Sufficiency of Evidence

Listen to this article

WI Supreme Court

Case Name: Debra K. Sands v. John R. Menard, Jr.,

Case No.: 2012AP2377; 2015AP870

Focus: Sufficiency of Evidence

We review a decision of the court of appeals, affirming the circuit court’s grant of summary judgment dismissing Debra Sands’ claims and Menard, Inc.’s counterclaim. Debra Sands and John Menard, Jr., were involved in a romantic relationship from late 1997 to April 2006. Sands alleges that from 1998 until 2006 she cohabitated with Menard and they engaged in a “joint enterprise” to work together and grow Menard’s businesses for their mutual benefit. Menard and his affiliated entities argue that by failing to comply with Supreme Court Rule 20:1.8(a), which regulates business transactions between lawyers and their clients, Sands is precluded from seeking an ownership interest in any of Menard’s various business ventures.

We review four issues. First, we consider whether Sands has pleaded facts sufficient to establish what she styled as an unjust enrichment claim under Watts v. Watts, 137 Wis. 2d 506, 405 N.W.2d 305 (1987), thereby necessitating a remand to the circuit court for a full hearing on the merits. Second, we consider whether the court of appeals properly concluded that SCR 20:1.8(a) may be raised as a defense to an unjust enrichment claim. Third, we consider whether the court of appeals properly granted summary judgment to Sands on Menard, Inc.’s counterclaim for breach of fiduciary duty. And fourth, we consider whether the court of appeals properly granted summary judgment to the Menard Trustees.

As to the claim she has characterized as a Watts unjust enrichment claim, we conclude that Sands has failed to allege facts which, if true, would support her legal conclusion that she and Menard had a joint enterprise that included accumulation of assets in which both she and Menard expected to share equally. On the second issue, for the reasons explained below, we conclude that SCR 20:1.8(a) may guide courts in determining required standards of care generally; however, it may not be used as an absolute defense to a civil claim involving an attorney. And finally, we also conclude that the court of appeals properly granted summary judgment to Sands on Menard, Inc.’s counterclaim for breach of fiduciary duty, and to the Trustees on their motion for summary judgment dismissing Sands’ claim. Accordingly, we affirm the court of appeals.

Affirmed

Concur: ABRAHAMSON, J. concurs and dissents, joined by A.W. BRADLEY, J. (opinion filed).

Dissent: ABRAHAMSON, J. concurs and dissents, joined by A.W. BRADLEY, J. (opinion filed).
Full Text

Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.