Saturday, December 28, 2013

Schwabe v. Chantilly, Inc. case brief

Schwabe v. Chantilly, Inc. case brief summary
226 N.W.2d 452 (1975)

CASE SYNOPSIS
Plaintiffs appealed order of Circuit Court for Milwaukee County (Wisconsin) striking fraud cause of action, holding claim was identical to one used as affirmative defense in prior action and thus they were obliged to assert the defense as a counterclaim or else lose the claim completely.

CASE FACTS
Plaintiffs were tenants under a two year lease with defendant apartment owner. During lease term plaintiffs vacated after giving sixty days notice. Defendant apartment owner sued plaintiffs for nonpayment of rent. Plaintiffs asserted affirmative defense of fraud, alleging defendant apartment manager fraudulently represented lease included provision for termination following sixty days' written notice. Following jury trial, judgment was rendered for plaintiffs. Plaintiffs sued defendants for fraud, and malicious prosecution. Trial court granted defendants' motion to strike fraud claim, since affirmative defense in the first action obliged plaintiffs to counterclaim in that action, or else lose claim completely.

DISCUSSION
The supreme court reversed holding that the claim was a permissive counterclaim and was not barred by the doctrines of res judicata, collateral estoppel, or election of remedies; therefore the trial court erred in striking it from the complaint; and the case was remanded for trial upon contested issues.

CONCLUSION
The supreme court reversed holding that the claim was a permissive counterclaim and was not barred by the doctrines of res judicata, collateral estoppel, or election of remedies; therefore the trial court erred in striking it from the complaint; and the case was remanded for trial upon the contested issues.


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