Tietsworth v. Harley-Davidson, Inc., 02-1034.

• Court: Court of Appeals of Wisconsin
• Citation: 261 Wis.2d 755,661 N.W.2d 450,2003 WI App 75
• Docket Number: No. 02-1034.,02-1034.
• Parties: Steven C. TIETSWORTH, David Bratz, John W. Myers, Gary Streitenberger and Gary Wegner, Plaintiffs-Appellants, v. HARLEY-DAVIDSON, INC., and Harley-Davidson Motor Company, Defendants-Respondents.
• Decision Date: 04 March 2003

261 Wis.2d 755
2003 WI App 75
661 N.W.2d 450

Steven C. TIETSWORTH, David Bratz, John W. Myers, Gary Streitenberger and Gary Wegner, Plaintiffs-Appellants,
v.
HARLEY-DAVIDSON, INC., and Harley-Davidson Motor Company, Defendants-Respondents.¹

No. 02-1034.

Court of Appeals of Wisconsin.

Submitted on briefs November 5, 2002.

Decided March 4, 2003.

261 Wis.2d 757

On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Jonathan D. Selbin and Lisa

261 Wis.2d 758

J. Leebove of Lieff, Cabraser, Heimann & Bernstein, LLP, San Francisco, California; David J. Bershad, Michael M. Buchman and Michael R. Reese of Milberg, Weiss, Bershad, Hynes & Lerach, LLP, New York, New York; Ted W. Warshafsky and Frank T. Crivello, II of Warshafsky, Rotter, Tarnoff, Reinhardt & Bloch, S.C., Milwaukee; Shpetim Ademi, Guri Ademi and Robert K. O'Reilly of Ademi & O'Reilly, LLP, Cudahy

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 and Brady LLP, Milwaukee and Robert L. Binder of Foley & Lardner, Milwaukee.

Before Wedemeyer, P.J., Fine and Curley, JJ.

¶ 1. WEDEMEYER, P.J.

Steven C. Tietsworth appeals from an order dismissing his complaint for failure to state a claim. Tietsworth originally filed a proposed class action lawsuit against Harley-Davidson (Harley) asserting individual and representative claims for: (1) violation of WIS. STAT. § 100.18 (1999-2000)², the Wisconsin Deceptive Trade Practices Act ("DTPA"); (2) negligence; (3) strict products liability; and (4) common law fraudulent concealment. He now seeks review of the trial court's dismissal of his fraudulent concealment and DTPA claims; he does not appeal the dismissal of his negligence or strict liability claims. Tietsworth argues that his complaint met all of the elements of both a common law fraudulent concealment and a DTPA violation. Because Tietsworth's complaint did state claims for fraudulent concealment and DTPA

261 Wis.2d 759

violations, the trial court erred in dismissing the complaint in its entirety, and we reverse

I. BACKGROUND

¶ 2. Tietsworth alleged that the 1999 and early-2000 model year Harley motorcycles equipped with TC-88 engines were defectively designed and potentially dangerous due to the TC-88 engines known propensity for premature cam failure, which causes sudden and total engine failure. This failure could result in injuries, including out-of-pocket repair costs, property damage, death, or serious injury.

¶ 3. Further, Tietsworth alleged that Harley uniformly, intentionally, and actively concealed this known defect from him and the proposed class, and failed to disclose this defect despite its duty to do so. Tietsworth claimed that Harley advertised, marketed, and sold the motorcycles and engines as having been extensively researched, meticulously tested, of premium quality, and fit for the road, while uniformly concealing and failing to disclose that the TC-88 engines were poorly designed, insufficiently tested, and defective. According to Tietsworth, Harley's concealment and failure to disclose the defect in motorcycles with TC-88 engines was intentional, and done for the purpose of inducing Tietsworth and the class to purchase the motorcycles at premium prices.

¶ 4. Harley denied that the motorcycles and engines were defective. Tietsworth further alleged that a "cam bearing repair kit" designed by Harley and sold for five hundred dollars was created specifically to fix the defect at issue here. Tietsworth also claims that during the 2000 model production year, Harley changed the

261 Wis.2d 760

TC-88 cam bearing design to correct the inherent defect, and implemented the new cam design into its production

¶ 5. The cam bearing design in question is uniform to all of the 1999 and early-2000 model TC-88 equipped motorcycles, and Tietsworth claimed it made this entire line of motorcycles highly unreliable and potentially dangerous unless the cam bearing kit was installed to fix the defect. Further, he claimed that the existence of the engine defect was a material fact to him and the class, who reasonably relied, to their detriment, on the material information that Harley concealed from them and the public. Tietsworth alleged that he and the class members either would not have purchased the defective motorcycles, or would have paid less for them, had Harley disclosed the alleged defect.

¶ 6. Tietsworth filed this proposed class action lawsuit against Harley on June 28, 2001, asserting four individual and representative claims. Tietsworth filed a first amended class action complaint (complaint) on September 27, 2001, adding David Bratz, John W. Myers, Gary Streitenberger, and Gary Wegner (collectively, Tietsworth), as individual and representative plaintiffs.

¶ 7. On November 1, 2001, Harley moved to dismiss the complaint and stay discovery pending resolution of the motion to dismiss. Tietsworth opposed both motions. On December 17, 2001, the trial court granted Harley's motion to stay discovery, and took its motion to dismiss under advisement without argument. On February 27, 2002, the trial court issued an order dismissing the complaint in its entirety for failure to state a claim. Although Tietsworth never filed a motion for class certification, in its order, the trial court found that all of the prerequisites for class certification were met,

261 Wis.2d 761

and that the class certification would have been appropriate if Tietsworth was able to establish his claims on the merits. Judgment was entered dismissing the case. Tietsworth now appeals the dismissal of his fraudulent concealment and DTPA claims

II. DISCUSSION

[1, 2]

¶ 8. Tietsworth contends that the trial court erred in dismissing the fraudulent concealment and DTPA portions of the complaint for failure to state a claim. The question of whether a court erroneously dismissed a complaint for failure to state a claim is a question of law reviewed by this court de novo; this court "accepts the alleged facts and all reasonable inferences [drawn from those facts] as true." Town of Eagle v. Christensen, 191 Wis. 2d 301, 311-12, 529 N.W.2d 245 (Ct. App. 1995). This court will liberally construe the complaint, and reinstate Tietsworth's claims unless "it is quite clear that under no conditions can the plaintiff recover." Id. at 311 (citations omitted).

A. Fraudulent Concealment Claim

¶ 9. Tietsworth argues that the trial court erred in dismissing his fraudulent concealment claim because he properly alleged all the elements of a viable claim and because Wisconsin law does not require him to wait for his engine to fail before he can state a fraudulent concealment claim. We agree.

¶ 10. Tietsworth properly alleged all of the elements of a viable common law fraudulent...