“Backed by the Land” Is a Mortgage: Wisconsin Statute of Frauds Requires a Signed Writing Identifying the Conveyed Security Interest

Introduction

In Charles Bich v. WW3 LLC (7th Cir. Mar. 10, 2025), Charles Bich and the Bruno Bich Trust (collectively, “the Bichs”) loaned over $1.6 million to entities involved in building an oil-waste processing facility in North Dakota. They alleged Curt D. Waldvogel and his entity WW3 LLC assured them their investment would be “secured” or “backed” by the land and improvements. When the venture failed and WW3 later collected rent and sold the property without remitting proceeds to the Bichs, they sued for (among other theories) breach of contract.

The appeal centered on whether Wisconsin’s statute of frauds barred enforcement of the alleged security promise and whether email writings sufficed. The Seventh Circuit affirmed summary judgment against the Bichs on their contract claim, holding that when property is said to “secure” a loan, the arrangement is a mortgage/conveyance that must satisfy Wisconsin’s strict writing requirements—requirements the parties’ emails did not meet.

Summary of the Opinion

The court affirmed the district court’s grant of summary judgment for WW3 and Waldvogel on breach of contract. Although the parties litigated the case largely through the lens of a “special promise” to answer for another’s debt under WIS. STAT. § 241.02(1)(b), the Seventh Circuit emphasized a different and dispositive characterization: a promise that real property will “secure” an investment is, under Wisconsin law, a mortgage (i.e., a conveyance/security arrangement). Mortgages and conveyances must satisfy WIS. STAT. § 706.02(1).

The court found the parties’ emails and draft “Land Lease/Purchase Agreement” reflected at most negotiations and an unenforceable “agreement to agree,” not a final contract. Even if the writings showed assent, they failed to identify the interest conveyed—i.e., they did not grant or promise any lien/security interest in the land—an essential statute-of-frauds element. The Bichs’ alternative “partnership” theory also failed, both factually (no conversion from debt to equity) and legally (and, in any event, such an oral arrangement concerning real estate would itself be barred by the statute of frauds). The court therefore left the Bichs to their equitable recovery, which they did not appeal.

Analysis

Precedents Cited

  • Kap Holdings, LLC v. Mar-Cone Appliance Parts Co., 55 F.4th 517 (7th Cir. 2022)
    Used to justify applying Wisconsin law because no conflict-of-law issue was raised. It frames the governing substantive law without affecting the merits.
  • Mann v. Erie Mfg. Co., 120 N.W.2d 711 (Wis. 1963) and Marshall v. Bellin, 133 N.W.2d 751 (Wis. 1965)
    These Wisconsin cases supply the classic distinction between “collateral” promises that must be written and “primary” promises that may be oral. The Seventh Circuit distinguished them as personal-guaranty cases—helpful background, but not a close fit once the court reclassified the alleged promise as a property security arrangement rather than personal liability.
  • Wozniak v. Wozniak, 359 N.W.2d 147 (Wis. 1984)
    Anchors the court’s key move: “a transfer of property as security, regardless of the form thereof, is a mortgage.” This precedent supports treating “backed by land” assurances as mortgages subject to land-conveyance formalities.
  • Gilbank v. Wood Cnty. Dep't of Hum. Servs., 111 F.4th 754 (7th Cir. 2024) (en banc)
    Supplies the appellate principle permitting affirmance “on any ground supported by the record” so long as the plaintiff had a chance to contest it. This mattered because the parties focused on § 241.02, while the court resolved the appeal under § 706.02.
  • Mohns Inc. v. BMO Harris Bank Nat'l Ass'n, 954 N.W.2d 339 (Wis. 2021)
    Establishes the election-of-remedies constraint: a party cannot recover for both breach of contract and unjust enrichment based on the same conduct. The court used this to flag that a contract win would require setting aside the unjust-enrichment award; the Bichs agreed to forgo it if they prevailed on contract.
  • Navratil v. City of Racine, 101 F.4th 511 (7th Cir. 2024)
    Restates the de novo summary-judgment standard and the requirement to view evidence favorably to the nonmovant.
  • Witt v. Realist, Inc., 118 N.W.2d 85 (Wis. 1962) and C.G. Schmidt, Inc. v. Permasteelisa N. Am., 825 F.3d 801 (7th Cir. 2016)
    Provide the contract-formation rule that an “agreement to agree” is unenforceable and that negotiations contemplating a later final agreement do not create a binding contract.
  • Nelson v. Albrechtson, 287 N.W.2d 811 (Wis. 1980)
    Supports the conclusion that a signature alone is not enough; the writing must evidence intent to be bound. The court used this to treat Waldvogel’s signed email transmitting a draft as nonbinding.
  • Reetz v. Advoc. Aurora Health, Inc., 983 N.W.2d 669 (Wis. Ct. App. 2022)
    Reinforces Wisconsin’s requirement of “definite and certain” terms and manifested intent to be bound.
  • Anderson v. Quinn, 743 N.W.2d 492 (Wis. Ct. App. 2007) (quoting Wiegand v. Gissal, 137 N.W.2d 412 (Wis. 1965)); Prezioso v. Aerts, 858 N.W.2d 386 (Wis. Ct. App. 2014); Stuesser v. Ebel, 120 N.W.2d 679 (Wis. 1963); Zapuchlak v. Hucal, 262 N.W.2d 514 (Wis. 1978)
    These cases govern the land-identification element under § 706.02(1): the property must be identified with “reasonable certainty.” The Seventh Circuit applied them to hold the “20 acre property” reference was sufficiently definite given the record evidence of only one matching parcel.
  • Williams v. Enbridge Pipelines (Lakehead), LLC, No. 2009AP1006, 2011 WL 4596153 (Wis. Ct. App. Oct. 6, 2011) and Cloud Corp. v. Hasbro, Inc., 314 F.3d 289 (7th Cir. 2002)
    Cited as persuasive authority for the proposition that an email signature can satisfy statute-of-frauds signature requirements, an important modern contracting point given the absence of a controlling Wisconsin published decision.
  • Trimble v. Wis. Builders, Inc., 241 N.W.2d 409 (Wis. 1976) and Consolidation Servs., Inc. v. KeyBank Nat'l Ass'n, 185 F.3d 817 (7th Cir. 1999)
    Trimble is the court’s central Wisconsin authority on statute-of-frauds compliance: even a “memorandum” confirming an oral contract must still contain all essential statutory elements. Consolidation Servs. was distinguished as Indiana law and thus irrelevant to relaxing Wisconsin’s strictness.
  • Equitable Bank, S.S.B. v. Chabron, 618 N.W.2d 262 (Wis. Ct. App. 2000)
    Supplies “hallmarks of a mortgage,” illustrating what sorts of terms/writings typically evidence a lien securing a debt. The court used it to underscore the absence of any written lien or key debt terms in the record.
  • Brown v. CACH, LLC, 94 F.4th 665 (7th Cir. 2024)
    Used for the “put up or shut up” summary-judgment principle; the Bichs bore the burden to present the convertible notes or other evidence establishing essential terms, but the notes were not in the summary-judgment record.
  • Heck & Paetow Claim Serv., Inc. v. Heck, 286 N.W.2d 831 (Wis. 1980)
    Supports the allocation of the burden to prove a partnership and the need to develop legal argument and facts showing partnership elements—something the Bichs did not do.
  • In re Est. of Schaefer, 241 N.W.2d 607 (Wis. 1976) (quoting Goodsitt v. Richter, 257 N.W. 23 (Wis. 1934))
    Critical to disposing of the “partnership/joint adventure” fallback: an oral partnership/joint venture to purchase or sell real estate is itself a contract respecting an interest in land and is void under the statute of frauds unless written or sufficiently performed.
  • Clay v. Bradley, 246 N.W.2d 142 (Wis. 1976)
    Cited in a footnote as part of the equitable-relief landscape (partial performance) under WIS. STAT. § 706.04, but deemed irrelevant on appeal because the Bichs did not challenge the equitable judgment.

Legal Reasoning

  1. Reframing the alleged promise from “guaranty” to “mortgage.”

    The parties litigated whether Waldvogel made a “special promise” under WIS. STAT. § 241.02(1)(b), which targets promises “to answer for the debt … of another.” But the Seventh Circuit observed a mismatch: the Bichs did not claim Waldvogel accepted personal liability; their asserted recourse was against the land. Under WIS. STAT. § 851.15 and Wozniak v. Wozniak, using property “as security” is a mortgage regardless of form. That triggers Wisconsin’s land-conveyance statute of frauds (WIS. STAT. § 706.02(1)).

  2. Affirmance on an alternative, record-supported ground.

    Even though the mortgage-based theory was not the parties’ primary focus, the court invoked Gilbank v. Wood Cnty. Dep't of Hum. Servs. to affirm on that basis, emphasizing that the district court had flagged it and the Bichs had the opportunity to contest it on appeal.

  3. No contract formation: the writings show negotiations, not assent.

    The “Land Lease/Purchase Agreement” was expressly sent as “the start” of what Waldvogel had, with “more needed,” inviting additions—classic non-final language. Under Witt v. Realist, Inc., C.G. Schmidt, Inc. v. Permasteelisa N. Am., and Nelson v. Albrechtson, this is an unenforceable “agreement to agree,” and a signature on an email does not substitute for an objectively manifested intent to be bound.

  4. Even assuming assent, § 706.02(1) requires specific elements—especially identification of the interest conveyed.

    The court walked through statutory requirements for a conveyance:

    • Land identification: satisfied. “20 acre property” was sufficiently definite given the record showing only one relevant parcel, consistent with Prezioso v. Aerts and related cases.
    • Signature: likely satisfied by email signatures, relying on Williams v. Enbridge Pipelines (Lakehead), LLC and Cloud Corp. v. Hasbro, Inc..
    • Party identification: left unresolved; references to “Branch investor(s)” might suffice, but the court did not decide.
    • Interest conveyed: not satisfied and dispositive. The writings never granted or promised a lien/security interest in the land—“Nowhere does this agreement convey, give, or promise” the Bichs “anything,” echoing Trimble v. Wis. Builders, Inc..

    The court also used Equitable Bank, S.S.B. v. Chabron to show how far the writings fell short of mortgage hallmarks: no expressed lien, no debt amount, interest, or due date in the summary-judgment record. Although those terms might have been in convertible notes, the notes were absent from the record—fatal under Brown v. CACH, LLC.

  5. Partnership theory rejected—and would still run into the statute of frauds.

    Factually, the Bichs invested via convertible notes and never converted to equity, remaining creditors rather than owners. Legally, they did not carry their burden to establish a partnership under Heck & Paetow Claim Serv., Inc. v. Heck. And doctrinally, In re Est. of Schaefer (quoting Goodsitt v. Richter) bars oral partnerships/joint ventures concerning real estate unless written or sufficiently performed.

  6. Equity carved out but not pursued on appeal.

    The court noted potential equitable relief under WIS. STAT. § 706.04 and partial performance principles discussed in Clay v. Bradley, but the Bichs’ equitable path had already gone to trial (unjust enrichment) and was not appealed.

Impact

  • Substance over label for “secured” loan talk: In Wisconsin-governed disputes, telling an investor the loan is “backed” by land is likely to be treated as a mortgage/conveyance, not merely a reassurance or a personal guaranty question. That reclassification forces compliance with WIS. STAT. § 706.02(1).
  • Email signatures help—but only if the writing contains the essential conveyance terms: The opinion signals that Wisconsin courts may accept email signatures for statute-of-frauds purposes, but the writing must still clearly grant/identify the security interest (lien/mortgage) and satisfy statutory elements.
  • Litigation discipline at summary judgment: Parties claiming secured status must put the operative instruments (notes, security agreements, drafts showing lien language) into the summary-judgment record. The “put up or shut up” reminder from Brown v. CACH, LLC is a practical warning for commercial litigants.
  • Remedies strategy matters: The court’s discussion of Mohns Inc. v. BMO Harris Bank Nat'l Ass'n underscores that plaintiffs may have to elect between contract and unjust enrichment when both rely on the same core conduct—making appellate posture and trial strategy consequential.

Complex Concepts Simplified

Statute of frauds
A rule requiring certain agreements to be in writing (and signed) to be enforceable. Wisconsin applies strict statutory elements for land-related conveyances (WIS. STAT. § 706.02(1)).
“Special promise” (guaranty) vs. mortgage
A guaranty is a person’s promise to pay another’s debt if that debtor doesn’t. A mortgage is different: the property is pledged as security. This case treats “the land backs the loan” as mortgage territory.
“Agreement to agree”
Preliminary discussions or drafts that show the parties plan to finalize terms later are generally not enforceable contracts under Wisconsin law (as applied through Witt v. Realist, Inc. and C.G. Schmidt, Inc. v. Permasteelisa N. Am.).
Unjust enrichment
An equitable remedy used when no enforceable contract exists, allowing recovery if it would be unfair for the defendant to retain a benefit. Wisconsin generally forbids double recovery for both contract damages and unjust enrichment for the same conduct (Mohns Inc. v. BMO Harris Bank Nat'l Ass'n).
Summary judgment
A pretrial ruling where the court decides there is no genuine dispute of material fact and one side wins as a matter of law. It is the stage when parties must present their evidence, not merely allegations (Brown v. CACH, LLC).

Conclusion

Charles Bich v. WW3 LLC stands for a clear, transaction-shaping proposition under Wisconsin law: when parties claim a loan is “secured” or “backed” by real property, the alleged security arrangement is treated as a mortgage/conveyance and is unenforceable unless a signed writing satisfies WIS. STAT. § 706.02(1), including identification of the interest conveyed (the lien/security interest itself). Drafts and emails that reflect ongoing negotiation, omit lien language, and lack essential security terms will not rescue an otherwise oral “secured” deal. The opinion reinforces Wisconsin’s formalism in land-related security arrangements and serves as a practical directive to reduce such promises to precise, signed, statutorily compliant documents—before the venture turns sour.