WI Plating v. Beckart Environmental
| Decision Date | 26 March 1997 |
| Docket Number | No. 96-1043,96-1043 |
| Citation | 568 N.W.2d 38,209 Wis.2d 601 |
| Parties | NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES. WISCONSIN PLATING WORKS OF RACINE, INC., Plaintiff-Respondent, v. BECKART ENVIRONMENTAL, INC., Defendant-Appellant. |
| Court | Wisconsin Court of Appeals |
APPEAL from a judgment of the circuit court for Racine County: DENNIS J. FLYNN, Judge. Affirmed.
Before SNYDER, P.J., BROWN and ANDERSON, JJ.
Beckart Environmental, Inc. (Beckart) appeals from a judgment denying its motions after verdict and affirming the jury's verdict for breach of its performance warranty and awarding damages in favor of Wisconsin Plating Works of Racine, Inc. (WPW). Beckart argues that the purchase contract included a limitation of remedies which should have been enforced; WPW failed to mitigate its damages; WPW's lost profits were not foreseeable and should not have been recoverable; and WPW should have been compelled to elect its remedy before trial. Beckart also questions several evidentiary rulings made by the trial court. We conclude that once a performance guaranty is given, the limitation of remedies fails for its essential purpose because it does not make a party whole if the guaranteed product or service does not meet the requisite standards. We further conclude that the mitigation of damages and foreseeability of lost profits are questions for the jury and will not be disturbed; Beckart waived the election of remedies argument; the rulings on the two plants are moot; and Beckart's issues with the expert testimony all go to the weight of the testimony and not its admissibility. Accordingly, we affirm.
WPW operated an electroplating plant in Racine, Wisconsin. 1 In 1988, due to federal, state and local mandates, WPW was required to install a system that would treat the effluent from its plating production line prior to discharge to the city sewer system. Between October and December 1988, WPW and Beckart negotiated a contract whereby Beckart agreed to design a system, purchase equipment and supervise the installation of a pretreatment system at WPW's Hamilton Street plant. Beckart selected an air flotation system for WPW and agreed to provide certain warranties and guarantees as to the capabilities of the system.
By April 1989, the system was installed and operational. From the beginning of operation, the system did not function properly. WPW outlined several of the problems in a letter dated August 28, 1989. Beckart made numerous modifications to the system; however, WPW continued to have system failures through August 1993. In October 1993, the City of Racine issued an order requiring WPW to stop production at the Hamilton Street plant because of its continuous noncompliance with its pretreatment permit.
Consequently, in July 1994, WPW filed suit against Beckart for negligence, misrepresentation, breach of contract and breach of warranty and sought damages for loss of goods, loss of past and future profits, and loss of goodwill. Beckart filed a motion for partial summary judgment to dismiss all claims for damages and to limit WPW's claim to the cost of replacement. The trial court denied the motion. 2
Beckart filed motions in limine to preclude expert testimony and evidence on the issue of profit loss as incidental and consequential damages. The trial court denied both motions. Specifically, the trial court determined that under § 402.715, STATS., "it's clear under both 1 and 2 as well as the prior section 714(3) that these type [sic] of damages, lost profits, can in fact be addressed in proper cases." The trial court noted that given the relationship between the parties:
[I]t's asserted that the defendants were involved in the design, manufacture and installation of the pretreatment system, that they had an awareness of the governmental regulations that had to be adhered to, and that they would particularly and uniquely be aware of the implications that would inure to a plaintiff in purchasing such a system if the system in fact did not work as represented.
It therefore concluded that "this is a proper case for the jury to consider the issue of damages, including the element of loss of profits."
After a six-day trial, the jury rendered a verdict in favor of WPW on its claim for breach of warranty and awarded WPW $1,101,200 in out-of-pocket loss, past and future profits and fines. Beckart filed motions after verdict and WPW filed motions for attorney's fees and judgment on the verdict. The trial court granted WPW's motions for judgment on the verdict and attorney's fees for a total judgment of $1,130,798.84. Beckart appeals. Additional facts will be included in the body of the decision as they apply to the issues.
Beckart first argues that the purchase contract included a limitation of remedies which should have been enforced. Beckart provided WPW with its original quotation on November 14, 1988, which outlined the pretreatment process and the type and cost of the equipment required, all subject to an attached set of terms and conditions. The attached terms and conditions of sale contained an express warranty that provided:
Beckart Environmental, Inc. warrants that the goods, services, or equipment furnished pursuant hereto will (1) conform to the approved or record drawings if any, (2) be of good workmanship, provided it has had normal use and used in accordance with manufacturer's instruction, for a period of 12 months from date of start-up or 18 months from date of shipment, whichever occurs first.
In the event that any defects in material and/or workmanship are detected within the specified period, Beckart Environmental, Inc.'s obligation under this warranty is limited to furnishing a replacement part F.O.B. factory. Labor of installation shall be done by others, Beckart shall be given the opportunity to inspect such alleged defects prior to taking any action. Components purchased by Beckart from others and incorporated into the equipment furnished by Beckart from others and incorporated into the equipment furnished by Beckart shall be limited to the usual guarantee or warranty extended by the manufacturer or supplier of such components.
BECKART MAKES NO WARRANTY OF MERCHANTABILITY NOR ANY OTHER WARRANTY, EXPRESS OR IMPLIED, EXCEPT AS STATED ABOVE. IT IS ALSO UNDERSTOOD AND AGREED THAT BUYER WILL MAKE NO CLAIM AGAINST BECKART FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED TO THE USE AND OPERATION OF EQUIPMENT FURNISHED HEREUNDER.
In response to concerns raised by WPW, Beckart submitted an addendum, dated December 9, 1988, that included a performance guarantee on the treated water and sludge, added another transfer pump, explained the other systems, i.e., alarm, control panel and lime feeding system and requested a 30% down payment with the purchase order to "seal the deal." A December 13, 1988, letter reiterated Beckart's performance guarantee as follows:
Beckart Environmental Incorporated will guarantee to meet the sewer standards as follows:
A. The Federal Register 40 C.F.R. 413.14, and subpart A, as of January 28, 1981.
B. Racine Sewer District permit number 1028.1-N.
* The guarantee is in effect under the following conditions only:
(1) The flow is not to exceed 50 gpm.
(2) All treating programs done as directed by Beckart Environmental, Inc.
(3) Equipment be properly maintained and a continuous supply of proper chemicals be in adequate supply at all times.
(4) Polymer be purchased from Beckart Environmental, Inc. for which they will provide free Engineering services.
(5) Clarifier to be cleaned as needed to prevent sludge bypass to sewer.
On December 14, 1988, WPW submitted its purchase order and down payment for the treatment system "as per [Beckert's] Quotation dated 11/14/88, with Addendums dated 12/9/88, and guarantees dated 12/13/88 and 12/9/88." The Installation began in early 1989 in conformance with the contract.
At the outset, we note that the contract between Beckart and WPW consisted of more than Beckart's original quotation. It is hornbook law that "offer," "acceptance" and "consideration" are elements of an enforceable contract. See NBZ, Inc. v. Pilarski, 185 Wis.2d 827, 837, 520 N.W.2d 93, 96 (Ct.App.1994). The existence of an offer and acceptance are mutual expressions of assent, and consideration is evidence of the intent to be bound to the contract. See id. And when a party sends a written offer that makes acceptance of the agreement subject to its terms, and the offeree responds with a form making its acceptance expressly conditional on assent to its new or different terms, no contract is formed unless the offeror accepts the offeree's terms. See Dresser Indus. Inc. v. Gradall Co., 965 F.2d 1442, 1449 (7th Cir.1992). Here, WPW's purchase order was contingent on Beckart's guarantees. Beckart agreed to those terms when it began drawing up plans and constructing WPW's system. We conclude that all documents, including the original quotation, the addendum, guarantees and the purchase order, constitute the contract between the parties.
Nevertheless, Beckart submits that "while [the] ... performance guarantees may well ... have supplanted the initial limited warranty against defects, what those additional warranties did not address was the contract's specific limitations on remedies." Under the Uniform Commercial Code (UCC) a seller of goods may limit his contractual liability through a disclaimer of warranties or a limitation of remedies. See Murray v. Holiday Rambler, Inc., 83 Wis.2d 406, 414, 265 N.W.2d 513, 517 (1978). 3 A disclaimer of warranties reduces the...
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