Thunderbird Eng'g v. Am. Design, Inc.
| Docket Number | 2021AP1985 |
| Decision Date | 07 July 2023 |
| Parties | Thunderbird Engineering, Inc., Plaintiff-Appellant, v. American Design, Inc. and John T. Williams, Defendants-Respondents. |
| Court | Court of Appeals of Wisconsin |
This opinion will not be published. See Wis. Stat. Rule 809.23(1)(b)5.
APPEAL from an order of the circuit court for Dane County: Cir. Ct. No. 2019CV2861, STEPHEN E. EHLKE, Judge.
Before Fitzpatrick, Graham, and Nashold, JJ.
Per curiam opinions may not be cited in any court of this state as precedent or authority, except for the limited purposes specified in Wis.Stat. Rule 809.23(3).
¶1 Thunderbird Engineering, Inc. ("Thunderbird") appeals an order denying its request for exemplary damages and partially denying its request for attorney fees pursuant to Wis.Stat. § 895.446(3) (2021-22).[1]Thunderbird also appeals the circuit court's ruling denying its requests for attorney fees under Wis.Stat. § 802.05(3) associated with responding to an unsuccessful request for sanctions filed by American Design, Inc. ("American Design") and John Williams (collectively, "Defendants"), and under Wis.Stat § 804.12(2) for Defendants' alleged discovery violations. We affirm.
¶2 This appeal arises in a somewhat unique procedural posture. The circuit court granted summary judgment to Thunderbird on its breach-of-contract and theft-by-contractor claims after Defendants failed to respond to Thunderbird's requests for admission. Defendants do not challenge the court's order granting summary judgment against them. Instead Thunderbird appeals the court's denial of its request for exemplary damages and the court's award of only partial attorney fees on Thunderbird's theft-by-contractor claims. Therefore, the following background focuses on facts relevant to these limited issues.
¶3 American Design is an architectural firm, with Williams as its president, majority owner, and sole active officer. In 2018, American Design entered into contracts to serve as the prime contractor for the renovation of two buildings in Milwaukee: the Andrew S. Douglas School ("Douglas project"), owned by the Milwaukee Public Schools ("MPS"); and the Merchant & Farmers State Bank Building ("Bader project"), owned by Bader Philanthropies, Inc ¶4 American Design hired Thunderbird as one of its subcontractors, to perform HVAC, plumbing, and electrical services on both projects. Shawn Woldt is the president of Thunderbird.
¶5 American Design and Thunderbird entered into contracts for the Douglas and Bader projects (the "Douglas contract" and "Bader contract," respectively). The Douglas contract required that American Design "attempt" to pay Thunderbird for its services within thirty days of receiving payment from MPS. The Bader contract required that American Design pay Thunderbird "promptly" after receiving payments from Bader Philanthropies, Inc. In addition, each contract required Thunderbird to name each project owner, MPS and Bader Philanthropies, respectively, as an additional insured under its general liability and umbrella liability insurance policies. Thunderbird's failure to comply with these insurance requirements could result in American Design being in breach of its contract with the project owners.
¶6 Over the course of the projects, MPS and Bader Philanthropies timely paid American Design approximately $380,000. Out of those funds, American Design would ultimately owe Thunderbird a total of $87,495 for its work on the Douglas project and $41,520 for its work on the Bader project.
¶7 Thunderbird's work on the Douglas project began in late 2018 or early 2019, with most of the work completed by August 2019. On October 3, 2018, American Design's office manager, Beverly Helbling, emailed Thunderbird's business manager, requesting that Thunderbird send Helbling a copy of Thunderbird's certificate of insurance ("COI") naming MPS as an additional insured on its policies, as the contract required. Helbling repeated this request in emails sent on December 10 and 12, 2018. Despite Thunderbird's attempts to rectify the insurance issues as of April 4, 2019, Thunderbird still had not satisfied the contract requirement that MPS be included as an additional insured. In addition, as the circuit court found, there continued to be "legitimate concerns regarding insurance in the months after April of 2019," which "[e]ven Mr. Woldt admitted [to] in his deposition testimony." Thunderbird did not produce a COI for the Douglas project containing the correct "additional insured" language until March 12, 2021, a few weeks before trial.[2]
¶8 In addition to the insurance issues, there were also issues involving Thunderbird's failure to sign the Douglas contract. In November 2018, Helbling notified Thunderbird that American Design had not yet received a signed copy of the contract and Helbling twice emailed Thunderbird the contract for signature. About seven months later, in June 2019, following Woldt's complaints to American Design about payment delays, Williams explained that he had needed to apply his "executive override" to pay Thunderbird because Woldt had not signed the contract. Williams requested that Woldt sign the contract. In July 2019, there were still ongoing emails and discussions about getting the Douglas contract signed, with Thunderbird ultimately signing the contract on July 23, 2019.
¶9 During the same time period in which the parties were attempting to resolve the insurance and contract signature issues, Thunderbird was also attempting to obtain payments from American Design for work that Thunderbird had performed. In November 2018, Thunderbird attempted to send its first invoice to American Design but sent it to the wrong email address. Although the contract required that invoices be sent to Helbling, Woldt either attempted to or did email the November invoice to Williams instead. In an email from Williams to Woldt on January 29, 2019, Williams stated that American Design had not received any invoices from Thunderbird and, in a follow-up email in February 2019, he stated that American Design received its first invoice at the very end of January 2019. Woldt responded, "It is our issue as my bookkeeper was not doing their job which was to verify the invoice was accepted." Woldt also admitted during his trial testimony that the November invoice was not submitted properly and that Defendants had not received it when originally sent. American Design paid this invoice in March 2019.
¶10 Although some or all of the payments were overdue, by April 12, 2019, American Design had paid Thunderbird fifty percent of the total that Thunderbird was owed regarding the Douglas contract. The circuit court credited Williams' testimony that American Design made these payments to Thunderbird despite the deficiencies in Thunderbird's insurance policies because Williams believed Thunderbird would eventually come into compliance with the contract and because he wanted to help a fellow minority-owned firm. The court also credited Williams' testimony, supported by contemporaneous emails, that in May and June of 2019, Williams repeatedly traveled to San Diego to spend time with his sick mother and that, as summarized by the court, "[o]nce things settled down, he had a chance to look things over and he decided that before they paid more on the [Douglas] contract, they needed to get the contract signed and make sure everything else was in order."
¶11 As the circuit court found, on July 31, 2019, "things came to a head" when Woldt sent an email to Sean Kane, an administrator with MPS, complaining about Defendants' nonpayment of invoices on the Douglas contract, with Williams copied on the email. After Kane asked the pair to work out their issues, Williams sent an email to Woldt on August 1, 2019, identifying the following problems: (1) Thunderbird's third-party vendors failed to submit timely invoices; (2) Thunderbird failed to timely sign the Douglas contract; and (3) Thunderbird's COI was still deficient. Williams closed his email by saying he was out of town on a personal family emergency.
¶12 Also on August 1, 2019, Woldt emailed Williams advising that he would be filing suit as a result of Defendants' failure to pay invoices. At some point after Williams read this August 1 email, he informed Woldt that any future communication between them must be through Williams' attorney.
¶13 As of Thunderbird's July 2020 summary judgment motion, Defendants owed Thunderbird $46,050 on the Douglas project. This remaining amount was not paid until December 2020, after the circuit court granted summary judgment to Thunderbird, awarding it damages in that amount.
¶14 Thunderbird's work on the Bader project began in late 2018 or early 2019, with most of the work completed in 2019. Thunderbird sent its first invoice to American Design on March 21, 2019, for $12,975; a second invoice on April 22 2019, for $25,950; and a third invoice on May 17, 2019, for $2,595. These invoices, reflecting the total of $41,520 owed on the Bader project, were paid between September 26, 2019 and October 18, 2019.
¶15 As with the Douglas project, problems occurred with the COI for the Bader project. On September 12, 2019 Thunderbird's business manager emailed a copy of Thunderbird's COI to Helbling and another American Design employee. That American Design employee emailed the Thunderbird manager, informing him that the COI lacked the language required by the Bader contract, and requested a proper COI. A few days later, an American Design employee followed up with Woldt and the Thunderbird manager, providing them with sample language from another subcontractor's COI that complied with the Bader contract. On September 17, 2019, Thunderbird...
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