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Johnson v. Johnson

Court of Appeals of Wisconsin, District III

July 6, 2016

Nancy A. Johnson, Jacklyn F. Hansen, Kenneth S. Johnson and Darrin P. Johnson, Plaintiffs-Respondents,
Kevin W. Johnson, Defendant-Appellant, Rick E. Johnson, Defendant.

         APPEAL from an order of the circuit court for Eau Claire County No. 2014CV69: WILLIAM M. GABLER, SR., Judge.

          Before Stark, P.J., Hruz and Seidl, JJ.

          SEIDL, J.

         ¶1 Kevin Johnson appeals an order apportioning proceeds from the sale of a home in this partition action. He argues the circuit court made several errors of law. We agree the court improperly ordered Kevin to make an equitable contribution representing the value of his use and occupancy of the home. Accordingly, we reverse.


         ¶2 The historical facts of this case are not disputed. Nancy Johnson and her husband, Marvin Johnson, owned their home in Eau Claire. In 1999, they quitclaim deeded the residence to their five children, Jacklyn Hansen, Kenneth Johnson, Darrin Johnson, Kevin Johnson, and Rick Johnson, as tenants-in-common. However, Nancy and Marvin retained a life estate in the property. Kevin lived in the home with his parents. His mother moved to a nursing home in July 2013, and his father died in September 2013.

         ¶3 Kevin, age fifty as of a December 2014 hearing, had lived in the home for forty-four years before moving out. He began paying his mother $200 monthly rent in the 1990s, but he was permitted to live there rent free beginning in December 2011, when he indicated he could no longer pay rent. He vacated the home in late October 2014 and moved to a motel room, where he paid $180 weekly rent.[1] Kevin was unemployed at the time of the hearing but previously worked at a company for twelve years ending in September 2012, and he received a wrongful-termination settlement from that company. He explained he was living off the settlement proceeds while looking for work.

         ¶4 In February 2014, a partition action was filed. The plaintiffs were mother Nancy, through her power of attorney, Jacklyn; Jacklyn; Kenneth; and Darrin (collectively, Jacklyn). Kevin and Rick were named as defendants.[2] The property was sold as ordered by the circuit court, and the December 2014 hearing was held to determine how to distribute the proceeds.

         ¶5 An expert witness testified that the home could be rented for $750 to $900 per month. There was also testimony about various amounts expended by parties on attorney fees and on repair and maintenance of the property. The court observed the property had sold for $113, 500 and the parties stipulated that just under $49, 000 would be distributed on Nancy's behalf, to pay a Medicaid lien based on the value of her life estate. The court then allowed Kevin a reimbursement for air conditioning repair, as well as reimbursements of all the other parties' expenses and attorney fees, which were not disputed. As explained in the court's written order, the total amount remaining to be distributed to the five sibling tenants-in-common after all expenses was $33, 265.10, which would result in five equal shares of $6, 653.02.

         ¶6 However, Jacklyn sought an equitable contribution for the value of rent Kevin should have paid for twelve months of living in the home. At the hearing, the circuit court stated:

So then the next question is should-before the money is split up, whatever is left, should there be an amount deducted from [Kevin's] distributive share, something representing the reasonable cost of rent? And I find that there should be something deducted. The testimony [from the] credible expert [was] that the fair rental value of that location would be between $750 and $900 a month. …
However-and [the expert] testified to it …. And that is that there is a significant collateral benefit to having somebody occupy a residence. A residence that is used and opened and people going in and out of doors, it preserves the atmosphere on the inside of the home. In other words, it prevents the home … from becoming stale, musty. Somebody who occupies a home, such as [Kevin] did, was able to ascertain, for example, and take remedial action when the air conditioning went out. That's an added value.
Even though [the expert] didn't think it was a problem, … I'm going to take judicial notice of the fact that in many instances if a home … isn't occupied, there is an exclusion clause that after so many months-and who knows if that would have applied here-it's common to have exclusions for coverage … if a residence is unoccupied. So having [Kevin] in the home, even though he didn't pay rent there, was a discernable benefit to not only himself but his other siblings …. [A]nd having somebody live in a house … is a … security benefit because it's well known that unoccupied homes … are a magnet for crime. And so even though [Kevin] didn't view it as such, perhaps, he … was … an added value. So he's entitled to some credit for that.

         ¶7 The court then considered the expert's valuation testimony but stated it also had to "take into account the reasonable value. What was the reasonable value to [Kevin]?" It further stated it had to consider that value relative to the prior deal between Kevin and his mother for $200 monthly rent. The court explained:

$200 a month certainly for living in a house like that is small, but we know that in terms of value, [Kevin] received value equaling at least $100 [sic] a week, because that's what he's paying now at the [motel]. So, therefore, I do find that [Kevin] did derive a benefit, albeit not worth $750 to $900, but he should have paid it seems to me $400 a month on the average of 100 bucks a week. So 400 times 12, whatever that is, that should be taken out, if you will, of [Kevin's] distributive share, set aside, split up into five chunks ….

         ¶8 Before the court gave its oral decision, Kevin had referred the court to his memorandum of authorities. The court acknowledged Kevin relied on two cases, a Rainer case and a Klawitter case, "which basically stands for [the] proposition that in this type of a case, allowance for use of occupancy shouldn't be made unless the equities of the particular case require it."[3] After its oral ruling set forth above, Kevin asked the court to explain why the equities required him to contribute for the use of occupancy. The court responded:

Well, here's why the equities require that [Kevin] pay, what I think, a minimal amount of $400. We know what that premises would rent for, based upon the testimony of [the expert], who was a credible witness. We also know that [Kevin] has been living there for 18 months rent free. We know that the plaintiffs-Kevin Johnson's siblings- could claim rent for 18 months. [Kevin], in fairness, nobody should occupy a house or home for nothing. That … just doesn't make common sense. Nobody lives in this world without paying for something. And $400 a month is … equitable, because … he's getting a deduct-according to the [expert], he's getting a $350 deduct a month off of the minimum rental price of $750. And for all those reasons, the equities favor that [Kevin] pay something. And that just happens to equal what he's currently paying, $100 [sic] a week, $400 [sic] a month, which is really cheap rent.[4]

         ¶9 Finally, Jacklyn's counsel persuaded the court that Kevin's $4800 rent contribution should instead be split only between the other four cotenant siblings, excluding Kevin. Thus, his share was reduced by the full $4800, and the other ...

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