Tietsworth v. Harley Davidson, Inc., 2004AP2655.

• Decision Date: 13 December 2005
• Docket Number: No. 2004AP2655.,2004AP2655.
• Citation: 709 N.W.2d 901,2006 WI App 5
• Parties: Steven C. TIETSWORTH, David Bratz, John W. Myers, Gary Streitenberger, and Gary Wegner, On Behalf of Themselves and All Others Similarly Situated, Plaintiffs-Appellants, v. HARLEY-DAVIDSON, INC., and Harley-Davidson Motor Company, Defendants-Respondents.<SMALL><SUP>†</SUP></SMALL>
• Court: Wisconsin Court of Appeals

709 N.W.2d 901

2006 WI App 5

Steven C. TIETSWORTH, David Bratz, John W. Myers, Gary Streitenberger, and Gary Wegner, On Behalf of Themselves and All Others Similarly Situated, Plaintiffs-Appellants, v. HARLEY-DAVIDSON, INC., and Harley-Davidson Motor Company, Defendants-Respondents.^†

No. 2004AP2655.

Court of Appeals of Wisconsin.

Oral Argument November 1, 2005.

Opinion Filed December 13, 2005.

On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Ted W. Warshafsky and Frank T. Crivello, II of Warshafsky, Rotter, Tarnoff, Reinhardt & Bloch, S.C. of Milwaukee; Jonathan D. Selbin, pro hac vice, and Lisa J. Leebove, pro hac vice, of Lieff, Cabraser, Heimann & Bernstein, LLP of San Francisco, CA; David J. Bershad, pro hac vice, Michael M. Buchman, pro hac vice, and Michael R. Reese, pro hac vice, of Milberg Weiss Bershad & Schulman LLP of New York, NY; and Shpetim Ademi, Guri Ademi and Robert K. O'Reilly of Ademi & O'Reilly, LLP of Cudahy. There was oral argument by Lisa J. Leebove.

On behalf of the defendants-respondents, the cause was submitted on the brief of W. Stuart Parsons, Patrick W. Schmidt and Kelly H. Twigger of Quarles & Brady LLP of Milwaukee, and Robert L. Binder of Foley & Lardner of Milwaukee. There was oral argument by W. Stuart Parsons.

Before WEDEMEYER, P.J., FINE and CURLEY, JJ.

¶ 1 WEDEMEYER, P.J

Steven C. Tietsworth, David Bratz, John W. Myers, Gary Streitenberger and Gary Wegner, on behalf of themselves and all others similarly situated (hereinafter "Tietsworth"), appeal from an order denying their motion to reopen the case for further proceedings under WIS. STAT. § 808.08(3) (2003-04)¹ and for leave to amend the complaint under WIS. STAT. § 802.09 to pursue the contract and warranty remedies the Wisconsin Supreme Court recognized in Tietsworth v. Harley-Davidson, Inc., 2004 WI 32, 270 Wis.2d 146, 677 N.W.2d 233. Tietsworth contends first, that the trial court erred in concluding that under § 808.08(3), it was powerless to allow Tietsworth to amend the complaint to assert legal claims which the supreme court explicitly recognized they have and, second, that the trial court erroneously exercised its discretion in denying Tietsworth's motion for leave to amend the complaint under § 802.09. Because the trial court erred in denying the motion to reopen and the motion to amend the complaint, we reverse and remand with directions.

BACKGROUND

¶ 2 On June 28, 2001, Tietsworth filed this proposed class action against Harley-Davidson, Inc. and Harley-Davidson Motor Company (hereinafter "Harley-Davidson") alleging problems with the design, manufacture, and sale of defective motorcycles and engines. Tietsworth's causes of action included: (1) a violation of WIS. STAT. § 100.18 (the "Deceptive Trade Practices Act" or "DTPA"); (2) negligence; (3) strict products liability; and (4) common-law fraudulent concealment. Plaintiffs also sought certification of a nationwide class of all persons who have owned, own, leased, lease, or acquired 1999 and early-2000 model year Harley-Davidson motorcycles equipped with Twin Cam 88 and Twin Cam 88B engines.

¶ 3 On November 1, 2001, Harley-Davidson moved to dismiss the complaint on the basis that Tietsworth's claims were premature as they incurred no actual injury, either personal or economic. Defendants also argued that plaintiffs' tort claims were barred by the economic loss doctrine, and that statutory fraud under WIS. STAT. § 100.18, and common law fraudulent concealment claims, should be dismissed for lack of particularity pursuant to WIS. STAT. § 802.03(2).

¶ 4 On February 27, 2002, the trial court issued an order dismissing the complaint in its entirety for failure to state a claim. On April 12, 2002, Tietsworth appealed to this court only the dismissal of its DTPA and the fraudulent concealment claims. We reversed the trial court's dismissal order and reinstated both causes of action. See Tietsworth v. Harley-Davidson, Inc., 2003 WI App 75, 261 Wis.2d 755, 661 N.W.2d 450.

¶ 5 Harley-Davidson appealed our decision to the supreme court, alleging that a claimed "propensity to fail" was insufficient to establish injury under either theory, and that the economic loss doctrine barred plaintiffs' fraudulent concealment claim. On March 26, 2004, our supreme court issued an opinion reversing this court's decision. Tietsworth v. Harley-Davidson, Inc., 2004 WI 32, 270 Wis.2d 146, 677 N.W.2d 233. The supreme court's opinion, however, explicitly recognized that the plaintiffs had contract and warranty remedies that had not been asserted in the complaint:

[T]he 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, including sums necessary to restore the party fraudulently induced to his position prior to the making of the contract. The economic loss doctrine does not bar these contract remedies for fraudulently induced contracts.

... 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.

Id., ¶¶ 36, 37, 677 N.W.2d 233 (citations omitted; emphasis in original).

¶ 6 On April 27, 2004, the supreme court entered a remittitur, which stated that "the decision of the court of appeals is reversed" and gave no further instructions to the trial court. The case was remanded to the trial court.

¶ 7 On June 16, 2004, in accordance with the supreme court's decision, after issuance of the remittitur, Tietsworth moved the trial court to reopen this matter under WIS. STAT. § 808.08(3) and for leave to amend the complaint under WIS. STAT. § 802.09 to pursue the contract and warranty remedies the court identified. Plaintiffs alleged fraudulent inducement to contract, breach of express warranty and unjust enrichment. They asserted that the supreme court's comments regarding the availability of contract claims and the failure of the supreme court to specifically state that no further proceedings may take place, provided a basis for them to reopen Tietsworth to amend the complaint. Defendants argued that the remittitur affirmed the dismissal of the trial court and the case was over.

¶ 8 On August 23, 2004, the trial court heard plaintiffs' argument to reopen Tietsworth. It did not grant Tietsworth's motion, holding that a trial court "may not allow amendments of pleadings when the supreme court affirmed the judgment dismissing the case." The trial court believed it lacked authority to grant the relief requested by the plaintiffs. Plaintiffs' claims were dismissed on September 9, 2004. Tietsworth appeals from that order.

DISCUSSION

¶ 9 The issue in this case is whether the trial court erred in ruling that it lacked authority to reopen this case to allow further proceedings on remand from the supreme court in Tietsworth, 270 Wis.2d 146, ¶ 45, 677 N.W.2d 233, and in denying Tietsworth's motion for leave to amend the complaint. We conclude that the trial court erred in denying the plaintiffs' motion to reopen and amend the complaint. Accordingly, we reverse the trial court's order and remand with specific directions to the trial court to enter an order granting the motion and allowing Tietsworth to file the second amended complaint and proceed with its contract and warranty claims.

¶ 10 We independently review the trial court's determination that it lacked authority to grant Tietsworth's motion to reopen the proceedings under WIS. STAT. § 808.08(3).² Harvest Sav. Bank v. ROI Invs., 228 Wis.2d 733, 737-38, 598 N.W.2d 571 (Ct.App.1999); see Breier v. E.C., 130 Wis.2d 376, 381, 387 N.W.2d 72 (1986).

¶ 11 The court of appeals reviews the trial court's denial of Tietsworth's motion for leave to amend under WIS. STAT. § 802.09 for an erroneous exercise of discretion. Finley v. Culligan, 201 Wis.2d 611, 626, 548 N.W.2d 854 (Ct.App.1996). A court's refusal to exercise its discretion constitutes a misuse of discretion. Oostburg State Bank v. United Sav. & Loan Ass'n, 130 Wis.2d 4, 11-12, 386 N.W.2d 53 (1986); Finley, 201 Wis.2d at 626, 548 N.W.2d 854.

A. Motion to Reopen.

¶ 12 Tietsworth argues that the trial court had the authority under WIS. STAT. § 808.08(3) to grant its motion. Harley-Davidson responds that the remand from the supreme court ended the matter. We conclude that the remand left open the possibility that the plaintiffs would move to amend their complaint to add the contract and warranty claims discussed in the supreme court's opinion.

¶ 13 This case, in part, depends on a statutory interpretation of WIS. STAT. § 808.08. Both parties agree that neither subsec. (1) directing the trial court to take specific action on remand, nor subsec. (2) directing the trial court to conduct a new trial on remand, apply to the facts of this case. Accordingly, the dispute centers on whether § 808.08(3) provides the trial court with the authority to reopen the case and allow the plaintiffs to amend. We conclude that subsec. (3) provides such authority.

¶ 14 The mandate by the supreme court in this case simply "reversed the decision of the court of appeals" and remanded the matter to the trial court. The supreme court's decision did not affirm a judgment of dismissal or direct that a judgment of dismissal be entered. The only trial court order, which this court reversed on appeal, was dismissal of the tort claims.

¶ 15 "[T]he traditional view [is] that a circuit court often has some discretion on remand to resolve matters not addressed by a mandate in a manner consistent with that mandate."...