Skyrise Constr. Grp., LLC v. Annex Constr., LLC

• Decision Date: 21 April 2020
• Docket Number: No. 19-1461,19-1461
• Citation: 956 F.3d 950
• Parties: SKYRISE CONSTRUCTION GROUP, LLC, Plaintiff-Appellant, v. ANNEX CONSTRUCTION, LLC, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

956 F.3d 950

SKYRISE CONSTRUCTION GROUP, LLC, Plaintiff-Appellant,

v.ANNEX CONSTRUCTION, LLC, Defendant-Appellee.

No. 19-1461

United States Court of Appeals, Seventh Circuit.

Argued September 25, 2019

Decided April 21, 2020

Gary W. Thompson, Esq., Attorney, Thompson Law Offices, S.C., Milwaukee, WI, for Plaintiff-Appellant.

Susan K. Allen, Gregory M. Jacobs, Attorneys, Stafford Rosenbaum LLP, Milwaukee, WI, for Defendant-Appellee.

Before Ripple, Rovner, and Brennan, Circuit Judges.

Rovner, Circuit Judge.

Skyrise Construction Group, LLC, a subcontractor, sued Annex Construction, LLC, a general contractor, for breach of contract, promissory estoppel, negligent misrepresentation, violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. , and violation of the Wisconsin Deceptive Trade Practices Act, Wis. Stat. 100.18. The district court granted summary judgment in favor of the defendants on all claims. We affirm.

I.

In the early summer of 2017, Annex Construction, LLC ("Annex"), issued a request for bids from subcontractors for a project to construct housing units near the University of Wisconsin-Oshkosh ("Project"). Skyrise Construction Group, LLC ("Skyrise") answered that call for bids by submitting a proposal on July 7, 2017, to supply the rough framing carpentry labor for the Project at a price of $899,662.

Skyrise submitted a second bid that same day for $970,000, revised to include a charge for "stick building."¹ Annex rejected the July 7 bids, and Skyrise followed up with a July 19 bid for $950,000. The July 19 bid caught Annex’s interest, and Tom Tomaszewski, the President of Annex, responded that same day with an emailed "Letter of Intent" ("Letter") to John Trojan, Skyrise’s project manager. In that Letter, Tomaszewski expressed "the intention of Annex" to "enter into a contract with Skyrise" for the rough carpentry work for the Project, and informed Skyrise that Annex would "work on getting you contract documents in the near future." R. 19, at 12. On the basis of that Letter, Skyrise immediately blocked out the Project on its calendar and declined to pursue or accept other work during the period that it expected the Project to proceed.

On August 2, Annex emailed the promised contract to Skyrise. The draft document (hereafter "Proposed Contract") consisted of a six-page "Agreement Between Contractor and Subcontractor," containing the general parameters of the agreement; a fourteen-page Exhibit A labeled "Subcontract General Conditions," consisting of eleven articles and numerous sub-articles detailing subjects such as design, construction, timing, payment terms, insurance, modifications, and dispute resolution; Exhibit B, a page labeled "The Construction Documents," with a link to an internet site; Exhibit C, a page labeled "The Project Schedule," which was otherwise blank; and Exhibit D, a page labeled "Lien Waiver and Contractor’s Affidavit Forms," which was also otherwise blank. The Proposed Contract declared, in part, that it represented the entire agreement between the parties, superceding all prior negotiations in any form. R. 19, at 17.

Skyrise believed that the framing work was scheduled to begin in the first week of October, but the subcontractor delayed signing and returning the Proposed Contract.² More than a month later, on September 6, Annex again emailed the Proposed Contract to Skyline. The next day, Trojan sent an email to Tomaszewski explaining that he (Trojan) was "still reviewing the contracts and ... should have it back to you tomorrow." R. 18, at 8. But instead of returning the Proposed Contract the next day, Trojan sent a request a week later on behalf of Skyrise’s managing member, Ignacio Garcia: Trojan asked that Tomaszewski "sign our proposal and return [it] to Skyrise Construction while he [Garcia] is reviewing your contract documents." R. 19, at 15. On September 22, Tomaszewski complied with this request, signing the July 19 bid proposal and writing on the face of the document, "Contract exhibit A." R. 19, at 13–14. Skyrise still did not sign and return the Proposed Contract.

Annex requested that Skyrise personnel attend a meeting at the construction site on October 9, and Skyrise complied. Skyrise personnel saw that the project was not ready for framing, and the parties began to discuss a possible expanded role for Skyrise in getting the Project completed on schedule. A few days later, on October 11, Tomaszewski received an email containing the Proposed Contract, signed by Garcia and marked with handwritten edits to the payment terms and also to two items involving the scope of the work to be completed.³ Garcia later asserted that Tomaszewski had orally agreed to the edits regarding payment terms, and that Garcia was merely fixing errors in the terms related to the scope of work. Annex never signed this revised version of the Proposed Contract.

Throughout October, the parties continued to discuss a potentially broader scope of work for Skyrise. On October 31, Skyrise submitted a vastly expanded proposal seeking a contract for framing, siding, windows, and drywall, totaling $3,864,643. On November 2, Tomaszewski sent an email to Trojan and Garcia stating:

We are going to go ahead and pass on this guys. I appreciate the hard work however I am going to bring in a large framing company we have a very good relationship with and can meet our timeframe and schedule at a much lower cost.

I will have our council [sic] get you a letter on the original contract that you signed in the near future.

R. 19, at 62. The very next day, Annex’s general counsel sent by email and overnight mail a letter formally rejecting Skyrise’s October 31 proposal and also stating that Annex "will not be accepting and countersigning the Agreement as marked-up by Subcontractor and is therefore null and void." R. 19, at 63.

Skyrise then filed this diversity suit against Annex, seeking damages for breach of contract, promissory estoppel, negligent misrepresentation, violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. ("Illinois Act"), and violation of the Wisconsin Deceptive Trade Practices Act, Wis. Stat. 100.18 ("Wisconsin Act"). On cross-motions for summary judgment, the district court granted judgment in favor of Annex on all counts and denied Skyrise’s motion. Skyrise appeals.

II.

On appeal, Skyrise contends that fact disputes preclude judgment on every count. On the breach of contract claim, Skyrise asserts that a contract was formed either on September 22, when Tomaszewski signed the July 19 bid, or on October 10 when Skyrise signed and returned Annex’s contract. In the alternative, Skyrise seeks damages for promissory estoppel, contending that it reasonably relied on the Letter of Intent and Annex’s oral representations over the next two months when it decided to block off its schedule for the Project and decline other work during the period that it expected to be working on the Project. For the three remaining claims, Skyrise relies on the same core of facts in arguing that Annex made misrepresentations and engaged in deceptive conduct on which Skyrise relied to its detriment.

We review the district court’s grant of summary judgment de novo , examining the record in the light most favorable to Skyrise and construing all reasonable inferences from the evidence in its favor. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Yahnke v. Kane County, Ill. , 823 F.3d 1066, 1070 (7th Cir. 2016). Summary judgment is appropriate when there are no genuine disputes of material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a) ; Anderson , 477 U.S. at 250, 106 S.Ct. 2505 ; Yahnke , 823 F.3d at 1070. We may affirm summary judgment on any basis we find in the record. Nature Conservancy v. Wilder Corp. of Del. , 656 F.3d 646, 653 (7th Cir. 2011).

Although federal law governs procedure in a case in which federal court jurisdiction is premised on diversity of citizenship, state law applies to substantive issues. Fednav Int’l, Ltd. v. Continental Ins. Co. , 624 F.3d 834, 838 (7th Cir. 2010) ; RLI Ins. Co. v. Conseco, Inc. , 543 F.3d 384, 390 (7th Cir. 2008). The Proposed Contract specifies that it "shall be governed by the laws of the state where the Project is located," which in this case is Wisconsin. R. 19, at 22. In a diversity case involving a contract that stipulates which state’s law is to govern, a federal court must follow state law in deciding whether to enforce the stipulation. Wood v. Mid-Valley Inc. , 942 F.2d 425, 426 (7th Cir. 1991). Wisconsin generally honors stipulations as to choice of law unless they conflict with public policy. American Family Mut. Ins. Co. v. Cintas Corp. No. 2 , 383 Wis.2d 63, 914 N.W.2d 76, 82 (2018). Because nothing here is contrary to Wisconsin’s public policy, Wisconsin law governs the contract claim. For the other claims, with the exception of the claim premised on the Illinois Act, "[w]hen neither party raises a conflict of law issue in a diversity case, the applicable law is that of the state in which the federal court sits." RLI Ins. , 543 F.3d at 390. Thus, with the exception noted, Wisconsin law applies to the substantive issues in the other claims as well.

A.

We begin with Skyrise’s claim for breach of contract. The first step in evaluating a breach of contract claim is to determine whether a valid contract exists. Steele v. Pacesetter Motor Cars, Inc. , 267 Wis.2d 873, 672 N.W.2d 141, 144 (Wis. Ct. App. 2003). Creation of a contract requires an offer, an acceptance, and consideration. Marks v. Houston Cas. Co. , 369 Wis.2d 547, 881 N.W.2d 309, 328 (2016) ; Paul R. Ponfil Trust v. Charmoli Holdings, LLC , 389 Wis.2d 88, 935 N.W.2d 308, 311 (Wis. Ct. App. 2019). "The existence of an offer and acceptance are mutual expression of assent, and consideration is evidence of the intent to be bound to the contract." NBZ, Inc....