March 7, 2024 – A proposed judgment that included the word “contempt” in its title was not a motion for contempt when it was filed to enforce the terms of an injunction, the Wisconsin Court of Appeals (District III) has held in an unpublished per curiam opinion in Pine Ridge Wausau, LLC v. Krist Oil Co., 2022AP1793 (Feb. 21, 2024).

Pine Ridge Wausau, LLC (Pine Ridge) operates a convenience store in Wausau. Krist Oil Co., (Krist), operates a convenience store located across the street from the Pine Ridge store in Wausau.

Pine Ridge sued Krist in Marathon County Circuit Court in May 2013.

Pine Ridge claimed that Krist had violated the Wisconsin Unfair Sales Act (USA), Wis. Stat. section 100.30, by selling gas at a price less than that allowed under the USA with the intent to induce customers to either: 1) buy gas from Krist; or 2) unfairly divert trade from Pine Ridge.

Parties Settle Lawsuit

Pine Ridge and Krist settled the lawsuit in July 2014. The settlement agreement added Carkelsy, Inc. (Carkelsy), which operates a convenience store in Merrill, as a third-party beneficiary (one of Krist’s stores is located one mile west of Carkelsy’s store in Merrill).

The settlement agreement included the entry of a permanent injunction barring Krist, Pine Ridge, and Carkelsy from selling gas in a way that violated the USA.

The settlement agreement and the permanent injunction specified that an aggrieved party may file a motion to enforce the injunction if any party: 1) violated the terms of the injunction; and either 2) failed to cure the violation in a timely manner or violated the injunction more than two times in one year.

The settlement agreement and the permanent injunction also specified that if a party moved to enforce the injunction and the circuit court determined that one of the other parties had violated the USA, the aggrieved party was entitled to $4,000 for each day of violation plus attorney fees and costs.

Motion to Enforce

Pine Ridge and Carkelsy filed a motion to enforce the injunction in August 2015. They claimed Krist had violated the injunction by running a coffee club program that allowed customers who paid with cash to pay five cents less per gallon of gas.

Krist responded by filing a motion to enforce the injunction. Krist claimed that Pine Ridge and Carkelsy had violated the injunction by running a customer rewards program and by accepting coupons that entitled customers to 50 cents of free gas.

The circuit court granted summary judgment for Pine Ridge and Carkelsy.

Pine Ridge and Carkelsy then submitted a proposed judgment stating that Krist had violated the injunction and awarded $160,000 to Carkelsy and $240,000 to Pine Ridge.

The proposed judgment included a section titled “Conclusions of Law and Judgement of Contempt.”

Court Rules Against Krist

The circuit court ruled in April 2022 that Krist’s coffee club program violated the USA.

The circuit court ruled that Carkelsy was entitled to $160,000 and Pine Ridge was entitled to $240,000 but concluded that Krist’s actions did not constitute contempt of court.

Krist appealed.

Contempt Controversy

On appeal, Krist argued that the circuit court erred by imposing a contempt sanction under ch. 785 despite finding that: 1) his violations of the injunction were not continuing; and 2) his actions didn’t constitute contempt.

The Court of Appeals noted that while the proposed judgment filed by Pine Ridge and Carkelsy contained the word ‘contempt,’ those parties clarified that they weren’t asking the circuit court to sanction Krist for contempt – they were asking the circuit court to enforce the injunction and award them damages under the injunction.

Krist argued that a motion to enforce an injunction is the same as a motion for contempt, and pointed out that Pine Ridge and Carkelsy hadn’t filed a motion to enforce the settlement agreement – a motion that would have sounded in contract.

But the Court of Appeals pointed out that the injunction expressly allowed an aggrieved party to sue to enforce the injunction and recover damages.

“The injunction identifies the method of its own enforcement, and Pine Ridge and Carkelsy followed that method when they moved to enforce the injunction,” the Court of Appeals wrote.

Tussle over Tetra Tech

Krist also argued the circuit court erred by retroactively applying the Wisconsin Supreme Court decision Tetra Tech EC, Inc. v. DOR, 2018 WI 75, 382 Wis. 2d 496, 914 N.W.2d 21.

In Tetra Tech, the Supreme Court ended the practice whereby a reviewing court deferred to an administrative agency’s conclusion of law.

Krist argued to the circuit court that the coffee club program didn’t violate the USA because the state Department of Agriculture, Trade, and Consumer Protection (DATCP) had, since 2007, allowed Fleet Farm to run a similar program.

But the circuit court ruled that under Tetra Tech, it wasn’t required to defer to DATCP’s interpretation of the USA.

Krist acknowledged that under Wisconsin caselaw, courts apply decisions retrospectively. But he argued that an exception applies where a contract has been entered into on reliance upon a legislative enactment as construed by earlier court decisions.

Krist argued that it entered into contracts with its gas supplier in reliance upon the enactment of the USA as construed by DATCP’s approval of the Farm Fleet coffee club.

DATCP Policy Not Precedential

But the Court of Appeals noted that Krist hadn’t explained how DATCP’s non-enforcement of the USA against Fleet Farm was equivalent to a prior precedential court decision that had been overturned.

Furthermore, the Court of Appeals concluded that even under due weight deference, the circuit court would have determined Krist violated the USA, because the section of the USA which Kirst violated was unambiguous.

“Thus, the court implicitly concluded that the DATCP’s prior interpretation of the Unfair Sales Act to allow Fleet Farm’s similar discount program was unreasonable,” the Court of Appeals wrote.