Grams v. Boss, No. 78-567

• Court: United States State Supreme Court of Wisconsin
• Writing for the Court: ABRAHAMSON
• Citation: 97 Wis.2d 332,294 N.W.2d 473
• Parties: , 1980-2 Trade Cases P 63,410 Richard GRAMS, Ronald Grams, Gerald Grams, Darrell Grams and Grams Insurance Services, Inc., a domestic corporation, Plaintiffs-Appellants, v. Kenneth J. BOSS, Jack A. Ketterhagen, Francis E. Beggs, Ketterhagen, Beggs & Boss, Inc., a domestic corporation, LaCrosse Garot-Christman Agency, Inc., a domestic corporation, and Associated Hospital Services, Inc., a domestic insurance corporation, Defendants-Respondents-Petitioners.
• Docket Number: No. 78-567
• Decision Date: 27 June 1980

Page 473

294 N.W.2d 473 97 Wis.2d 332, 1980-2 Trade Cases P 63,410 Richard GRAMS, Ronald Grams, Gerald Grams, Darrell Grams and
Grams Insurance Services, Inc., a domestic
corporation, Plaintiffs-Appellants,
v.
Kenneth J. BOSS, Jack A. Ketterhagen, Francis E. Beggs,
Ketterhagen, Beggs & Boss, Inc., a domestic corporation,
LaCrosse Garot-Christman Agency, Inc., a domestic
corporation, and Associated Hospital Services, Inc., a
domestic insurance corporation, Defendants-Respondents-Petitioners. No. 78-567. Supreme Court of Wisconsin. Argued June 4, 1980.
Decided June 27, 1980.

Page 474

[97 Wis.2d 333] Steven E. Keane (argued), Ronald M. Wawrzyn and Foley & Lardner, Milwaukee, on brief, for Associated Hospital Service, Inc.; Foley, Foley & Seehawer, S. C., Racine, of counsel.

Page 475

Roger L. Gierhart (argued) and Bell, Metzner & Seibold, S. C., Madison, on brief, for Kenneth J. Boss, Jack A. Ketterhagen, Francis E. Beggs and Ketterhagen, Beggs & Boss, Inc.

[97 Wis.2d 334] James C. Herrick (argued) and Brynelson, Herrick, Gehl & Bucaida, Madison, on brief, for plaintiffs-appellants.

ABRAHAMSON, Justice.

This is a review of an unpublished decision of the court of appeals, Grams, et al. v. Boss, et al., 282 N.W.2d 637 (1979), which reversed orders of the circuit court for Dane County, P. Charles Jones, Circuit Judge. The circuit court had granted defendants' motions for summary judgment on plaintiffs' second cause of action, entitled conspiracy in restraint of trade. ¹ We agree with the court of appeals that the circuit court erred in granting summary judgment.

I.

The individual plaintiffs (Grams) are insurance agents for and officers of the corporate plaintiff, Grams Insurance Service, Inc., an insurance agency based in Madison, Wisconsin. The individual defendants (Boss, Ketterhagen and Beggs) are insurance agents for and officers of one of the corporate defendants, Ketterhagen, Beggs & Boss, Inc. (K, B & B), an insurance agency based in Madison, Wisconsin. The defendant LaCrosse Garot-Christman Agency, Inc. (L G-C), is an insurance agency located in LaCrosse, Wisconsin. All three agencies market hospital, health and life insurance. The defendant Associated Hospital Services, Inc. (AHS), also known as Blue Cross of Wisconsin, is a hospital service corporation organized under sec. 182.032, Stats.1973. ² The plaintiffs were at one time employed by K, [97 Wis.2d 335] B & B, but in the spring of 1975, they terminated their employment with K, B & B and formed their own insurance agency, Grams Insurance Service. The plaintiffs were licensed by AHS to sell Blue Cross.

The plaintiffs began this action on February 5, 1976. The second cause of action of the third amended complaint alleges that subsequent to the Grams' termination of employment with K, B & B, Boss, Ketterhagen and Beggs, individually and as principals of K, B & B, carried on a course of conduct to cause the termination of plaintiffs' licenses to sell Blue Cross; that in June, 1975, AHS sent a letter to the plaintiffs (with a copy to defendant Ketterhagen), informing the Grams that their licenses were cancelled; and that AHS then informed the plaintiffs to disregard the letter and continue selling Blue Cross.

The complaint further alleges that between May and October, 1975, all the defendants "agreed, combined and conspired to cause the termination" of plaintiffs' licenses

Page 476

[97 Wis.2d 336] to sell Blue Cross; that AHS entered into such conduct because of pressure from the other defendants; that pursuant to the agreement among the defendants, on September 13, 1975, AHS cancelled the plaintiffs' licenses to sell Blue Cross insurance, thereby restraining or preventing the Grams Insurance Service from acting as a general agency for the sale of insurance.

The complaint also alleges that the defendants conspired together to contact, and did personally contact, plaintiffs' customers, ridiculed the Grams to Grams' customers, and wrongfully described the insurance which the plaintiffs had sold to their customers; that the defendants wrongfully caused numerous unfounded complaints to be lodged with the Wisconsin Commissioner of Insurance against the plaintiffs; that the defendants attempted to interfere with "the check-off of insurance premiums system; " and that all such conduct was intended and designed by defendants to force plaintiffs out of the insurance business.

The complaint asserts that the defendants' conduct constituted a combination or conspiracy in restraint of trade, in violation of sec. 133.01(1), Stats., ³ resulting in substantial damages to the plaintiffs. The plaintiffs seek compensatory and treble damages plus the costs of the action, including reasonable attorney fees.

The circuit court granted the defendants' motions for summary judgment because it was "persuaded that even if the allegations can be proved, recourse by the plaintiffs[97 Wis.2d 337] is pursuant to Ch. 207, Stats. (1973) ⁴ and not Wisconsin's mini-Sherman Act (sec. 133.01, Stats.)." The circuit court also stated that even if a claim for "restraint of trade" under sec. 133.01, Stats., could be brought against a hospital insurance corporation, the circuit court did not believe that the allegations of the complaint stated "the type of fact situation contemplated by" sec. 133.01, Stats.

The court of appeals reversed the circuit court's orders granting summary judgment. The court of appeals determined that the complaint states a claim under sec. 133.01, Stats., reasoning that "sec. 182.032, Stats. (1973), cannot be said to authorize AHS to intentionally drive general agents out of the insurance business". The court of appeals concluded that the affidavits presented on the motion for summary judgment show a factual dispute as to the intent of the parties.

Sec. 802.08(2), Stats., provides that summary judgment shall be rendered when no genuine issue as to any material fact exists and the moving party is entitled to a judgment as a matter of law. ⁵

[97 Wis.2d 338] This court has in numerous cases set forth the procedure to be used in reviewing the trial court's granting a summary judgment. The court must initially examine the pleadings to determine whether a claim has been stated and whether a material issue of fact is presented. If the complaint states a claim and the pleadings show the existence of factual issues, the court examines the moving party's (in this case

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the defendants') affidavits or other proof to determine whether the moving party has made a prima facie case for summary judgment under sec. 802.08(2). To make a prima facie case for summary judgment, a moving defendant must show a defense which would defeat the plaintiff. If the moving party has made a prima facie case for summary judgment, the court must examine the affidavits and other proof of the opposing party (plaintiffs in this case) to determine whether there exists disputed material facts, or undisputed material facts from which reasonable alternative inferences may be drawn, sufficient to entitle the opposing party to a trial. Ricchio v. Oberst, 76 Wis.2d 545, 550-551, 251 N.W.2d 781 (1977); Krezinski v. Hay, 77 Wis.2d 569, 572, 253 N.W.2d 522 (1977); Coleman v. Outboard Marine Corp., 92 Wis.2d 565, 570, 285 N.W.2d 631 (1979).

On summary judgment the moving party has the burden to establish the absence of a genuine, that is, disputed, issue as to any material fact. On summary judgment the court does not decide the issue of fact; it decides whether there is a genuine issue of fact. A summary judgment should not be granted unless the moving party demonstrates a right to a judgment with such clarity as to leave no room for controversy; some courts have said that summary judgment must be denied unless the moving party demonstrates his entitlement to it beyond a reasonable doubt. Doubts as to the existence of [97 Wis.2d 339] a genuine issue of material fact should be resolved against the party moving for summary judgment.

The papers filed by the moving party are carefully scrutinized. The inferences to be drawn from the underlying facts contained in the moving party's material should be viewed in the light most favorable to the party opposing the motion. If the movant's papers before the court fail to establish clearly that there is no genuine issue as to any material fact, the motion will be denied. If the material presented on the motion is subject to conflicting interpretations or reasonable people might differ as to its significance, it would be improper to grant summary judgment. 10 Wright & Miller, Federal Practice & Procedure: Civil sec. 2725, p. 515 (1973); Kraemer Bros. Inc. v. United States Fire Insurance Co., 89 Wis.2d 555, 565-67, 278 N.W.2d 857 (1979). Coleman v. Outboard Marine Corp., 92 Wis.2d 565, 571, 285 N.W.2d 631 (1979).

II.

The first step of the procedure described above is to examine the pleadings to determine whether the complaint states a claim. The defendants argue that the complaint does not state a claim under sec. 133.01(1), Stats., because the defendants' alleged conduct is subject to regulation under ch. 207, Stats.1973, not under sec. 133.01(1), Stats., and because the defendants' alleged conduct does not constitute a combination or conspiracy in restraint of trade or commerce in violation of sec. 133.01, Stats.

A.

We turn first to consider whether sec. 133.01(1), Stats., is applicable when defendants' alleged conduct [97 Wis.2d 340] is proscribed by ch. 207, Stats.1973, entitled "Unfair Insurance Methods."

Sec. 133.01, Stats., is Wisconsin's mini-Sherman Act declaring illegal a combination or conspiracy in restraint of trade. Sec. 133.01(1), Stats., provides "Every contract or combination in the nature of a trust or conspiracy in restraint of trade or commerce is hereby declared illegal. . . ." A violation of sec. 133.01, Stats., may be prosecuted by the government for a forfeiture and by the injured party for treble damages and costs of...