United Concrete & Constr., Inc. v. Red-D-Mix Concrete, Inc.

• Citation: 2013 WI 72,349 Wis.2d 587,836 N.W.2d 807
• Decision Date: 12 July 2013
• Docket Number: No. 2011AP1566.,2011AP1566.
• Court: United States State Supreme Court of Wisconsin
• Parties: UNITED CONCRETE & CONSTRUCTION, INC., Plaintiff–Appellant, v. RED–D–MIX CONCRETE, INC., Defendant–Respondent–Petitioner, Nationwide Mutual Insurance Company and Allied Insurance Company, Defendants–Respondents.

349 Wis.2d 587

836 N.W.2d 807

2013 WI 72

UNITED CONCRETE & CONSTRUCTION, INC., Plaintiff–Appellant,

v.RED–D–MIX CONCRETE, INC., Defendant–Respondent–Petitioner,Nationwide Mutual Insurance Company and Allied Insurance Company, Defendants–Respondents.

No. 2011AP1566.

Supreme Court of Wisconsin.

Argued April 23, 2013.

Decided July 12, 2013.

For the defendant-respondent-petitioner, there were briefs by Frank Kowalkowski, James Kalny, and Davis & Kuelthau, S.C., Green Bay, and oral argument by Frank Kowalkowski.

For the plaintiff-appellant, there was a brief by Valerie J. Revnew and Epiphany Law, LLC, Appleton, and oral argument by Valerie J. Revnew.

MICHAEL J. GABLEMAN, J.

[349 Wis.2d 592]¶ 1 There are many vagaries in the law. However, we deal here with the concrete. Specifically, certain batches of concrete that United Concrete and Construction, Inc. (United) purchased from Red–D–Mix Concrete, Inc. (Red–D–Mix) and now complains were defective. United used the concrete to pour outdoor installations (known in the industry as “flatwork”) at various properties. After problems arose with the installations, United obtained assignments from a number of the property owners,¹ who transferred their putative right to sue Red–D–Mix over to United. United then exercised that right, filing a complaint in tort and contract, in both its own name and in that of the assignees, and alleging violations of Wis. Stat. § 100.18 (2011–12).² The circuit court ³ granted summary judgment for Red–D–Mix, on the grounds that United's claims through the property owners and its tort claims were barred by the economic loss doctrine, its § 100.18 claim could not proceed because the allegedly actionable statements constituted puffery and because United was not a member of the public within the meaning of the statute, and damages had been insufficiently established to support the remaining claims. Disagreeing entirely with the trial judge, the court of appeals reversed on all grounds.

¶ 2 As shown below, the court of appeals was in the main correct, but reached the wrong result in one respect and was overbroad or imprecise in others. To wit, the court of appeals properly reversed the circuit court's ruling regarding puffery, though it incorrectly determined that puffery is always a question of fact for the jury. On the next issue, the court of appeals erred in its determination that the claims United asserted through the assignments were valid, when, with two exceptions,⁴ the economic loss doctrine barred the homeowners from suing Red–D–Mix and thus barred United from suing in their name. Finally, the court of appeals rightly reversed the circuit court for finding all the asserted damages speculative, though in doing so it prematurely interpreted the legal significance of the assignments. Its language construing the assignments is overruled. See Griebler v. Doughboy Recreational, Inc., 160 Wis.2d 547, 556, 466 N.W.2d 897 (1991) (overruling specific language from the court of appeals decision under review).

¶ 3 When the case is returned to it, the circuit court is directed to dismiss the claims asserted through the assignments, and to allow the remaining claims to proceed to trial. Accordingly, we affirm in part, reverse in part, and remand with instructions.

I. FACTUAL BACKGROUND

¶ 4 Because this case is here on summary judgment, we recite the facts in the light most favorable to United, the party opposing summary judgment, and accept as true its allegations.⁵Kraemer Bros., Inc. v. U.S. Fire Ins. Co., 89 Wis.2d 555, 567, 278 N.W.2d 857 (1979).

¶ 5 From 2002 to 2004, Red–D–Mix supplied United with concrete,⁶ which United then poured at various job sites. During that time, United complained to Red–D–Mix that its product was generating excessive “bleed water,” ⁷ thereby damaging several of United's projects, including a number of basements. When the problem was not resolved to United's satisfaction, it severed its business relationship with Red–D–Mix.

¶ 6 In 2007, unhappy with price increases at its new supplier, M & M Concrete, United contacted Red–D–Mix to inquire into the possibility of restoring the relationship. John Clark, a salesman for Red–D–Mix who had not been with the company during the earlier difficulties with bleed water, came to United's offices at its request. There, he met with Timothy Hippert, the president of United, and Kevin Kluess, United's foreman. Hippert and Kluess sought assurances from Clark that the problems with the concrete had been resolved and that Red–D–Mix could now guarantee a high-quality, durable product. When Clark delivered those assurances, the two companies entered into a new contract.

[349 Wis.2d 595]¶ 7 The good will was short lived. Customers soon began alerting United to defects in their outdoor concrete installations, such as pitting, discoloration, crumbling, and spalling.⁸ In response, United asked property owners to sign an assignment of rights. The assignment indicated that the signatory “desires to transfer any and all rights they [sic] may have arising from the supply of defective concrete for the purpose of prosecution and/or otherwise resolving the claims as seen fit by” United. It informed the reader that “the legal effect of signing this Assignment fully and forever extinguishes any and all claims which he/she has or might have had against any company for the supply of defective concrete for use in flatwork performed by a third-party as of the date of execution except as expressly reserved.” The assignment then concluded, “Assignor conveys, assigns, transfers and sets over unto Assignee, all rights to any causes of action and/or claims of any nature, whether known or unknown, in any way relating to the outstanding claims that exist in his/her favor....” Ultimately, 22 property owners acquiesced to United's request. Of these, 20 did so without any conditions. Of the other two, one, the Michaels, insisted on a reservation of rights in return. The other, the Beyers, sued United in small claims court and agreed to the assignment as part of a stipulated dismissal, in exchange for United promising to either repair the damaged concrete or pay for its replacement.

II. PROCEDURAL HISTORY

¶ 8 Its assignments in hand, United brought suit in its own name and through the assignments against Red–D–Mix in Outagamie County Circuit Court, demanding damages, in its third and final amended complaint, for breach of contract, breach of express warranty, breach of implied warranty, false representations under Wis. Stat. § 100.18, negligence, indemnification, and contribution.⁹ Red–D–Mix moved for summary judgment, arguing that damages were speculative because United had not yet performed any repairs. The motion further argued that the negligence claims were barred under the economic loss doctrine, as no harm befell any individuals or property other than the concrete itself, aside from two minor incidents involving grass growing in a driveway and abnormal wear and tear on a floor. With respect to the assigned claims as a whole, Red–D–Mix contended that they should all be dismissed because, under our decision in Linden v. Cascade Stone Co., Inc., 2005 WI 113, 283 Wis.2d 606, 699 N.W.2d 189, the owners could sue only United, not Red–D–Mix, and they therefore had nothing to assign. Lastly, Red–D–Mix submitted, in its motion for summary judgment, that United's Wis. Stat. § 100.18 claim was based on puffery and that United was not a “member of the public” protected by the statute, and thus its claim failed as a matter of law on both grounds.¹⁰

¶ 9 The circuit court more or less embraced in full Red–D–Mix's view of the case, holding that the claims made through the assignments and all of the tort claims were prohibited by the economic loss doctrine,¹¹ that the representations forming the basis for the Wis. Stat. § 100.18 claim were puffery and were being improperly brought by a non-member of the public, and that United had not alleged sufficient damages to proceed to trial.

¶ 10 Reversing, the court of appeals took exception to the circuit court on each point. United Concrete & Constr., Inc. v. Red–D–Mix Concrete, Inc., No. 2011AP1566, 2012 WL 2122197, unpublished slip op. (Wis.Ct.App. June 13, 2012). The court first concluded that damages were not overly speculative for summary judgment purposes because United “could present sufficient evidence to enable a reasonable jury to award damages in an amount supported by the evidence.” Id., ¶ 10. It then determined that Linden did not foreclose the suit, reasoning that “[w]hile the homeowners may have had no rights against Red–D–Mix to assign, the Assignments neither strip from United its right to sue Red–D–Mix nor protect United from [the] homeowners' potential breach-of-contract claims.” Id., ¶ 11. Turning to the Wis. Stat. § 100.18 claim, the court of appeals considered the issue unfit for summary judgment disposal, as questions remained as to “what role, if any, Clark's being a ‘new’ salesperson should play in his credibility, what he said, and whether it constituted ‘puffing’....” Id., ¶ 14. Finally, the panel also instructed the circuit court that the issue of whether United was a member of the public in the sense contemplated by § 100.18 “presentsa question of fact.” Id., ¶ 16 (citation omitted). Elaborating, the court explained that “[a] jury reasonably could find that a particular relationship existed between United and Red–D–Mix because of their past dealings; it just as reasonably could find that United was a member of ‘the public’ when Red–D–Mix, through Clark, solicited United's business anew.” Id. As such, the matter was properly submitted to the trier of fact, not the court on summary judgment. Id.

¶ 11 We granted Red–D–Mix's petition for review. Finding no error in the court of appeals' decision to afford United a trial, but finding several errors in its analysis, we affirm in part, reverse in part, and remand with instructions.

III. STANDARD OF...