In this Column . . .
(contact information and email links)
And. . .Did You Know
- About the American Rule on Attorneys Fees?
- About the Unconstitutional and Unnecessary Proposed Special Events Permit for the City of Oshkosh?
- How Mediation and Arbitration Help and Hurt the Legal Process
- About Easements?
-$8,000 First Time Homebuyer's Tax Credit
-What To Do First When A Loved One Dies
-Home Improvement Laws
FYI - We will post relevant comments & corrections after reviewing them. Just click on the comment link.
Who Are the Lawyers on Sawyer?
141 N. Sawyer St.
Oshkosh, Wisconsin 54902
Email a Lawyer on Sawyer
Friday, October 30, 2009
England (and other countries) has passed laws awarding attorneys fees to the “winners” of civil lawsuits. There were two reasons for these statutes. These “fee-shifting” statutes discourage suits that have little chance of success or are worth less than the costs of resolving the issue privately. The older English statutes also set a schedule of fees that could be charged to clients and assessed in Courts. In the seventeenth century, some American colonies adopted the English Rule, passing laws that set legal fees and awarded these fees to the “winners” of civil lawsuits. The U.S. Congress passed similar laws, which lapsed or were revoked by the early 1800s.
Nevertheless, many colonial Courts established a common law practice of requiring each side to pay its own attorney fees. (In the absence of a statute or regulation, Courts must establish their own rules. These rules are referred to as the common law.) In Arcambel v Wiseman (1796), the U.S. Supreme Court held: "[t]he general practice in the United States is in opposition [to awarding attorney's fees to the “winning” party]; and even if that practice were not strictly correct in principle, it is entitled to the respect of the Court, till it is changed, or modified, by statute." Eighty years later, the US Supreme Court noted that legal remedies were more accessible because each side bears its own fees. That is, an average citizen could afford his or her day in Court. The Court also noted that a trial to determine a reasonable fee might be more burdensome than the original trial.
Both Wisconsin and Federal common law recognize exceptions to the American Rule. There are over 150 Federal laws and over 50 Wisconsin laws allowing a successful plaintiff to recover attorney's fees. Consumer protection laws and law encouraging private prosecution of crimes against the government often allow the plaintiff to collect attorney's fees. Courts will also allow contracting parties to enter into almost any agreement to share risk.
The second most common exception is contract clauses awarding attorney's fees to the winning party. Sometimes these clauses allow creditors to collect attorney's fees required to collect receivables. Sometimes theses clauses are designed to discourage litigation unless the plaintiff believes he or she has a high probability of success. Often each party wins some claims and loses others. Courts sometimes adjust contract based fee awards to reflect relative success.
Courts in Wisconsin may also award attorney's fees where the wrongful acts of the defendant have involved the plaintiff in litigation with others. For example a principle may become liable for acts of his or her agent. If a real estate agent makes a false statement about the condition of a home, the buyer may sue both the agent and the seller. The seller would be entitled to recover both his damages and his attorney's fees.
Wisconsin Courts may also award attorney's fees for an insurance company's bad faith denial of coverage or benefits. A contract of insurance promises to defend an insured and pay damages up to the policy limits. Bad faith occurs when the insurance company denies coverage or payment without just cause. If an insurance company fails to defend its insured, the insured can recover his or her cost to sue the insurance company for payment or defend against a suit brought by a third party. Likewise, if an insurer fails to pay the full amount of covered damages within policy limits, an insured can recover attorney's fees required to obtain payment. In either case, attorney's fees are paid as damages in the same way that medical expenses are paid as damages for a personal injury.
Federal Courts may award attorney's fees where plaintiffs have established rights as beneficiaries of a common fund, such as a pension fund. When this happens, the attorneys fees are paid by the fund. This means all of the beneficiaries share the costs of the judgment obtained by the plaintiffs.
The American Rule is an important protection for individuals sued in civil court. Sometimes Judges overreach their authority in an effort to make one party whole. Recently the Court of Appeals reversed the Trial Court's award of attorney's fees in two cases. In one case a Circuit Court Judge awarded a municipality attorney's fees as contractual damages. The Appeals Court reversed the award. The contract did not provide for attorney's fees, therefore the American Rule required each side to pay its own attorneys. In a second case, a Circuit Court Judge awarded attorney's fees as punitive damages for trespass. The Appeals Court reversed this award because the American Rule does not allow attorney's fees to be awarded as punitive damages.
The Final Words
Litigation is risky. The American Rule holds it is unfair to penalize a party for merely bringing or defending a lawsuit. The American Rule encourages access to the Courts by reducing the cost of losing a case. The same incentive makes it more “affordable” for a business to take actions that may result in litigation. The American Rule reduces the cost of trial by eliminating the burden of determining what is a reasonable fee in every suit. The exceptions to American Rule raise the stakes whenever they apply. Exceptions encourage certain kinds of litigation by increasing the rewards for success. Hopefully individuals and businesses exercise greater caution when they face the additional penalty of paying the plaintiff's attorney's fees.
Thursday, September 17, 2009
I have broken this letter in to two pieces. Part 1 of the article explains the ordinance and suggests a more sensible alternative. Part II examines the ordinance in light of Sauk County v. Gumz, 1008 WI 87.
Part I: What is Proposed and a Sensible Alternative.
On September 9, 2009, the Oshkosh City Council reviewed a proposed ordinance to require permits for any temporary gathering of two or more people on public or private property that
(a) offers food, drink or merchandise; or
(b) includes amplified sound or excessive noise; or
(c) uses temporary structures (e.g, tents); or
(d) any part of which happens between 11 PM and 8 AM; or
(e) makes exclusive use of any property owned, leased, or controlled by city; or
(f) requires any city services required because of the event itself; or
(g) requires closing of a public street, alley or right of way; or
(h) includes more than 250 people on private property.
The ordinance require event planners to pay a non refundable fee of $50 to $200 to consider an application that must be submitted at least 45 days before the event. Special events which are held without permits or exceed the limits of their permit are subject to fines of $500 to $1000 a day. Otherwise, the city manager or his designee has the exclusive authority to decide if your gathering of two or more people is a special march or public assembly event requiring a permit.
There are some exemptions. No permits are required for events that are on property specifically designed or suited for the event, with an appropriate certificate of occupancy, sanitary services, street access and controls. However this exemption is lost if the event results in more use of public facilities and services than are used on a normal non-event day.
Funeral processions are exempt. So are events sponsored solely by the City of Oshkosh. Family gatherings and picnics organized by businesses or charitable organizations are exempted if they include none of the listed factors (presumably food and drink are permitted, but use of stereo equipment, home theatre and roadside parking will require a permit).
There is a five day notice requirement for public assemblies and marches. Public assemblies are organized gatherings on public property for the purpose exercising constitutional rights where it reasonably expected attendees may violate traffic regulations or other public use rules. Marches are moving gatherings for the purpose of exercising constitutional rights where the police are required to close rights of way or direct traffic. Assemblies and Marches that do not meet these criteria are special events.
According to the draft, special events include: walking, running or jogging events, sports events or competitions, cultural events such as art fair or antique show, films, concerts, theater, religious services, classes, meetings, and parties as well as other gatherings meeting criteria (a) to (h).
The City Council should not approve the ordinance in its present form. First, it is unconstitutional. It imposes prior restraint on individuals freedoms of speech, association, assembly and religion which are not necessary for an significant government interest. Second, it is neither practical or reasonable to license the small and medium sized events hosted by individuals, families, neighborhoods, churches, businesses and civic organizations. These are the customary and normal daily events in the life of any small city. These events require no extraordinary resources and should not be subject to approval by government.
For fun, retake the Quiz. Pretend you are the City Manager and classify the events listed below. Are they special events, public assemblies, marches, one the exceptions or exemptions or none of the above
Marriage proposal while playing “your song” after a candlelight dinner for two in the gazebo in Menominee Park
Neighborhood graduation party on an empty lot.
After school tag football game in Red Arrow Park
Antique car show at Ardy & Eds Drive-in, feature private tents and both patrons and cars overflowing into the cul de sac.
Neighborhood Rummage Sale
Teens skateboarding near their homes
Parents picking up 75 children who got back late from a school ski trip.
Overflow audience at School Board Meeting
the Zombies (youth) gathering nightly in Opera House Square.
Sail boat race
Church picnic in the Church parking lot.
300 people attending a graveside funeral service for a beloved teacher
Your daughters 8th birthday party with a sleep over.
I live near Emmeline Cook elementary school, so I know that kids' football, baseball and soccer games generate plenty of loud noise. Are they special events? Ask the Oshkosh City Manager.
Here is a better idea. The proposed ordinance requires a permit for temporary gatherings of more than 250 people on private property. Revise the proposal to require a $50 permit fee for special events and marches and public assemblies that (1) involve more than 250 people, (2) are scheduled in advance and (3) are not held at permanently established places of assembly sufficient space (say 30 square feet per person) or seating capacity.
Part II, for curious readers:
Why the Proposed Ordinance is Unconstitutional.
A recent Wisconsin Supreme Court decision, Sauk County v. Gumz, 2003 WI 87 (click here to read) explains why the proposed ordinance is unconstitutional. The court reviewed Sauk County's special event ordinance requiring sponsors of any event involving more than 1,000 people to submit applications, along with non-refundable fees of up to $500, at least 60 days before the event. The County had 45 days to review applications. There was a ban on advertising, promotion and ticket sales until a permit was issued.
The Supreme Court found each of these provisions unconstitutional. Bans on promotion violate the first amendment rights to freedom of speech. Government regulations affecting constitutional rights must be “narrowly tailored” to preserve significant public interests. Application deadlines can be no longer than reasonably necessary. Federal courts upheld a Chicago's 30 day application deadline fo r events with more than 50 people because thousands of applications are filed every year. The court found Sauk County could not justify a 60 day deadline. Nominal fees which do not exceed the actual cost of processing the permit are allowed. The Wisconsin Supreme Court established a bright line rule that fees must be $100 or less and held daily fees unconstitutional because a multi-day event does not require a different standard of review. Finally, the court found the 45 day review period excessive. However, after the 45 day review period was removed, there was no limit to the amount of time the County could take to review an application. Since that, too, is unconstitutional, the court found Sauk County's special event ordinance had to be struck in its entirety.
The same reasoning would find the Oshkosh ordinance unconstitutional. It has fees greater than $100. It has higher fees if a liquour license is required, but not if other permits or inspections are needed. Oshkosh is not Chicago, application periods of 30 days or more are excessive. The proposed ban on advertising is unconstitutional. There is no limit on the time for approval in the Oshkosh ordinance. The city manager must give the council a recommendation “as quickly as possible,” but the permit cannot be issued before all other city permits, licenses and approvals are in place. Without a time limit, the entire ordinance is unconstitutional.
The US and Wisconsin Supreme Courts have decided cities must provide an ample opportunity for spontaneous assemblies responding to recent events. Sauk County's code does not require permits for assemblies at permanently established places of assembly. The proposed ordinance prohibits spontaneous gatherings altogether by requiring organizers to file an application and pay a fee five days in advance for a permit to gather or walk in protest or support of government action.
Extra protections are required when cities go beyond regulation the time, place and manner of the use of property. There must be immediate judicial review paid for by the city to determine if a permit can be denied or limited. The proposed ordinance goes beyond time, place and manner restrictions. It has different rules for different folks. Funeral processions and any event whose only sponsor is the City are exempt. So are some family gatherings and picnics or similar events sponsored by charities or businesses. The ordinance does make an immediate appeal to the courts possible and it does require the City to pay for appeal. The ordinance does not specify any appeal process for special events. For public assemblies and marches whose sole purpose is the exercise of constitutional rights, denials by the police chief can be appealed to the city manager and then to city council and then to the courts.
The proposed special event ordinance is unconstitutional and unnecessary. Under the proposed ordinance, two people can constitute a public assembly, a march or a special event. You will need a special events permit if you want to surprise your sweetheart with a candelight dinner in the Gazebo in Menominee Park and the propose marriage while 'your song' is playing on speakers connected to your IPOD. If the proposed ordinance had already passed this summer, you would need a public assembly permit if half a dozen people stood in Opera House Square stopping people and cars to see if anyone would sign a petition in favor of having the City renovate the Grand Opera House. A march permit may be required if there is a reasonable expectation you and your friends will jaywalk on your way to City Hall to apply for the public assembly permit for Opera House square or that you will loiter in parking lot to discuss city politics on your way.
If the City Council wishes to regulate large private events, revise the proposal to require a $50 permit fee for special events and marches and public assemblies that (1) involve more than 250 people, (2) are scheduled in advance and (3) are not held at permanently established places of assembly with seating capacity (or if outside, sufficient space for the event). The review should take no longer than the week or two required for a liquor license. So the application deadline should be no more than two or three weeks before the event.
For more information or advise please call Ken Friedman at 920-231-1500
Monday, July 13, 2009
Mediation. In mediation, the disputing parties ask a neutral third party to help them reach a settlement of some or all of their issues. Most Wisconsin residents encounter mediation in small claims suits or divorce. In Winnebago County, all small claims disputes and many larger civil cases are referred to mediation. Mediation is often successful. For example, the Winnebago County Conflict Resolution Center settles about 90% of all small claims cases through mediation. To encourage parties to settle, mediators emphasize the three advantages of ADR.
A. Certainty of settlement compared with the risk and expense of trial.
B. Savings of time and legal fees.
C. The ability to find solutions a court would be unlikely to reach. (Courts award money and property rights. They do not negotiate payment plans.)
Arbitration. In Wisconsin, arbitration is used to settle disputes between unions and employers. Unlike a mediator, an arbitrator makes the final decision. Credit card companies and other financial institutions like stock brokers, mutual fund companies, health care insurers and retirement plans may require arbitration of disputes. Chances are that if you or your family do business with a regional or national company, your agreement contains an arbitration clause.
Sometimes these arbitration agreements are helpful. Sometimes not. ADR can deny relief for smaller claims because the cost of mediation and arbitration is higher than court fees. Arbitration of small claims may not include a hearing and may not be required to follow the law. Some companies use ADR as a way of delaying resolution of a grievance. So many employers and financial institutions are requiring disputes be arbitrated, we will soon need to decide if employees and consumers should have a right to their day in court.
Our tradition of open courts helps keep both judges and law accountable to the public. Private settlements are usually confidential. The public has no rights and public opinion is irrelevant in ADR. While this may have advantages, it also means that neither the public or the courts have the opportunity to understand how establish legal precedents fit - or fail to fit - disputes arising form changes in business, culture and society.
Any change in society raises issues. The Saga of Burnt Njal recounts the fate of a wise man living in Iceland in the middle ages. Nhal success at settling disputes eventually interfered with royal politics and prerogatives. One night, Njal is burned alive in his home. Today the story would be a little different. Njal would be CEO of the Fortune 100 company, Global ADR, Inc. Njal is tossed out of the company when the ADR bubble bursts, but his golden parachute allows him to live well after a soft landing. It is individual members of the public and society as a whole who get burned when Global ADR arbitrates all private disputes.
Thursday, June 11, 2009
Pop Quiz: (Answers near the end of the post)
Do you know which of the following statements correctly describes an easement or easement law?
1. Easements are found with other Candies in Aisle 6 of Walgreens
2. Harry, next door, told me I can dig in his garden any time I want.
3. I signed a contract allow Jones Sign to put a Billboard 10 feet from my back lot-line.
4. I don’t know my neighbor, but I’ve been hunting quail on his land for 25 years.
5. My weekender neighbor doesn’t know, but my Dad and I have been fishing off his pier for 55 years.
6. If Curmudgeon’s snowplow breaks down and blocks your shared driveway, you can drive around it.
7. Wisconsin’s law of easements can be traced back to 450 BC.
A easement is an irrevocable legal right in the property of another, called the subservient estate. A easement usually consists of a right the easement holder can exercise over a specific part of the subservient estate. . The easement holder may be an individual or, if the easement belongs with some other property, the owner of the dominant estate. The easement can be limited by time, place, or any specific condition that may (or will) occur in the future. An easement holder can do what is necessary to maintain the easement rights. Sometimes maintenance includes rights to go outside the easement to prevent damage. The owner of the subservient estate cannot unreasonably interfere with the easement holder’s rights.
Frequently, the subservient estate grants an easement in writing to a person or a subservient estate. If the writing is recorded, the easement holder can enforce his or her rights against all persons (except a buyer at a foreclosure sale of a mortgage created before the easement). How an easement is written is crucial. Say you have an pedestrian easement to cross the eastern 10 feet of Curmudgeon’s lakeshore property. You put on your bathing suit, grab your towel and go for a swim. When you enter the water, Curmudgeon, looking unhappy as usual, dials 911 and tells the County Sheriff you are trespassing. Who is right?
The final answer is: . . . Curmudgeon. The right to enter the water is a riparian right. Wisconsin law holds that no easement includes riparian rights unless the easement says so in writing. Your easement says nothing about the lake or the right to enter the water.
Suppose Curmudgeon plants a row of hostas across the easement? You can remove them. Suppose Curmudgeon parks his boat and trailer across the easement, blocking it completely, and lets the air out of the tires. If your property is in England, you can simply go around it. In about 1857, the Lord Chief Baron of the Exchequer, Sir Jonathon Frederick Pollack, decided the case of Hawkins v. Carbines, 27 LJ Exch. 44. Lord Pollack held that the owner of a narrow right of way had the right deviate from the easement only to the extent necessary to turn his horse and buggy around.
In the U.S. generally, and Wisconsin particularly, the right of deviation is restricted to public rights of way. You can deviate onto the subservient estate if a street is blocked, two moving trucks are parked side by side in the alley in back of your house or if a tree falls across the beach easement. (This is important, in Malibu beach access easements allow paraparazzi to snap pics of movie stars lounging on the back decks of their beachfront property). So in Wisconsin, you can’t go around the easement. You can only move the boat if Curmudgeon does not object. Otherwise, you need to go to court to enforce your easement.
There three are kinds of easements that can be obtained without consent: easements of necessity, implied easements and prescriptive easements (easements gained by adverse possession). If there is no way, no matter how inconvenient or expensive to get from your cottage to a public street, you may be able to have a court grant an easement of necessity. This allows you to walk or drive across a convenient, not unreasonable right of way the court will determine. But, like any access easement, you cannot use it for utilities such as water, sewer, electricity, gas or (gasp!) cable. If you have an access easement or an easement for ingress, egress and/or regress, you do not have the right to place utility lines over, along or under the easement.
Suppose you Curmudgeon sells off a quarter acre, lake view ,cottage with a winding half mile drive down to the lake. The drive leaves your property and goes over Curmudgeon’s land. You may have an easement by implication to use the road. Courts can award an easement by implication for the use of a visible, longstanding improvement which has been used to benefit your property.
Finally, suppose you buy the quarter acre and take a shortcut to the Lake whenever Curmudgeon takes his daily nap or runs down to the post-office for his mail and a few pints with locals. Curmudgeon would never permission. You never asked for permission. After 20 years, you are entitled a prescriptive easement to walk down to the lake via the shortcut. Prescriptive easements are limited to the rights you actually used for 20 years and to the place(s) you used them.. Since you have been walking, the rules are simple. No cars. No entering the lake unless you went regularly went swimming. No fishing unless you frequently took dinner out of the lake
And now for the rest of the story. You must to more than laugh and tell your friends about how you got away with it. Within another 30 years, you have to file a record of your claim or lose it. Clients who tell me they have gone down to the Lake for 45 years can have a prescriptive walking easement. If clients tell me Grandpa started taking Mom to the Lake in 1958 and never filed an affidavit, then they will be able enjoy the lake view, but not the lake shore.
Now go back and take the quiz again. The answers are: (1) No (2) No (3) Yes. Jones should record it as well. (4) This is a quail hunting easement. Your deer hunting friends are out of luck. (5) No. Too bad, because it is so easy to record an affidavit announcing your easement rights. (And so illegal, if you know you don’t have any). (6) a shared driveway may or may not be an easement. Either way, you can only drive around the snowplow in England, where you must remember to kept to the left. (7) Yes. Roman laws were kept secret until 450 BC when the first partial descriptions of the laws of Rome were published as the ten tables (revised as the twelve tables in 449 BC). Table VII outlined legal definitions and procedures for real property.
Now you know a little more about easements.
If you are wondering about your easement rights - or if you are considering buying a property - it’s time to see a lawyer. And never, ever make an offer on a property with an easement – or one that might have an easement – unless you include the right to review and approve any easements.
For more information or advise please call Ken Friedman at 920-231-1500
Saturday, May 2, 2009
1. First time homebuyers (who did not own a principal residence in the three years before closing) are eligible.
2. Income taxes are reduced by 10% of the cost of the buyer's ownership interest in the home or $8,000, whichever is more, subject to conditions below.
3. This is a "refundable tax credit" - so if tax liability is less than the tax credit, the buyer will get a tax refund for the difference.
4. The tax credit is reduced as income increases beyond $75,000 for individuals or $150,000 for a married couples.
5. This applies to buying a partial interest in a home owned by others. For example, if Lucky Lee MyChild moves from their apartment after marry Mr. (Mrs.) Already A. Homeowner and purchases a half-interest in the home, they may be eligible for the tax credit.
6. In 2010, the $7,500 non-refundable, payback, tax credit program returns for first time homebuyers.
For more information see IRS form 5045 or email Ken Friedman
Sunday, April 19, 2009
1. Comfort the Survivors
Comforting survivors is job #1. In addition to emotional support, check whether survivors have access to money for living expenses.
Surviving family members and dependents may need several thousand dollars – enough to last for the 60 to 90 days it may take for the personal representative or others have time to arrange for transfers from decedent's assets (if any). Sources of funds include survivor's individual bank accounts, retirement or other financial assets, joint accounts or credit cards, POD/TOD accounts and Trusts with surviving Trustees.
2. Help With or Make Final Arrangements
Helping make or confirm final arrangements is the second major priority. Organ donations may be indicated on driver's licenses, powers of attorney for healthcare or powers of disposition of final remains. Funeral and burial (or other disposition) wishes may be stated in a will or power of disposition. There may be a funeral trust. While final arrangements cost money, most providers are used to the idea that payment will be delayed for some weeks while survivors work out the details of administration of the decedent's estate. If you are approached for contribution to expenses, make sure you understand who, if anyone, has a responsibility to reimburse you and whether they have sufficient assets to do so.
3. Get Copies of the Death Certificate
The funeral home, county clerk or, in some cases, the coroner, will provide a copy of the death certificate. Death certificates are essential to administer estates and to prove death to parties who hold assets for the decedent and his or her heirs. It will often be helpful to have half a dozen originals as attorneys, courts and most financial institutions will want originals or copies.
4. Take Time For Grief
Each of us needs time to grieve and time to heal. Focusing on financial decisions delays our adjustment to a loss. Even if death appears to be a blessing, focusing on administration of the estate may make it more difficult to adjust.
Many people try to "take care of everything" in the first days following the death of a loved one. This is impossible and often makes matters worse. Forcing decisions can leave hard feelings. The law gives 30 days to start probate, but many probates start later. Administration of an estate takes time, often between six months and two years. Even the simplest tasks (like accessing funds in a payable on death bank account) may require a death certificate and several days.
Sometimes, family members and heirs are in town for a funeral or reception. Depending on their feelings, this may be a good time for a preliminary meeting with an attorney. Otherwise, it might be better to wait until you have more information. (See step 7).
5. If You Need to Pay Bills, Stick to Necessities and Avoiding Late Fees and Interest
Creditors understand that a death will mean a delay in payment or, as the case may be, a write-off. If a survivor or trustee has access to funds, then he or she should start dealing with bills that assess fees or interest for delayed payment. If no funds are available, or if funds are inadequate, it may be necessary to make arrangements for critical services (e.g., heat, light and phone).
6. Find “The Estate Records List” (if one exists).
It will simplify decision-making if the decedent left instructions for final arrangements and/or where to locate papers or assets, Survivors may know where papers are located, If there was a will or trust and what other wishes the decedent may have had. Hint: if you don’t have a list, now is a good time to make one.
7. When You Are Ready, Gather Information and Seek Advice
Gathering is NOT organizing. It is merely putting mail and readily available information about wills, trusts and assets in a safe place. Review the information you have gathered and make an appointment to discuss how the estate will be administered. If there is a trust, the beneficiaries should meet with the Trustee. Trustees should confer with their attorneys. If there is probate property or debts which cannot be paid from probate property, the personal representative(s) named in the will probably need to see an attorney to start the legal process of administration (probate). A family member, heir or creditor may take responsibility for probate if there is no will or if the personal representatives (and alternates) fail to act.
For more information email Ken Friedman, call him at 920-231-1500 or post a comment here.
Thursday, April 9, 2009
What is a false advertising statement under Wis. Stats. 100.18?
False advertising is any communication, written or oral, made to the public, that is untrue, misleading or deceptive. The public includes anyone - even a single individual who does not have a "particular relationships" with the seller.
Let's take it a step at a time. Any communication is an advertisement. Say Joe is selling his home. Advertising communications include newspaper ads, internet ads, spec sheets (like a realtor's handout), the real estate condition report and oral statements, as long as the communication is made before an offer is accepted. Joe tells Lookie Lou, "I had a building permit for my deck." If Lookie Lou makes an offer and discovers there was no building permit and the deck does not meet code, Joe is liable for false advertising. If Lookie Lou has to rebuild the deck, he can recover his costs and, if Lookie Lou wins in court, his attorney fees.
What is a "particular relationship?"
Most often, it is a sales contract or a previous customer relationship. If Joe has accepted Lookie Lou's offer to purchase the house, they have a particular relationship. In that case, the statute does not apply.
Puffery is to be Expected, Not Prosecuted.
Puffery is a qualitative statement, usually an exaggeration, whose truth cannot be determined. Joe is using puffery when he says "this is the best house on the block." Other examples of puffery include: "extensively remodeled," "move-in condition" and "Be the envy of the neighborhood." The Supreme Court has held that puffery is the accepted and expected exaggeration of quality by salespeople.
For more information, email Ken Friedman, call him at 920-231-1500 or post a comment here.
(1) Other laws that may apply in special cases include Wis. Admin. Code ATCP 110.02 (Home Improvement Practices/Prohibited Trade Practices) and Wis. Stats. 895.446 which allows a private right of action for violations of 943.20(1)(d) theft by fraud (as well as certain other criminal violations).