Chitwood v. A.O. Smith Harvestore Products, Inc.

• Decision Date: 17 October 1991
• Docket Number: No. 90-0292,90-0292
• Citation: 170 Wis.2d 622,489 N.W.2d 697
• Parties: John CHITWOOD, and Barbara Chitwood, Plaintiffs-Respondents, d v. A.O. SMITH HARVESTORE PRODUCTS, INC., Defendant-Appellant, A.O. Smith Corporation, Dodgeland Harvestore, Edward Bartolemei, Robert Carl Shoemaker, Maryland Casualty, and Tower Insurance Company, Inc., Defendants. . Oral Argument
• Court: Wisconsin Court of Appeals

Page 697

489 N.W.2d 697

170 Wis.2d 622

John CHITWOOD, and Barbara Chitwood, Plaintiffs-Respondents,^d v. A.O. SMITH HARVESTORE PRODUCTS, INC., Defendant-Appellant A.O. Smith Corporation, Dodgeland Harvestore, Edward Bartolemei, Robert Carl Shoemaker, Maryland Casualty, and Tower Insurance Company Inc., Defendants.

No. 90-0292.

Court of Appeals of Wisconsin.

Oral Argument Oct. 17, 1991.

Opinion Released Aug. 20, 1992.

Opinion Filed Aug. 20, 1992.

For defendant-appellant the cause was submitted on the briefs of Michael A. Schumacher of Herrick, Hart, Duchemin, Danielson & Guettinger, S.C., Eau Claire, and Donald E. Egan, Bonita L. Stone (argued), and Mark L. Johnson of Katten Muchin & Zavis, of counsel, Chicago, Ill., and orally argued by Bonita L. Stone.

For plaintiffs-respondents the cause was submitted on the brief of Charles A. Bird (argued), of Bird and Jacobsen, Rochester, Minn., and James R. Koby, La Crosse, Minn., and William Mahler, Rochester, Minn., and Karen Fowell, Richland Center, Minn., and orally argued by Charles A. Bird.

Before EICH, C.J., GARTZKE, P.J., and DYKMAN, J.

DYKMAN, Judge.

A.O. Smith Harvestore Products, Inc. ("Harvestore Products" or "the company"), appeals from an order denying its motions for judgment notwithstanding the verdict, to change verdict answers and for a new trial. The issues are: (1) whether the trial court properly ordered a jury trial after the plaintiffs failed to timely pay the jury fee; (2) whether the trial court erred in admitting evidence of representations made by a dealer's salesman; (3) whether plaintiffs proved justifiable reliance on the company's misrepresentations; (4) whether plaintiffs proved a causal connection between the misrepresentations and consequential damages; (5) whether the trial court's instruction on benefit of the bargain damages was erroneous; and (6) whether the trial court erred by admitting evidence of lost profits over a twenty-five-year period.

We conclude that the trial court had the discretion to allow a jury trial notwithstanding the waiver, and that it properly exercised this discretion. In addition, we find that the trial court did not err in admitting evidence of the salesman's representations or the plaintiffs' lost profits. Furthermore, we conclude that the plaintiffs offered credible evidence of justifiable reliance on the misrepresentations and of a causal connection between the misrepresentations and their consequential damages. However, we conclude that the trial court erroneously instructed the jury on both benefit of the bargain and consequential damages and therefore, we remand the cause for a new trial on these issues.

John and Barbara Chitwood brought this action in 1985. They are dairy farmers in Blue River, Wisconsin. The complaint alleged that in 1979, they purchased a silo and related equipment, known together as a Harvestore. The Harvestore was manufactured by A.O. Smith Harvestore Products, Inc., a subsidiary of A.O. Smith Corp. The Harvestore was sold to the Chitwoods by Dodgeland Harvestore, Inc., of Dodgeville, Wisconsin. Defendants Edward Bartolemei and Robert Shoemaker were alleged to be employees of Dodgeland, and the named insurance companies were alleged to be insurers of Dodgeland or its employees. The Chitwoods alleged that the Harvestore failed to function as promised. They sought recovery on several theories.

Before trial, defendants Dodgeland, Bartolemei, Shoemaker and the insurance companies settled and were dismissed. Some of the Chitwoods' theories were dismissed by summary judgment. Their claims of conspiracy, intentional misrepresentation and strict responsibility against Harvestore Products and A.O. Smith Corp. were tried to a jury in 1989. The jury found by special verdict that there was no conspiracy and that Harvestore Products had intentionally misrepresented. The jury did not decide strict responsibility. It awarded the plaintiffs $425,000 in compensatory damages. The trial court denied the company's motions after verdict, and it appeals. ¹

I. PAYMENT OF JURY FEE

The company argues that the plaintiffs waived their right to a jury trial, that the trial court lacked discretion to order such a trial notwithstanding the waiver, and that the judgment must be vacated and a new trial granted. The Wisconsin Constitution provides the right to a jury trial: "The right of trial by jury shall remain inviolate, and shall extend to all cases at law without regard to the amount in controversy; but a jury trial may be waived by the parties in all cases in the manner prescribed by law." WISCONSIN CONST. art. I, § 5 (amended 1922).

Several statutes are also relevant. Section 805.01, Stats., provides in part:

(2) Any party entitled to a trial by jury or by the court may demand a trial in the mode to which entitled at or before the scheduling conference or pretrial conference, whichever is held first. The demand may be made either in writing or orally on the record.

(3) The failure of a party to demand in accordance with sub. (2) a trial in the mode to which entitled constitutes a waiver of trial in such mode. The right to trial by jury is also waived if the parties or their attorneys of record, by written stipulation filed with the court or by an oral stipulation made in open court and entered in the record, consent to trial by the court sitting without a jury.

Section 814.61(4), Stats., provides that the clerk shall collect for a jury in all civil actions:

a nonrefundable fee of $6 per juror demanded to hear the case to be paid by the party demanding a jury within the time permitted to demand a jury trial. If the jury fee is not paid, no jury may be called in the action, and the action may be tried to the court without a jury.

In 1989, the company moved to have the case tried to the court on the ground that the Chitwoods had waived their right to a jury trial. According to the court's decision on that motion, the plaintiffs demanded a jury trial to twelve jurors at a telephone scheduling conference on September 12, 1988. The court entered a scheduling order for such a trial to start in July 1989. On June 12, 1989, the court informed the parties that the plaintiffs had not paid the jury fee. The plaintiffs did so, and the defendants moved for trial to the court.

The court concluded that failure to pay the fee at or before the scheduling conference, as required by sec. 814.61(4), Stats., waived the Chitwoods' right to a jury trial. The court further concluded, however, that it had the discretion to relieve the plaintiffs from the failure and allow them to pay the fee late, and it did so. We denied the defendants' petition for leave to appeal from a nonfinal order.

On appeal, Harvestore Products argues that the plaintiffs waived their right to a jury trial and that the trial court did not have discretion to order such a trial despite this waiver.

Assuming, without deciding, that the trial court correctly ruled that the plaintiffs waived their right to a jury by failing to timely pay the fees under sec. 814.61(4), Stats., we conclude that the court had discretion to allow a jury trial. The provisions of ch. 801, Stats., govern procedures in civil actions. Section 801.01(2), Stats. Section 801.15(2)(a), Stats., provides:

When an act is required to be done at or within a specified time, the court may order the period enlarged but only on motion for cause shown and upon just terms.... If the motion is made after the expiration of the specified time, it shall not be granted unless the court finds that the failure to act was the result of excusable neglect. The order of enlargement shall recite by its terms or by reference to an affidavit in the record the grounds for granting the motion.

Although the trial court did not expressly rely on this provision, it is applicable here. We regard the plaintiffs' late payment of the fee and their opposition to the defense motion for a trial to the court as a motion for enlargement of the time. Because it came after the expiration of the specified time, the court was required to find that the failure to act was the result of excusable neglect. In its memorandum decision, the court noted that the scheduling conference was conducted by telephone and none of the lawyers were actually in the courthouse to pay the jury fee. It found that it did not appear that the plaintiffs' conduct was in any way motivated by a desire to delay the case. Although it did not use the term "excusable neglect," such a finding is implicit in the court's analysis.

The court satisfied the requirement that it recite the grounds for the enlargement. It wrote that the case is complex, includes a demand for punitive damages and is of a type that would normally be tried to a jury. It noted that the failure to pay the fees was raised by the court, and no party would be prejudiced because all had been preparing for a jury trial. We conclude that the court did not abuse its discretion in allowing the late payment of the jury fee.

Even if we were to conclude that the trial court improperly ordered a jury trial, however, that would still not compel a reversal of the judgment. Section 805.18(2), Stats., provides:

No judgment shall be reversed or set aside or new trial granted in any action or proceeding ... for error as to any matter of ... procedure, unless in the opinion of the court to which the application is made, after an examination of the entire action or proceeding, it shall appear that the error complained of has affected the substantial rights of the party seeking to reverse or set aside the judgment, or to secure a new trial.

The company has not shown how its substantial rights were affected by trial to a jury rather than to the court. In denying the company's petition for leave to appeal, we stated that if the company prevailed on the jury fee issue in a postjudgment appeal, the remedy would probably be to order the trial court to make findings and conclusions...