Friends of Maple Grove, Inc. v. Merrill Area Common Public School District

2021 WI App 26
COURT OF APPEALS OF WISCONSIN
PUBLISHED OPINION

Case No.: 2020AP1179

Complete Title of Case:

FRIENDS OF MAPLE GROVE, INC., A WISCONSIN CORPORATION, DR.
ANGELA SERVI, INDIVIDUALLY AS A MEMBER OF THE MAPLE GROVE
GOVERNANCE BOARD, AN UNINCORPORATED ASSOCIATION, TRINA
LUTZKE, INDIVIDUALLY AS A MEMBER OF THE MAPLE GROVE
GOVERNANCE BOARD, AN UNINCORPORATED ASSOCIATION, ANNETTE
NESKE, INDIVIDUALLY AS A MEMBER OF THE MAPLE GROVE
GOVERNANCE BOARD, AN UNINCORPORATED ASSOCIATION, STEVIE
KLOCKZIEM, INDIVIDUALLY AS A MEMBER OF THE MAPLE GROVE
GOVERNANCE BOARD, AN UNINCORPORATED ASSOCIATION AND
KATHRYN HENRICHS, INDIVIDUALLY AS A MEMBER OF THE MAPLE
GROVE GOVERNANCE BOARD, AN UNINCORPORATED ASSOCIATION,

PLAINTIFFS-RESPONDENTS,

V.

MERRILL AREA COMMON PUBLIC SCHOOL DISTRICT,

DEFENDANT-APPELLANT.

Opinion Filed: March 9, 2021
Submitted on Briefs: January 27, 2021
Oral Argument:

JUDGES: Stark, P.J., Hruz and Seidl, JJ.
Concurred:
Dissented:
Appellant
ATTORNEYS: On behalf of the defendant-appellant, the cause was submitted on the
briefs of Sarah A. Zylstra, Tess O’Brien-Heinzen and Tanner
Jean-Louis of Boardman & Clark LLP, Madison.

Respondent
ATTORNEYS: On behalf of the plaintiffs-respondents, the cause was submitted on the
brief of David C. Moore of Nowlan & Mouat LLP, Janesville.

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2021 WI App 26

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
March 9, 2021
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10 and
RULE 809.62.

Appeal No. 2020AP1179 Cir. Ct. No. 2020CV150

STATE OF WISCONSIN IN COURT OF APPEALS

FRIENDS OF MAPLE GROVE, INC., A WISCONSIN CORPORATION,
DR. ANGELA SERVI, INDIVIDUALLY AS A MEMBER OF THE MAPLE GROVE
GOVERNANCE BOARD, AN UNINCORPORATED ASSOCIATION, TRINA
LUTZKE, INDIVIDUALLY AS A MEMBER OF THE MAPLE GROVE
GOVERNANCE BOARD, AN UNINCORPORATED ASSOCIATION, ANNETTE
NESKE, INDIVIDUALLY AS A MEMBER OF THE MAPLE GROVE
GOVERNANCE BOARD, AN UNINCORPORATED ASSOCIATION, STEVIE
KLOCKZIEM, INDIVIDUALLY AS A MEMBER OF THE MAPLE GROVE
GOVERNANCE BOARD, AN UNINCORPORATED ASSOCIATION AND
KATHRYN HENRICHS, INDIVIDUALLY AS A MEMBER OF THE MAPLE
GROVE GOVERNANCE BOARD, AN UNINCORPORATED ASSOCIATION,

PLAINTIFFS-RESPONDENTS,

V.

MERRILL AREA COMMON PUBLIC SCHOOL DISTRICT,

DEFENDANT-APPELLANT.
No. 2020AP1179

APPEAL from an order of the circuit court for Marathon County:
MICHAEL K. MORAN, Judge. Affirmed in part; reversed in part and cause
remanded for further proceedings.

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

¶1 STARK, P.J. This appeal involves a dispute regarding Maple Grove
Charter School (“Maple Grove”), a public charter school in the Merrill Area
Common Public School District (“the District”). In January 2020, the District sent
a notice of default to the Maple Grove Governance Board (“the Governance
Board”), asserting that the Governance Board had defaulted on various obligations
set forth in its contract with the District. Friends of Maple Grove, Inc., a Wisconsin
nonstock corporation whose board of directors is comprised of the same individuals
who are the members of the Governance Board, then sued the District, seeking a
declaration that the events of default alleged in the District’s notice were not
sufficient to permit the District to terminate the contract. Friends of Maple Grove
also sought an injunction preventing the District from doing so. The individual
members of the Governance Board were later joined as plaintiffs, and the circuit
court ultimately granted the plaintiffs’ requested relief.

¶2 The District now appeals, arguing: (1) the Governance Board lacked
the authority to sue the District; and (2) the circuit court erred by determining that
the Governance Board had not defaulted on its contractual obligations. We reject
the District’s argument that the Governance Board could not sue the District. We
also conclude the court properly determined that the Governance Board did not
default on its contractual obligations regarding academic performance and the use
of an innovative educational program. We therefore affirm the court’s order in part.

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¶3 We conclude, however, that the circuit court applied the wrong legal
standard when determining whether the Governance Board defaulted under the
contract provisions regarding enrollment. The contract provided that an event of
default occurred if Maple Grove had “insufficient enrollment to successfully operate
the Charter School as determined by the District.” (Emphasis added.) This
provision granted the District sole discretion to determine what level of enrollment
was insufficient for Maple Grove to operate successfully. The only limitation on
the District’s exercise of discretion was that it was required to act reasonably and
with a proper motive. See Interim Health Care of N. Ill., Inc. v. Interim Health
Care, Inc., 225 F.3d 876, 884 (7th Cir. 2000).

¶4 The circuit court therefore erred by substituting its discretion for that
of the District when it determined that Maple Grove’s enrollment was sufficient for
successful operation. Accordingly, we reverse the court’s order in part, to the extent
the court concluded the Governance Board did not default with respect to
enrollment. We remand for the court to reassess that issue using the proper legal
standard—i.e., whether the District acted reasonably and with a proper motive when
it determined that Maple Grove’s enrollment was insufficient.

BACKGROUND

¶5 In January 2017, the Governance Board entered into a charter school
contract (“the contract”) with the District pertaining to Maple Grove. The contract
had a five-year term, which began on July 1, 2017, and ended on June 30, 2022.

¶6 Under the contract, the District authorized the Governance Board to
operate Maple Grove as an instrumentality charter school within the District. As
such, the District employs all personnel who work at Maple Grove, including the

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No. 2020AP1179

principal and teachers. See WIS. STAT. § 118.40(7)(a) (2017-18).1 Under the
parties’ contract, the District funds Maple Grove through its allocated state aid. The
District also provides Maple Grove with transportation, food services, and
administrative services, which include purchasing, accounts payable, accounting,
bookkeeping, risk management, auditing, cash management, payroll, benefits
administration, pupil services, recordkeeping, reporting, building and grounds
maintenance, and student testing.

¶7 Several other provisions of the parties’ contract are relevant to the
issues raised in this appeal. First, § 4 of the contract provides that Maple Grove will
“enroll students, with a targeted enrollment of a maximum of 100 students in grades
Kindergarten through 5th grade.” Section 4 also states that Maple Grove’s
“Educational Program” will meet students’ needs “through standards-based
integrated instruction and classes with multi-aged project based classes with
exploratory learning and personal learning plans serving as the learning tools
through which all subject standards are taught.” Section 4 continues:

The innovative and research based Project Based Learning
model used by [Maple Grove] will be based on both clearly
defined learning targets and broad, encompassing questions,
or essential questions to guide learning. These essential
questions, based upon major science, design, systems,
literacy, and social studies themes related to the individual
projects, will direct the focus of all core subjects using
student passions and interests as an anchor for learning. The
Project Based Learning focused, non-sectarian model, uses
the school’s surroundings and community as a framework
and context for student learning. Wisconsin’s common core
curriculum standards in academics will be addressed in the
integrated projects. Students will actively participate
regularly in community experiences that will involve
observing current events, collecting data, testing and
evaluating hypothesis [sic], and drawing conclusions. The

1
All references to the Wisconsin Statutes are to the 2017-18 version unless otherwise
noted.

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No. 2020AP1179

content area instruction the students receive at [Maple
Grove] will be fluid and connected to the essential questions
of math, literacy, systems, design, community, science, and
social studies.

Section 4 also provides that the “Educational Program” described therein “shall be
the primary method used to attain the educational goals established by Wis. Stats.
§ 118.01.”

¶8 Next, § 5 of the contract—entitled “Goals and Methods of Measuring
and Reporting Student Progress”—states that “[t]he following goals and objectives
shall be bench marks which [Maple Grove] shall aspire to obtain ….” One of the
listed goals—entitled “Increase Students[’] Ability to Direct Their Own
Learning”—provides: “Objective: By the end of the first academic year (2017-
2018) one hundred percent (100%) of students will have a Personalized Learning
Plan.” Another of the listed goals—entitled “Increase Student Achievement”—
states:

i. Objective: the 2017-2018 school year will be the
benchmark year. In following years eighty percent (80%) of
[Maple Grove] students will score at or above the national
average in reading on the Measures of Academic Progress
test, beginning Spring of 2019. The same percentage will
increase their proficiency on the same assessment when
compared to their individual scores from the previous Fall,
beginning in Spring 2018.

ii. The 2017-2018 school year will be the benchmark year.
In the following years eighty percent (80%) of
[Maple Grove] students will score at or above the national
average in mathematics on the MAP test, beginning spring
of 2019. The same percentage will increase their proficiency
on the same assessment when compared to their individual
scores from the previous fall, beginning in Spring 2019.

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¶9 Finally, § 27 of the contract—entitled “Termination by District”—
provides that the District may terminate the contract if it “finds that any of the
following Events of Default have occurred”:

(1) The pupils enrolled in [Maple Grove] have failed to
make sufficient progress toward attaining the educational
goals under s. 118.01, Wisconsin Statutes, have failed to
achieve standards under Wisconsin’s Accountability Index,
as determined by the State of Wisconsin for 3 consecutive
years, or have failed to make progress as set forth in
Section 5 of this Contract for 3 consecutive years;

….

(6) The Governance Board defaults in any of the terms,
conditions, promises or representations contained in or
incorporated into this Contract;

….

(8) At the close of the enrollment period, [Maple Grove] has
insufficient enrollment to successfully operate the Charter
School as determined by the District.

¶10 Section 27 then sets forth procedures that the District must follow in
order to terminate the contract. As relevant here, if the District determines that a
nonemergency event of default has occurred, it “shall advise [Maple Grove] in
writing of the pertinent occurrence and shall specify a reasonable period of time
(though in no instance less than 30 days) within which [Maple Grove] shall cure or
otherwise remedy the specified Event(s) of Default to the reasonable satisfaction of
the Superintendent.” If the default is not timely cured, the District may terminate
the contract “by written notice delivered within 10 days after expiration of the
specified period.”

¶11 On January 20, 2020, the District sent the Governance Board a
“Notice of Events of Default.” The notice alleged that three events of default had
occurred under the parties’ contract. First, the notice asserted that Maple Grove’s

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No. 2020AP1179

students had “failed to make [academic] progress pursuant to Section 5 of the
Contract for 3 consecutive years.” More specifically, the notice alleged that the
“percentage of students at or above the national norm from fall 2017 to spring 2019
failed to increase consistently over those three years, and decreased in many
instances.”

¶12 Second, the notice of default alleged that the Governance Board “is
not implementing the Educational Program of [Maple Grove] as promised and
represented to the District in the Contract.” The notice further alleged that Maple
Grove’s educational program “does not reflect the innovative program … most
recently authorized in 2017 (Exploratory Learning)” and that the educational
program “has not been clearly defined by the Governance Board and the innovative
program described in the Contract has not been implemented.” In addition, the
notice asserted that the Governance Board had “unilaterally” acted to “try and
‘rebrand’ [Maple Grove] and adopt a Thematic and Project Based Learning
program.”

¶13 Third, the notice of default alleged that Maple Grove had “insufficient
enrollment to successfully operate as determined by the District.” The notice
asserted:

Section 4 of the Contract states that [Maple Grove] will have
a targeted enrollment of 100 students in K-5. The School
has had an average enrollment of 80 students over the last
three years and a review of the enrollment figures since 2013
show[s] a steady decline in enrollment with 97 students in
2013 and 82 in 2019.

Based upon these enrollment numbers as well as other
factors, including [Maple Grove] and District revenue and
expenses, costs to provide administrative services and
transportation to [Maple Grove], anticipated capital costs of
the [Maple Grove] school building, considerations of
efficiency in District services and facility use, District-wide

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No. 2020AP1179

staffing, and anticipated resources needed to address
achievement gaps, the District Board of Education has
determined that [Maple Grove] has insufficient enrollment
to successfully operate.

¶14 The notice of default gave the Governance Board seventy-two days to
cure the specified events of default “to the reasonable satisfaction of the
Superintendent.” The notice further stated the Governance Board’s failure to cure
the events of default within that time period “may be cause for the District Board of
Education’s termination of the Contract.”

¶15 In response to the notice of default, on February 28, 2020, Friends of
Maple Grove filed the instant lawsuit against the District. In its complaint, Friends
of Maple Grove alleged that the Governance Board was “not in default under the
terms of the Contract.” The complaint further alleged that the District’s “attempt to
assert default on the part of Maple Grove under the terms of the Contract is
pretextual and represents an attempt to terminate the Contract for reasons other than
any purported act of default.” The complaint therefore sought a declaration that the
events of default alleged in the District’s notice were not sufficient to allow the
District to terminate the contract, and it also requested an injunction preventing the
District from doing so.

¶16 The District subsequently asserted that Friends of Maple Grove was
not a proper party because the contract was between the District and the Governance
Board. Friends of Maple Grove disagreed; however, the parties ultimately
stipulated to the joinder of the Governance Board’s five members as plaintiffs in
order to resolve the issue. We refer to the plaintiffs-respondents, collectively, as
“the Governance Board” throughout the remainder of this opinion.

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¶17 The circuit court held an evidentiary hearing on the Governance
Board’s claims over five days during May 2020, and the parties then submitted
written closing arguments. The court subsequently issued an oral ruling granting
the Governance Board’s requested declaratory and injunctive relief.

¶18 As relevant to this appeal, the circuit court first addressed and rejected
the District’s argument that the Governance Board had no authority to sue the
District. The court relied on WIS. STAT. § 118.40(4)(d)8., which grants a charter
school governing board the power “[t]o sue and be sued in its own name.” The court
also reasoned that parties to a contract have an “expectation … that the courts are
there to enforce the terms of a contract if it cannot be resolved between the parties.”

¶19 The circuit court next addressed whether the Governance Board had
defaulted on its contract with the District. First, the court concluded the evidence
did not show that Maple Grove had failed to meet the academic goals set forth in
§ 5 of the contract for three consecutive years, as alleged in the District’s notice of
default. The court noted that the contract went into effect on July 1, 2017, and the
notice of default was issued on January 20, 2020. The court therefore found that,
regardless of whether the term “years” in § 5 referred to school years or calendar
years, three consecutive years had not yet elapsed at the time the District issued its
notice of default.

¶20 The circuit court also concluded that the academic objectives set forth
in § 5 of the contract were merely goals that the Governance Board “must aspire to
reach,” rather than strict standards the Governance Board was required to attain.
The court further found there was evidence that the Governance Board “tried to raise
the test scores[,] and in some areas there was improvement again.” Thus, although
the court reasoned that there “could be a default proven by consecutive scores over

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a three year period, and a lack of attempt at progress, the lack of aspiration,
essentially a charter school giving up,” that was a “worst case scenario” and was
“not the case here.”

¶21 The circuit court next concluded that the Governance Board had not
defaulted on its contractual obligations pertaining to enrollment. The court
emphasized that although the contract provided for a maximum enrollment of
100 students, it did not specify a minimum enrollment. The court noted that during
the contract term, Maple Grove had maintained an enrollment of approximately
eighty students. The court also noted that during the same time period, declining
enrollment was occurring “throughout the District.” In addition, the court cited
evidence that Maple Grove continued to be “financially viable” at its current level
of enrollment.

¶22 The circuit court acknowledged that the contract granted the District
discretion to determine what level of enrollment was insufficient for Maple Grove
to operate successfully. While the court found it “difficult” to accept that the
contract allowed the District to make that determination unilaterally, the court
conceded that the District has “the final say on [the] enrollment question.” The
court stated, however, that “[t]here must be a basis for the District’s determination.”
The court then concluded the evidence did not support a finding that Maple Grove’s
enrollment was insufficient for it to operate successfully, “given [that] the
enrollment has remained steady in the past two and a half years of the contract.”

¶23 The circuit court also concluded there was no default under the
parties’ contract with respect to Maple Grove’s educational program. The court
found that Maple Grove was “in the process of implementing the required
curriculums during the … short two and a half years the contract was in place and

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until the notice of default was issued.” The court noted there was testimony that
Maple Grove’s students “were involved in projects such as collecting maple syrup,
raising chickens, composting, science fairs and other activities.” The court also
found that Maple Grove had taken steps to “rebrand” its curriculum in the spring of
2019 to implement “thematic project-based learning,” with the apparent approval of
the District’s superintendent. The court further found that in the fall of 2019, Maple
Grove “was teaching core curriculum mandated by the District in the morning and
introducing project-based learning in the afternoon.” The court therefore stated it
could not find that Maple Grove “failed to provide the programming” described in
the parties’ contract.

¶24 Finally, the circuit court concluded the Governance Board was
entitled to an injunction because allowing the District to terminate the contract
would result in irreparable harm—specifically, the closure of Maple Grove. The
court also concluded there was no adequate alternative remedy. In addition, the
court concluded that the equities favored granting an injunction, and that an
injunction would not disserve the public interest.

¶25 The circuit court subsequently entered a final order declaring that “the
purported events of default” set forth in the District’s January 2020 notice of default
were “not events of default sufficient to permit the [District] to terminate the
contract between the parties.” The order also permanently enjoined the District
from “taking action to terminate said contract based upon the purported events of
default” alleged in the January 2020 notice. The District now appeals.

DISCUSSION

I. Authority to sue the District

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¶26 On appeal, the District renews its argument that the Governance
Board lacked authority to sue the District. Our resolution of this issue requires us
to interpret and apply both WIS. STAT. § 118.40 and the parties’ contract. Statutory
interpretation presents a question of law that we review independently. McNeil v.
Hansen, 2007 WI 56, ¶7, 300 Wis. 2d 358, 731 N.W.2d 273. The interpretation of
an unambiguous contract also presents a question of law for our independent review.
Town Bank v. City Real Estate Dev., LLC, 2010 WI 134, ¶32, 330 Wis. 2d 340,
793 N.W.2d 476.

¶27 The circuit court concluded the Governance Board had authority to
sue the District under WIS. STAT. § 118.40(4)(d)8., and we agree with that
conclusion. Section 118.40 grants school boards the authority to enter into contracts
for the operation of charter schools.2 See § 118.40(1m)-(2m), (3).
Section 118.40(4)(ag) then specifies that each charter school “shall be governed by
a governing board that is a party to the contract with the authorizing entity.” Section
118.40(4)(d), in turn, sets forth the powers of a governing board, stating in relevant
part: “Subject to the terms of its contract, a charter school governing board has all
the powers necessary to carry out the terms of its contract, including all of the
following: … To sue and be sued in its own name.” See § 118.40(4)(d)8.

¶28 Thus, WIS. STAT. § 118.40(4)(d)8. expressly grants a charter school
governing board the power to sue in its own name. Moreover, the statute grants the
governing board the power to do so as necessary “to carry out the terms of its

2
The statute grants “school boards” the authority to enter into charter school contracts.
See WIS. STAT. § 118.40(1m)-(2m), (3). The charter school contract at issue in this case named the
District as a party, rather than the District’s school board. Nevertheless, the school board president
signed the contract on the District’s behalf. In any event, the parties do not assert that the distinction
between the District and the school board makes any substantive difference for purposes of our
analysis. We therefore do not address the issue further.

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contract.” Id. The statute does not contain any provision limiting the governing
board’s power to sue or otherwise providing that the governing board may not sue
its authorizing school district. We therefore agree with the circuit court that under
the plain language of § 118.40(4)(d)8., the Governance Board had authority to sue
the District in order to enforce the terms of the parties’ contract.

¶29 The District contends this interpretation of WIS. STAT.
§ 118.40(4)(d)8. is incorrect for two reasons. First, the District argues that because
Maple Grove is an instrumentality charter school, it has a “superior-subordinate
relationship” with the District and is a mere “extension” of the District. The District
also emphasizes that Maple Grove is a “creature of statute,” as the legislature
authorized the creation of charter schools in § 118.40. The District then asserts that
“[a]s a creature of statute, and instrumentality of the District, the Governance Board
simply does not have the right to seek judicial enforcement” of its contract with the
District. Stated differently, the District asserts that the general consent to sue
granted by § 118.40(4)(d)8. does not permit the Governance Board to sue “its
superior governmental entity.”

¶30 There are at least two problems with the District’s argument. First,
the District conflates the Governance Board—the plaintiff in this lawsuit—with
Maple Grove—the instrumentality charter school created by the Governance
Board’s contract with the District. Unlike Maple Grove, the Governance Board is
not an instrumentality of the District, nor does it have a superior-subordinate
relationship with the District. Rather, the Governance Board is a separate and
independent party that entered into a contract with the District to create and operate
Maple Grove. Thus, even if the District is correct that Maple Grove cannot sue the
District, that proposition is not relevant here because the Governance Board, not
Maple Grove, is the plaintiff in this lawsuit.

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¶31 Second, even if the Governance Board could be construed as having
a superior-subordinate relationship with the District, the District does not cite any
legal authority supporting its contention that a subordinate government entity may
never sue its superior government entity. The only legal authority the District cites
is City of Waukesha v. Salbashian, 128 Wis. 2d 334, 382 N.W.2d 52 (1986). In
that case, our supreme court took note of the “general rule” that “a municipality, as
a creature of the legislature, lacks the legal capacity to challenge the actions of its
creator.” Id. at 349. In support of that general rule, the court cited City of Madison
v. Town of Fitchburg, 112 Wis. 2d 224, 240, 332 N.W.2d 782 (1983), which
stated: “It is well settled that a municipality, being a creature of the legislature, does
not have legal capacity to challenge the constitutionality of a statute.”

¶32 Thus, both Salbashian and City of Madison addressed whether
municipalities, as creatures of the legislature, could challenge the legislature’s
actions. The District does not explain why it believes those cases should be read to
mean that either a charter school or its governing board cannot sue an authorizing
school district for alleged violations of a charter school contract. The District does
not cite any other legal authority in support of its claim that the Governing Board,
as a subordinate entity, may not sue the District, its superior entity. To the extent
the District claims that either Maple Grove or the Governance Board is a “creature
of the legislature,” under Salbashian and City of Madison, that status would merely
prevent them from suing the legislature, not the District.

¶33 The District also argues that our interpretation of WIS. STAT.
§ 118.40(4)(d) is flawed because the statute expressly states the powers listed
therein are “[s]ubject to the terms of [a governing board’s] contract.” The District
also notes that a charter school contract must specify “[t]he effect of the
establishment of the charter school on the liability of the school district.” See

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§ 118.40(1m)(b)15., (2m)(a). Based on these provisions, the District argues we
must consider whether the contract at issue in this case allows the Governance Board
to file suit against the District.

¶34 The District then cites § 25 of the parties’ contract, which states that
“the establishment of [Maple Grove] shall have no effect on the liability of the
District other than those obligations specifically undertaken by the District under
this Contract.” The District also cites §§ 27 and 28 of the contract, which set forth
the procedures by which the District and the Governance Board, respectively, may
terminate the contract in the event of a default by the other party. The District also
notes there is no provision in the contract expressly stating that the Governance
Board may sue the District to enforce the contract’s terms. The District therefore
argues that “the Governance Board’s exclusive remedies are the default procedures
identified in the Contract.”

¶35 We disagree. Section 25 of the contract merely states that the
District’s liability is limited to the “obligations specifically undertaken by the
District under this Contract.” Here, the District issued a notice of default, which
asserted that the Governance Board had defaulted on its contractual obligations in
three ways. The Governance Board contends, however, that it has not defaulted.
The Governance Board therefore sued the District to prevent it from terminating the
parties’ contract based on the alleged defaults. Stated differently, the Governance
Board sued to prevent a prospective breach by the District—i.e., an unlawful
termination of the contract. As such, the Governance Board sued to enforce an
obligation specifically undertaken by the District under the contract—namely, its
obligation not to terminate the contract absent the Governance Board’s default.
Section 25 does not prevent the Governance Board from suing the District on these
grounds.

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¶36 We also reject the District’s argument that §§ 27 and 28 of the contract
set forth the parties’ exclusive remedies and therefore preclude the Governance
Board from suing to enforce the contract’s terms. As noted above, those sections
describe the procedures the District and the Governance Board may use to terminate
the contract in the event of a default by the other party. Nothing in the contract,
however, states that those procedures are the parties’ exclusive remedies.
Moreover, there is nothing in the contract that prevents either party from seeking
judicial enforcement of the contract’s terms. “Parties who enter into contracts
expect courts to enforce the terms, which the law requires unless the contract is for
an illegal purpose or a party lacked capacity.” Mackenzie v. Miller Brewing Co.,
2001 WI 23, ¶28, 241 Wis. 2d 700, 623 N.W.2d 739.

¶37 In summary, we conclude WIS. STAT. § 118.40(4)(d)8. grants a
charter school governing board authority to sue its authorizing school district. We
further conclude that nothing in the contract at issue in this case limited the
Governance Board’s ability to sue the District. We therefore reject the District’s
argument that the Governance Board lacked authority to file the instant lawsuit.3

II. Default under the parties’ contract

¶38 The District next argues that the circuit court erred by concluding the
Governance Board did not default on its obligations under the parties’ contract.4

3
In addressing whether the Governance Board had authority to sue the District, both
parties rely heavily on a Colorado case—Academy of Charter Schools v. Adams County School
District No. 12, 32 P.3d 456 (Colo. 2001). We do not find that case helpful, as it applied a charter
school statute that differs from WIS. STAT. § 118.40 in significant ways. We therefore confine our
analysis to the plain language of § 118.40 and the parties’ contract.
4
Aside from arguing that the circuit court erroneously determined the Governance Board
did not default, the District does not develop any argument that the court erred by granting the
Governance Board either declaratory or injunctive relief. We therefore limit our discussion to the
court’s findings and conclusions regarding default.

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Again, the interpretation of a contract presents a question of law that we review
independently. Town Bank, 330 Wis. 2d 340, ¶32. However, the circuit court’s
findings of fact regarding the parties’ conduct will not be set aside unless they are
clearly erroneous. See WIS. STAT. § 805.17(2). A finding of fact is clearly
erroneous when it is against the great weight and clear preponderance of the
evidence. Phelps v. Physicians Ins. Co. of Wis., 2009 WI 74, ¶39, 319 Wis. 2d 1,
768 N.W.2d 615.

¶39 On appeal, the parties dispute whether the District had the burden to
prove that the Governance Board defaulted on its contractual obligations, or whether
the Governance Board instead had the burden to prove that it did not default. The
circuit court concluded the Governance Board had the burden of proof with respect
to default, and we agree with that conclusion.

¶40 As a general rule, “the party seeking judicial process to advance a
position carries the burden of proof.” Long v. Ardestani, 2001 WI App 46, ¶37,
241 Wis. 2d 498, 624 N.W.2d 405. Here, the Governance Board sued the District,
seeking declaratory and injunctive relief to prevent the District from terminating the
parties’ contract. The Governance Board’s claims were premised on the assertion
that, contrary to the District’s contention, the Governance Board had not defaulted
on its contractual obligations. On these facts, the Governance Board was the party
“seeking judicial process to advance a position”—i.e., that the District could not
lawfully terminate the parties’ contract because the Governance Board had not, in

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fact, defaulted. See id. The Governance Board therefore bore the burden to prove
that it did not default on its contractual obligations.5

A. Academic performance

¶41 The District argues the circuit court erred by concluding the
Governance Board did not default on its contractual obligations related to academic
performance. As noted above, § 5 of the contract lists various “goals and
objectives” that “shall be benchmarks which [Maple Grove] shall aspire to obtain.”
Under the heading “Student Goal 1—Increase Student Achievement,” the contract
contains an “[o]bjective” stating that the 2017-18 school year will be the benchmark
year, and in following years, beginning in Spring 2019: (1) 80% of Maple Grove’s
students will score at or above the national average in reading on the Measures of
Academic Progress (MAP) test; (2) 80% of Maple Grove’s students will score at or
above the national average in math on the MAP test; (3) 80% of Maple Grove’s
students will increase their proficiency in reading on the MAP test when compared
with their scores from the previous fall; and (4) 80% of Maple Grove’s students will

5
The rule that the party seeking judicial process to advance a position bears the burden of
proof is merely a “general rule” and, as such, is not necessarily applicable in all circumstances. See
Long v. Ardestani, 2001 WI App 46, ¶37, 241 Wis. 2d 498, 624 N.W.2d 405. The Governance
Board, however, has failed to present a developed argument that this “general rule” is not applicable
in the instant case.

Our supreme court has established a five-factor test for allocating the burden of proof. See
Acuity Mut. Ins. Co. v. Olivas, 2007 WI 12, ¶40, 298 Wis. 2d 640, 726 N.W.2d 258. Despite citing
Olivas, the Governance Board does not acknowledge the existence of this five-factor test or attempt
to apply it to the facts of this case. Under these circumstances, we decline to develop an argument
on the Governance Board’s behalf that the burden of proof should be allocated to the District under
Olivas’s five-factor test. See Industrial Risk Insurers v. American Eng’g Testing, Inc., 2009 WI
App 62, ¶25, 318 Wis. 2d 148, 769 N.W.2d 82 (we will not abandon our neutrality to develop
arguments for a party). Instead, we apply the general rule that the Governance Board, as the party
seeking judicial process to advance a position, bore the burden to prove it did not default on its
contractual obligations.

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increase their proficiency in math on the MAP test when compared with their scores
from the previous fall.

¶42 The District argues the undisputed facts show that 80% of
Maple Grove’s students have never met or exceeded the national average in either
reading or math on the MAP test. The District asserts it is also undisputed that there
has never been a year in which 80% of Maple Grove’s students increased their
proficiency in reading or math from fall to spring. The District contends these
undisputed facts conclusively establish that the Governance Board defaulted with
respect to academic progress under both § 27a.(1) of the contract—which states an
event of default occurs if Maple Grove’s pupils “have failed to make progress as set
forth in Section 5 of this Contract for 3 consecutive years”—and § 27a.(6)—which
states an event of default occurs if the Governance Board “defaults in any of the
terms, conditions, promises or representations contained in or incorporated into this
Contract.”

¶43 The District’s argument fails because, as the circuit court correctly
noted, the contract expressly states that the various academic standards set forth in
§ 5 are merely “goals and objectives” that Maple Grove “shall aspire to obtain.”
Contrary to the District’s assertion, under the plain language of the contract, the
academic standards in § 5 were not strict thresholds that Maple Grove was required
to reach in order to avoid default. As such, the fact that 80% of Maple Grove’s
students never reached the various benchmarks set forth in § 5 of the contract does
not establish that the Governance Board defaulted under either § 27a.(1) or
§ 27a.(6).

¶44 The District argues the academic standards in § 5 cannot be
interpreted as merely aspirational because they are preceded by the word

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“Objective.” The District contends that “[w]hile a goal may be aspirational,
objectives are not.” However, the District cites no authority in support of this
proposition. Nothing in the plain language of the contract indicates that the parties
intended “objectives” to be mandatory but “goals” to be merely aspirational. To the
contrary, § 5 expressly states that the “goals and objectives” listed therein “shall be
bench marks which [Maple Grove] shall aspire to obtain.” (Emphasis added.)

¶45 The District also asserts that if the academic standards in § 5 are
merely aspirational, then there is no way for the parties to determine whether the
Governance Board has violated § 5, such that an event of default has occurred under
§ 27a.(1). We agree with the circuit court, however, that the aspirational nature of
the academic standards in § 5 does not mean the Governance Board can never be
found in default for failing to comply with that section. Instead, as the court aptly
explained, the Governance Board may be found in default on its obligations under
§ 5 if the evidence shows “a lack of attempt at progress, the lack of aspiration,
essentially a charter school giving up.” The court expressly found, however, that
“[t]hat’s not the case here,” as the Governance Board proved “that [it had] tried to
raise the scores[,] and in some areas there was improvement.” The District has not
shown that the court’s finding in that regard was clearly erroneous.6

6
The District asserts that when the default notice was served on the Governance Board,
its president “had to ask for the MAP test scores for the last three years because she did not have
them and the Governance Board never kept track.” However, the fact that the Governance Board’s
president did not have the test scores on hand when she received the District’s notice of default
does not establish that the Governance Board made no effort to improve the test scores during the
contract term.

Moreover, the District’s assertion that the Governance Board never kept track of the test
scores is misleading. Although the District cites the Governance Board president’s testimony in
support of that assertion, the president actually testified that the test scores “were not something
that the Governance Board kept track of except by getting updates from [Maple Grove’s principal]
at board meetings.” (Emphasis added.) Contrary to the District’s assertion, this testimony indicates
that the Governance Board was, in fact, kept apprised of Maple Grove’s test scores.

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No. 2020AP1179

¶46 Finally, citing evidence extrinsic to the contract, the District asserts
that before it issued the default notice, the Governance Board had interpreted the
academic standards in § 5 of the contract as “not simply aspirational, but firm
requirements.” The District contends it was “only after the Governance Board hired
counsel that it claimed the 80% student achievement numbers were merely
aspirational.”

¶47 Be that as it may, we do not consider extrinsic evidence when
interpreting an unambiguous contract. See Town Bank, 330 Wis. 2d 340, ¶33.
Here, § 5 of the contract unambiguously states that the academic standards set forth
therein are goals or objectives that Maple Grove shall aspire to achieve. That
language cannot reasonably be interpreted to mean that Maple Grove was required
to meet the stated academic standards in order to avoid default. We therefore refuse
to consider extrinsic evidence regarding how the Governance Board may have
previously interpreted § 5. Instead, based on the unambiguous contract language,
we conclude the academic standards were merely aspirational, and, as such, the
failure to meet those standards did not constitute an event of default under the
parties’ contract.7

B. Educational program

¶48 The District’s notice of default also alleged that the Governance
Board was in default under the parties’ contract for failing to implement an

7
As noted above, the circuit court also concluded the evidence did not show that
Maple Grove had failed to meet the academic goals set forth in § 5 of the contract for three
consecutive years, as alleged in the District’s notice of default. Specifically, the court concluded
that regardless of whether the term “years” in § 5 referred to school years or calendar years, the
District had not presented three years of data. Because we conclude the academic standards in § 5
of the contract were merely aspirational, we need not address this alternative basis for the court’s
ruling.

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No. 2020AP1179

innovative educational program. On appeal, however, the District begins its
discussion of this issue by advancing a different argument. Namely, the District
argues the circuit court should have concluded that the Governance Board defaulted
by failing to implement personalized learning plans for 100% of Maple Grove’s
students, as required by § 5 of the contract. This argument fails for two reasons.

¶49 First, the plain language of the contract indicates that the
implementation of personalized learning plans for all of Maple Grove’s students
was merely an aspirational goal, rather than a mandatory requirement. Again, § 5
of the contract sets forth “goals and objectives” that Maple Grove “shall aspire to
obtain.” Section 5b.i. then contains an “Objective” that states: “By the end of the
first academic year (2017-2018) one hundred percent (100%) of students will have
a Personalized Learning Plan.” The failure to meet this aspirational goal did not
constitute a default under the parties’ contract.

¶50 Second, the District’s notice of default did not assert that the
Governance Board had defaulted on its contractual obligations by failing to
implement personalized learning plans for 100% of Maple Grove’s students.
Instead, the notice asserted that the Governance Board was in default for failing to
implement an innovative educational program. Because the notice did not allege
any default regarding the implementation of personalized learning plans, there was
no need for the circuit court to address that issue. As such, the court did not err by
failing to do so.

¶51 We therefore turn to the alleged default that actually was raised in the
District’s notice—i.e., the Governance Board’s failure to implement an innovative
educational program. It is undisputed that § 4 of the parties’ contract required
Maple Grove to use an educational program that included a “Project Based Learning

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model.” The District interprets § 4 as requiring “all core curriculum [to] be
embedded and taught through student projects.” The District asserts that Maple
Grove “never implemented” a project-based learning model “in the first nearly three
years of the Contract.” Although the District appears to concede that some
project-based learning began in the fall of 2019, it asserts that the Governance Board
remained in default because Maple Grove was not exclusively using project-based
learning to teach its core curriculum.

¶52 This argument fails because the District does not point to any
language in § 4 of the contract that unambiguously required all core curriculum to
be taught through project-based learning. Instead, the contract merely required
Maple Grove to use an educational program that included project-based learning as
one of its “main features.” The circuit court found that Maple Grove had, in fact,
implemented a project-based learning program for a portion of its curriculum by the
time the District issued its notice of default in January 2020. That finding is
supported by evidence in the record and is not clearly erroneous.

¶53 Specifically, Maple Grove’s teaching principal, Dr. Dawn Nonn,
testified that as of March 2019, Maple Grove was using the District’s curriculum
for “English language arts and mathematics,” but “for science and social studies we
did more of the project-based learning.” Nonn explained that Maple Grove “did
core academics in the morning[,] and then we did the project-based [learning] in the
afternoon.”

¶54 Nonn further testified that in March 2019, she and the Governance
Board were interested in “rebranding” Maple Grove’s curriculum to “shore up what
we wanted to call the type of learning taking place at the school.” As part of the
rebranding, they envisioned that beginning in the fall of 2019, some of the

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No. 2020AP1179

English/Language Arts curriculum that was being taught in the morning would be
moved into the afternoon and “blend[ed] … more into the project-based learning
that was taking place in the afternoon.” Nonn testified Maple Grove implemented
that change in the fall of 2019 by “adjust[ing] the time that we had available for
teachers to be able to put into the project-based learning so that it was a little bit
more active and engaging for the children throughout the day.”

¶55 Nonn’s testimony supports the circuit court’s finding that
Maple Grove had implemented a project-based learning program before the District
issued its notice of default in January 2020. Again, while the parties’ contract
required Maple Grove to have an educational program that included project-based
learning, the District does not point to anything in the contract requiring the entirety
of Maple Grove’s curriculum to be taught using a project-based learning model.
Consequently, the court properly determined that Maple Grove did not default by
failing to implement the educational program required by the parties’ contract.

C. Enrollment

¶56 The District also argues that the Governance Board defaulted on its
contractual obligations with respect to enrollment. Again, the contract states that
Maple Grove “will enroll students, with a targeted enrollment of a maximum of 100
students.” The contract further states that an event of default occurs if Maple Grove
“has insufficient enrollment to successfully operate … as determined by the
District.”

¶57 We agree with the District that the contract, by its plain language,
grants the District sole discretion to determine whether Maple Grove’s enrollment
is sufficient for successful operation. The circuit court expressed discomfort with
this principle in its oral ruling, stating it was “difficult to find” that the contract

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No. 2020AP1179

allowed the District to “unilaterally decide” whether Maple Grove’s enrollment was
sufficient. The court acknowledged, however, that “that’s what the contract says.”
The court later reiterated that the contract gave the District “the final say on [the]
enrollment question.”

¶58 Nevertheless, the circuit court then proceeded to substitute its own
discretion for that of the District regarding the sufficiency of Maple Grove’s
enrollment. The court cited the superintendent’s testimony that Maple Grove was
financially viable at its current level of enrollment. The court also noted that
enrollment had been declining across the District during the contract term. The
court then concluded that Maple Grove’s enrollment was sufficient because it had
“remained steady in the past two and a half years of the contract.”

¶59 The circuit court apparently gave little or no weight to the District’s
evidence showing that Maple Grove’s low enrollment directly impacted the
District’s finances. Brian Dasher, the District’s director of finances, testified that
the District received $9,700 in revenue from the State for each District resident
enrolled at its schools. Dasher explained that Maple Grove’s enrollment of
approximately eighty students, rather than 100 students, meant a difference of
approximately $200,000 in funding. Dasher also testified that because of
Maple Grove’s low test scores, the District was forced to spend funds that had
originally been allocated for other schools on reading specialists and instructional
coaches for Maple Grove students. Dasher testified that if Maple Grove had 100
students enrolled instead of eighty, the additional revenue from the State would have
covered the cost of hiring those specialists.

¶60 In essence, the circuit court weighed the evidence and made an
independent determination that Maple Grove’s enrollment was sufficient for it to

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No. 2020AP1179

operate successfully. The contract, however, granted the District sole discretion to
determine whether Maple Grove’s enrollment was sufficient. “When one party to a
contract is vested with contractual discretion, it must exercise that discretion
reasonably and with proper motive, and may not do so arbitrarily, capriciously or in
a manner inconsistent with the reasonable expectations of the parties.” Interim
Health Care, 225 F.3d at 884. Thus, the proper inquiry was not whether the court
reasonably believed that Maple Grove’s enrollment was sufficient, but whether the
District acted reasonably and with a proper motive when it determined that Maple
Grove’s enrollment was insufficient.

¶61 Consequently, the circuit court failed to apply the proper legal
standard when considering whether an event of default had occurred under the
parties’ contract with respect to Maple Grove’s enrollment. Moreover, the record
is insufficient for us to apply the proper standard in the first instance on appeal—
particularly regarding the issue of whether the District acted with a proper motive.
We therefore reverse the court’s decision, to the extent the court determined the
Governance Board did not default on its contractual obligations with respect to
enrollment. We remand for the court to consider whether the District’s
determination regarding the insufficiency of Maple Grove’s enrollment was made
reasonably and with a proper motive. See id.

¶62 No party shall receive appellate costs. See WIS. STAT.
RULE 809.25(1).

By the Court.—Order affirmed in part; reversed in part and cause
remanded for further proceedings.

26