Property — landlord-tenant

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Wisconsin Court of Appeals

Civil

Property — landlord-tenant

A lease extension provision is enforceable, even if the tenant and the party to which it sublet the property did not know of the provision.

“Quad/Graphics, a sophisticated business entity, occupied the 300 North Jefferson Street premises under a purported sublease with New Electronic Printing Systems (we say ‘purported’ because the leases required Gagliano’s consent to subleases, which it did not give). Thus Quad/Graphics accepted the benefits conferred by the Gagliano leases and their amendments, which were also disclosed to it in the July 6, 2006, Membership Interest Purchase Agreement. Therefore, Quad/Graphics cannot disclaim or avoid its liabilities for the burdens imposed by those leases and amendments—including the lease-extension terms in paragraph 2.4 and the October 23, 2003, amendment’s specification of the proper recipients for notice. We recognize that Quad/Graphics attempted to do that in the purported sublease, but Gagliano was not a party to that sublease and did not consent to it. It is elemental law that only parties to an agreement may be bound by it. See Lakeshore Commercial Finance Corp. v. Drobac, 107 Wis. 2d 445, 447, 455–458, 319 N.W.2d 839, 840, 845–846 (1982); Gans v. St. Paul Fire & Marine Ins. Co., 43 Wis. 108, 113, 1877 WL 3668 at *2 (1877) (A contract that seeks to ‘bind a third party who is a stranger to it, and who never agreed to be bound by it … would be a manifest absurdity.’). Thus, Gagliano’s December 29, 2005, Notice of Lease Extension was effective and bound Quad/Graphics as well as Openfirst, Inc.’s other successors. Therefore, the trial court improperly granted summary judgment to Quad/Graphics dismissing Gagliano’s claims against it.”

Reversed and Remanded.

Recommended for publication in the official reports.

2012AP122 Anthony Gagliano & Co., Inc., v. Openfirst, LLC

Dist. I, Milwaukee County, Moroney, J., Fine, J.

Attorneys: For Appellant: Armstrong, Thomas, Milwaukee; For Respondent: Apfeld, Michael B., Milwaukee; Huitink, Michael D., Milwaukee; Schmidt, Mark, Milwaukee; Maher, Ann M., Milwaukee; Lawless, Lisa M., Milwaukee