to the
real estate and other items it was not purchasing, such as some of the equipment, as
“Excluded Assets.” It further stated that Container Life would conduct due
diligence on the Excluded Assets, including the real property, to determine their
“value, condition, and fitness … for their intended use” prior to entering into a lease.
Michael Higgins understood this to mean that after Container Life reviewed the real
property available from Mid America, it would lease the property it thought was

1
Another parcel, located at 2529 East Norwich Avenue in Saint Francis and referred to as
the “Kitzinger property,” was included in Mid America’s complaint. That parcel is owned by
17H LLC, an entity that is also owned by Michael and Timothy Higgins. However, the jury rejected
Mid America’s claims regarding that parcel, and this appeal does not include any arguments
pertaining to that portion of the verdict. We therefore do not discuss that parcel further.

3
No. 2021AP1603

“necessary for the business.” Mid America gave Container Life access to its
property for approximately thirty months to conduct its due diligence.

¶8 Container Life and Mid America entered into an Asset Purchase
Agreement in November 2013.2 The Agreement included a schedule of real
property involved in the transaction, including the “Oak Creek” property, which was
defined as “the real estate and improvements thereto located at 8570 South Chicago
Road, Oak Creek, Wisconsin.” The Agreement further stated that there was a lease
for that South Chicago Road property; however, neither the Trailer Yard, nor its
address on Puetz Road, were referenced as being part of the leased property.

¶9 The Higginses assumed that this indicated that Container Life had
“selected the parcels [it] wanted to lease[,]” which did not include the Trailer Yard.
Michael Higgins testified at the trial that as part of its due diligence, Container Life
had conducted an environmental analysis on the property and determined that there
could be some contamination on the property, particularly at the location of a “chop
shop” that was on the Trailer Yard parcel. Michael stated that he had been told
“very directly” by Container Life that they did not “want to operate on any
contaminated or potentially contaminated property.” Therefore, the Higginses
presumed that Container Life had decided not to include the Trailer Yard in the
lease.

¶10 However, the president of Container Life, Randy Stacy, thought the
Oak Creek property, as identified in the Agreement, included the other parcels used
by Mid America in its business, particularly the Trailer Yard. This

2
As part of the sale of Mid America’s business assets to Container Life, Michael and
Timothy Higgins became partners in Container Life. Michael Higgins remained active in running
the business until November 2018.

4
No. 2021AP1603

misunderstanding was shared by “numerous people” at Container Life, including its
general counsel and the outside attorneys who drafted the lease.

¶11 Shortly after the Agreement was executed, Michael Higgins told
Stacy that Container Life was using parcels it had not leased, including the Trailer
Yard. Michael stated that if Container Life was going to continue using these
parcels, they would have to “get something worked out in terms of a lease.” Stacy
agreed; however, no other leases were ever executed.

¶12 Mid America then filed the complaint underlying this appeal in
January 2019, alleging that Container Life was trespassing on the Trailer Yard and
the Drop Off Lot and claiming that Container Life was being unjustly enriched
through its use of those parcels; Mid America sought to eject Container Life from
those premises. In response, Container Life filed a counterclaim seeking
reformation of the lease to include the Trailer Yard.

¶13 The matter then proceeded to a jury trial in April 2021. Prior to the
trial, however, Container Life filed a motion to bifurcate, arguing that its
counterclaim for reformation—an equitable claim that must be tried to the court, as
opposed to a jury—should be tried first, before the jury trial on Mid America’s
claims. The trial court denied the motion, noting its concern that hearing the
reformation counterclaim first could potentially lead to the court making factual
findings on certain issues that overlap with the legal claims of Mid America, which
Mid America had the right to put before a jury.

¶14 After the trial had begun, Container Life requested the inclusion of a
jury instruction on the duty to speak relating to the Higginses’ duty to inform
Container Life that the Trailer Yard and Drop Off Lot were separate parcels from
the main operating site. The trial court rejected the request as untimely, because it

5
No. 2021AP1603

was not included in Container Life’s proposed jury instructions even though this
was an argument that it had asserted throughout the litigation of this matter. The
trial court further found that the instruction was not necessary because it relates to
fraud claims, and there were no fraud claims alleged in this case.

¶15 Also during the trial, Container Life requested that several advisory
questions relating to its reformation counterclaim be submitted to the jury.
Specifically, the questions proposed by Container Life asked whether either party
had made a mistake relating to the property included in the lease, and whether this
was a misrepresentation—either willful or innocent—by the Higginses and Mid
America.

¶16 The trial court rejected this request as well. It again commented on
the lack of timeliness of the request by Container Life since it was being raised in
the middle of trial, and these questions had not previously been included with the
proposed jury instructions and special verdict forms submitted by the parties prior
to the trial. The court further noted that although some additional instructions and
verdict questions had been proposed by the parties since the pretrial deadline, those
supplemental filings were helpful to “focus and winnow the information for the
jury” regarding the legal claims the jury was deciding. However, these proposed
special verdict questions regarding Container Life’s reformation counterclaim
would be “essentially sort of adding an entirely new kind of claim to the issues for
the jury to decide midway through the trial,” which the court deemed to be
inappropriate.

¶17 The trial court further observed that the reformation counterclaim was
“reasonably straightforward” and a “pretty typical type of matter that the [c]ourt

6
No. 2021AP1603

makes decisions about all the time.” Therefore, the court determined that the
proposed advisory jury questions were not “necessary or appropriate.”

¶18 Another issue arose at the end of the trial with a pattern jury
instruction that was submitted regarding implied consent for the use of the parcels
at issue. This instruction, WIS JI—CIVIL 8015, related to Container Life’s argument
that the Higginses had given implied consent to Container Life for the use of the
Trailer Yard and Drop Off Lot. However, the instruction is generally used in tort
cases, particularly for personal injury claims by a trespasser against a property
owner. See id. As a result, the last sentence of the instruction directs the jury that
“[i]f, under all the existing circumstances, a reasonable person would conclude that
the possessor of the premises impliedly consented that the plaintiff be on the
premises, then there was consent.” Id. (emphasis added). As the instruction was
being read to the jury, counsel for Container Life realized that for this case, the
sentence should have stated that the issue of implied consent related to use of the
parcels at issue by the defendant—Container Life—not the plaintiff. As such, the
trial court substituted “defendant” for “plaintiff” in that sentence, and re-read it to
the jury.

¶19 Upon further discussion by the trial court and the parties regarding the
instruction, there were two additional instances where the use of the word “plaintiff”
was determined to be inaccurate under the circumstances of this case; specifically,
where the instruction directs the jury to consider both “the acquiescence of the
possessor, if any, in the previous use of the premises by others (including the
plaintiff),” and “the customary use, if any, of the premises by others (including the
plaintiff)[.]” Id. (emphasis added). After hearing arguments by the parties
regarding proposed additional changes to the instruction, the trial court decided to
strike the parentheticals.

7
No. 2021AP1603

¶20 The trial court also considered whether Mid America’s claim for
punitive damages should be submitted to the jury. After deferring its ruling in order
to hear the evidence relevant to the claim, the court determined that although Mid
America had established a prima facie case for punitive damages, in that it had
demonstrated that Container Life continued to use the Trailer Yard and Drop Off
Lot even after Mid America had pointed out that they were not included in the lease,
Container Life’s actions did not rise to the level of being “sufficiently aggravated”
such that punitive damages were warranted. The court therefore declined to submit
the issue of punitive damages to the jury.

¶21 After deliberating the issues before it, the jury determined that
Container Life was trespassing on the Trailer Yard and the Drop Off Lot; that Mid
America was entitled to possession of those parcels; and that Container Life had
been unjustly enriched by its use of those parcels. Furthermore, the trial court found
that Container Life’s equitable counterclaim for reformation of the lease to include
the Trailer Yard was not warranted. The court therefore entered a judgment in the
amount of $458,222, plus costs and attorney’s fees, in favor of Mid America, and
dismissed Container Life’s counterclaim with prejudice. This appeal follows.

DISCUSSION

¶22 On appeal, Container Life asserts that the trial court erred in several
ways, including denying its motion to bifurcate its counterclaim from Mid
America’s claims; declining to give a jury instruction on the duty to speak; declining
to allow advisory questions on the special verdict form relating to the reformation
of the lease; the court’s modification of the pattern jury instruction for implied
consent; and dismissing its counterclaim for reformation of the lease. Additionally,
Mid America appeals on the issue of punitive damages, contending that the court

8
No. 2021AP1603

erred in failing to allow the jury to consider that claim. We review each of these
arguments in turn.

Bifurcation

¶23 We begin with Container Life’s assertion that its equitable
counterclaim for reformation of the lease should have been bifurcated from the legal
claims of Mid America. The decision of whether to bifurcate claims is within the
trial court’s discretion. Dahmen v. American Fam. Mut. Ins. Co., 2001 WI App
198, ¶11, 247 Wis. 2d 541, 635 N.W.2d 1. This court will not reverse such a
discretionary decision “unless it is clearly shown that the trial court failed to
consider the relevant facts, apply the proper standard of law and reach a conclusion
a reasonable judge could reach.” Id.

¶24 In making its decision regarding bifurcation, the trial court “must
consider the potential prejudice to the parties, the complexity of the issues, the
potential for jury confusion and the issues of convenience, economy and delay.” Id.
At the hearing on this motion, the trial court considered all of these factors. As
described above, the court was particularly mindful of the potential for prejudice to
Mid America if the reformation claim was bifurcated, due to the probability of
overlapping evidence, which could result in the court making factual findings
relating to issues that should properly be before the jury with Mid America’s legal
claims. See id. The court further observed that this case was “as likely to go to a
jury trial if the reformation claim is heard and decided first or if it is not”; in other
words, bifurcation would not result in a resolution where a trial on Mid America’s
claims would be eliminated. Thus, there would likely be no judicial economy, or
cost savings for the parties, that would result if that issue was bifurcated. See id.

9
No. 2021AP1603

¶25 Additionally, the trial court found that the issues for the jury on the
legal claims would not be “any less complex” if the reformation counterclaim was
bifurcated and decided first. See id. Finally, the court noted that there were still
scheduling backups due to the pandemic, and that bifurcating the reformation
counterclaim, and thereby having to schedule two trials, would create an “undue
delay” in resolving all of the issues. See id.

¶26 Container Life, however, cites Carroll v. Bohan, 43 Wis. 218 (1877),
for the premise that in a trespass action where a counterclaim for reformation is
filed, “[t]he proper practice … is to try the issue upon the equitable counter claim
first[.]” Id. at 219. Indeed, our supreme court recognized in the Carroll decision
that while the rule for bifurcation “generally rests in [the] discretion” of the trial
court, in this type of case bifurcation “seems to be imperative.” Id. at 219-20. The
claim in Carroll involved a store that had been mortgaged, with the issue being
whether the “entire stock of goods” of the store was included in that mortgage. Id.
at 220. The jury informed the trial court that it was unable to answer this question,
but rendered a verdict nonetheless; the supreme court ultimately held that verdict
was insufficient. Id. at 220-21. The supreme court observed that the counterclaim
for reformation of the mortgage to include the chattel property at issue was “very
much overlooked throughout” the proceedings, with the verdict on the equitable
issue of the counterclaim essentially being “advisory only[.]” Id. at 220.

¶27 In the present case, the trial court distinguished Carroll, noting that
“[t]his is not a situation where the jury is not able to make decisions about
entitlement to property or damages to property until the [trial] [c]ourt figures out
which property is at issue,” because it was “very clear” that the parcel at issue in the
counterclaim was the Trailer Yard. The court believed that the jury would be able
to make findings regarding Mid America’s claims for trespass, ejectment, and unjust

10
No. 2021AP1603

enrichment as they related to the Trailer Yard and Drop Off Lot without a prior
determination regarding the reformation counterclaim.

¶28 We agree with the trial court’s assessment in distinguishing Carroll.
We further conclude that the trial court applied the proper legal standard in
exercising its discretion in deciding not to bifurcate the reformation counterclaim.
See Dahmen, 247 Wis. 2d 541, ¶11. Therefore, the trial court did not err in denying
Container Life’s motion for bifurcation. See id.

Jury Instruction for Duty to Speak

¶29 We next review Container Life’s argument that the trial court erred in
denying its request to include a jury instruction regarding the duty to speak. This
instruction relates to whether the Higginses had a duty, prior to executing the Asset
Purchase Agreement and lease, to inform Container Life that the Trailer Yard and
Drop Off Lot were separate parcels from the main operating site. The decision of
whether or not to give a requested jury instruction is also within the discretion of
the trial court. Arents v. ANR Pipeline Co., 2005 WI App 61, ¶42, 281 Wis. 2d
173, 696 N.W.2d 194. In fact, the trial court “is afforded great latitude when giving
jury instructions.” Id.

¶30 The trial court rejected Container Life’s request for the instruction as
untimely because it was not included in Container Life’s proposed jury instructions
submitted pretrial. The court further noted that it had “repeatedly” asked at the
beginning of the trial whether the preliminary jury instructions were final, and
counsel for Container Life had represented that they were.

¶31 The trial court also observed that Container Life’s basis for requesting
the duty to speak instruction—whether the Higginses had failed to disclose that the

11
No. 2021AP1603

Trailer Yard and Drop Off Lot were not included in the lease—was not a new
position, but rather had been Container Life’s argument throughout the proceedings.
Thus, the court rejected Container Life’s assertion that its untimeliness in requesting
the instruction was due to evidence that was presented in the first several days of
trial.

¶32 The trial court has within its discretion the inherent power to control
its docket for purposes of judicial economy. Neylan v. Vorwald, 124 Wis. 2d 85,
94, 368 N.W.2d 648 (1985). To that end, the court had clearly stated its expectations
for submissions of requested jury instructions, and explained why it believed that
Container Life’s request for an additional jury instruction was outside of the court’s
directive. Thus, the court did not erroneously exercise its discretion in declining
Container Life’s request to add the duty to speak jury instruction. See Dahmen, 247
Wis. 2d 541, ¶11.

Advisory Questions for Special Verdict

¶33 Container Life’s next argument is that the trial court erred in denying
its request to include several advisory questions relating to its counterclaim for lease
reformation on the special verdict form for the jury to consider. As with jury
instructions, trial courts have “wide discretion in determining the words and form
of a special verdict.” City of Milwaukee v. NL Indus., 2008 WI App 181, ¶83, 315
Wis. 2d 443, 762 N.W.2d 757 (citation omitted).

¶34 Furthermore, the requested questions were, as noted, completely
advisory in nature, given that they related to the equitable counterclaim of
reformation, which was to be tried by the trial court, not the jury. Thus, for the
issues raised in these questions, the trial court would have the “ultimate

12
No. 2021AP1603

responsibility” to make the findings of fact and conclusions of law regarding those
issues. See Abdella v. Smith, 34 Wis. 2d 393, 397, 149 N.W.2d 537 (1967).

¶35 Here, the trial court determined that the requested advisory questions
would “essentially” be “adding an entirely new kind of claim to the issues for the
jury to decide,” which the court deemed to be inappropriate. The court further stated
that the issues of the reformation counterclaim were “straightforward,” such that
having the jury answer those questions was not necessary for the court to make its
decision on the counterclaim. This determination was completely within the court’s
discretionary province, see NL Indus., 315 Wis. 2d 443, ¶83, and we conclude that
the court did not erroneously exercise its discretion in declining Container Life’s
request to include the advisory questions on the special verdict form submitted to
the jury, see Dahmen, 247 Wis. 2d 541, ¶11.

Modification of Jury Instruction for Implied Consent

¶36 Next, we review Container’s Life’s argument that the trial court erred
in its modification of the pattern jury instruction for implied consent, WIS JI—CIVIL
8015. The trial court “has broad discretion to craft jury instructions based upon the
facts and circumstances of the case.” Smith v. Goshaw, 2019 WI App 23, ¶9, 387
Wis. 2d 620, 928 N.W.2d 619. “The court must, however, exercise that discretion
in a way that fully and fairly informs the jury of the rules of law applicable to the
case and that assists the jury in making a reasonable analysis of the evidence.” Id.
“Whether the [trial] court erred by stating the law incorrectly or in a misleading
manner is a question of law this court reviews de novo.” Id.

¶37 As explained above, the trial court modified WIS JI—CIVIL 8015 to
accurately portray Container’s Life argument that there was implied consent by Mid
America for it to use the Trailer Yard and Drop Off Lot. Specifically, the term

13
No. 2021AP1603

“plaintiff” had to be replaced by “defendant” in the last sentence of the pattern
instruction in order to comport with the facts of the case. The court also struck two
parentheticals from the pattern instruction where the term “plaintiff” was used.

¶38 Container Life, to the contrary, contends that the parentheticals were
“essential” to provide the jury with clarification of the law of implied consent.
Container Life therefore advocated at the jury instruction conference for substituting
the term “defendant” for “plaintiff” in the parentheticals, as was done in the last
sentence of the pattern instruction.

¶39 However, the trial court determined that striking the parentheticals
altogether provided an accurate representation of the law without being misleading,
and was consistent with the arguments and evidence presented by the parties. The
final instruction given to the jury by the trial court, illustrated with the stricken
parentheticals and modified language, is as follows:

In determining whether an implied consent exists,
you should look at all of the circumstances then existing,
including the acquiescence of the possessor, if any, in the
previous use of the premises by others (including the
defendant); the customary use, if any, of the premises by
others (including the defendant); the apparent holding out of
the premises, if any, to a particular use by the public; and the
general arrangement or design of the premises. If, under all
the existing circumstances, a reasonable person would
conclude that the possessor of the premises impliedly
consented that the defendant be on the premises, then there
was consent.

(Alterations added.)

¶40 This court “review[s] jury instructions as a whole to determine
whether ‘the overall meaning communicated by the instructions was a correct
statement of the law ....’” Smith, 387 Wis. 2d 620, ¶13 (citations omitted; ellipses
in Smith). Under the law, consent, which is a defense to a claim of trespass, “may

14
No. 2021AP1603

be given expressly or may be implied from the conduct of the plaintiff, from the
relationship of the parties or from custom.” Grygiel v. Monches Fish & Game
Club, Inc., 2010 WI 93, ¶41, 328 Wis. 2d 436, 787 N.W.2d 6.

¶41 We conclude that WIS JI—CIVIL 8015, as modified by the trial court,
accurately reflects the law of implied consent, as it was to be applied to the particular
facts and circumstances of this case. It fully informed the jury of the law on this
issue, without being misleading or confusing, to allow for proper analysis when the
jury reviewed the evidence. See Smith, 387 Wis. 2d 620, ¶¶9, 13. Therefore, the
trial court did not erroneously exercise its discretion in giving the modified
instruction. See id., ¶9; Dahmen, 247 Wis. 2d 541, ¶11.

Counterclaim for Reformation of Lease

¶42 Container Life’s final argument is that the trial court erred in
dismissing its counterclaim for reformation of the lease. “Reformation of a written
instrument is appropriate when the instrument fails to express the intent of the
parties, either because of the mutual mistake of the parties, or because of the mistake
of one party coupled with fraud or inequitable conduct of the other.” Hennig v.
Ahearn, 230 Wis. 2d 149, 174, 601 N.W.2d 14 (Ct. App. 1999). The party seeking
reformation has the burden to prove, by clear and convincing evidence, that
reformation is warranted. First Nat. Bank of Kenosha v. Scalzo, 70 Wis. 2d 691,
701-02, 235 N.W.2d 472 (1975). This court reviews the trial court’s decisions on
equitable claims under the erroneous exercise of discretion standard. Wynhoff v.
Vogt, 2000 WI App 57, ¶13, 233 Wis. 2d 673, 608 N.W.2d 400.

¶43 Container Life’s counterclaim for reformation reflects its theory in
this case: that while it erred in failing to recognize that the parcel named in the
lease—8570 South Chicago Road—did not encompass the Trailer Yard, the

15
No. 2021AP1603

Higginses and Mid America failed to disclose this fact to Container Life. The trial
court noted the error on the part of Container Life in failing to fully investigate the
property it was leasing. The court further observed that Mid America made a
“misstatement” in the Asset Purchase Agreement with regard to its representation
that the property to be leased, as described in the Agreement, constituted all the
property which Mid America was utilizing for its business. However, the trial court
found that the Trailer Yard was distinguished as a separate parcel in the Asset
Purchase Agreement, and that a “cursory examination” by Container Life of the
documents regarding the property involved in Mid America’s business should have
revealed the error at or prior to the time the Agreement was executed. It further
acknowledged Michael Higgins’s testimony that he believed Container Life had
intentionally decided not to lease the Trailer Yard, at least in part because of possible
environmental contamination.

¶44 Furthermore, the trial court determined that the “balancing of the
equities” did not favor reformation. The court found that although the misstatement
by Mid America in the representations of the Asset Purchase Agreement was a
“technical misrepresentation,” it was not intentional, and further, that it was not
relied upon by Container Life, which had “received and reviewed reports from
which it could have readily discovered the error.” Indeed, the court observed that
the lease was “negotiated between two sophisticated business entities[.]”

¶45 Moreover, the trial court found that Container Life had not established
that the rent for the South Chicago property, without the inclusion of the Trailer
Yard, was excessive. On the contrary, it concluded that reformation of the lease
“would result in Mid America’s loss of use of its real property, without additional
compensation[.]” It therefore held that reformation of the lease was not warranted.

16
No. 2021AP1603

¶46 Upon review, the record supports the trial court’s determination.
Therefore, it did not erroneously exercise its discretion in dismissing Container
Life’s counterclaim for reformation. See id.; Dahmen, 247 Wis. 2d 541, ¶11.

Cross-Appeal for Punitive Damages

¶47 Finally, we reach Mid America’s cross-appeal, which asserts that the
trial court erred in declining to allow the jury to consider whether punitive damages
were warranted for Container Life’s unauthorized use of the parcels not included in
the lease. “[W]hether there is sufficient evidence to submit the question of punitive
damages to the jury is … a question of law” that this court reviews de novo.
Strenke v. Hogner, 2005 WI 25, ¶13, 279 Wis. 2d 52, 694 N.W.2d 296.

¶48 The standard for awarding punitive damages, as set forth in WIS.
STAT. § 895.043(3) (2019-20),3 requires that there be evidence demonstrating that
the defendant “acted maliciously toward the plaintiff or in an intentional disregard
of the rights of the plaintiff.” In interpreting this statute, our supreme court
determined that there are three criteria that must be met before the issue of punitive
damages can be submitted to the jury: (1) a deliberate “act or course of conduct”
where the actor is “substantially certain” that it will result in the plaintiff’s rights
being disregarded; (2) the act or conduct must “actually disregard the rights of the
plaintiff, whether it be a right to safety, health or life, a property right, or some other
right”; and (3) the act or conduct “must be sufficiently aggravated to warrant
punishment by punitive damages.” Strenke, 279 Wis. 2d 52, ¶¶38, 40-42.

3
All references to the Wisconsin Statutes are to the 2019-20 version unless otherwise
noted.

17
No. 2021AP1603

¶49 Mid America contends that the trial court used the wrong legal
standard in declining to allow the jury to consider the issue of punitive damages.
Specifically, Mid America points to the court’s statement that it believed that Mid
America had established a prima facie case with regard to punitive damages.
However, the court subsequently clarified that its statement referred to the fact that
Container Life had acknowledged that the Trailer Yard and Drop Off Lot parcels
were not included in the lease upon being told this by Michael Higgins shortly after
the lease was executed, yet it continued to utilize the parcels.

¶50 The trial court went on to discuss the final criteria in the Strenke
test—that in order to be presented to the jury, there must be evidence that Container
Life’s conduct was sufficiently aggravated in order to qualify for punitive damages.
See id., ¶38. In that discussion, the trial court recognized the importance of property
rights; Mid America also focuses on this right in its argument in support of this
claim, citing Jacque v. Steenberg Homes, Inc., 209 Wis. 2d 605, 563 N.W.2d 154
(1997). In Jacque, our supreme court upheld a punitive damages award of $100,000
in a trespass case, even though the compensatory damages awarded were only the
nominal amount of $1. Id. at 609. However, Jacque was decided almost eight years
before Strenke, and does not specifically discuss the statutory standard for punitive
damages; rather, the issue in Jacque was whether punitive damages could be
awarded where there was essentially no compensatory damages. Id., 209 Wis. 2d
at 609.

¶51 Furthermore, the trial court here also noted that Michael Higgins’s
testimony indicated that he had “acquiesced to a certain degree” to Container Life’s
use of the Trailer Yard parcel. The court stated that this was likely in order to “not
rock the boat” right after the Asset Purchase Agreement was executed, when the
partnership between the Higginses and Container Life was just beginning. The court

18
No. 2021AP1603

further observed that there had been ongoing discussions and negotiations between
the parties regarding the issue of compensation for the use of the Trailer Yard parcel
prior to Mid America commencing this action.

¶52 Therefore, the trial court found that the evidence did not support a
finding that Container Life’s conduct was sufficiently aggravated to warrant sending
the issue of punitive damages for consideration by the jury. Upon review, we
conclude that the trial court properly considered the criteria set forth in Strenke, and
did not err in declining to send this issue to the jury. See id., 279 Wis. 2d 52, ¶13.

¶53 Accordingly, as we have rejected all of the claims raised on appeal by
both Container Life and Mid America, we affirm the trial court’s judgment and
order in favor of Mid America, as well as its dismissal of Container Life’s
counterclaim for reformation of the lease.

¶54 No costs to either party.

By the Court.—Judgment and order affirmed.

Not recommended for publication in the official reports.

19