State v. State Farm Fire & Cas. Co., 79-1492
| Decision Date | 03 March 1981 |
| Docket Number | No. 79-1492,79-1492 |
| Citation | 302 N.W.2d 827,100 Wis.2d 582 |
| Court | Wisconsin Supreme Court |
| Parties | STATE of Wisconsin, Plaintiff, v. STATE FARM FIRE & CASUALTY COMPANY, a foreign corporation, Defendant, Gregory Gillmeister, d/b/a Custom Carpet Service, Defendant-Respondent, Robert W. Johnson, d/b/a National Carpet Company, Defendant and Third-Party Plaintiff-Appellant, John Bosshard, d/b/a Bosshard, Sundet & Associates, Appellant-Respondent, Lowy Distributors and Diamond Rug & Carpet Mills, Inc., Third-Party Defendants-Respondents. |
Janet A. Jenkins (argued), Bosshard, Sundet & Associates, La Crosse, on brief, for defendant and third-party plaintiff-appellant.
John H. Drew and Steele, Klos & Flynn, La Crosse, for Lowy Distributors.
John J. Perlich, La Crosse, for Gregory Gillmeister.
Richard L. Newman and Koritzinsky, Neider, Langer & Roberson, Madison, for Diamond Rug & Carpet Mills, Inc.; John H. Drew, John J. Perlich, La Crosse, and Richard Langer, Madison, argued.
This is an appeal from that part of the judgment of the Circuit Court for La Crosse County, the HON. PETER G. PAPPAS, presiding, awarding costs and attorneys' fees to Gregory Gillmeister, d/b/a Custom Carpet Service, Lowy Distributors and Diamond Rug & Carpet Mills, Inc. (respondents), against Robert W. Johnson, d/b/a National Carpet Company (defendant) and Attorney John Bosshard of the law firm of Bosshard, Sundet & Associates, jointly and severally, under the frivolous claims and counterclaims statute, sec. 814.025, Stats. This case arose out of a claim of a breach of contract on the part of Robert W. Johnson who contracted to sell and install certain carpeting on the University of Wisconsin-Stout campus and is before this court on certification from the Court of Appeals.
On February 6, 1975, Johnson, the sole proprietor of the National Carpet Co. in La Crosse, Wisconsin, was engaged in the retail sale of carpeting and submitted a bid for the sale and installation of carpeting at four residence halls on the University of Wisconsin-Stout campus. Johnson was awarded the contract for the carpeting as the low bidder. The contract provided that Johnson furnish and completely install "Diamond Mark V" 1 carpeting manufactured by the Diamond Rug & Carpet Mills (Diamond), in various areas of certain residence halls in accordance with the specifications and carpet location floor plan drawings. This type of carpeting was represented by Diamond to meet the state's specifications. 2 The contract detailed the specifications for the carpeting as well as the installation procedures in part as follows:
Johnson submitted a purchase order for 2,266 square yards of Diamond Mark V quality carpeting to Lowy Enterprises, Inc. of Minneapolis, Minnesota (Lowy) and assigned the proceeds of the contract to Lowy as security for payment. Johnson hired Gregory Gillmeister, d/b/a Custom Carpet Service, to install the carpet. Installation of the carpeting was completed in early August of 1975 and the state made payment to Lowy, pursuant to the assignment. Johnson's involvement in the installation of the carpeting was that of a general contractor as he only sporadically supervised Gillmeister's work.
Shortly after the job was completed, U.W.-Stout Housing Director Allen Klink observed several problems with the carpeting, i. e., mismatched dye lots, seams bubbling up, separating and pulling apart, as well as the carpeting coming up from the floor at the corners and edges. Klink, upon completion of the work in August and through the following February, made several unsuccessful attempts to contact Johnson and, after finally reaching him, advised him of the problems concerning the carpeting and tried to persuade him to take steps to correct the problems, but Johnson failed to do so. At this time, Johnson was bidding on other carpeting jobs with the State University System and specifically had submitted bids for carpeting jobs on the U.W. campuses at River Falls and Superior. Even though Johnson had submitted the low bid on the River Falls job, his bid was rejected by the University System's purchasing agent, Allen Hickox, who detailed his reason for the rejection in a letter dated August 27, 1975:
In a letter dated August 28, 1975, Hickox returned Johnson's bid on the U.W.-Superior job unopened, stating:
Despite the statement in Hickox's (the University's purchasing agent) letters that Johnson's bids on the U.W.-River Falls and Superior carpeting jobs were rejected because of Johnson's failure to successfully complete his existing contracts with the state, Johnson continued to ignore requests to rectify the problems at Stout. Subsequently, Klink, on December 31, 1975, requested Myrle Lehman's, the U.W.-Stout purchasing agent, aid in resolving the carpeting problem. Lehman, on March 3, 1976, advised Johnson by letter in part as follows:
A copy of Lehman's letter to Johnson was forwarded to the University System's purchasing agent, Hickox, who likewise urged Johnson to take remedial action by letter dated March 9, 1976:
Shortly thereafter, Johnson arranged a meeting between Klink and the other Stout officials and Pat Clinton, a sales representative from Lowy, to inspect the carpeting at the four residence halls. Johnson testified that at the time of the inspection, he observed seam separation, pilling, 4 sprouting 5 and delamination. 6 Johnson's opinion was that the inferior quality of the carpeting was the cause of the seam separation, delamination and other carpeting problems. Johnson and the other parties agreed to having the carpet tested as he believed the carpet did not meet the purchase order specifications. Johnson did nothing further to resolve the carpet problems setting forth his...
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