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Mrozek v. Intra Financial Corp.6/9/2005
the income history of the corporation that's actually functioning there is relevant information and would be admissible as to profit projections for the proposed PMI, Plover Motel, Incorporated.
What I don't believe is here, however, is the opposite side of the ledger and that is evidence that would detail the proposed expenses of this operation. Certainly the purchase price for the operating business that's at that location now and the purchase price for the Plover Motel, Incorporated were different and the capitalization of those two operations, how much debt they incurred, what the interest rates were on the debt that was incurred are, I would assume, different . . . .
And the projection of profit can't be accomplished without a correlation between the expense portion of the ledger and the projections on income . . . .
So lacking that, I don't believe there is evidence in the record that's sufficient to support the judgment in terms of projected profit of the corporation and, therefore, management expenses to be paid to [Mrozek] . . . .
We agree with the circuit court's analysis. Given that we must look to figures showing profits and losses in order to ascertain damages, PMI's failure to provide evidence of expenses relating to a business owner in its position results in PMI's failing to meet its burden. See Lindevig, 150 Wis. 2d at 740. The evidence we are left with on the summary judgment record makes a determination of PMI's lost profits speculative. It also follows that if PMI has demonstrated no profits, Mrozek's contract that required profitability before she received payments under it has no value. Accordingly, we conclude the circuit court correctly granted summary judgment on PMI's and Mrozek's claims relating to lost profits.
III. CONCLUSION
We conclude that the circuit court correctly granted summary judgment dismissing the claim of PMI for lost profits, as well as Mrozek's claim for lost management fees that was dependent on PMI's claim for lost profits. However, we conclude that it was error to dismiss Mrozek's and PMI's other claims. Accordingly, we affirm in part, reverse in part and remand to the circuit court for further proceedings on Mrozek's and PMI's remaining claims based on the allegedly negligent provision of legal services.
By the Court.--The decision of the court of appeals is affirmed in part; reversed in part and cause remanded.
PATIENCE DRAKE ROGGENSACK, J. (concurring).
There is one remaining issue presented by this case that the majority chose not to address because it was not briefed by the parties. That is whether an appellate court can apply issue preclusion when the circuit court has not considered the question. I write in concurrence to bring this issue to the attention of the courts and the litigants because I have concluded that the court of appeals erred in doing so here.
In the usual course of an appeal involving issue preclusion, the task of an appellate court is solely to review the decision of a circuit court that either chose to apply issue preclusion or did not so choose. However, that is not what happened in this case. Here, the appellate court applied issue preclusion when the question had never been presented to or decided by the circuit court, nor had any party argued to the court of appeals that it should be applied.
In my view, issue preclusion cannot be applied in the first instance by an appellate court because it cannot be applied as a matter of law, but only as a discretionary determination made after a fairness analysis. Paige K.B. v. Steven G.B., 226 Wis. 2d 210, 225, 594 N.W.2d 370 (1999). For example
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