638 N.W.2d 331 (Wis.App. 1998), 01-0242, Deminsky v. Arlington Plastics Machinery

Docket Nº:01-0242.
Citation:638 N.W.2d 331, 249 Wis.2d 441
Opinion Judge:[8] The opinion of the court was delivered by: Deininger, J.
Party Name:Todd DEMINSKY, Plaintiff-Respondent, [D] v. ARLINGTON PLASTICS MACHINERY, Locator Corporation, Alpha Omega Plastics Company, Conair, Inc., and Steadfast Insurance Company, Defendants, Image Plastics, Inc. and Federated Mutual Insurance Company, Defendants-Appellants.d
Case Date:November 29, 2001
Court:Court of Appeals of Wisconsin
 
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Page 331

638 N.W.2d 331 (Wis.App. 1998)

249 Wis.2d 441

Todd DEMINSKY, Plaintiff-Respondent, [D]

v.

ARLINGTON PLASTICS MACHINERY, Locator Corporation, Alpha Omega Plastics Company, Conair, Inc., and Steadfast Insurance Company, Defendants,

Image Plastics, Inc. and Federated Mutual Insurance Company, Defendants-Appellants.d

No. 01-0242.

Court of Appeals of Wisconsin.

November 29, 2001

Page 332

[Copyrighted Material Omitted]

Page 333

[Copyrighted Material Omitted]

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[249 Wis.2d 447] On behalf of the defendants-appellants, the cause was submitted on the briefs of Robert E. Salmon, Richard L. Pemberton, Laura J. Hanson and Erica Gutmann Strohl of Meagher & Geer, P.L.L.P., Minneapolis, MN.

On behalf of the plaintiff-respondent, the cause was submitted on the brief of John P. Richie of Misfeldt, Richie, Wickstrom & Wachs, Eau Claire, David E. Richie of Danielson, Guettinger, Richie & Manydeeds, S.C., Eau Claire, and Raymond L. Hoel of Hoel Law Office, Cornell.

Before VERGERONT, P.J., ROGGENSACK and DEININGER, JJ.

¶ 1 DEININGER, J.

Image Plastics, Inc. and its insurer, Federated Mutual Insurance Company, appeal a $1.7 million judgment entered against them in favor of Todd Deminsky for injuries he sustained while operating a plastic-grinding machine. 1 Image, which purchased the machine from Arlington Plastics Machinery, contends that an indemnity provision in Arlington's favor contained in a sales order for the machine should not be enforced. Image further contends that, even if the indemnity provision is valid, Image cannot be bound to the terms of Arlington's subsequent settlement with Deminsky, upon which the [249 Wis.2d 448] appealed judgment is based. We conclude that the indemnity provision is a part of Image's contract with Arlington, and

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that the provision is enforceable against Image. We also conclude, however, that Image is not bound by the Deminsky-Arlington settlement, and Image is thus entitled to litigate the extent of Arlington's liability to Deminsky for damages. We therefore reverse the appealed judgment and remand to the circuit court for further proceedings consistent with this opinion.

BACKGROUND 2

¶ 2 Image Plastics, Inc. is a Wisconsin corporation engaged in the business of recycling and reprocessing plastic. As the result of a request from a customer, and in an effort to increase its revenues, Image decided to purchase a machine which could grind up plastic snow fencing. The owner of Image, Gregory Harm, contacted John Clarke, the president of Arlington Plastics Machinery, an Illinois corporation that buys and sells used plastic processing machinery, and from whom Image had previously purchased equipment. Clarke told Harm that he had a machine that might work. Harm then traveled to Arlington's plant in Illinois for a "physical inspection" of the machine, carrying with him some of the snow fencing to test on the machine.

¶ 3 After Harm's inspection of the machine, he agreed to purchase it, giving Clarke a "verbal purchase order." Clarke then had his secretary type up the order on an Arlington sales order form. Clarke testified at his [249 Wis.2d 449] deposition that he does not remember whether the sales order form was typed and mailed to Harm, or if it was given to Harm on the day of his visit to the Arlington plant. Clarke also did not remember the specifics of what he may have told Harm regarding the written contract, but he testified that, customarily he would tell a customer to review the sales order and call him if there were any questions. Harm testified that before leaving the Arlington plant, he had "made an agreement with [Clarke] that I was going to buy" the machine. He also acknowledged that he signed and returned the sales order form to Arlington, and that he was aware there was "wording on the back" of the form.

¶ 4 The following language on the sales order form for the grinder is relevant to the issues in this appeal:

TERMS AND CONDITIONS

WE [Arlington] ACCEPT YOUR ORDER ONLY ON THE EXPRESS CONDITION THAT YOU ASSENT TO THE TERMS CONTAINED BELOW AND YOUR ACCEPTANCE AND RECEIPT OF THE GOODS SHIPPED HEREUNDER SHALL CONSTITUTE ASSENT TO SUCH TERMS.....

....

3-BUYER'S INDEMNITY OF ARLINGTON.

A. WARNING-... Buyer expressly agrees as a condition of its purchase of these items that it will indemnify and hold Seller harmless from any and all claims that may hereafter at any time be asserted by any subsequent owner or user of the items sold hereunder or asserted by any agent or employee of such user or by any third party arising from any purported defect in the items or by reason of the use of these items....

B. HAZARDS LIABILITY Purchaser shall indemnify and hold harmless Seller .... from and against any and all losses, expenses, demands, and

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claims made against Seller ... by Buyer, [and] any ... employee of Buyer ... because of injury or illness or alleged injury or illness (including death) ... actual or alleged whether caused by the sole negligence of Seller, the concurrent negligence of Seller with Buyer ... or any other person or otherwise arising out of, resulting from, or in any way connected with the operation, maintenance, possession, use, transportation, or disposition of the Articles. ... Buyer agrees to defend any suit action or cause of action brought against Seller, its agents, servants, or employees based on any such alleged injury, illness, or damage and to pay all damages, costs, and expenses including attorney's fees, in connection therewith or resulting therefrom.

¶ 5 The sales order bears a date of November 3, 1995. Harm signed and dated it three days later and faxed a signed copy back to Arlington on November 6th. Clarke had filled out an "Estimate and Repair Order" on November 3rd to have the machine cleaned, painted and tested. A "Sales Information Sheet" was also generated by Arlington on November 3rd, indicating that the machine had been sold to Image. After Image forwarded payment of the $10,000 purchase price, the grinder was transported to Image's plant in Wisconsin. Within the next year, Deminsky was seriously injured while operating the machine after his sweatshirt sleeve got caught in the rotating gears, pulling his right arm through and mutilating it. 3

[249 Wis.2d 451] ¶ 6 Deminsky filed suit against Arlington, alleging that the grinder was unreasonably dangerous and in a defective condition when it left Arlington's possession, and further that Arlington had been negligent in altering a guard on the machine. Deminsky subsequently impleaded Image and its insurer, Federated, based on the indemnity provision in the sales order. Soon after impleading Image, Deminsky and Arlington entered into a "Stipulation for Entry of Judgment." The circuit court approved the stipulation and entered a $1.475 million judgment against Arlington in Deminsky's favor. Subsequently, on cross-motions for summary judgment, the court entered judgment for Deminsky against Image for the full amount of the Arlington judgment, plus interest and costs. Image appeals.

¶ 7 Additional background facts are included in the analysis which follows.

ANALYSIS

¶ 8 We review a circuit court's grant or denial of summary judgment de novo, owing no deference to the trial court's decision. Waters v. United States Fid. & Guar. Co., 124 Wis.2d 275, 278, 369 N.W.2d 755 (Ct.App.1985). "[S]ummary judgment is appropriate when there is no genuine issue of [249 Wis.2d 452] material fact and the moving party is entitled to judgment as a matter of law." M & I First Nat'l Bank v. Episcopal Homes Mgmt., Inc., 195 Wis.2d 485, 497, 536 N.W.2d 175 (Ct.App.1995); WIS. STAT. § 802.08(2).

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¶ 9 We will reverse a decision granting summary judgment if either (1) the trial court incorrectly decided legal issues, or (2) material facts are in dispute. Coopman v. State Farm Fire & Cas. Co., 179 Wis.2d 548, 555, 508 N.W.2d 610 (Ct.App.1993). In our review, we, like the trial court, are prohibited from deciding issues of fact; our inquiry is limited to a determination of whether a factual issue exists. Id. Here, both Image and Deminsky moved for summary judgment. When both parties move for summary judgment and neither argues that factual disputes bar the other's motion, the " 'practical effect is that the facts are stipulated and only issues of law are before us.' " See Lucas v. Godfrey, 161 Wis.2d 51, 57, 467 N.W.2d 180 (Ct.App.1991) (citation omitted).

I.

¶ 10 Image claims the trial court erred in concluding that the indemnity provision set forth on the back of the sales order for the plastic-grinding machine was a part of its contract with Arlington. The parties agree that the Uniform Commercial Code governs the transaction between them, and that both Wisconsin and Illinois have adopted the Code. At least with respect to the initial questions presented in this appeal (when did a contract between Image and Arlington for the purchase and sale of the machine arise, and what were its terms), the parties acknowledge that our answers would be the same under the law of either [249 Wis.2d 453] state. Accordingly, we will rely exclusively on Wisconsin statutes and precedents for this part of our analysis. Sharp v. Case Corp., 227 Wis.2d 1, 10-11, ¶ 17, 595 N.W.2d 380 (1999) (When examining a conflict of laws issue, "[i]f the laws of the two states are the same, we apply Wisconsin law.").

¶ 11 Image contends that when its president, Gregory Harm, left the Arlington plant on November 3, 1995, the parties had entered into an oral contract under which Image had agreed to buy, and Arlington had agreed to sell, the grinding machine for $10,000. Image points out that Arlington immediately began processing the order by issuing an "Estimate and Repair Order" to service the machine and a...

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