M.R. Commerce Building, LLC v. TLM Development LLC
2022AP000925
| Wis. Ct. App. | Feb 1, 2023Background
- TLM Development (owned by Tammy Myers) signed three commercial leases for suites in an M.R. Commerce building in Jan–Feb 2021; each lease included handwritten concessions reducing or suspending rent and waiving the security deposit for the first 90 days.
- Myers and M.R. Commerce owner Medhat Rizk also signed an offer to purchase (Jan 23, 2021) making closing contingent on financing; closing deadlines were later extended multiple times.
- Myers paid earnest money and $10,500, which she says was to cover rent through closing; Rizk maintained the sale and leases were separate and continued to demand rent.
- The parties failed to close (dispute over who prevented closing); Rizk later demanded unpaid rent (about $54,800), served a notice to vacate (Oct 16, 2021), and brought an eviction action.
- At a one-day bench trial the court credited Rizk over Myers, found no enforceable oral modification excusing rent beyond the initial 90 days, and rejected a retaliatory-eviction defense (both on credibility and because Wisconsin law limits that defense to residential tenancies).
- The circuit court entered writs of restitution; damages were stayed pending a related suit over the failed sale. The Court of Appeals affirmed and remanded for further proceedings on damages.
Issues
| Issue | Plaintiff's Argument (M.R. Commerce) | Defendant's Argument (TLM) | Held |
|---|---|---|---|
| Whether the parties orally modified the leases to suspend rent through closing | No oral modification; written leases control and rent was due after the initial 90 days | Parties agreed orally to relieve rent obligations while sale was pending; $10,500 covered rent through closing | Court accepted trial court credibility finding for Rizk and held no oral modification relieved TLM of rent beyond the initial concessions |
| Whether a retaliatory-eviction defense is available in a commercial tenancy | Eviction was lawful; retaliatory-eviction defense not available in commercial context | Eviction was retaliatory (Myers alleged sexual advance and threat to evict) and should bar eviction | Court held Wisconsin recognizes retaliatory-eviction defense only for residential tenancies; also found Myers’ testimony not credible, so defense fails |
| Whether the appellate court should overturn factual/credibility findings | Defer to trial court’s credibility determinations | Trial court erred in crediting Rizk over Myers; appellate reversal required | Court applied standard of deference to the trial court’s opportunity to judge demeanor and affirmed the credibility findings |
Key Cases Cited
- Dickhut v. Norton, 45 Wis.2d 389 (1970) (recognizes retaliatory-eviction defense in residential contexts)
- Rossow Oil Co. v. Heiman, 72 Wis.2d 696 (1976) (limits retaliatory-eviction defense to residential housing)
- Lessor v. Wangelin, 221 Wis.2d 659 (1998) (trial court is ultimate arbiter of witness credibility)
- State v. McCallum, 208 Wis.2d 463 (1997) (appellate courts limited to the printed record and must defer to trial court’s demeanor-based credibility assessments)
- Chapman v. State, 69 Wis.2d 581 (1975) (appellate reversal for credibility requires findings that are inherently or patently incredible)