Sufficiency of Evidence

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WI Court of Appeals – District I

Case Name: Anthony Gagliano & Co., Inc. v. Openfirst, LLC., et al.

Case No.: 2018AP432

Officials: Brash, P.J., Kloppenburg and Dugan, JJ.

Focus: Sufficiency of Evidence

Anthony Gagliano & Co., Inc. (“Gagliano Co.”) appeals an order of the trial court denying its postverdict motions and entering judgment in favor of Robert Kraft and New Electronic Printing Systems, LLC (“New EPS”). That order was the culmination of lengthy litigation stemming from the alleged breach of a lease for commercial property located on North Jefferson Street in the City of Milwaukee. That lease, dated May 2000, was originally between Gagliano Co. as the landlord and Electronic Printing Systems, Inc. (“EPS”) as the tenant, with Kraft personally guaranteeing the lease on behalf of EPS. Subsequently, EPS’s assets were sold to several entities, including New EPS;  the lease was assigned to New EPS, with Kraft extending his personal guaranty of the lease on behalf of New EPS.

The order underlying this appeal was the result of a jury verdict from the second trial in this matter, held in October 2017. The jury found that Gagliano Co. had breached its duty to disclose the landlord extension option, that New EPS had not breached the lease by ceasing to make rent payments in October 2008, and that Kraft had not guaranteed New EPS’s performance of the lease. Therefore, the jury concluded that no damages for unpaid rent were owed to Gagliano Co. Gagliano Co.’s postverdict motions argued that the verdict was not supported by credible evidence, and requested that the trial court grant judgment in its favor notwithstanding the verdict. Gagliano Co. contended that the evidence showed that Kraft and New EPS knew of the landlord extension option when EPS’s lease rights were sold to New EPS and guaranteed by Kraft, and therefore that provision was expressly agreed to by New EPS and affirmed by Kraft. Furthermore, Gagliano Co. noted that subsequent actions by Kraft and New EPS after their discovery of the provision—including the execution of the amendment that added more space to the leased premises—also affirmed the lease. Therefore, Gagliano Co. argued, Kraft and New EPS were bound by all of the lease’s provisions, including the landlord extension option; as a result, the jury’s finding that New EPS and Kraft did not breach the terms of the lease was not supported by the evidence.

We agree that the evidence indicates that New EPS and Kraft affirmed the lease with knowledge of the landlord extension option and, therefore, the jury verdict is not supported by the evidence. As a result, we reverse and remand to the trial court to enter a judgment in favor of Gagliano Co. notwithstanding the verdict, and for further proceedings to determine the amount of Gagliano Co.’s damages.

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.