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2000  WI  App  57
COURT OF APPEALS OF WISCONSIN
PUBLISHED OPINION
Case No.:                                   99-0103
†Petition for review filed
Complete Title
of Case:
LARRY A. WYNHOFF,
PLAINTIFF,
V.
GARY S. VOGT, VERONICA VOGT, AND THE VOGT
FAMILY LIMITED PARTNERSHIP,
DEFENDANTS-THIRD-
PARTY PLAINTIFFS-APPELLANTS,
V.
GEORGE WYNHOFF,
THIRD-PARTY DEFENDANT-
RESPONDENT.†
Opinion Filed:                              February 16, 2000
Submitted on Briefs:                        November 19, 1999
JUDGES:                                     Brown, P.J., Nettesheim and Snyder, JJ.
Concurred:
Dissented:




2000  WI  App  57
Appellant
ATTORNEYS:                                                               On behalf of the defendants-third-party plaintiffs-appellants, the cause
was submitted on the briefs of  John A. Busch and Gordon P. Giampietro
of Michael, Best & Friedrich LLP of Milwaukee.
Respondent
ATTORNEYS:                                                               On behalf of the third-party defendant-respondent, the cause was
submitted on the brief of Christopher Lowe of Lowe Law Offices, S.C.
of Milwaukee.




COURT OF APPEALS
NOTICE
DECISION
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.
February 16, 2000
                                                                                                            A  party  may  file  with  the  Supreme  Court  a
                                                                                                            petition  to  review  an  adverse  decision  by  the
                                                                           Cornelia G. Clark
                                                                                                            Court of Appeals.   See WIS. STAT. § 808.10 and
                                                                           Acting Clerk, Court of Appeals
                                                                                                            RULE   809.62.
                                                                           of Wisconsin
No.                                                                        99-0103
                                                                           STATE OF WISCONSIN               IN COURT OF APPEALS
LARRY A. WYNHOFF,
PLAINTIFF,
V.
GARY S. VOGT, VERONICA VOGT, AND
THE VOGT FAMILY LIMITED PARTNERSHIP,
DEFENDANTS-THIRD-PARTY
PLAINTIFFS-APPELLANTS,
V.
GEORGE WYNHOFF,
THIRD-PARTY DEFENDANT-
RESPONDENT.
APPEAL from a judgment of the circuit court for Waukesha County:
KATHRYN W. FOSTER, Judge.   Reversed and cause remanded with directions.




No.   99-0103
Before Brown, P.J., Nettesheim and Snyder, JJ.
¶1                                                                                        SNYDER, J.     Gary S. Vogt, Veronica Vogt and the Vogt Family
Limited Partnership (the Vogts) appeal from a judgment determining that property
deeded to Gary on January 18, 1974, should be retitled in favor of his stepfather
and third-party defendant, George Wynhoff.   The Vogts contend that the circuit
court sitting in equity did not have the authority to reform the 1974 deed because it
was valid and unambiguous on its own terms.   Larry Wynhoff responds that the
court properly exercised its discretion in retitling the property based on the intent
of George and his wife Dorothy to have Larry and Gary share an equal interest in
the property.
¶2                                                                                        Although we are cognizant of the circuit court’s broad power in
granting equitable relief, we also recognize that equity must follow the law.   In
this case, the court did not have the authority to fashion the remedy it created.   The
circuit  court  exceeded  the  limits  of  its  equitable  powers  by  functionally
introducing a new cause of action which had not been pled or noticed to the Vogts.
In addition, equity did not permit the court to consider conditions and reservations
that were never expressed in a valid and unambiguous deed, much less cancel the
deed itself.   We therefore reverse the court’s judgment retitling Gary’s property.
BACKGROUND
¶3                                                                                        On February 11,  1997, Larry, the stepbrother of Gary and natural
son of George,1 filed a foreclosure action against the Vogts claiming that Gary had
failed to make payment on a note and mortgage allegedly executed by Gary in
1 Larry is the stepson of Dorothy Wynhoff, who was the natural mother of Gary.   She
passed away in 1998.
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No.   99-0103
favor of George on January 18, 1974.   According to Larry, the note memorialized
Gary’s  promise  to  pay  a  principal  sum  of                                         $139,000  plus  interest,  and  final
payment was due on January 18, 1994.   The note was secured by fifty-six acres of
land in Menomonee Falls (Menomonee Falls property)—the same property that
was deeded to Gary on January 18,  1974.   Larry alleged that on September  2,
1975, a warranty deed was recorded showing that Gary had transferred one acre of
the Menomonee Falls property to Dale and Patricia Kuhlman.   Larry claimed that
on January 18, 1977, George assigned the note and mortgage to him by written
agreement, which was later recorded on December 27, 1995.   Larry sought to have
Gary  pay  him  the  principal  and  interest  from  the  note,  which  totaled  over
$400,000.
¶4                                                                                      The Vogts denied Larry’s claim and filed a motion for summary
judgment, contending that the note and mortgage forming the basis of Larry’s
complaint could not have been executed on January 18, 1974.   The court denied
their motion.
¶5                                                                                      The Vogts then filed a third-party complaint against George.   They
alleged that on January  18,  1974, Gary received title to the Menomonee Falls
property by quitclaim deed executed by Grace Kimball, a neighbor of George and
Dorothy, for consideration of one dollar.   The Vogts asserted that the transaction
was actually a gift from George.   They also contended that Gary had not entered
into  the  January  18,                                                                 1974  note  and  mortgage.    The  Vogts  ultimately  sought
indemnification from George for any relief awarded to Larry.
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No.   99-0103
¶6                                                                                       A bench trial was held from October 6 through 8, 1998.   In its oral
decision, the court determined that Larry had failed to prove that the January 18,
1974 note and mortgage were valid and enforceable.2   The court, however, also
ruled that the Vogts’ title3 to the Menomonee Falls property was invalid because
“there was no intention on the part of [George] Wynhoff to have that property be
exclusively under the control and dominion of [Gary].”   The court then retitled the
property in George’s name.   The Vogts appeal from the court’s judgment dated
November 25, 1998.
DISCUSSION
¶7                                                                                       The Vogts raise several arguments on appeal.   First, they contend
that George should have been found incompetent to offer testimony regarding his
alleged transactions with Grace Kimball under Wisconsin’s dead man’s statute,
WIS. STAT. § 885.16 (1997-98).4   They also assert that the evidence established
that  Gary  has  held  title  to  and  exercised  dominion  and  control  over  the
Menomonee Falls property since  1974.   Further, and more fundamentally, they
argue that the circuit court lacked the authority to reform the quitclaim deed from
Kimball to Gary.   We are persuaded by this final argument, and thus we need not
address Gary’s evidentiary issues.
2 Larry does not appeal this portion of the court’s judgment.
3 On July 11, 1995, Gary executed a quitclaim deed transferring the Menomonee Falls
property to the Vogt Family Limited Partnership.
4 All references to the Wisconsin Statutes are to the 1997-98 version unless otherwise
noted.
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No.   99-0103
¶8                                                                                        We begin by taking a closer look at the circuit court’s oral decision.
The court initially explained that the transactions resulting in Gary’s title to the
Menomonee  Falls  property  involved                                                      “wheeling  and  dealing  and  gifting  and
avoiding the ramifications of taxes.”   Because of the questionable nature of Gary’s
acquisition of the property, the court looked beyond the quitclaim deed itself,
although  the  court  did  not  find  any  defects  in  the  deed.    The  court  found
compelling the “intent stated in … the letter of [Dorothy] Wynhoff to Gary … to
gift to the two respective families that is, [Larry’s] and [Gary’s] family equally.”
¶9                                                                                        The court found there to be a “scheme of gifting” wherein George
and Dorothy Wynhoff desired not to give up control over the subject of their gifts.
The court was persuaded that George had exercised “considerable dominion” over
the Menomonee Falls property, as evidenced by his participation in the one-acre
sale to the Kuhlmans and his handling of property located on Vliet Street in
Milwaukee.     The  court  stated,                                                        “[T]he  total  picture  the  court  comes  with
incorporating both Menomonee Falls and Vliet Street property in terms of taking
control of the rental income, making decisions as apparently to do remodeling, the
length of leases and so on, again seem to remain with [George] Wynhoff.”
¶10    While ultimately finding that Larry had failed to meet his burden of
proving that the note and mortgage and assignment of the note and mortgage were
valid, the court also determined that Gary’s acquisition of the Menomonee Falls
property was a gift that “came with strings.”   According to the court, there was
some “ambiguity … at the time that the quitclaim deed was urged upon Grace
Kimball.”   The court found that George wanted to retain an interest in the property
on behalf of Larry but that it was not to the extent that Larry claimed ($139,000
plus interest).
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No.   99-0103
¶11    The court then considered Wisconsin’s statute of frauds, WIS. STAT.
§ 706.02,  and  in  particular  paragraph                                                  (1)(c),  which  requires  a  real  estate
transaction  to  be  evidenced  by  a  conveyance  that                                    “[i]dentifies  the  interest
conveyed, and any material term, condition, reservation, exception or contingency
upon  which  the  interest  is  to  arise,  continue  or  be  extinguished,  limited  or
encumbered.”   The court stated that it believed there were “lots of contingencies
and reservations that were not listed on any of [the] documents.”
¶12    The court then proceeded to WIS. STAT.  §  706.04, the equitable
relief section of WIS. STAT. ch. 706, which states:
A transaction which does not satisfy one or more of the
requirements of s. 706.02 may be enforceable in whole or
in  part  under  doctrines  of  equity,  provided  all  of  the
elements of the transaction are  clearly and  satisfactorily
proved and, in addition:
(1) The deficiency of the conveyance may be supplied by
reformation in equity ….
Exercising its power to fashion an equitable remedy, the court concluded that just
as George did not intend to create the note and mortgage upon which Larry had
sued, George had no desire for the property to “be exclusively under the control
and dominion of  [Gary].”    The court further stated that because Dorothy and
George Wynhoff intended to share equally between Larry’s and Gary’s families,
the
only way I can see that intention  … carried out is that
likewise the title that [Gary] has in the property is clouded
by the absence of the reservations ….   I am satisfied the
equitable relief is to in effect retitle the property in the sole
name of George Wynhoff because of those irregularities.
Standard of Review
¶13    In canceling the 1974 quitclaim deed, the circuit court exercised its
equitable powers under WIS. STAT. § 706.04.                                                “The basis of all equitable rules is
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No.   99-0103
the principle of discretionary application.”   Mulder v. Mittelstadt,  120 Wis. 2d
103, 115, 352 N.W.2d 223 (Ct. App. 1984) (quoting Yuba Consol. Gold Fields v.
Kilkeary, 206 F.2d 884, 889 (9th Cir. 1953)).   We apply the erroneous exercise of
discretion  standard  in  reviewing  decisions  in  equity.     See  Lueck’s  Home
Improvement, Inc. v. Seal Tite Nat’l, Inc., 142 Wis. 2d 843, 847, 419 N.W.2d
340 (Ct. App. 1987).   Discretionary acts are upheld if the circuit court “examined
the relevant facts, applied a proper standard of law, and, using a demonstrated
rational process, reached a conclusion that a reasonable judge could reach.”   Loy v.
Bunderson, 107 Wis. 2d 400, 414-15, 320 N.W.2d 175 (1982).   We will sustain
the court’s findings of fact unless they are clearly erroneous.   See WIS. STAT.
§ 805.17(2).
Analysis
¶14    At the outset, we point out that neither the circuit court nor any party
has contended that the 1974 deed was deficient or ambiguous in its own right.   Our
review of the deed indicates that it clearly provided for transfer of the title to the
Menomonee Falls property from Grace Kimball to Gary.    The document was
properly signed, delivered and recorded.
¶15     When the circuit court learned that George and Dorothy Wynhoff
had no intention of Gary acquiring the Menomonee Falls property outright, it
resorted to WIS. STAT. §§ 706.02 and 706.04 in creating an equitable remedy.   The
court said that it was directed to the  § 706.04 equitable relief provision by the
Vogts.   However, neither the Vogts nor any other party requested cancellation of
the deed and retitling of the property.
¶16    The  court  stated  that  it  believed  there  were  contingencies  and
reservations in the deed that were not listed in any of the documents.   Under WIS.
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No.   99-0103
STAT. § 706.02(1)(c), a real estate conveyance must identify “any material term,
condition,  reservation                                                                  …  upon  which  the  interest  is  to  arise,  continue  or  be
extinguished, limited or encumbered.”   Because the 1974 deed did not contain any
such condition, the court read George’s reservations into the deed apparently by
way  of  “reformation  in  equity”  pursuant  to  WIS.  STAT.                            § 706.04(1).    This
provision, however, also speaks to  “the deficiency of the conveyance” and the
failure to satisfy one or more of the § 706.02 requirements.   No party contended
that the  deed  was deficient, ambiguous or  fraudulent, and the court does not
explain why the omission of a reservation rendered the deed invalid.   Moreover,
what  the  court  did  here  was  not                                                    “reformation”  pursuant  to                                       §   706.04,  but
cancellation.   The court invalidated a written and recorded real estate agreement
based upon the subsequent expressed intent of an individual, George, who was not
even a party to the transaction.
¶17    The court’s granting of equitable relief conflicts with fundamental
tenets of property law.   First and foremost, we note that although a court sitting in
equity enjoys the “power to enlarge the scope of the ordinary forms of relief, and
even to contrive new ones adapted to new circumstances,” Mulder, 120 Wis. 2d at
115 (citations omitted), it must nonetheless follow the law, see Kurowski v. Retail
Hardware Mutual Fire Insurance Co., 203 Wis. 644, 647, 234 N.W. 900 (1931).
Wisconsin law has made clear that if a party wants to retain an interest in property,
it must expressly do so in the document of conveyance.   See Baraboo Nat’l Bank
v. State, 199 Wis. 2d 153, 160, 544 N.W.2d 909 (Ct. App. 1996).   In addition,
“once the deed takes effect as of date of delivery, subsequent conduct or remarks
of the grantor cannot operate retroactively to change such effect.… ‘[A]s a matter
of law there cannot be a conditional delivery of a deed to a grantee; in such a case
the delivery becomes absolute.’”    Ritchie v. Davis,  26 Wis. 2d  636,  644,  133
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No.   99-0103
N.W.2d  312  (1965)  (quoting George Williams College v. Village of Williams
Bay, 242 Wis. 311, 320, 7 N.W.2d 891 (1943)).   Here, George failed to include
any reservations in the  1974 deed; therefore, once the deed was delivered, his
undocumented intentions were of little consequence.
¶18     Our supreme court has also aptly pointed out that “[a] deed, like any
instrument, should not be rewritten by the court.   If the court could rewrite or
invalidate  private  contractual  agreements,  it  would  destroy the  certainty upon
which  contracting  parties  are  entitled  to  rely.”     Stoesser  v.  Shore  Drive
Partnership, 172 Wis. 2d 660, 670, 494 N.W.2d 204 (1993).   In the present case,
the  circuit  court’s  decision  undermines  the  certainty  of  legitimate  real  estate
transactions.
¶19    Wisconsin case law further recognizes that deeds and other
[s]olemnly executed instruments are not to be set aside or
reformed  except  upon  evidence  sufficient  to  establish
mistake  or  fraud  so  clearly  as  to  leave  no  substantial
doubt...                                                                                    [A] mere promise on the part of the grantee that
certain  sums  shall  be  paid  are  of  themselves,  alone,
insufficient to establish that a reservation or condition to
such effect was intended to have been incorporated in a
deed.
Baumann v. Lupinski, 108 Wis. 451, 456, 84 N.W. 836 (1901) (citation omitted).
Similarly, in the present case, although George wanted to retain a controlling
interest in the Menomonee Falls property, not even a promise by Gary to permit
such a reservation would have preserved George’s interest.
¶20    In an early case, Mills v. The Evansville Seminary, 47 Wis. 354,
362, 2 N.W. 550 (1879), our supreme court addressed whether a court in equity
had the authority to reform a deed that was “absolute in terms” but that did not
reflect  the  intent  of  the  grantor.    There,  Mills  claimed  that  when  he  deeded
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No.   99-0103
property to the Evansville Seminary, he did so as a grant upon the condition that
the property be used only for a seminary, and that if the land no longer was
utilized for such a purpose, it would revert back to him.    However, no such
condition was set forth in the deed.   Mills wanted to reform the deed to make it
express what he considered to be the actual intention and understanding of the
parties.   Because the land was no longer being used for a seminary, he wanted the
court to declare a forfeiture of the property.   The supreme court declined, holding
that a court of equity could not exercise its jurisdiction to reform a perfectly valid
deed.   See id.
¶21    Similarly, the circuit court here did not have the authority to cancel a
deed  that was not only statutorily sufficient,  but one  whose  validity was not
challenged by any of the parties.    Wisconsin law is plain that once a deed or
similar instrument has been properly executed and recorded, a court may not alter
the  document—aside  from  fraud  or  mistake—when  a  party  later  expresses  a
different intent than what was memorialized.   In George’s case, he was awarded
title to the Menomonee Falls property in the face of a valid deed held by Gary and
despite the fact that George was not a party to the transaction.   We are convinced
that the circuit court exceeded its discretion in retitling the property.   Therefore,
we reverse the court’s judgment and remand with directions to award all rights,
title and interest in the property to the Vogts.
¶22     Costs are denied to all parties.
By  the  Court.—Judgment  reversed  and  cause  remanded  with
directions.
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