## Facts

- Bettye J. Gregg offered to buy a home from Head & Seemann, Inc. (H&S), a Wisconsin corporation.
- Gregg represented (verbally and in writing) that she had $15,000–$20,000 in equity in another home and would use that equity, after selling the other home, to fund the purchase.
- Gregg knew she did not have that equity; the representations were intentionally fraudulent.
- H&S relied on the representations, accepted Gregg’s offer, and the parties entered into a land contract.
- Gregg took possession of the property but failed to make any contract payments.
- After investigating, H&S discovered the fraud and sued seeking alternative relief:
  - For fraud: rescission, ejectment, and money recovery for lost use (rental value) and out-of-pocket expenses; or
  - For breach of contract: rescission, foreclosure, and ejectment.

- The circuit court granted partial summary judgment for H&S, rescinding the land contract based on fraud and ordering ejectment, with a two-week stay to allow Gregg to move voluntarily.
- The stay followed a stipulation: if Gregg vacated within two weeks, H&S would agree to dismiss its money claim.
- Gregg did not vacate within the two-week period, and the circuit court entered an ejectment judgment.
- Gregg then moved to dismiss H&S’s remaining money claim, arguing that rescission and ejectment were an election of remedies that barred further recovery.
- The circuit court agreed and dismissed H&S’s damages claim.
- H&S appealed; the court of appeals reversed the dismissal and remanded.
- The Wisconsin Supreme Court granted review and adopted the court of appeals’ reasoning, affirming and remanding for further proceedings.

## Issues

1. Whether a defrauded real-estate vendor who obtains rescission of a land contract and restitution of the property (ejectment) may also recover money for the rental value of the property during the purchaser’s possession and for certain out-of-pocket expenses, or whether the election-of-remedies doctrine bars that recovery.

## Decision

- The Wisconsin Supreme Court affirmed the court of appeals and adopted its opinion as the Supreme Court’s own.
- The Court held that rescission and restitution of the land do not, by themselves, bar additional monetary recovery when the money award functions as restitution and does not create a double recovery.
- The Court concluded that the vendor may seek restitutionary money for the reasonable rental value of the property during the purchaser’s period of possession to prevent unjust enrichment.
- The Court also concluded that the vendor may seek certain out-of-pocket expenses if they are not duplicative of the return of the land or rental-value recovery and do not amount to benefit-of-the-bargain recovery.
- The case was remanded to the circuit court for further proceedings consistent with these rulings.

## Legal Principles

- The election-of-remedies doctrine is applied to prevent double recovery; it is not a rigid bar triggered by the use of different remedial labels.
- Rescission for fraud is coupled with restitution: the aim is to return the parties, as nearly as possible, to their pre-transaction positions.
- Restitution after rescission may include both return of the property in specie and a monetary award for benefits the defendant obtained from possession, including the reasonable rental value for the period of use.
- A restitutionary rental-value award is not the same as benefit-of-the-bargain damages; it may be awarded with rescission so long as it does not overcompensate the plaintiff.
- Out-of-pocket expenses may be recoverable following rescission even if they did not directly benefit the defendant, provided they are not duplicative and do not place the plaintiff in a better position than before the transaction.

## Conclusion

Head & Seemann, Inc. v. Gregg holds that when a purchaser fraudulently induces a real-estate sale and the vendor rescinds the land contract and recovers the property, the vendor may also pursue restitutionary monetary recovery—such as reasonable rental value for the purchaser’s period of possession and nonduplicative out-of-pocket expenses—because the election-of-remedies doctrine operates to prevent double recovery, not to bar consistent forms of restitution.


Head & Seemann, Inc. v. Gregg, 104 Wis. 2d 156, 311 N.W.2d 667 (1981) aff'd and remanded, 107 Wis. 2d 126, 318 N.W.2d 381 (1982)