Tietsworth v. Harley-Davidson, Inc.

Decision Date12 July 2007
Docket NumberNo. 2004AP2655.,2004AP2655.
Citation735 N.W.2d 418,2007 WI 97
PartiesSteven C. TIETSWORTH, David Bratz, John W. Myers, Gary Streitenberger, Gary Wegner and on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. HARLEY-DAVIDSON, INC. and Harley-Davidson Motor Company, Defendants-Respondents-Petitioners.
CourtWisconsin Supreme Court

Schulman L.L.P., New York, NY; Shpetim Ademi, Guri Ademi, Robert K. O'Reilly, and Ademi & O'Reilly, L.L.P., Cudahy, WI, and oral argument by Jonathan D. Selbin.

¶ 1 DAVID T. PROSSER, J

The issue presented in this review is whether plaintiffs may reopen their case and amend their complaint after the circuit court has dismissed the complaint in its entirety on the merits and the dismissal has been affirmed on appeal. The court of appeals reversed the circuit court's determination that it could not reopen the case to amend the complaint on these facts without a clear directive from the court deciding the appeal. Tietsworth v. Harley-Davidson, Inc. (Tietsworth III), 2006 WI App 5, 288 Wis.2d 680, 709 N.W.2d 901. After carefully reviewing the facts, the statutory and case law, and the policy embodied in the procedural code, we agree with the circuit court. Consequently, we reverse the court of appeals.

¶ 2 We hold that in the absence of a remand order in the mandate line or some other clear directive from the appellate court ultimately deciding the appeal, a circuit court has no authority to reopen the case for an amended complaint after an appellate court has affirmed the dismissal of the complaint in its entirety on the merits.

FACTS AND PROCEDURAL HISTORY

¶ 3 This case has a lengthy history, including a previous decision by this court. Tietsworth v. Harley-Davidson, Inc. (Tietsworth II), 2004 WI 32, 270 Wis.2d 146, 677 N.W.2d 233. In Tietsworth II, this court addressed the merits of plaintiffs' tort-based complaint against the defendants. Now we are called upon to address the procedural ramifications of Tietsworth II. This requires us to set out the procedural history of the case.

¶ 4 On June 28, 2001, Steven C. Tietsworth, a resident of California, filed a complaint in the Milwaukee County Circuit Court on behalf of himself and a class consisting of all persons and entities in the United States who have owned, own, leased, lease, or acquired 1999 and early 2000 model Harley-Davidson motorcycles equipped with Twin Cam 88 or Twin Cam 88B engines. Tietsworth v. Harley-Davidson, Inc. (Tietsworth 2001), No. 2001CV5928 (Mil. Cty. Cir. Ct. June 28, 2001).1 The complaint alleged that defendants, Harley-Davidson, Inc. and Harley-Davidson Motor Company (Harley), had designed, manufactured, marketed, and sold motorcycles with defective engines because of cam bearings that were faulty, inferior, and prone to sudden failure. The complaint asserted four tort-based causes of action: (1) negligence; (2) strict products liability; (3) fraudulent concealment; and (4) fraudulent misrepresentation and deceptive trade practices in violation of Wis. Stat. § 100.18(1) and (11)(b).

¶ 5 On September 27, 2001, Tietsworth amended his complaint, adding four Wisconsin residents as named plaintiffs (collectively, Tietsworth).

¶ 6 The factual basis for the complaint is discussed in Tietsworth II, 270 Wis.2d 146, ¶¶ 5-6, 677 N.W.2d 233. In essence, Harley-Davidson, the only major American-based motorcycle manufacturer, redesigned its motorcycle engines in the late 1990s, developing the Twin Cam 88 and Twin Cam 88B engines for the 1999 and early 2000 models. A problem cropped up. On January 22, 2001, Harley sent a letter to Tietsworth and approximately 140,000 other owners of the subject motorcycles, explaining that "the rear cam bearing in a small number of Harley-Davidson Twin Cam 88 engines has failed." While the letter assured Harley owners that they would probably never have to worry about this problem, it reported that Harley was extending the standard one-year/unlimited mileage warranty to a five-year/50,000 mile warranty on the rear cam bearing. For owners who wanted to repair their engines immediately, Harley made available cam bearing repair kits for $495.00.

¶ 7 Tietsworth's complaint alleged that Harley motorcycles with the Twin Cam 88 or 88B engines are inherently defective and have an unreasonably dangerous propensity to suffer premature cam bearing failure, resulting in engine failure. Although Tietsworth did not identify any specific engine failures, especially in motorcycles owned by the named plaintiffs, he asserted that the "inherent cam bearing defect" posed safety risks and diminished the value of all Harley motorcycles with Twin Cam 88 engines. This led to his four tort-based claims.

¶ 8 On November 1, 2001, Harley filed motions to dismiss the complaint and to stay discovery. On December 3, 2001, Tietsworth filed a cross-motion to compel discovery. The circuit court, William J. Haese, Judge, granted Harley's motion to stay discovery; and on February 27, 2002, it dismissed the entire complaint for failure to state a claim.2 The court dismissed the negligence and strict products liability claims because the plaintiffs failed to allege any actual damages and because the economic loss doctrine barred the claims. The court dismissed the two fraud claims because the plaintiffs did not allege any actual damages.

¶ 9 On April 12, 2002, Tietsworth filed a notice to appeal the dismissal of his common law fraud and statutory fraudulent misrepresentation/deceptive trade practices claims.

¶ 10 On that same day—April 12—Tietsworth's counsel filed a separate class action lawsuit against Harley on behalf of Wilton Jones and Richard Kempen (collectively, Jones). The Jones suit made contract claims, namely, breach of warranty and unjust enrichment, based on the same facts involving the Twin Cam 88 and 88B Harley engines. Jones v. Harley-Davidson, Inc., No.2002CV3629 (Mil.Cty.Cir.Ct. Apr. 12, 2002).

¶ 11 On September 23, 2002, the Milwaukee County Circuit Court, Jeffrey A. Kremers, Judge, dismissed the entire Jones complaint for failure to state a claim because Jones did not allege a cognizable injury. The court stated that to recover under a breach of warranty, Jones was required to allege an actual failure of the engine and Harley's refusal or inability to fix the failure. A mere allegation of a defect was not sufficient. Likewise, to recover under unjust enrichment, Jones must have alleged actual engine failure. Jones did not appeal.

¶ 12 On March 4, 2003, the court of appeals decided Tietsworth's appeal. Tietsworth v. Harley-Davidson, Inc. (Tietsworth I), 2003 WI App 75, 261 Wis.2d 755, 661 N.W.2d 450. The court of appeals reinstated both the common law fraud and statutory fraudulent misrepresentation/deceptive trade practices claims on the theory that plaintiffs had suffered actual damages under the "benefit of the bargain" rule and under the standard enunciated in Pritzlaff v. Archdiocese of Milwaukee, 194 Wis.2d 302, 315, 533 N.W.2d 780 (1995). Tietsworth I, 261 Wis.2d 755, ¶¶ 11-16, 661 N.W.2d 450.

¶ 13 Harley sought review of the decision to reinstate the two fraud claims; and on March 26, 2004, we reversed. Tietsworth II, 270 Wis.2d 146, 677 N.W.2d 233. With regard to the fraudulent misrepresentation/deceptive trade practices claim, we held that the plaintiff did not allege facts to meet the elements of the statutory claim. See id., ¶ 40. Specifically, we held that non-disclosure did not constitute an assertion, representation, or statement of fact under Wis. Stat. § 100.18(1). Id., ¶ 40. In addition, we stated that to the extent any affirmative assertions were made, they were mere commercial puffery. Id., ¶ 41.

¶ 14 We dispatched the common law fraud claim by holding that it was barred by the economic loss doctrine. Id., ¶ 37. Our discussion of the economic loss doctrine included the following passages in paragraphs 36 and 37:

As such, the plaintiffs have warranty remedies for the alleged defects in their motorcycles. In addition, there are contract remedies at law and in equity to the extent that the plaintiffs were fraudulently induced to purchase their motorcycles. A contract fraudulently induced is void or voidable; a party fraudulently induced to enter a contract may affirm the contract and seek damages for breach or pursue the equitable remedy of rescission and seek restitutionary damages . . . . The economic loss doctrine does not bar these contract remedies for fraudulently induced contracts. . . .

In short, we see no reason to recognize an exception to the economic loss doctrine to allow this consumer contract dispute to be remedied as an intentional misrepresentation tort. The economic loss doctrine bars the plaintiffs' common-law fraud claim. The plaintiffs may have contract remedies—breach of contract/warranty or rescission and restitution—but may not pursue a tort claim for misrepresentation premised on having purchased allegedly defective motorcycles.

Tietsworth II, 270 Wis.2d 146, ¶¶ 36-37, 677 N.W.2d 233.

¶ 15 After discussing both fraud claims, we reversed the court of appeals. Our mandate stated: "The decision of the Court of Appeals is reversed." Id. at 172, 677 N.W.2d 233. There was no mention of "remand" in the mandate or in the decision.

¶ 16 Following the release of ...

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