# Appendix — Juneau Square Corp. v. First Wisconsin National Bank of Milwaukee

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1980
- **Citation:** 449 U.S. 1013

## Text

Supreme Yours, uv. o.
FILED

oct 1 1980

30-517
No.

miinatRODAK, JR., CLERK

In the
Supreme Cowt of the United States

OctoserR Term, 1980

JUNEAU SQUARE CORP.,, et al.,

Petitioners,
vB.

FIRST WISCONSIN NATIONAL BANK OF MILWAUKEE,
et al,

Respondents.

APPENDIX TO
PETITION FOR WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT

GEORGE P. KERSTEN

E. CAMPION KERSTEN
231 West Wisconsin Avenue
Milwaukee, Wisconsin 53203
(414) 271-0054

Attorneys for Petitioners
Of counsel:

KERSTEN & McKINNON
231 West Wisconsin Avenue
Milwaukee, WI 53203

eae

UNITED STATES LAW PRINTING CO., CHICAGO, ILLINOIS 60618 (312) 525-6581

i
cs tase tl Be ett sean ow

INDEX

PAGE
July 3, 1980 decision of the United States Court of
Appeals for the Seventh Cireuit 2.00220... App. 1
September 30, 1976 District Court memorandum and
order granting and denying defendants’ motion for
directed verdict (first trial) 2.2.2... eeeseeee App. 31
July 29, 1977 decision of District granting defen-
BE I I ietetacectisthicesiaceisatiencisneeecnenecdntatepleivatonaninndclons App. 51
September 18, 1977 District Court memorandum and
order denying certification for interlocutory ap-
IES | ccisclca Mle orconiehsnelandapnionenniienliciecststadnsdiniannaipsbiinatipenaaudaiens App. 97

February 22, 1978 District Court order granting and
denying defendants’ motions to dismiss for lack
IE Sichanacenithsiieiniasestinsinialienmecionanaitenbiea App. 107

March 30, 1978 District Court’s bench order dismiss-
ing plaintiff Wil-Ten for lack of standing (second
SI sisacs-chsedbaieanenictncaleltesnaehanbinnicatianttlacniatiaeunenpeanidinanisinontelnenisins App. 135

March 22, 1978 District Court order denying plain-
tiffs permission to litigate certain issues or to
a celesitestaesdeiicentanianiitapienbin App. 136

July 31, 1979 decision of District Court denying
plaintiffs motion for a new trial (following second
I ° aicictinidiasvtretcinronnieennsttniensbensincidabinineindnialinnaiannten App. 138

July 3, 1980 judgment of the United States Court of
Appeals for the Seventh Circuit, affirming trial
ROR ae Se ae ee a nr App. 168

PX 303 and 304—handwritten covering note and
memo from Attorney David Shute to Attorney
I TID

App. 134

Calderone Enterprises Corporation v. United Artists
Theatre Circuit, supra; see Congress Building Corp. Vv.
Loew’s, Inc., 246 F.2d 587 (7th Cir. 1957) ; Steiner v. 20th
Century-Fox Film Corp., 232 F.2d 190 (9th Cir. 1956).

The only remaining plaintiffs are Mr. Jack D. Moertl
and Mr. John F. Spoden. As to the standing of these
plaintiffs, their brief states:

The plaintiffs have not pursued any claims on behalf
of Jack D. Moertl and John F’. Spoden individually be-
cause such claims are derivative, and they will be made
whole by properly compensating Juneau Square Corp.
and Wil-Ten. We therefore do not oppose the mo-
tion to dismiss Messrs. Moertl and Spoden as parties.

The motion to dismiss these plaintiffs will, therefore, be
granted.

For the reasons stated above, the defendants’ motions
are granted in part and denied in part. Juneau Square
Services, Inc., Harold C. Smith, III, J ack D. Moertl and
John F. Spoden are dismissed as plaintiffs from this action.
The motion to dismiss Wil-Ten Co., Inc., for lack of stand-
ing is stayed. The damage claims of Wil-Ten Co., Inc. re-
lating to its commercial interest in projects other than the
Juneau Square project are dismissed.

SO ORDERED this 22nd day of February, 1978, at Mil-
waukee, Wisconsin.

/s/ Robert W. Warren
United States District Judge

App. 135

District Court’s Bench Order Dismissing Plaintiff
Wil-Ten for Lack of Standing

[Transcript of Second Trial at 1040-1041]

Now, gentlemen, I told you at the side bar, and I am
convinced after Mr. Moertl’s last answer to my question
that Wil-Ten Co., does not have standing in this lawsuit.
I think that comes as no surprise to plaintiff.

I indicated in the memorandum that we were unsure and
we just left it open, but with that evidence, the only owner-
ship equity that Wil-Ten had in Juneau Square Project,
as we call it, is its ownership of Juneau Square and then
I would, and do herewith enter an order to the effect that
Wil-Ten Co. does not lack standing in this anti-trust suit
and therefore that portions of the—well, first of all any
testimony with respect to that we should disregard, and
then I think that has an impact on this exhibit in terms
of part four.

Now, I appreciate that, if I heard the last few questions,
that apparently the plaintiffs contend that Juneau Square
Corp was liable as a guarantor on this $111,000, but I
would opine that I don’t think that gives Juneau Square
Corp a standing to assert that as a counterclaim in the
lawsuit. A guarantor is not the maker, and unless you can
convince me that there’s some law to the contrary, I don’t
see how you can now say, well, we are liable on that note
as a guarantor, therefore, we can assert it as a counter-
claim here.

App. 136

Order Denying Plaintiffs Permission to Litigate
Certain Issues or to Amend Pleadings

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

JUNEAU SQUARE CORP., et al.,
Plaintiffs,

vs. Case No. 72-C-533

FIRST WISCONSIN NATIONAL
BANK OF MILWAUKEE, et al.
Defendants.

MEMORANDUM AND ORDER

Upon consideration of briefs submitted by the parties
on March 20, 1978, the Court hereby enters the following
order. The counterclaim of defendant First Wisconsin
National Bank and the set-off in the ‘‘Seventh Defenses”’
in the answers of the defendants Marshall- Wisconsin
Company, Inc. and Marshall-Michigan Company, Inc. have
been previously determined by this Court. The Court’s
rulings in this regard remain unchanged by the order
granting a new trial. The issues pertaining to the counter-
claim and set-off will not, therefore, be relitigated at this
trial. Paragraph four of the judgment previously entered
in this action will be re-entered when all issues are re-
solved, and paragraph five will similarly be re-entered
if appropriate.

App. 137

Upon motion of the defendant, it is ordered that the
plaintiff is precluded from relitigating the factual issue
of any involvement of the Aetna defendants in a con-
spiracy in violation of 15 U.S.C. §'1. Additionally, the
plaintiffs may not now assert that the Aetna defendants
were controlled or manipulated by one or more of the re-
maining defendants. Such an assertion would, in the
Court’s opinion, require an amendment of the pleadings in
this case. The defendants have objected to any such
amendment, and the Court sustains that objection.

SO ORDERED this 22nd day of March, 1978, at Mil-
waukee, Wisconsin.

/s/ Robert W. Warren
United States District Judge

App. 138

District Court Order Denying Plaintiff’s Motion
for New Trial (Second Trial)

JUNEAU SQUARE CORP., Wil-Ten Co., Inc., Ralph W.
Conway, Hal Bradley & Associates, Inc., Emil Bartel,
Anna Bartel, Vione Perry, as Administratix of the Es-
tate of Thomas H. Perry, Plaintiffs,

Vv.

FIRST WISCONSIN NATIONAL BANK OF MILWAU-
KEKE, First Wisconsin Development Corporation, First
Wisconsin Corporation, Marshall-Michigan Company,
Inc., Marshall-Wisconsin Company, Inc., Defendants.

Civ. A. No. 72-C-533.
United States District Court, E. D. Wisconsin.
July 31, 1979.

MEMORANDUM AND ORDER
Wanrren, District Judge.

The plaintiffs commenced this action for treble damages
under Section 4 of the Clayton Act, 15 U.S.C. § 15, alleging
that the defendants violated Sections 1 and 2 of the Sher-
man Act, 15 U.S.C. §§ 1, 2 and Section 7 of the Clayton
Act, 15 U.S.C. § 18.

Subsequently, summary judgment was granted in favor
of the defendants on the claim arising under Section 7 of
the Clayton Act. The first jury trial in this case com-
menced on May 3, 1976. At the conclusion of plaintiffs’
case, the Court granted defendants’ motions for directed
verdicts on the monopoly claims asserted under Section 2
of the Sherman Act. The Court also granted the motion
for directed verdict filed on behalf of the Aetna Casualty
& Surety Company.

App. 139

The remaining claims—the restraint of trade violations
asserted under Section 1 of the Sherman Act—were sub-
mitted to the jury at the close of the evidence. The jury
returned its verdict in favor of the plaintiffs on October
1, 1976. The jury found that the First Wisconsin defen-
dants? and Marshall-Michigan Company, Inc. conspired to
unreasonably restrain trade in the leasing, development,
construction and operation of office rental space, and in
the financing for the development of office buildings. The
Aetna Life Insurance Company was the only defendant not
found to be a member of the conspiracy. Judgment was
duly entered on October 26, 1976.

Following the entry of judgment, various post-trial mo-
tions were filed with the Court. On July 29, 1977, after
extensive examination and analysis of the facts and evi-
dence presented, the Court granted the motion of the First
Wisconsin defendants and defendant Marshall-Michigan
Company, Inc. for a new trial in the interests of justice.
The Court denied plaintiffs’ motion for a new trial as to
Aetna Life Insurance Company. Juneau Square v. First
Wisconsin National Bank of Milwaukee, 435 F.Supp. 1307
(E.D.Wis. 1977).

? Section 1 of the Sherman Act, 15 U.S.C. § 1 provides in
relevant part:

Every contract, combination in the form of trust or other-

wise, or conspiracy, in restraint of trade or commerce among

the several States, or with foreign nations, is declared to be

illegal.

2 The First Wisconsin defendants consist of the First Wisconsin
Corporation and its wholly-owned subsidiaries the First Wisconsin
National Bank of Milwaukee, the First Wisconsin Development
Corporation, and the Marshall-Wisconsin Company, Inc.

App. 140

On March 20, 1978, a second jury trial commenced which
lasted until June 15, 1978. On June 19, 1978, the jury re-
turned a verdict in favor of the defendants. The jury
found that the defendants did not enter into a contract,
combination, or conspiracy with any other person which
unreasonably restrained trade or commerce in the leasing
of office rental space in the central business district of
Milwaukee. On November 3, 1978, the Court entered judg-
ment in this action.

On November 13, 1978, plaintiffs filed a motion for a
new trial on all issues pursuant to Rule 59 of the Federal
Rules of Civil Procedure. In support of their motion for a
new trial, plaintiffs allege that the Court committed nu-
merous prejudicial errors with respect to jury instructions,
evidentiary rulings and other trial management decisions.

In order to facilitate an orderly discussion of plaintiffs’
grounds for a new trial, the Court will address these
grounds, under the following groupings, as utilized by the
plaintiffs :

(1) Alleged instructional errors.
(2) Alleged errors in rulings on evidence.
(3) Alleged errors in trial management.

A timely motion for a new trial is addressed to the
sound discretion of the trial court. Montgomery Ward &
Co. v. Duncan, 311 U.S. 243, 61 S.Ct. 189, 85 L.Ed. 147
(1940) ; Schybinger v. Interlake S.S. Co., 273 F.2d 307 (7th
Cir. 1959).

Rule 61 of the Federal Rules of Civil Procedure pro-
vides that:

No error in either the admission or the exclusion of
evidence and no error or defect in any ruling or order or
in anything done or omitted by the court or by any of

App. 141

the parties is grounds for granting a new trial... unless
refusal to take such action appears to the court incon-
sistent with substantial justice.

The question of whether error is ‘‘harmless’’ is to be
resolved in the context of the individual case. Where it
appears that error in no way influenced jurors or had but
a slight effect upon them, the verdict and judgment are
to be affirmed. International Merger & Acquisition Con-
sultants, Inc. v. Armac Enterprises, Inc., 531 F.2d 821
(7th Cir. 1976). See, also Kotteakos v. United States,
328 U.S. 750, 66 S.Ct. 1239, 90 L.Ed. 1557 (1946).

Thus, under rule 61, a new trial should not be granted
unless the court finds that refusal to take such action is
inconsistent with substantial justice. International Mer-
ger & Acquisition Consultants, Inc. v. Armac Enterprises
Inc. supra; Everett v. Southern Pacific Co., 181 F.2d 58
(9th Cir. 1950).

ALLEGED INSTRUCTIONAL ERRORS

Plaintiffs argue that the Court erred in instructing
tne jury that the antitrust laws were enacted ‘‘for the
protection of competition, not competitors’’ and that the
plaintiffs were required to show actual injury to compe-
tition.

The following instruction on restraint of trade was
given by the Court:

The -anti-trust laws were enacted for the protection
of competition, not competitors. The plaintiffs must,
therefore, establish that the defendants’ acts injured
not only the plaintiffs themselves, but competition in
the leasing of office rental in the central business
district of the City of Milwaukee. (Tr. 10,578)*

’ Transcript citations, unless otherwise indicated, are to the tran-
script of the second trial which commenced on March 20, 1978.

i.

App. 142

The first sentence of this instruction is a direct quote
from Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429
U.S. 477, 488, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977), which
adopted the phrase, ‘‘competition, not competitors’’ from
Brown Shoe Co. v. United States, 370 U.S. 294, 320, 82
S.Ct. 1502, 8 L.Ed.2d 510 (1962). The Court’s instruction
was not a misstatement of the law.

In order to recover under the antitrust laws, a plaintiff
must show ‘‘antitrust injury,’’ that is, ‘‘injury of the type
the antitrust laws were intended to prevent and that flows
from that which makes the defendants’ acts unlawful.’’
Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., supra at
499, 97 S.Ct. at 697.

Merely showing that one was a competitor of the defen-
dants and was injured is not sufficient to show an anti-
trust violation under the Sherman Act. Plaintiffs must
also establish an injury to competition. Brunswick Corp.
v. Pueblo Bowl-O-Mat, Inc., supra; Magnus Petroleum Co.,
Inc. v. Skelly Oil Co., 599 F.2d 196 (7th Cir. 1979); John
Lenore & Co. v. Olympia Brewing Co., 550 F.2d 495 (9th
Cir. 1977); Redwing Carriers, Inc. v. McKenzie Tank
Lines, Inc., 443 F.Supp. 639 (N.D.Fla. 1977), Aff’d, 594
F.2d 114 (5th Cir. 1979). As the court stated in Magnus
Petroleum Co., Inc. v. Skelly Ow Co., supra at 204, evi-
dence showing that ‘‘the effect upon competition in the
marketplace was substantially adverse’’ is also required.

Contrary to plaintiffs’ assertions, this instruction did
not add another element to be proved by plaintiffs. A
reading of the instructions as a whole shows that the
Court specifically set forth the three elements that plain-
tiffs were required to prove by a preponderance of the
credible evidence. These elements were:

(1) that the defendants contracted, conspired or
combined to restrain commerce;

App. 143

(2) that such restraint was unreasonable;

(3) that as a direct and proximate result of such a
conspiracy to restrain trade, the plaintiffs suffered
an injury to their business or property. (Tr. 10,571-
10,572)

The Court also instructed the jury as to the question
of proof of harm to the general public immediately after
the challenged instruction on competition. The Court
stated that: ‘‘A restraint (of trade) is unreasonable if it
tends or is reasonably calculated to prejudice the public
interest.’’? (Tr. 10,578)

Plaintiff also argues that they were deprived of any
opportunity to argue to the jury with respect to the chal-
lenged instruction because the Court decided to insert
this ‘‘competition, not competitor’s’’ language from de-
fendants’ proposed instruction 19A after the close of
final arguments.

At the beginning of the final day of argument, the
Court informed the parties that it was withholding its
decision of defendants’ proposed instruction 19A and
taking it under advisement. The Court gave serious con-
sideration to the position of both parties and ultimately
concluded that language from this instruction should be
included in the final instructions given to the jury. Plain-
tiffs did not request that the Court rule on this proposed
instruction prior to completion of their closing argu-
ment, although they did object to the instruction when
the Court announced its decision.

The case cited by plaintiffs to support its position on
this question, Frederic P. Wiedersum Associates v. Na-
tional Homes Construction Corp., 540 F.2d 62 (2d Cir.
1976), is clearly distinguishable from the facts of this

ve

App. 144

action. In Weidersum, the court refused to inform the
parties of any of the instructions it intended to give the
jury, even though defense counsel requested the court
to do so. Certain defense contentions about issues in the
case were rejected by the court during the trial, but the
court then instructed the jury on these contentions. Fur-
thermore, the court gave totally inconsistent and conflict-
ing instructions and failed to winnow out the requested
instructions which it intended to adopt from those which
it intended to reject.

Under these circumstances, the Second Circuit Court
of Appeals granted a new trial, noting that it is funda-
mental error to give instructions which are hopelessly con-
fusing and which fail ‘‘to provide even the barest legal
guideposts to aid the jury in rationally reaching a deci-
sion.’ Jd. at 66, quoting McNello v. John B. Kelly, Inc.,
283 F.2d 96, 102 (2d Cir. 1960).

In the present case, the Court finds that its augment-
ing of the restraint of trade instruction after the close
of the final arguments did not fundamentally change the
instruction or constitute prejudicial error requiring a new
trial. See, Garland v. Material Service Corp., 291 F.2d
861, 863 (7th Cir. 1961).

After careful consideration, the Court concludes that
its restraint of trade instruction, taken in context, was
not erroneous but a correct statement of the law. The
addition of the ‘‘competition, not competitors’’ language
after the close of final arguments did not constitute preju-
dicial error.

Plaintiffs contend that the Court erred in instructing
the jury that it was irrelevant whether various acts of the
defendants violated laws other than the antitrust laws.

App. 145

Plaintiffs argue that the wrongfulness of specific acts
done to accomplish a trade restraint is relevant in evalu-
ating the defendants’ conduct to ascertain whether a con-
spiracy exists and to determine whether the restraint of
trade is reasonable.

In its instructions, the Court advised the jurors:

During the course of the trial reference has been
made to acts on the part of the various defendants
and other persons that the plaintiffs claim were done
as a part of a conspiracy to restrain trade, so as to
injure plaintiffs in their business or property. You
are to consider these acts, if you find they were in-
deed done by the defendants only if you also find
that they were done in the course of and in further-
ance of a conspiracy to violate the antitrust laws by
unreasonably restraining trade. Whether or not these
acts were violative of laws other than the anti-trust
laws is irrelevant. If any of the defendants have
committed any other wrongs and I do not suggest
whether they have or have not, you should not con-
sider the character of these acts under laws other
than the anti-trust laws as I have defined and ex-
plained them in these instructions. (Tr. 10,586-10,587)

In this instruction, the Court explained to the jury
that only those allegedly illegal acts done by the defen-
dants in the course of and in furtherance of a conspiracy
to violate the antitrust laws could be considered. Whether
any of these acts also violated principles of tort law was
not, in and of itself, determinative of an antitrust viola-
tion. Merely because a defendant’s acts may have con-
stituted a tort does not automatically make that defen-
dant’s acts violative of the Sherman Act.

This is what the Court instructed the jury. Such in-
struction was not erroneous.

App. 146

Plaintiffs also argue that they were entitled to have
this instruction on the illegality of defendants’ acts as
part of their theory of the case. It is clear that plaintiffs
are entitled to have their theory of the case presented
to the jury. Florists Nationwide Telephone Delivery
Network v. Florists Telegraph Delivery Assn., 371 F.2d
263 (7th Cir. 1967).

However, the Court gave the substance of the parties’
theories when it outlined the contentions of each of the
parties at the outset of the jury instructions. (Tr. 10,556)
Plaintiffs also argued their theories to the jury regard-
ing the defendants’ allegedly illegal conduct during closing

argument.

The Court’s instructions were geared to guiding and
aiding the jury in its evaluation of the vast amount of
evidence presented. Plaintiffs’ and defendants’ theories
of the case were set forth by the Court. Accordingly,
the Court finds that it did not err in its instruction con-
cerning the alleged illegal or unreasonable acts of the
defendants.

Plaintiffs assert that the Court erred in failing to give
plaintiffs’ requested instruction 16 regarding unfair com-
petition as a per se violation of the Sherman Act. Plain-
tiffs state that the per se illegality of using unfair and
illegal methods to destroy a competitor is well-established
in case law, citing Albert Pick-Barth Co. v. Mitchell
Woodbury Corp., 57 F.2d 96 (1st Cir. 1932); cert. denied,
286 U.S. 552, 52 S.Ct. 503, 76 L.Ed. 1288 (1932) and
related cases.

One problem with plaintiffs’ position is that the Court
considered and rejected plaintiffs’ per se theories in the
first trial and no new judicial authority has been presented

App. 147

to change the Court’s earlier decision. In its prior de-
cision, the Court explained that the per se theory an-
nounced in Pick-Barth has never been approved by the
Supreme Court nor has it gained acceptance in most cir-
cuits. The Court also pointed out that, in light of George
R. Whitten, Jr., Inc. v. Paddock Pool Builders, Inc., 508
F.2d 547 (1st Cir. 1974), there is some doubt as to whether
the Pick-Barth rule is still good law. See, Juneau Square

v. First Wisconsin National Bank of Milwaukee, supra
at 1319.

Recent case law has also criticized the per se rule set
forth in Pick-Barth. See, Stifel, Nicolaus & Co. v. Dain,
Kalman & Quail, Inc., 578 F.2d 1256 (8th Cir. 1978) ; North-
west Power Products, Inc. v. Omark Industries, Inc., 576
F.2d 83 (5th Cir. 1978); Redwing Carriers, Inc. v. Me-
Kenzie Tank Lines, Inc., supra.

Moreover, the Supreme Court, in its recent decision in
Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36,
97 S.Ct. 2549, 53 L.Ed.2d 568, expressed reluctance to ex-
tend per se rules under Section 1 of the Sherman Act. In
light of the foregoing, the Court finds that it did not err
in refusing to instruct the jury about unfair competition
as a per se violation of the Sherman Act.

Plaintiffs argue that Aetna should have been included
in the new trial and that the Court should not have in-
structed the jury that ‘‘you may not find that Aetna Life
Insurance Company was a member of the alleged con-
spiracy.’’ (Tr. 10,575) Plaintiffs state they should have
been permitted to prove and argue that Aetna had been
used and manipulated by the other defendants. The Court
precluded this evidence by written order of March 22,
1978 on the ground that such an assertion would require
an amendment of the pleadings.

|

App. 148

Plaintiffs contend that their third amended complaint
was improperly construed by the Court, ‘‘a fair reading
of which leaves ample room for proof of control or mani-
pulation of Aetna by the defendants.’’ (Plaintiffs’ brief
in support of motion for a new trial, p. 8).

A reading of this complaint does not show allegations of
use and manipulation of Aetna. Furthermore, to allow
plaintiffs leave to amend this complaint after the com-
mencement of the second trial and over five years after
the initiation of this action would not have served the
interests of justice.

With respect to the exclusion of Aetna from the second
trial, Rule 59(a) of the Federal Rules of Civil Procedure
specifically authorizes the granting of a new trial as to
‘¢all or any of the parties and on all or part of the issues.’’

The jury in the first trial found that Aetna was not a
member of the conspiracy. In denying plaintiffs’ motion
for a new trial with respect to Aetna, the Court found
that the verdict was not against the weight of the evi-
dence. The Court noted, among other considerations,
that the record contained no evidence of any communi-
cation between Aetna and the First Wisconsin defendants
during the relevant period, much less an agreement to
restrain competition and that there was no evidence indi-
cating that Aetna was even aware of First Wisconsin’s
interest in the development during much of the relevant
period. The Court also found that there were substantial
business justifications for Aetna’s subsequent refusal to
continue financing the project. See, Juneau Square v.
First Wis. National Bank of Milwaukee, supra at 1326.

The Court’s rulings on evidence and its instruction re-
lating to Aetna were in keeping with the Court’s prior
decision. The Court allowed plaintiffs to introduce cer-

App. 149

tain evidence pertaining to Aetna but refused to permit
plaintiffs to relitigate Aetna’s involvement in the alleged
conspiracy.

The Court concludes that it did not err in instructing
the jury regarding Aetna and in precluding proof and
argument that Aetna was controlled or manipulated by
the other defendants.

Plaintiffs challenge the Court’s mortgage foreclosure
law instructions, alleging that it was erroneous in its over-
all impact and failed to provide the jury with a fair and
accurate standard for evaluating the conduct of the
parties.

Plaintiffs specifically object to the particular aspects of
the Court’s instruction dealing with the operation of ac-
ccleration clauses and extensions of time to cure defaults.
Plaintiffs also assert that the instruction ignored the equi-
table character of the precedure and the considerable
lutitude vested in the Court in foreclosure actions.

The Court instructed the jury in part as follows:

The general purpose of a mortgage is to provide a
security for payment of a debt or performance of an
obligation. Thus, if a borrower is not able to pay
the amounts due, the lender can look to the value of
the property mortgaged to obtain payment. The law
permits mortgages to be bought and sold and this
right to transfer ownership of a mortgage is also im-
portant to its value. When a mortgage is in default,
several things may occur. Holders of defaulted mort-
gages may grant the property owner additional time
in which to discharge his obligations under the mort-
gage, but such extensions are entirely voluntary, are
not required by law and may be made subject to any
conditions the mortgage holder wishes to impose in
order to protect its interest. If such an agreement is
not made, the holder of the mortgage must invoke the

App. 150

aid of the Court to enforce the provision of it, of
this mortgage agreement. The mortgagee is author-
ized by law to foreclose on that mortgage and re-
quires the property owner to either one, pay the full
amount of the debt immediately if the mortgage so
provides or two, relinquish to the holder of the mort-
gage all rights in the mortgaged property.

If the failure to pay real estate taxes constitutes a
default under the terms of a mortgage, and the mort-
gagee is entitled to payment of the full amount of
the mortgage upon default, payment of the real estate
taxes would not bar the mortgagee from maintaining
a foreclosure action. A foreclosure suit is a legal
proceeding supervised by a court. Rules of equity or
fairness are applied to such proceedings to insure
fair treatment of both the creditor and the debtor.
If the judge finds that the property owner has de-
faulted on the mortgage, he will enter judgment in
favor of the mortgage holder. The law allows the
party against whom the judgment was entered to
redeem his property by paying the amount of the
judgment within one year. If the property is not
redeemed, the mortgage holder may then have the
real estate sold at a sheriff’s sale in order to recover
the debt due it. (Tr. 10,587-88)

The statement that extensions of time to discharge an
obligation under a mortgage are voluntary and ‘‘not re-
quired by law’’ is not erroneous. Such extensions are
not required by law and may, as the Court stated, be
made subject to any conditions the mortgage holder
wishes to impose. The operation of acceleration clauses
was also correctly presented to the jury.

Contrary to plaintiff’s contentions, the Court did not
ignore the equitable considerations in a foreclosure action.
Rather, the Court stressed that ‘‘rules of equity or fair-
ness are applied to such proceedings to insure fair treat-
ment of both the creditor and debtor.’’ (Tr. 10,588)

App. 151

After carefully examining its instruction on mortgage
foreclosure law, the Court concludes that the instructions,
as a whole, accurately and unbiasedly set forth the ap-
plicable law. The instruction provided the jury with a
fair and accurate standard for evaluating the conduct of
the parties.

Plaintiffs argue that the Court erred by unduly em-
phasizing their burden of proof in giving the ‘‘equal hy-
pothesis’’ instruction and by thereafter giving the ‘‘in-
ference upon inference’’ instruction.

The following ‘‘equal hypothesis’’ instruction was
stated to the jury:

If from the evidence you cannot determine whether
the allegations have been proved or not proved then
your verdict should be for the defendants. (Tr. 10,560)

Plaintiff relies on South East Coal Co. v. Consolidated
Coal Co., 484 F.2d 767 (6th Cir. 1970) to support its
position that this instruction was redundant, confusing
and should have been omitted. The district court in the
South East Coal Co. case did not give the equal hypothesis
instruction and the defendant appealed on this and other
grounds. The court of appeals stated that the trial judge
should have directed a verdict if he believed that the evi-
dence on both sides was equal in weight. The court then
explained:

It appears that the ‘‘equal hypothesis rule’’ is
simply a negative way of phrasing the rule of law
that a plaintiff must sustain his burden of proof.
Thus, if a plaintiff does not come forth with evidence,
when considered in light of opposing evidence, from
which a jury could infer the truth of an alleged prop-
osition over its contraproposition, the plaintiff has
not met his burden of proof. Id. at 777.

App. 152

The Court finds the ‘‘equal hypothesis’’ instruction was
not erroneous.

With respect to the ‘‘inference upon inference’’ instruc-
tion, the Court told the jurors: |

A ‘‘reasonable inference’’ is defined as a process of
reasoning whereby from the facts otherwise admitted
or established by the evidence in the light of your
common knowledge and experience, a reasonable and
logical conclusion may be drawn that a certain
fact is true. A reasonable inference is, therefore, to
be thoroughly distinguished from a mere guess or
conjecture. The law does not permit speculation.
Moreover, on the basis solely of one inference so drawn
a further inference may not be drawn.

In other words, you may not pile inference on in-
ference, but may draw an inference only from facts
or circumstances which you find to have been estab-
lished by a preponderance of the evidence. (Tr. 10,561-
62)

Taken in context, this instruction was not erroneous.
It explained to the jury the distinction between reasonable
inferences and mere speculation and correctly stated that
inferences must be drawn from a factual basis. Plaintiffs’
motion for a new trial on this ground must be denied.

ALLEGED ERRORS IN RULINGS ON EVIDENCE

Plaintiffs challenge various evidentiary rulings of the
Court and assert that these alleged errors necessitate the
granting of a new trial.

Rule 103(a) of the Federal Rules of Evidence provides:

Error may not be predicated upon a ruling which
admits or excludes evidence unless a substantial right
of the party is affected, and

App. 153

(1) In case the ruling is one admitting evidence, a
timely objection or motion to strike appears of record,
stating the specific ground of objection, if the specific
ground was not apparent from the context; or

(2) In case the ruling is one excluding evidence,
the substance of the evidence was made known to the
court by offer or was apparent from the context with-
in which questions were asked.

Plaintiffs state that the Court erred in prohibiting plain-
tiff Jack Moertl, Jack Cisco, and Richard Krauss from
testifying to the reasons given by sources of financing
for declining to finance Juneau Square East. Plaintiffs
argue that Moertl should have been allowed to testify to
the reasons given to him by Mr. Tishmann for the loss
of the Cooper-Horwitz financing and to the reasons given
by Cisco for loss of the New York Life Insurance Co.
(New York Life) financing. According to plaintiffs,
Krauss should have been permitted to testify to the
reasons given him by Faulkner of New York Life for the
loss of the New York Life financing and similar testimony
by Cisco should also have been allowed.

One of the primary reasons for the Court’s decision to
grant a new trial in this case in 1977 was that hearsay evi-
dence prejudicial to the defendants had crroneously been
admitted into evidence over defendants’ strenuous objec-
tions. In particular, the Court cited the fact that Moertl
was permitted to testify in the first trial about a conversa-
tion he had with Cisco about the loss of New York Life
financing.

In this testimony, Moertl characterized a conversation
he had with Cisco who was repeating a conversation he
had with some unidentified person. This testimony clearly
involved multiple levels ef hearsay and was properly ex-
cluded by the Court in the second trial.

App. 154

The testimony of Krauss and Cisco similarly involved
conversations with persons who were repeating statements
made to them by other sources. This is clearly hearsay
and inadmissible. The fact, as plaintiffs assert, that each
of the proposed witnesses were either spokesmen for the
financial institutions involved or received the information
from such spokesmen does not change the fact that they
were repeating information received from another who
received it from still another source.

This testimony sought to be introduced was clearly
hearsay and would have been highly prejudicial to the de-
fendants. The Court properly excluded this proposed tes-
timony.

Contrary to plaintiffs’ contentions, the Court did not
require witnesses to change facts or testimony to accom-
modate any unrealistic sequence of events caused by the
Court’s excluding the above-described testimony. No error
was committed in this regard.

Plaintiffs argue that Warren Stringer should heve been
allowed to give his opinion about the validity of Metropoli-
tan Life Insurance Company’s (Metropolitan) expressed
reasons for refusing to finance Juneau Square East. Plain-
tiffs offered to prove through Stringer that, after several
months of work on a financing package for Juneau Square,
he received a letter setting forth ‘‘stereo-typed boiler
plate’’ reasens for the turndown of the loan. Stringer
stated that there was some other reason for the turndown,
but he did not know what it was. However, he said the
reason given ‘‘was not the genuine reason.’’ (Tr. 2838-39)

Rules 701 and 702 of the Federal Rules of Evidence set
forth criteria for the lay opinion and expert opinion testi-
mony. In order to offer opinion testimony by lay witnesses,
rule 701 provides that the witness’ opinion must be (1)

App. 155

based on personal knowledge; and (2) must be helpful to
the trier of fact. See Weinstein, Evidence J 701[02] p.
701-10 (1978).

Stringer’s proposed testimony did not meet this criteria
and, therefore, was properly excluded by the Court.

Plaintiffs challenge various evidentiary rulings relating
to Marshall-Michigan, including the exclusion of various
portions of the depositions of Donald E. Boerema, Charles
Pinto, and William Clark.

The Court has examined the trial transcript and its
prior rulings, excluding certain sections of these deposi-
tions from the trial. Many of the sections excluded con-
tained hearsay, speculation or lacked adequate foundation.
The Court finds that these portions of the deposition testi-
mony of Boerema, Pinto and Clark were properly excluded
from the trial.

Plaintiffs challenge the Court’s ruling on the Marshall-
Michigan letter to Juneau Square tenants. As previously
determined, whether an action violates principles of tort
law is not, in and of itself, proof of a violation of antitrust
law. The Court finds that it did not err in failing to in-
struct the jury that the letter sent by James Huber on be-
half of Marshall-Michigan to Juneau Square was tortious.

Furthermore, the Court was not inconsistent in deciding
that Judge Robert Landry’s decision should be excluded
and in refusing to strike Huber’s testimony regarding his
rationale for sending the letter to the tenants. (Tr. 7856-
61) Judge Landry’s dicta regarding the procedure utilized
by Marshall-Michigan was not relevant to this action and
was prejudicial to the defendants. On the other hand, the
Court reaffirms its position that Huber’s thoughts and in-
tentions at the time he drafted the tenant’s letter is rele-
vant with respect to his motivation. (See Tr. 7861)

App. 156

The Court concludes that it did not err in its rulings re-
yarding the Marshall-Michigan letter to tenants.

Plaintiffs assert that the Court’s restrictions on plain-
tiffs’ cross examination of John Sann was extremely preju-
dicial. Certain questions about documents were excluded
by the Court because the witness had never seen the docu-
ments, and because questions about the documents were
not raised during direct examination. (See Rule 611(b) of
the Federal Rules of Evidence.)

After due consideration, the Court concludes that it did
not err in setting certain limitations on the cross examina-
tion of Mr. Sann.

The Court also concludes that it was not in error to pre-
vent plaintiff Moertl from testifying that the reason given
to him by Aetna’s attorney, James Urdan, for Aetna’s
entry of foreclosure judgment on January 4, 1972 was that
Marshall-Michigan had entered its judgment the preceding
day. Urdan could have been called as a witness by plain-
tiffs. In addition, the question of Aetna’s decision to enter
foreclosure judgment was not raised by plaintiffs when
Urdan testified on behalf of the defendants. Finally,
Aetna’s rationale for entering its foreclosure judgment
was not relevant to the issues in the second trial.

Plaintiffs contend that they should have been allowed
to introduce evidence on the circumstances for the forma-
tion of Wil-Ten Associates. The Court considered plain-
tiffs’ arguments at trial and declined to admit the evidence,
stating that the evidence did not have sufficient probative
value ‘‘that would justify the influence for which plaintiff
would obviously be offering it.’’ (Tr. 608)

The Court has reexamined its decision and finds that it
did not err in excluding these prejudicial statements about
the rational for the formation of Wil-Ten Associates.

App. 157

The Court excluded plaintiffs’ exhibits 491 and 533,
which listed First Wisconsin’s real estate holdings and
Northwestern Mutual Life Insurance Company’s (NML)
real estate holdings in Milwaukee’s central business dis-
trict, respectively.

Plaintiffs argue that the size and power of these com-
panies in the relevant market had an obvious bearing on
the existence of a conspiracy and on the issue of the rea-
sonableness of the restraint of trade. The Court is not
persuaded by plaintiffs’ position. The fact that First Wis-
consin and NML are large corporations with extensive
real estate holdings in the central business district does
not, of itself, support plaintiffs’ allegations of conspiracy.

After careful consideration of the evidence and argu-
ments of the parties, the Court finds that these exhibits
were properly excluded. Even though the exhibits were
inadmissible, plaintiffs were not foreclosed from all in-
quiry about these property listings and the relationship
between NML and First Wisconsin. Plaintiffs had an op-
portunity to examine Richard Holscher on the First Wis-
consin’s real estate holdings (Tr. 5378-71) and Donald
Mundt on the NML listings (Tr. 3893-96). Other exhibits
pertaining to NML were introduced into evidence. See PX
523-532 and 537-544.

The Court, therefore, concludes that it did not err in
excluding the exhibits listing the real estate holdings of
First Wisconsin and NML.

Plaintiffs challenge various Court rulings relating to
the New York Life financing. Specifically, plaintiffs state
the Court erred in (1) excluding certain testimony of
Moertl, Krauss and Cisco; (2) in its ruling on deposition
and prior trial testimony of New York Life witnesses;
(3) in excluding certain questioning of Edward Rose;

App. 158

(4) in excluding from evidence portions of plaintiffs’ ex- —
hibit 408 and the handwritten notations on plaintiffs’ ex-
hibits 383 and 419; and (5) its evidentiary rulings relat-
ing to First Wisconsin’s credit report to New York Life.

The Court has previously concluded that it did not err
in excluding the testimony of Moertl, Krauss and Cisco
regarding the alleged reasons for New York Life’s turn-
down of the Juneau Square loan.

With respect to the deposition and prior testimony of
the New York Life witnesses, the Court finds it did not
commit prejudicial error warranting a new trial in refus-
ing to permit certain testimony. To advise the jury that
much of the questioning of the New York Life witnesses
during their depositions was conducted by David Beckwith
of Foley & Lardner would have been unduly prejudicial,
in addition to being irrelevant to the issues in this action.
The Court had a similar problem with plaintiffs’ exhibit
422, the Martindale-Hubbell listing showing that Foley &
Lardner represented New York Life as of 1971.

The Court concludes its rulings on these questions were
not erroneous so as to require the granting of a new trial.

Plaintiffs sought to impeach Rose’s testimony to the
effect that First Wisconsin’s unfavorable credit report to
New York Life was not a factor in the May 19, 1971 deci-
sion of New York Life to refuse financing and had not
been discussed at this committee meeting. Handwritten
notations on plaintiffs’ exhibit 419, the committee brief
of the meeting, indicate that the credit report had been
discussed.

In his testimony, Rose stated he did not know who made
the handwritten notations or when they were made (Tr.
8634-8639). In addition, the handwriting had not previ-

App. 159

ously been identified. The Court therefore concluded that
Rose could not be questioned on the contents of these
notations.

Upon reconsideration, the Court finds that this ruling
was not erroneous and plaintiffs are not entitled to a new
trial on this ground.

The Court properly excluded the handwritten notations
on plaintiffs’ exhibits 383 and 419. The requirements of
the business records exception to the hearsay rule, Rule
803(6) of the Federal Rules of Evidence, were not met in
this instance. No testimony was presented about the iden-
tity of the writer of the notes nor did anyone testify that
these notations were made in the course of New York
Life’s regularly conducted business and were a regular
practice of the company.

With respect to plaintiffs’ exhibit 408, the Lutz-Duncan
memorandum, this memorandum was to be utilized to sup-
port plaintiffs’ theory that the First Wisconsin defendants
were attempting to interfere with the New York Life loan
application.

In the first trial in this action, the Court granted a new
trial in part because of the hearsay evidence of a highly
prejudicial nature contained in this memorandum. The
Court stated that several levels of hearsay were found in
the memorandum and concluded that the ‘‘lack of trust-
worthiness and the prejudicial nature of this memoran-
dum and self-evident.’’ Juneau Square Corp. v. First Wis.
Nat’l. Bank, supra at 1324.

After careful consideration of plaintiffs’ arguments, the
Court declines to change its earlier ruling. The Court finds
that the memorandum contains prejudicial hearsay and
was properly excluded by the Court.

App. 160

According to plaintiffs, the basic accusation made in
First Wisconsin’s credit report to New York Life was that
First Wisconsin was involved in the construction lending
on Juneau Square and found that proceeds were not being
used as indicated. Three witnesses were offered by defen-
dants to justify this statement: Austin Lett, John Dickens
and Alfred Little, author of the report. Only Little testi-
fied in person at the trial.

Dickens’ prior trial testimony was read to the jury be-
cause he was unavailable as a witness pursuant to Rule
804(a)(4) of the Federal Rules of Evidence (Tr. 6412-16).
Plaintiffs do not challenge the propriety of the Court’s
decision on this ground.

However, plaintiffs state that the Court should have re-
quired that the entire deposition testimony of Lett be
read to the jury.

Rule 611(a) of the Federal Rules of Evidence provides:

The court shall exercise reasonable control over the
mode and order of interrogating witnesses and pre-
senting evidence so as to (1) make the interrogation
and presentation effective for the ascertainment of
the truth, (2) avoid needless consumption of time,
and (3) protect witnesses from harassment or undue
embarrassment.

The Court exercised its discretion and allowed the parties
to decide their trial tactics and the best way to present
their evidence. The Court did not err in refusing to order
that the entire Lett deposition be read into evidence in
sequence.

Plaintiffs assert that they were allowed inadequate time
to cross-examine Little and that the Court improperly
quashed their subpoena of Little. Little, who had been
waiting to be called to testify for two days, was finally
called to the stand on Friday, May 26, 1978 at 4:26 P.M.

App. 161

The Court split the remaining time between plaintiffs and
defendants.

During their cross-examination, plaintiffs were able to
ascertain the source of Little’s belief that Juneau Square
had used funds for purposes other than had been indicated
to the bank. Plaintiffs also were able to elicit the admis-
sion that if this underlying report was incorrect, then his
statement to New York Life was also incorrect.

Plaintiffs then subpoenaed Little at the close of his tes-
timony and defendants moved to quash the subpoena.

In ruling on this motion, the Court noted that the time
constraints were, in part, necessitated by the extensive
cross-examination of a prior witness, and that the Court
had indicated to plaintiffs that they should consider cur-
tailing this cross-examination. Nevertheless, the cross-
examination of Sann continued until 4:25 P.M. (Tr. 8179).

Prior to deciding the motion to quash, the Court ques-
tioned Little, a Florida resident, who indicated it would
be ‘‘very inconvenient’’ for him to return the following
week. The witness also professed an inability to add any-
thing further to the statements he had already made. (Tr.
8174-8177). In light of all these factors and the Court’s
uncertainty as to the validity of the service of the sub-
poena, the Court granted the motion to quash the sub-
poena (Tr. 8179-80).

After careful consideration, the Court now finds that
plaintiffs were not unduly prejudiced by the time limita-
tions and that the Court did not err in quashing plaintiffs’
subpoena.

App. 162
ALLEGED ERRORS IN TRIAL MANAGEMENT

Plaintiffs contend that certain other decisions of the
Court were highly prejudicial to the plaintiffs and neces-
sitate the granting of a new trial in the interests of jus-
tice. Specifically, plaintiffs list the Court’s time restric-
tions on the trial and closing arguments, the limitations
placed on the cross-examination of certain witnesses and
the alleged misconduct of defense counsel and defense wit-
ness Harold Shapiro.

A. Time Restrictions

The second trial in this case commenced on Monday,
March 20, 1978, at 2:00 P.M. Court recessed for the day
at 6:45 P.M., after a jury of six plus four alternates had
been selected. The Court blocked out some twelve weeks
of its trial calendar for this trial. Plaintiffs had thirty-
four days of actual trial time and the defendants had
twenty days of trial time. Plaintiffs were allotted five
hours for closing argument, including rebuttal, while the
defendants had four hours for their closing argument. The
plaintiffs request for a minimum total of six hours for
argument was denied by the Court. (Tr. 10,149)

Plaintiffs assert that these time constraints denied them
the opportunity to present their claims completely and
fairly. Plaintiffs point out that defendants were permitted
extensive cross-examination of witnesses called by plain-
tiffs but identified with the defendants and that they were
required to read irrelevant portions of depositions coun-
terdesignated by the defendants. In addition, defendants
were allegedly permitted extensive voir dire. In the opin-
ion of plaintiffs, all of this combined to further shorten
their already too limited trial time.

The Court was very aware of the complexity of the case
and the great quantity of evidence to be presented. These
factors were taken into consideration in blocking out some

App. 163

three months for the trial. Two days were set aside for
closing arguments.

The Court also recognized its responsibility to parties
to other litigation pending before the Court. Considering
the crowded dockets of the courts, the Court has a respon-
sibility to exercise reasonable control over the amount of
trial time allotted to litigants. Affording parties unlimited
amounts of trial time prejudices other litigants before the
Court who must then wait extra months before their cases
come to trial. These factors must also be considered and
were considered by the Court.

During the entire three months of trial, the Court han-
dled its regular schedule of status reports, pretrial and
final pretrial conferences, arraignments, and sentencings.
liearings on temporary restraining orders and preliminary
injunctions were also scheduled as the need arose. To al-
Jow plaintiffs additional time for closing arguments would
have cut into the Court’s time allotted to other pending
cases or necessitated the extension of closing argument to
a third day. Under the Court’s time schedule, each side’s
argument could be presented in one trial day. The Court
did not err in restricting time for closing arguments and
in setting very reasonable time limitations for the trial.

Furthermore, the Court finds that it did not err in requir-
ing plaintiffs to read deposition designations and the
counterdesignations by the defendants or in permitting de-
fendants to conduct voir dires on revisions of plaintiffs’
damage exhibit. Such decisions are discretionary with the
Court and, in these instances, were designed to further the
orderly presentation of the evidence. These decisions were
not prejudicial to plaintiffs so as to necessitate a new trial.

In summary, the Court is not persuaded by plaintiffs’
arguments that the time constraints prevented plaintiffs
from fairly and fully presenting their case. The Court set

App. 164

aside a substantial amount of time for this trial with mini-
mum interruptions. The amount of time was not unreason-
ably short, and the five hours allotted to plaintiffs for
closing arguments did not unfairly prejudice the plaintiffs.

Therefore, the Court finds that the time constraints
placed on the parties were reasonable in light of all the
facts and circumstances and did not deny plaintiffs a fair
trial in this case.

B. Plaintif’s’ Cross-Examination of Witnesses

Plaintiffs also assert that they were unduly prejudiced
when the Court limited the cross-examination of James
Huber and George IF’. Kasten. Plaintiffs sought to ques-
tion Huber about a matter outside the scope of his direct
examination and the Court properly excluded this line of
questioning. Rule 611 of the Federal Rules of Evidence.
(See Tr. 7663-7672)

Plaintiffs wanted to confront Kasten with the deposition
testimony of Holscher which allegedly contradicted Kas-
ten’s testimony. The Court did permit plaintiff to intro-
duce the Holscher deposition excerpt later in the day at
the end of Kasten’s testimony. Under the circumstances,
the Court finds that plaintiffs were not unduly prejudiced
so as to be entitled to a new trial on this issue.

C. Alleged Misconduct of Witness and
Defense Counsel

Plaintiffs assert that the alleged misconduct of defense
counsel, Peter Baugher, and of Harold Shapiro, a witness
identified with the defendants, took place when candy was
obtained from a juror while the Court, court staff, plain-
tiffs’ counsel and other defense counsel were engaged in
conferences at the side bar.

App. 165

According to plaintiff John Spoden, he personally ob-
served Baugher obtaining candy or other snack food from
a juror on two separate occasions during the trial. The
first incident occurred when plaintiff Moertl was testifying
and the second while Shapiro was testifying on April 12,
1978. Spoden also observed on April 12, 1978, that Shapiro
made comments to the jury and obtained candy from a
juror. (Spoden Affid. {| 2.)

When the Court was informed of these activities, the
Court indicated it would instruct the jury about the candy
problem. The Court also admonished Shapiro not to take
any additional candy from any juror. (Tr. 2478)

Plaintiffs’ counsel at the time asked that Shapiro be
‘‘admonished or requested from here on in not to do any
other activity of that type’’ and that the bailiff monitor
the jury box area during sidebar conferences. (Tr. 2476)
Plaintiffs did not move for a mistrial at the time.

Plaintiffs state in their reply brief that plaintiffs’ coun-
sel did not become aware until after the trial that one of
the defense counsel had repeatedly obtained candy from
a juror. Had they known about this, plaintiffs assert, they
would have asked for a mistrial or public admonishment
of defense counsel.

In his affidavit, however, plaintiff Spoden states he ob-
served defense counsel] taking candy from a juror on two
occasions, the last on April 12, 1978. Thus, plaintiffs had
notice of defense counsel’s activities at the time the Court
instructed the jury about this type of conduct.

The Court did not condone these occurrences but, in-
stead, took steps to correct the problem. Moreover, the
Court finds that these occurrences were not unduly preju-
dicial to plaintiffs and do not alone warrant the granting
of a new trial.

App. 166

D. Other Alleged Prejudicial Errors

Plaintiffs also cite in their brief several other errors
allegedly committed by the Court during the presentation
of evidence. With respect to the testimony of James Liek,
the Court finds that his testimony was admissible and of
probative value.

The Court also did not erroneously rule and comment up-
on plaintiffs’ counsel’s presentation or upon the reference
to Arthur Anderson in the plaintiffs’ damage presentation.
Nor did the Court attempt to enhance the credibility of
certain defense witnesses by asking friendly and rehabili-
tating questions. Rather, the Court’s questions were de-
signed to obtain clarification of issues or to elicit further
explanation of a particular point.

Plaintiffs further assert that the exclusion of plaintiffs
Spoden and Moertl and their wives from the courtroom
during the cross-examination of defense witness Huber
was unduly prejudicial and erroneously suggested to the
jury that these plaintiffs had engaged in some misconduct.

The Court is not persuaded by this argument. Plaintiffs
Moertl and Spoden were only excluded for the few hours
of the cross-examination of Huber because they were to
be called as rebuttal witnesses and might be testifying as
to the same transaction as Huber. Moreover, these plain-
tiffs were only excluded after the Court granted plaintiffs’
motion to exclude Sann from the courtroom during the
balance of Huber’s testimony. (Tr. 7647-7651) Therefore,
plaintiffs’ motion for a new trial on this ground is denied.

Contrary to plaintiffs’ contentions, the Court did not
take an unduly restrictive view of the business records
exception to the hearsay rule and other rules of evidence
to the detriment of plaintiffs. Rather, the Court properly
applied the rules of evidence fairly and impartially during
the course of the trial.

App. 167

In their post trial motion, plaintiffs also allege other
errors warranting a new trial, although these grounds
were not specifically addressed in their brief. Plaintiffs
allege that defendants’ attorneys, in their opening state-
ment and closing argument, made numerous erroneous as-
sertions of law and fact not supported by the record,
thereby substantially prejudicing plaintiffs. The Court has
examined the record and finds that the defendants’ open-
ing statement and closing argument to the jury were not
prejudicial to the rights of plaintiffs.

With respect to the other grounds for a new trial, the
Court has considered plaintiffs’ arguments and finds that
no error prejudicing the rights of the plaintiffs was com-
mitted.

~ In conclusion, the Court finds, after careful examination,
that the alleged errors in the trial of this action with re-
spect to jury instructions, evidentiary rulings, and other
trial management decisions, were basically fair to both
sides and were not unduly prejudicial to plaintiffs so as
to require the granting of a new trial in the interests of
justice. Moreover, the Court is convinced that the cumula-
tive effect of the trial time restrictions and the alleged
errors of the Court are not of sufficient substance and
magnitude to warrant ordering a new trial.

Ultimately, the Court has the duty to see that there is
no miscarriage of justice. Only if the Court is convinced
that there has been, should it set aside the jury’s verdict.

In this case, the Court has exhaustively examined the
testimony and evidence presented and has carefully con-
sidered the arguments of plaintiffs in support of their
motion for a new trial. In the final analysis, the Court
finds that no miscarriage of justice occurred and that the
interests of justice are served by upholding the jury’s
verdict in this action. Accordingly, the Court hereby
orders that plaintiffs’ motion for a new trial must.be and
is hereby denied.

App. 168

UNITED STATES COURT OF APPEALS
For the Seventh Circuit
Chicago, Illinois 60604
July 3, 1980.
Before

Hon. Robert A. Sprecher, Circuit Judge
Hon. Harlington Wood, Jr., Circuit Judge
Hon. Nicholas J. Bua, District Judge*

JUNEAU SQUARE CORP., et al.,
Plaintiffs-Appellants,

No. 79-2037 vs.

FIRST WISCONSIN NATIONAL BANK OF
MILWAUKEE, et al.,
Defendants-Appellees.

Appeal from the United States District Court for the
Eastern District of Wisconsin
No. 72-C-533
Robert W. Warren, Judge

This cause was heard on the record from the United
States District Court for the Kastern District of Wiscon-
sin, and was argued by counsel.

On consideration whereof, it is ordered and adjudged
by this court that the judgment of the said district court
in this cause appealed from be, and the same is hereby,
AFFIRMED, with costs, in accordance with the opinion
of this court filed this date.

* The Honorable Nicholas J. Bua, United States District Judge
for the Northern District of Illinois is sitting by designation.

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App. 172

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p44

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App. 178
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App. 175

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387

App. 177

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App. 178

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App. 179

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App. 180

NYY , nail
Wt} OFFICE MEMORANDUM
Date —lyvoe_12,127
to _MANAGEBR_FAULKAER Suvecr._Conference Call _
Milwaukee Office Project
raom __-F-s_Ba_ Walker
Participants: Harold Barian

Bill Lutz

Bruce Davies

Bob Conklin

Frank Walker

General synopsis: Barian wanted to know what specific ob-
jections existed to our making this deal.

Mr. Lutz indicated:

1. Sponsors had mis-handled funds
and were being foreclosed.

2. Bank was not sufficiently capital-
ized to handle gap funds.

Barian has substitute money sources (private) and would remove
the present developers. He is interested in getting 0.T. or other
developers into the deal. He did not offer names of new principals
and/or developers at this time. He questioned Lutz that if all were
brought to the fore could the deal be saved. Lutz replied it would
have a good chance. °

Barian indicated he would need a week to put it all together be-
fore getting back to us.

The conversation was ended. Abe
Senior Appraiser

ple %& Lakin pepath be
A. de hot qilas H

FBW:FP N:

i
wh wd

PX3¢3 Hig a yt nt ar,

etic - ta puch, Ae
HHS gre LES

App. 181

Excerpt from Testimony of William C. Lutz (NYL)

Mr. Campion Kersten: The number on this memo-
randum is 383.

Mr. George Kersten: I’m sorry, your Honor, I misread
my own writing.

Mr. McSweeney: Would you hold it a minute while we
get that? All right.

Mr. George Kersten: Okay?

Mr. McSweeney: All right.

Mr. George Kersten:

**Q. Did you in that call express the reasons for that
declination?

A. He says I did.

Q. Go ahead, as you recall it, as refreshed by this
memorandum, and then in the next page toward the bot-
tom, please go ahead.

A. I will have to say that the memorandum says that
Mr. Lutz indicated 1, sponsors mishandled funds and were
being foreclosed. 2, bank was not sufficiently capitalized
to handle gap funds.

Now, T have to also tell you—

Q. Now go ahead, let us get your testimony on the
record.

A. I have to also say that I could have given him
other reasous besides this, but this is what he has noted.

Q. You recall giving him at least these reasons?

A. Where it says number one, ‘sponsors have mis-
handled funds and were being foreclosed.’ Dates there

App. 182

refer to the same data as shown in Paragraph 2 of this
May 11, 1971, bank check, where it says, ‘our source bank
had a part in the construction lending and further pro-
ceeds were not being used as indicated.’

Q. This is the report given by Mr. Albert C. Little?

A. Yes, that would be in effect coming to that con-
clusion.

Q. Well, that was the source of that opinion on your
part, wasn’t it?

A. Yes,

Q. Now, the sponsors as referred to in your answer
just a moment ago, that would be Mr. Moertl and Mr.
Spoden and the Juneau Square Corporation people?

A. Yes.

Q. And the bank, the No. 2, the Midland Bank, cor-
rect? One other question, with regard to any other rea-
sons, there are no other reasons listed on this memo-
randum, are there?

A. No.
Q. Now then, during the months of May and June,

and I want to begin with May 19. In other words, from
May 19 through the balance of May and on through the
month of June, will you state whether or not there were
any other communications between the First Wisconsin
National Bank and New York Life Insurance Company?
-A. Ihave no idea. |

Q. Did anyone ever teil you about any such

App. 183

May 11, 13971
CREDIT CHECALIC Midland National Bank

3B. J. Davey Milwaukee, Wi3consin

We were told that the juneau Square Corpocation is a wholly owned
subsidiary of Wiltenco, a conpany evgaged in the construction of office
buildings. The eudsidiary was incorporated to handle the developwent of
property at Marshall Street and Wisconsin Avenue. Principals in both
organizations are ir. Ralph Conway, Mr. Jack Moertl and Mr. John Spoden.

We were told that the proverty has beeo developed in instalments and
was “bootstrapped all the way." They have a high debt. It was believed
that the mortgage held by che Aetna was in trouble and the lender has
agreed to defer foreclosure. Our source bank had a part in the construction
lending and found proceeds were not being used as indicated. There appeared
to be several recent judgsents and liens against tue property.

: Ie was our source's opinion that the eatire pruject wae uvt adequately
financed. Recent high interest rates guve them real probiems.

The Midland Mational Bank was described as a retail oriented institn-
tion that has made reasona»is progress. They to0% over .a: bank a short while
ago and this accounts for a jump in deposits from $60 million to $100 million.
The bank's President, Mr. Kelly, was described as a very aggressive banker
who was not well liked in the local financial cormunity. He had been with
the Marina 3ank where, he led a proxy fight to get control of the corpora-
tion that was larsely owned by interests clos: to the bank for which he was
workins.

It was believed that some of the furds in this venture comes from the
Norris Grain Company interests in Chicago.

BJD:MB

(Information obtained from Mr. Aldert C. Little, V.P., First Wisconsin
National Bank, Milwaukee, Wisc.)

If [>> ae [4s

App. 184

NS} OFFICE MEMORANDUM - il nea
Date ay. 2

To_ CREDIT CHECKING Sussect. Midland National Bank

geen. B. J. Davey Milwaukee, Wisconsin

We were told that the Juneau Square Corporation is a wholly owned
subsidiary of Wiltenco, a company engaged in the construction of office
buildings. The subsidiary was incorporated to handle the development of
property at Marshall Street and Wisconsin Avenue. Principals in both
organizations are Mr. Ralph Conway, Mr. Jack Moertl and Mr. John Spoden.

We were told that the property has been developed in instalments and
was "bootstrapped all the way." They have a high debt. It was believed
that the mortgage held by the Aetna was in trouble and the lender has
agreed to defer foreclosure. Our source bank had a part in the construction
lending and found proceeds were not being used as indicated. There appeared
to be several recent judgments and liens against the property. ,

It was our source's opinion that the entire project was not adequately
financed. Recent high interest rates gave them real problems.

The Midland National Bank was described as a retail oriented institu-
tion that has made reasonable progress. They took over .4. bank a short whil
ago and this accounts for a jump in deposits from $60 million to $100 millio
The bank's President, Mr. Kelly, was described as a very aggressive banker
who was not well liked in the local financial community. He had been with
the Marine Bank where, he led a proxy fight to get control of the corpora~
tion that was largely owned by interests close to the bank for which he was
working.

It was believed that some of the funds in this venture comes from the
Norris Grain Company interests in Chicago.

6355 10-54 (eth aell) Printed in U.S.A. 45Cs

App. 185

Plainriees* LoPy

(. C

OFFICE MEMORANDUM Dictated ~n tape May 21, 1971
Oa May 24, 1971

%

Te TREASURER DUNCAN _ suecer Proposed loan - joint ven
Willtas ¢, Lute — with follewing parcicipants:
. ‘ * . .NMational Bank - SWC Wisconsin Avenue an
. Marshall Street, Milwaukee, Wisconsin

3 I learned from ional Officer Wilford that he had a
discussion with Baird & Warner regarding our declination of

E « the subject case, He was told by our correspondent that

‘fm they been called the First Wisconsin Bank, apparently

) to determine whether applicants, or anyone associated

with them, had any "clout" with New York Life,

~ They apparently made it clear to Baird & Warner that.

ft they didn't want 3s building built - apparently because

“ it would interfere with the t of the leasing in their. __—_—_..
proposed building. Our corres t conveyed to Joe-Wilford:.-° ~~.
the feeling that there were veiled intimidations along the
lines that First Wisconsin would use their best efforts to
‘delay or interfere with the construction of this building.

I do not know whether First Wisconsin Bank was one of
your sources of information but if it was, I must tell you
; that I consider that bank, because of its own plans for
bui across the street, as hardly falling the eoneqney
la of a disinterested source of information - rather, I woul
consider them as having a definite conflict of interest in
“S report on their competitor's efforts in building a structure
across street from their proposed building that will come
“ on the leasing market at least a year or more ahead of their
~~ building R

\% I bring this information to your attention because it
appears that additional substantial ownership participation
. may be injected in this: case which, of course, will result in
i, it being presented to the comnittee again.
RS LP
; a Dr 27 .
wa : Won ° Va fet
= x ; Vice President
™ = weCL:s

sh S ,
> as Qoeard 5S

P08 19-46 Govett i) Printed ir © 8A

¥S3

App. 186

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App. 187

MILWAUKEE DOWNTOWN SPACE ANALYSIS

May, 1966 to October, 1970:

Space absorbed of 868,000 sq.ft. or 192,000 sq.ft./yr.
Present Vacancy:
440,000 sq.ft., of which 123,000 sq.ft. is new.

(Total downtown space, including 5 banks, is 4,676,000 sq.ft.)

Proposed Space:

MGIC 160,000 sq.ft.
Marine MGIC 20,000 sq.ft.
Old First Wisconsin 200,000 sq.ft.
New First Wisconsin 430,000 sq.ft:
Total 810,000 sq.ft. “assumes 3 floors over bzse)

&
or 4.2 yrs. to fili the
lay
previous absorption rete

Possible New Buildings:

Lewis Center (3 floors)
First Federal Building
Manpower Building
Schlitz Building
Juneau Square Building

It should be noted that the space absorbed over the last 4.5 aca includes
the following major tenants:

M&I1 109,000 sq.ft.
First Wisconsin 60,000 sq.ft.
Marine 20,090 sq.ft.
Telephone Company 20,0990 sq.ft.

Total 200,000 sq.ft.

This would lead one to the conclusion that it would take even nore than the
4.2 yrs. to fill up the proposed new space and also assumes no other aww
duildings would be built in this period. i
° is
3 lud

49 / RAE 11/12/70

DUTLDINGS

IBM Building
Jackson-Mason Building
Lewis Center

Juneau Square

Marine Plaza

M&TI Bank

National Trunk
(across from Marine)

660 East Mason

' Office on the Square
(Wells-Jefferson)

Catholic Knights
Clark Building
Continental Bank

Riverside Building
(Towne Realty)

Time Insurance
(new only)

App. 188

SPACE BUILT -_ 1962 TO 1970

(Approximate BOM; Figures 10/1/70)

SQ.FT.
* + 110,000
9,000
90,009
144,000
401,000
269,509
20,000

22,000
30,000

45,009
176,809

84 ,000
30,000

1,000

ee 2 A")

1,482,300

Total Vacancy New Buildings:

Specific Vacancy 1970 Buildings;

Continental
Time
Catholic Knights

OCCUPANCY
CREATER THAN

967
967,

$67

857%

51% (of 90,090 sq.

(& ground
' floor vacant)

(tenant wants ¢
leave 23%)

Average - 185,259

123,000 sa.

40,090 sq.
40,000 sq.
20,000 sq.

ft.

109,009 sc.

gst, 12/52/79

App. 189
PLAINTIFFS’ EXHIBIT 499
FIRST WISCONSIN NATIONAL BANK

MEMORANDUM

TO: George F. Kasten, Chairman of the Board
Hal C. Kuehl, President
Richard H. Holscher, Vice President

FROM: John S. Helling, Assistant Vice President
DATE: January 17, 1972

SUBJECT: FIRST WISCONSIN CENTER RENTAL
RATES

‘his report has two parts, an explanation of the rationale
used in setting recommended rental rates, and several sup-
porting schedules including one showing the actual rates
recommended,

The schedules and rates recommended result from a sub-
stantial amount of economic analysis and preparation of
pro forma statements. Until early in 1970, nothing more
than rough approximations of economic impact had been
made. In April, 1970, we prepared some additional esti-
mates so that the First Wisconsin Center impact on earn-
ings could be estimated. In August of 1970, and again
in October through November of 1970, the earlier esti-
mates were refined so that a presentation on the entire
program could be made to the Board. At that time we
made some basic assumptions because the total building
program was undefined. These figures were used to
analyze such things as adding a second Galleria level and
two or three stories at the top. By March, 1971, the
decision to capitalize certain expenses and interest during
construction had been made so the estimate of capitaliza-
tion due to base building costs was cranked into the figures.

App. 190

By May, 1971, not only had the scope of the project been
defined but about one third of the contracts had been let.
At this point all figures were revised based on budgeted
costs, and a much closer estimate of rate levels required
to recapture costs was made. During July, 1971, actual
floors were measured from plans, and an extensive analy-
sis was made of the impact of charging higher rates on
higher floors and of the impact of varying rates within
one floor according to corner influence ete. By November,
1971, enough information on costs, scope changes, funds
costs, operating costs, and on real estate tax rates was
known to calculate the final figures and recommended rates.
We knew all along that costs would be such that we would
have to charge higher rates than anyone else. Our goal
was to set rates competitive in today’s market that result
in nearly full occupancy as quickly as possible with the
minimum income objective of recovering our costs.

We are recommending average rates from $9.00 on the
lowest available floor to $10.25 on the highest available floor
(Schedule A) with a variation from $.10 below the average
to $.50 above the average depending on location on a floor.
These rates will be from 5.8% to 27.2% higher than MGIC’s
rates which are presently the highest in town. The MGIC
Plaza and the First Federal Plaza are our only competi-
tion today as there is virtually no first class office space
available east of the river. MGIC’s announced rates are
$7.90 on a full floor basis or $8.70 on a multi-tenant floor
basis including electricity (worth about $.25 per square
foot) on a 1972 base year.

(Schedule C compares MGIC and FWC) Full floor
means all useable area on a floor is rented including the
elevator lobby, the toilets, the closets and hallways. If
there is more than one tenant on a floor, these areas be-
come public areas. In order to get the same number of dol-
lars from a floor, an amount has to be added to the rent

*

App. 191

for a smaller tenant to pick up the rent from the lobby,
etc. that would otherwise be lost. In MGIO’s case 11%
of their floors are these types of areas so they have to add
that to the rate for smaller tenants i.e. $7.90 + 11% =
$8.70. The First Wisconsin Center will have to load its
full floor rates from 18.5% to 14.5%. Recently Thomas J.
Klutznich, Mxecutive Vice President of Urban Investment
& Development Company, MGIC’s partner, spoke to the
Milwaukee BOMA about their project. At that time he
indicated they were negotiating on about 30,000 square
feet of space out of a total of 170,000 square feet. First
Federal Savings & Loan Association announced a new
building of 169,000 square feet of which 125,000 square
feet will be competitive space available. Their rate will
be $8.50. This leads us to believe that MGIC may even
be forced to drop their rates when our rates are an-
nounced in order to fill their building despite the existing
differential. We feel our rates are justified by virtue of
the building’s size, location, height, and prestige of its
owner and tenants, but that they are at the maximum.

Schedule of Rental Rates—1st Class Buildings
Kast of River

FWC $9.00 - $10.25
MGIC $8.70 (with electricity) (1972 Base Year)
First Federal $8.50
Marine $8.00 (with electricity)
M&I $7.55 (with electricity)
Van Buren
Bldg. $6.50 Estimated
Juneau

Square $7.00
Lewis Center $6.00 - $7.00
IBM $6.50 - $7.00
Mariner Bldg. $6.50
Other Buildings are less

App. 192

In addition to First Wisconsin Center’s 400,000 square
feet, MGIC’s 170,000 square feet, First Federal’s 125,000
square feet, there will be about 200,000 square feet of
space available in our Water Street quarters. With all
this space added to the market at once, the above quoted
rates will become competitive factors as tenants leave those
buildings for the First Wisconsin Center. We expect to
fill better than half of the First Wisconsin Center’s 400,000
square feet immediately, but the remaining 200,000 square
feet will have to compete with MGIC, First Federal, 735
North Water Street, and the other east side buildings.

We compared income produced from the recommended
rate schedule with costs. Costs were split into three areas
and estimated separately, real estate taxes, (Schedule D-
3), all other operating costs, (Schedule D-2), and costs of
funds (Schedule D-1).

Some fundamental assumptions were made regarding
costs and income. Probably the most significant was the
decision to cover ‘‘costs’’ only and not provide for depre-
ciation (i.e. recapture of capital investment). The theory
is that because of market conditions we can only get rents
today to cover costs, therefore, for the short term, say five
years, can we justify this?’ If we look at the real issue,
the actual value of the asset at the end of five years, we
ask if this is really a ‘‘wasting asset’’ over the first five
years. In our opinion, the land and building will be worth
more after five years than they cost, thus we try to compete
in the market, cover costs initially, and increase rents after
five years to provide then for depreciation or recapture of
investment.

Another fundamental assumption was that rents should
reflect only those costs caused by construction of the basic
building. Special costs incurred because of the nature
of the Bank were ignored. Some of these were, art work,

App. 193

allowance for special bank improvements, systems depart-
ment program costs (e.g. communication consultant, one
half of the security consultant), portions of the architectur-
al reimbursables, part of the interior design fee, moving
costs, and furniture costs. In addition, it was assumed
that the areas occupied by the bank would produce income
and that the bank’s basic rental rate would be the same
as the rate for the cheapest tower floors or slightly under
this rate. Bank space at the Wisconsin level, Galleria
level, parking areas, and drive-in areas reflect market con-
ditions and are different than the basic rate.

The final basic assumption made was that cost estimates
would be based on experience for 1970, (later adjusted to
1971). The leases entered into would provide for an es-
calation of rent to reflect any increased costs between the
time the lease was signed and the time of occupancy. Thus
we are able to quote rates at today’s dollars rather than
have to quote rates with a built in estimate of inflation.
This is desirable since rent rates for existing buildings are
being quoted at today’s rates, while generally these build-
ings’ leases have escalator clauses which will cause their
rates to increase by the time our building is ready for
occupancy.

Real estate tax estimates (Schedule D-3) were based on
the 1970 tax rate and an estimate of assessed value made
by the assessor’s office after reviewing our plans. Subse-
quent to that time, this estimate was revised upward to
reflect the additional cost for a parking deck and inclu-
sion of the land value of one half of the 2nd and 3rd blocks
which had been excluded originally. Although there have
been scope changes in the building which are likely to in-
crease our taxes, they have been offset by a reduction in
the 1971 tax rate so our total budget figure is still good.
Two assumptions made in the real estate area were that
certain hidden costs of construction would not be reflected
in the assessment such as fees, supervision, and tests.

App. 194

The other assumption is that, on the basic cost of con-
struction, the actual level of assessment will be 48% of
cost rather than 55%. This is based on our experience and
knowledge of costs and subsequent assessment levels of
other new buildings.

The second general area of cost breakdown is all other
operating expenses (Schedule D-2). This is cost of labor,
utilities, supplies, repairs, etc. This amount is based on
our experience at 735 North Water Street. The cost of
operating the main office per square foot of net rentable
area is applied to the area of the First Wisconsin Center.
To this are added the extra costs per square foot for the
bank occupied areas—also based on the experience at 735
North Water Street. The actual costs for the first nine
months of 1971 were found to be slightly under 1970 ex-
perience so we have used the original figures with 1971
as a base year. Thus, both our tax expense and other
expense should be current for 1971.

About 55% of all costs are estimated to be cost of funds
(Schedule D-1) and it is interesting to note that the cash
rent income almost covers the cash costs (taxes and op-
erating) while the cost of funds closely approximates the
imputed rent from the bank. Therefore it may be fairly
said that the actual occupancy cost to the bank in the new
building is slightly more than the loss of interest income
on the total capitalization for the building (plus the im-
puted interest on funds expended but excluded from build-
ing economics—like art, etc.). There are several assump-
tions made on ‘‘cost of funds’’. The most basic is that it is
assumed that the funds invested in the new building project
could have otherwise been earning income and therefore
the new building must be charged with the costs of not
investing those funds. This, like bank rent, is an imputed
figure, but it reflects the fact that all bank assets can be
measured against the costs of doing business. For the
First ‘Wisconsin Center, we have assumed that there will

App. 195

be in excess of $50,000,000 expended at the gross de-
benture cost of 8.6%. The excess funds are assumed to
come out of general banking funds at the average cost of
funds for all assets—most recently estimated at 5.9%.
Thus, an average cost of interest on every dollar spent is
computed. It works out to 7.4%.

We have estimated the rate of fund expenditures for
both construction and other expenses, and have applied
the annual imputed 7.4% interest charge against the ex-
penditures from time of payment through 1973 when we
have assumed that the total project will be closed and set
up on the books as an asset. The total building value
(Schedule D-1) will consist of three elements, 1) construc-
tion costs, 2) other costs charged to the project and capi-
talized (new building development cost, miscellaneous ex-
pense, and real estate taxes during construction), and 3)
imputed interest on the first two types of expenses which
is also capitalized. The total building value is multiplied
by 7.4%, and the answer is the amount charged to the
building as cost of funds.

Schedule E estimates the direct and indirect impact of
the building on the Bankshares books.

Approval of rental rates is requested in Schedule A.
/s/ John
John 8S. Helling

PLAINTIFFS’ EXHIBIT 554
FIRST WISCONSIN NATIONAL BANK
of Milwaukee
5/6/71
Mr. Kasten:

For your information—Marshall-Michigan is foreign
money represented by Foley & Lardner; Aetna has first
mortgage on the property.

Dick Holscher

App. 196

PLAINTIFFS’ EXHIBIT 472

FOLEY & LARDNER
735 North Water Street
Milwaukee 53202
Telephone (414) 273-0800

May 4, 1971

Mr. Richard H. Holscher, President

First Wisconsin Development Corporation
110 East Wisconsin Avenue

Milwaukee, Wisconsin 53202

Dear Dick:

Enclosed for your information is a copy of a memo-
randum dated May 3, 1971, summarizing the present status
of the litigation relating to the Juneau Square property.
All information in this memo is a matter of public record
in the court proceedings.

Best regards.

Cordially,
/s/ Bob
Robert B. Bradley
Enclosure
Copy to: G. F. Kasten

A. C. Little 5/6/71

PLAINTIFFS’ EXHIBIT 472-A
MEMORANDUM

TO: MR. BRADLEY
FROM: MR. HUBER

Re: Marshall-Michigan Company, Inc. vs.
Juneau Square Corp.

In March, 1971, Marshall-Michigan agreed, upon certain
stipulated conditions, not to enter its $1,050,000 judgment
of foreclosure against Juneau Square prior to January

App. 197

2, 1972. If financing is not obtained for the East Project
by that date, Marshall-Michigan is free to proceed im-
mediately to a foreclosure sale, without any right of re-
demption by any party. If Juneau Square pays Marshall-
Michigan $1,050,000, plus interest and advances, prior
thereto, we will satisfy our mortgage and judgment and
convey our one-half undivided interest in the Existing
Project to Juneau Square or its designee.

The terms of the Marshall-Michigan/Juneau Square
stipylation are similar to a stipulation entered into be-
tween Aetna, Juneau Square Corp., and all other defen-
dants, in Aetna’s foreclosure suit. Aetna obtained a
$4,380,797.11 judgment on its first mortgage, but likewise
agreed not to enter its judgment prior to January 2, 1972,
unless the time to do so is accelerated under the terms
of the stipulation. In the meantime, Buenger-Mariner
Management Company has been appointed and presently is
managing the property.

If, on January 2, 1972, Marshall-Michigan and/or Aetna
become entitled to enter their respective judgments, Mar-
shall-Michigan is to proceed initially to sale and confirma-
tion. Within ten days after confirmation, Marshall-Michi-
gan may, at its option, choose to litigate its defenses re-
lating to the tender of taxes to Aetna. Should Marshall-
Michigan so choose and prevail, Aetna must reinstate;
should Aetna prevail, Aetna may then enter its judgment
of foreclosure and proceed to sale without redemption.

If Marshall-Michigan does not choose to litigate the tax
defense, they may redeem by paying Aetna out in full.

As a complete alternative to the above procedure, Mar-
shall-Michigan may, within ten days after confirmation of
its sale, elect to reinstate the mortgage by making Aetna
current on all its principal and interest and paying to
Aetna its costs and disbursements, plus $30,000 attorneys’
fees, and a $500,000 mortgage prepayment.

App. 198

PX 589, page 22 — Chart of Milwaukee
Central Business District

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App. 199

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App. 200

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App. 201

PX 143 — Chart of Juneau Square block showing coverage
of Aetna and Marshail-Michigan mortgages

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App. 202

EXCERPTS FROM JURY INSTRUCTIONS—
FIRST TRIAL

From pages 13,946-13,948 of the transcript :

As I stated, this is an action under the anti-trust laws.
The purpose of the Sherman Anti-Trust Act is to preserve
and advance our system of free, competitive enterprise
and to encourage, to the fullest extent practicable, free
and open competition in the market place; all to the end
that the consuming public may receive better goods and
services at a lower cost. So, any unreasonable interfer-
ence by contract or combination or conspiracy with the
ordinary and usual freely-competitive pricing or distribu-
tion system of the open market in interstate trade and
commerce constitutes an unreasonable restraint of inter-
state trade and is a violation of the Federal Anti-Trust
Laws.

* * a

To restrain interstate trade and commerce means then
to interfere unreasonably with the ordinary, usual, and
freely-competitive pricing or distribution system of the
open market in interstate trade and commerce.

From Page 13,957 of the transcript:

The term ‘‘restraint of trade’’ which must be the ob-
jective or effect of any contract combination or conspiracy
condemned by the antitrust laws contemplates only an
unreasonable restraint of trade. The law recognizes that
it may be impossible to conduct a business without in some
degree restraining trade. The Sherman Antitrust Act,
accordingly, does not condemn all restraints, but only those
which unreasonably restrain commerce among the states
or with foreign nations. The plaintiffs allege, and in order
{o recover they must prove by a preponderance of the
evidence that they were injured or damaged as a result 0

App. 203 iin

the alleged violation by the defendants of the antitrust
laws. In other words, the damage or injury which they
claim must be proximately caused by the alleged antitrust
law violation.

FIRST WISCONSIN DEFENDANTS’
INSTRUCTION NO. 25

[FIRST TRIAL]

The term ‘‘restraint of trade’’, which must be the ob-
jective or effect of any contract, combination, or conspiracy
condemned by the antitrust laws, contemplates only an
unreasonable restraint of trade. The law recognizes that
it may be impossible to conduct a business of any kind
without in some degree restraining trade. The Sherman
Antitrust Act, accordingly, does not condemn all combina-
tions or conspiracies which interrupt interstate commerce.
It does not apply to restraints as such, but only to those
which directly, immediately, and necessarily unreasonably
affect commerce among the states or with foreign nations.

Restraints of commerce which arise from the full and
free play of competition between business concerns all of
which have more or less ability, industry, ingenuity, capi-
tal, and various other advantages or disadvantages in
doing business, are reasonable restraints and in no man-
ner are prohibited or restricted by the antitrust laws. In
fact, the very purpose of the antitrust laws is to preserve
unrestricted competition which produces such reasonable
restraints. The Sherman Act only prohibits unreasonable
restraints. a

An unreasonable restraint is one which unreasonably
or unlawfully interferes with normal, full, and free com-
petitive conduct within the relevant market.

App. 204

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

JUNEAU SQUARE CORP., WIL-TEN CO.,
INC., JUNEAU SQUARED SERVICES, INC.,
RALPH W. CONWAY, HAL BRADLEY &
ASSOCIATES, INC., EMIL BARTEL,
ANNA BARTEL, VIONE PERRY, as
Administratrix of the Estate
of Thomas H. Perry, HAROLD C.
SMITH III, as Administrator of
the Estates of Harold C. Smith, Jr.,
and Mildred B. Smith, JACK D.
MOERTL and JOHN F. SPODEN,

Plaintiffs,

vs. Case No. 72-C-533

FIRST WISCONSIN NATIONAL BANK OF

MILWAUKEE, FIRST WISCONSIN DEVELOP-

MENT CORPORATION, FIRST WISCONSIN

CORPORATION, MARSHALL-MICHIGAN COMPANY.

INC., MARSHALL-WISCONSIN COMPANY,

INC., AETNA LIFE INSURANCE COMPANY,
Defendants.

VERDICT FORM

VERDICT
QUESTION NO. 1

Did any of the defendants enter into any contract, com-
bination, or conspiracy with any other person which was
in effect at anytime since September 22, 1968 and which
unreasonably restrained interstate trade or commerce in
the leasing, development, construction und operation of

App. 205

office rental space or the financing for the development of
office buildings?
Answer YES

If your answer to the above question is ‘‘no,’’ then you
should not answer any of the following questions. Pro-
ceed to the last page and place your signatures on the
lines indicated.

QUESTION NO. 2

If your answer to the above question is ‘‘yes,’’ identify
the line or lines of interstate trade unreasonably re-
strained by placing a yes answer next to the trade or
trades listed below.

A. Leasing, development, construction and operation
of office rental space.

Answer YES
B. Financing for the development of office buildings.
Answer YES

QUESTION NO. 3

Identify the defendant or defendants who were members
of the contract, combination, or conspiracy found in ques-
tion number 1 by placing a ‘‘yes’’ answer next to the de-
fendant or defendants listed below.

A. First Wisconsin National Bank of Milwaukee

Avswer YES
B. First Wisconsin Development Corporation
Answer YES

C. First Wisconsin Corporation
Answer YES

App. 206

D. Marshall-Wisconsin Company, Inc.
Answer YES

E. Marshall-Michigan Company, Inc.
Answer YES

F. Aetna Life Insurance Company
Answer NO

QUESTION NO. 4

Was the contract, combination, or conspiracy, as found
by you, a substantial and proximate cause of injury to
any of the plaintiffs’ business or property.

Answer YES

If your answer to the above question is ‘*no,’’ then you
should not answer any of the following questions. Pro-
ceed to the last page and place your signatures on the lines
indicated.

QUESTION NO. 5

If your answer to the above question is ‘‘yes,”’ identity
the plaintiff or plaintiffs who were injured in their busi-
ness or property as found in question number 4 by placing
a ‘‘yes’’? answer next to the plaintiff or plaintiffs listed
below.

A. Juneau Square Corp.
Answer YES

B. Wil-Ten Co., Inc.
Answer YES

©. Ralph W. Conway
Answer YES

D. Hal Bradley & Associates, Inc.
Answer YES

App. 207

Emil Bartel
Answer YES

Anna Bartel
Answer YES

Vione Perry, As Administratrix of the Estate of
Thomas H. Perry
Answer YES

Harold C. Smith, III, as Administrator of the Es-
tate of Harold C. Smith, Jr. and Mildred B. Smith
Answer YES

I. Jack D. Moertl

Answer YES
John F’. Spoden
Answer YES

QUESTION NO. 6

As to the plaintiff or plaintiffs whom you found to have
been injured as indicated above, place the sum of money
in the spaces provided which would fairly and reasonably
compensate the individual plaintiff or plaintiffs for any
damages sustained.

A. Juneau Square Corp.

B.

C.

Answer $5,500,000.00

Wil-Ten Co., Inc.
Answer $500,000.00

Ralph W. Conway
Answer $100.00

Hal Bradley & Associates, Ine.
Answer $100.00

Emil Bartel
Answer $100.00

—

App. 208

F. Anna Bartel
Answer $100.00

G. Vione Perry, As Administratrix of the Estate of
Thomas H. Perry
Answet $100.00

H. Harold C. Smith, III, as Administrator of the Es-
tate of Harold C. Smith, Jr. and Mildred B. Smith
Answer $100.00

I. Jack D. Moertl
Answer $100.00

J. John F. Spoden
Answer $100.00

Proceed to the next page and place your signatures on
the lines indicated.

We the jury unanimously find the facts to be as indi-
cated in our answer(s) to the foregoing questions.
/s/ Jerome H. Subeck
JUROR
/s/ Edward Volm
JUROR
/s/ Robert Schwinn
JUROR
/s/ Richard Slavin
JUROR
/s/ James Behrendt
JUROR
/s/ Carl R. Slye
JUROR

Dated at Milwaukee, Wisconsin this 1st day of October,
1976.

After you have placed your signatures on the lines indi-
cated, notify the bailiff that you have reached a verdict.

App. 209

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

JUNEAU SQUARE CORP., WIL-TEN CO., INC.,
JUNEAU SQUARE SERVICES, INC., RALPH W.
CONWAY, HAL BRADLEY & ASSOCIATES, INC.,
EMIL BARTEL, ANNA BARTEL, VIONE PERRY, as
Administratrix of the Estate of Thomas H. Perry,
HAROLD C. SMITH, III as Administrator of the Estates
of Harold C. Smith, Jr., and Mildred B. Smith, JACK D.
MOERTL and JOHN F. SPODEN,

Plaintiffs.

Vs. Case No. 72-C-533

FIRST WISCONSIN NATIONAL BANK OF MILWAU-
KEE, FIRST WISCONSIN DEVELOPMENT CORPO-
RATION, FIRST WISCONSIN BANKSHARES COR-
PORATION, MARSHALL-MICHIGAN COMPANY,
INC., MARSHALL-WISCONSIN COMPANY, INC.
AETNA LIFE INSURANCE COMPANY and THE
AETNA CASUALTY AND SURETY COMPANY,
Defendants.

JUDGMENT

The jury having returned its verdict October 1, 1976 and
the Court having considered and decided the motions of
the parties on the counterclaims and claims for set-off and
having entered its order for judgment this 26th day of
October, 1976,

IT IS ADJUDGED AND DECREED AS FOLLOWS:

1. That the plaintiff Juneau Square Corp. recover of
the defendants First Wisconsin National Bank of Mil-
waukee, First Wisconsin Development Corporation, First
Wisconsin Corporation, Marshall-Michigan Company, Inc.

App. 210

and Marshall-Wisconsin Company, Inc., jointly and sev-
erally, the sum of $16,500,000, less the set-off of $1,545,346
provided for in paragraph 5 below, making a judgment
in the net amount of $14,954,654, plus attorneys’ fees and
costs of suit to be determined later by the Court pur-
suant to Section 4 of the Clayton Act (19 U.S.C. See. 15).

9. That the plaintiff Wil-Ten Co., Inc. recover of the
defendants First Wisconsin National Bank of Milwaukee,
First Wisconsin Development Corporation, First Wiscon-
sin Corporation, Marshall-Michigan Company, Inc. and
Marshall-Wisconsin Company, Inc., jointly and severally,
the additional sum of $1,500,000, plus attorneys’ fees and
costs of suit to be determined later by the Court pursuant
to Section 4 of the Clayton Act (15 U.S.C. See. 15).

3. That the plaintiffs Ralph W. Conway, Hal Bradley
& Associates, Inc., Emil Bartel, Anna Bartel, Vione Perry,
as Administratrix of the Estate of Thomas H. Perry,
Harold ©. Smith, IIJ, as Administrator of the Estate of
Harold C. Smith, Jr., and Mildred B. Smith, Jack D.
Moertl and John F. Spoden each recover of the defendants
First Wisconsin National Bank of Milwaukee, First Wis-
consin Development Corporation, First Wisconsin Cor-
poration, Marshall-Michigan Company, Inc. and Marshall-
Wisconsin Company, Inc., jointly and severally, the ad-
ditional sums of $300 each, plus attorneys’ fees and costs
of suit to be determined later by the Court pursuant to
Section 4 of the Clayton Act (15 U.S.C. See. 15).

4. That the defendant First Wisconsin National Bank
of Milwaukee recover of the plaintiffs Wil-Ten Co., Inc.,
Ralph W. Conway, Jack D. Moertl and John F. Spoden
on its counterclaim the amount of $111,760, principal, and
$117,856, interest, making a total judgment amount of
$229,616, with interest on the principal amount of $111,760
at the rate of twelve (12) percent plus attorneys’ fees and

App. 211

costs allocable thereto and that all collateral and other
security and mortgages held by said defendant First Wis-
consin National Bank of Milwaukee in connection with or
as security for the note which is the subject of said counter-
claim shall be released and satisfied upon payment and
satisfaction of said judgment.

5. That the amount claimed as set-offs in the ‘‘Seventh
Defenses’’ in the answers of the defendants Marshall-Wis-
consin Company, Inc. and Marshall-Michigan Company,
Inc., based upon the deficiency judgment entered in favor
of Marshall-Michigan Company, Ine. on March 20, 1972
in the Circuit Court of Milwaukee County, Wisconsin, in
the total amount of $1,545,346 shall be set off against the
judgment of Juneau Square Corporation as provided for
in paragraph 1 above in satisfaction of said claims for set-
off and of said deficiency judgment (and each part there-
of), and the judgment which is the subject of said claims
for set-off, that is, each and every part of the deficiency
judgment entered in favor of Marshall-Michigan Company,
Ine. on March 20, 1972 in the Cireuit Court of Milwaukee
County, Wisconsin (Case No. 375-113) shall be discharged
and satisfied and the defendants Marshall-Michigan Com-
pany, Inc. and Marshall- Wisconsin Company, Inc. are here-
by directed to satisfy said judgment of record in said

Court.

6. That the award of attorneys’ fees and costs of suit
pursuant to Section 4 of the Clayton Act (15 U.S.C. See.
15) shall be made later by the Court and added to this
judgment as set forth in paragraphs 1, 2 and 3 above.

7. That the claims and causes of action of the plaintiffs
against the defendant Aetna Life Insurance Company and
the defendant Aetna Casualty and Surety Company be and
hereby are dismissed on the merits, with costs.

App. 212

8. This judgment is entered nunc pro tunc as of October
1, 1976 for all purposes, except that for the purposes of
making motions for judgment notwithstanding the verdict
and/or for new trial and taking an appeal the date of
actual entry rather than the nunc pro tunc date shall con-
trol.

Dated this 26th day of October, 1976.

/s/ Ruth W. LaFore
Clerk of Court
Approved :

/s/ Robert W. Warren
United States District Judge

App. 213

“INFERENCE ON INFERENCE”’
INSTRUCTION

A, ‘‘reasonable inference’’ is defined as a process of
reasoning whereby from the facts otherwise admitted or
established by the evidence in the light of your common
knowledge and experience, a reasonable and logical con-
clusion may be drawn that a certain fact is true. A rea-
sonable inference is, therefore, to be thoroughly distin-
guished from a mere guess or gonjecture. The law does
not permit speculation. Moreover, on the basis solely of one
inference so drawn a further inference may not be drawn.

In other words, you may not pile inference on inference,
but may draw an inference only from facts or circum-
stances which you find to have been established by a pre-
ponderance of the evidence.

‘“AETNA NOT CONSPIRATOR”’
INSTRUCTION

In regard to the membership in the conspiracy alleged,
I instruct you that you may not find that Aetna Life In-
surance Company was a member of the alleged conspiracy.

“LOSS OF AETNA FINANCING NOT DUE
TO CONSPIRACY” INSTRUCTION

Also, in regard to damages in this case, I instruct you
that there is insufficient evidence to find that the decision
of Aetna Life Insurance Company to decline financing for
Juneau Square East was the direct and proximate result
of a conspiracy by the defendants in this case; therefore, I
instruct you that in assessing the amount of damages, if
any, to plaintiffs, you may not award any damages to them
based on the March 11, 1969, decision of Aetna to decline
the financing.

App. 214

“TRRELEVANCE OF OTHER
ILLEGAL ACTS”? INSTRUCTION

During the course of the trial reference has been made
to acts on the part of the various defendants and other
persons that the plaintiffs claim were done as a part of a
conspiracy to restrain trade, so as to injure plaintiffs
in their business or property. You are to consider these
acts, if you find they were indeed done by the defendants
only if you also find that they were done in the course of
and in furtherance of a conspiracy to violate the anti-
trust laws by unreasonably restraining trade, whether or
not these acts were violative of laws other than the anti-
trust laws is irrelevant. If any of the defendants have
committed any other wrongs and | do not suggest whether
they have or have not, you should not consider the char-
acter of these acts under laws other than the anti-trust
laws as I have defined and explained thera in these in-
structions.

“COMPETITION NOT COMPETITORS”’
INSTRUCTION

THE COURT: The term ‘‘restraint of trade’’ which
must be the objective or effect of any contract, combina-
tion or conspiracy condemned by the anti-trust laws con-
templates only an unreasonable restraint of trade. The
law recognizes that it may be impossible to conduct a
business without in some degree restraining trade. The
anti-trust laws were enacted for the protection of com-
petition, not competitors. The plaintiffs must, therefore,
establish that the defendants’ acts injured not only the
plaintiffs themselves, but competition in the leasing of
office rental space in the central business district of the
City of Milwaukee.

App. 215

‘““FORECLOSURE LAW’
INSTRUCTION

In order to assist you in evaluating the conduct of the
parties, the following instructions set forth the applicable
law governing various transactions raised by the evidence,
reference has been made to the law of real estate mort-
gages, in fact, you have gotten a short course in the law
of real estate mortgages.

The general purpose of a mortgage is to provide a
security for payment of a debt or performance of an ob-
ligation, thus, if a borrower is not able to pay the amounts.
due, the lender can look to the value of the property
mortgage to obtain payment. The law permits mortgages
to be bought and sold and this right to transfer ownership
of a mortgage is also important to its value. When a
mortgage is in default, several things may occur. Holders
of defaulted mortgages may grant the property owner
additional time in which to discharge his obligations under
the mortgage, but such extensions are entirely voluntary,
are not required by law and may be made subject to any
conditions the mortgage holder wishes to impose in order
to protect its interest. If such an agreement is not made,
the holder of the mortgage must invoke the aid of the
Court to enforce the provision of it, of this mortgage agree-
ment. The mortgagee is authorized by law to foreclose
on that mortgage and requires the property owner to either
one, pay the full amount of the debt immediately if the
mortgage so provides or two, relinquish to the holder of
the mortgage all rights in the mortgaged property.

If the failure to pay real estate taxes constitutes a de-
fault under the terms of a mortgage, and the mortgagee is
entitled to payment of the full amount of the mortgage
upon default, payment of the real estate taxes would not
bar the mortgagee from maintaining a foreclosure action.

App. 216

A foreclosure suit is legal proceeding supervised by a
court, rules of equity or fairness are applied to such pro-
ceedings to insure fair treatment of both the creditor and
the debtor. If the judge finds that the property owner has
defaulted on the mortgage, he will enter judgment in favor
of the mortgage holder. The law allows the party against
whom the judgment was entered to redeem his property
by paying the amount of the judgment within one year.
If the property is not redeemed, the mortgage holder may
then have the real estate sold at a sheriff’s sale in order
to recover the debt due it. The proceeds of this.sale must
be applied first to delinquent taxes, if any, then to the
holder of the first mortgage and then to the holders of
subsequent mortgages, followed by general and other un-
secured creditors. The defaulted owner receives noth-
ing unless the sale price is sufficient to first repay all
of these obligations.

In regard to the priorities which I have listed above,
payment of delinquent taxes by a second mortgagee does
not give the second mortgagee priority over the first mort-
gagee from the tax payment. One who buys property at
« foreclosure sale on a second mortgage buys the prop-
erty subject to all prior claims and mortgages including
the delinquent taxes and the first mortgage. Reference
nas also been made to the legal effect of the consent judg-
ments entered in state court pursuant to the stipulations
and settlement agreements. As a general rule these agree-
inents are binding on the parties and have the effect of
discharging all claims and matters raised therein. Such
agreements are favored by the law and could not be set
aside except upon the clearest and most positive proof of
fraud or mistake. When such agreements are fraudulent-
ly obtained, however, the judgment may be set aside and
the parties are now bound by the stipulation and

App. 217
[| SECOND TRIAL]
Plaintiffs’ Requested Instruction No. 16.

USE OF UNFAIR METHODS TO DESTROY
COMPETITION AS PER SE VIOLATION OF
SHERMAN ACT

16-1. Unfair methods of competition, when used as
part of a conspiracy the object of which is to destroy the
business of a competitor, are in and of themselves unrea-
sonable restraints of trade.

16-2. Under the evidence in this case it is not dis-
puted that First Wisconsin Corporation and First Wis-
consin National Bank of Milwaukee, as owners and lessors
of commercial office space in the First Wisconsin Center
and the Water Street properties, and Juneau Square Cor-
poration, as owner and lessor of commercial office space
in Juneau Square North and Juneau Square South, as
well as in Juneau Square East had the latter building been
constructed, were competitors in the leasing of office space
in the central business district of Milwaukee.

If you find that:

(a) There existed an agreement, combination or con-
spiracy between First Wisconsin Corporation and
First Wisconsin National Bank of Milwaukee or
between one or both of them and one or more of
the other defendants or with any other person;
and

(b) That unfair methods of competition were employed
as a part of the agreement, combination or con-
spiracy; and

App. 218

(c) That the intent of the parties to the agreement,
combination or conspiracy was to destroy the
plaintiffs as competitors,

such findings without more would require you to answer
‘Yes’? to the questions on the verdict inquiring whether
the First Wisconsin Corporation and First Wisconsin
National Bank of Milwaukee agreed, combined or con-
spired to restrain trade. Such findings would also require
you to answer ‘‘Yes’’ to similar questions regarding any
other defendant who was a party to such agreement,
combination or conspiracy.

[SECOND TRIAL]
Plaintiffs’ Requested Instruction Number 18.

AETNA/MARSHALL-WISCONSIN AGREEMENT
OF APRIL 4, 1972

18-1. The evidence establishes that on January 4, 1972
Aetna Life Insurance Company filed a judgment of fore-
closure against Juneau Square Corporation. This judg-
ment stated the amount due Aetna from Juneau Square
Corporation was just over $5,100,000, and ordered that
the mortgaged premises be sold by the sheriff with the
proceeds to be credited against the judgment amount.

18-2. Plaintiffs’ Exhibit 330 is a written agreement be-
tween Aetna and the defendant Marshall-Wisconsin Com-
pany dated April 4, 1972. This agreement contains vari-
ous terms for a mortgage relationship between Aetna and
the defendant Marshall-Wisconsin Company covering the
so-called existing project in Juneau Square, which Mar-

shall-Wisconsin was acquiring from the defendant Mar-
shall-Michigan.

18-3. The court finds as a matter of law that the agree-
ment of April 4, 1972 operated to extinguish Juneau
Square Corporation’s debt to Aetna, so that from and

App. 219

after that day Juneau Square Corporation was not in-
debted to Aetna. The court further instructs you that it
was the obligation of Aetna and Marshall-Wisconsin
promptly to make their agreement a matter of public
record or otherwise to advise the Circuit Court of Mil-
waukee County or Juneau Square Corporation of the agree-
ment, so that the judgment earlier recorded against Juneau
Square Corporation, providing for a debt of $5,100,000
{rom Juneau Square Corporation to Aetna, would not be
artificially maintained as a matter of record.

18-4. The court further finds that the defendant Mar-
shall-Wisconsin Company intended that there be a delay
and there was delay in recording or otherwise advising
the Circuit Court of Milwaukee County or Juneau Square
Corporation of the Aetna-Marshall-Wisconsin agreement
of April 4, 1972, and that this intended delay constituted
an unfair and unreasonable act and agreement by the de-
fendant Marshall-Michigan Company.

18-5. The agreement of April 4, 1972 further provided
that Aetna would assign to the defendant Marshall-Wis-
consin Company all of Aetna’s right, title and interest in,
to and under any deficiency judgment which might result
in the Aetna foreclosure action. The court finds this to
be an illegal, unfair and unreasonable act and agreement
by and between Aetna and Marshall-Wisconsin Company.

MEMORANDUM

The April 4, 1972 agreement between Aetna and Mar-
shall-Wisconsin was the subject of frequent briefing and
arguments on various motions prior to trial. Various ex-
planations have been attempted by defendants in justifica-
tion of this agreement and, so far as plaintiffs can tell,
they have all been abandoned. No valid explanation has
ever been advanced.

App. 220

The agreement (PX 330) provides in part (p. 6):

_, . Mortgagee (Aetna) shall cooperate with Pur-
chaser (Marshall-Wisconsin) in terminating the rights
of Juneau Square Services, Inc. (‘*Services’’) in
any part of the Properties, including any rights it
may have as a lessee under any lease or under the
Stipulation (and Mortgagee shall assign to Purchaser
all of its rights against such lessee, to the extent same
are assignable), and in obtaining modifications of any
leases which are subordinate to the Mortgagor the
rights of Mortgagee in the foreclosure proceedings.
Mortgagee shall warrant that, to the best of its knowl-
edge, it has not waived any defaults by Services un-
der its lease and/or the Stipulation, and that Services
is in substantial default under the terms of its lease
and/or the Stipulation. The course of action here-
after taken in the foreclosure proceedings shall take
cognizance of the need to effect a termination of Ser-
vices rights and the above-described modifications.
Purchaser shall bear any legal expenses in connection
with such termination and modifications.

The agreement also provided (p. 6-7):

If requested by Purchaser (Marshall-Wisconsin),
Mortgagee (Aetna) shall assign to Purchaser all of
Mortgagee’s right, title and interest in, to and under
any deficiency judgment which results in the foreclo-
sure proceedings. Mortgagee shall assign to Pur-
chaser without recourse, the two Promissory Notes exe-
cuted by Juneau Square Services, Inc. and guaranteed
by Jack D. Moertl which were received by Mortgagee
with respect to Services’ rental obligations, as well
as all claims for unpaid rentals or other sums due from
Services under its lease and/or the Stipulation.

The agreement also provided (p. 7):

It is intended that the economics of the foregoing
settlement are to be effected immediately although the
form of legal implementation of such settlement has
not yet been selected... .

App. 221

As of the time this agreement was entered into, Juneau
Square Corp., its affiliate Juneau Square Services, Inc. and

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_0533%3A2. Public record. Not legal advice.