United Concrete & Construction, Inc. v. Red-D-Mix Concrete, Inc. ( 2013 )

2013 WI 72SUPREME COURT OF WISCONSIN
CASE NO.: 2011AP1566
COMPLETE TITLE: 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.
REVIEW OF A DECISION OF THE COURT OF APPEALS
Reported at 343 Wis. 2d 679, 819 N.W.2d 563(Ct. App. 2012 – Unpublished)
OPINION FILED: July 12, 2013
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: April 23, 2013
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Outagamie
JUDGE: John A. Des Jardins
JUSTICES:
CONCURRED: ABRAHAMSON, C.J., BRADLEY, CROOKS, J.J., concur.
(Opinion filed.)
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
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.
2013 WI 72NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2011AP1566
(L.C. No. 2008CV1595)
STATE OF WISCONSIN : IN SUPREME COURT
United Concrete & Construction, Inc.,
Plaintiff-Appellant,
v.
Red-D-Mix Concrete, Inc.,
FILED
Defendant-Respondent-Petitioner, JUL 12, 2013
Nationwide Mutual Insurance Company and Allied Diane M. Fremgen
Clerk of Supreme Court
Insurance Company,
Defendants-Respondents.
REVIEW of a decision of the Court of Appeals. Affirmed in
part, reversed in part, and cause remanded with instructions.
¶1 MICHAEL J. GABLEMAN, J. 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
No. 2011AP1566
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 court3 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,
1
Following the court of appeals and the parties, we will
also occasionally call the property owners "homeowners."
2
All subsequent citations to the Wisconsin statutes are to
the 2011-12 edition. None of the provisions relevant to the
instant case have changed in any pertinent respect since the
underlying conduct giving rise to the dispute occurred.
3
The Honorable John A. Des Jardins presiding.
2
No. 2011AP1566
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
4
See infra note 19.
3
No. 2011AP1566
allegations.5 Kraemer 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-
5
For this reason, we will not insert an ungainly
"allegedly" before every allegation. We do not thereby imply
the truth of any factual assertion.
6
The briefs and court of appeals opinion refer only to
concrete, not cement, so we do the same.
7
As explained in the summary judgment materials, "bleed
water" is essentially excess water that seeps out of concrete
after it has been poured and rests on the surface. There was
testimony taken at depositions that such water can make the
upper layers of the concrete weaker and more likely to
prematurely degenerate.
4
No. 2011AP1566
Mix could now guarantee a high-quality, durable product. When
Clark delivered those assurances, the two companies entered into
a new contract.
¶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
8
To spall is to "[b]reak off . . . in fragments; splinter,
chip." Shorter Oxford English Dictionary 2935 (6th ed. 2007).
5
No. 2011AP1566
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,
9
Red-D-Mix filed a counterclaim, alleging that United was
itself negligent in various actions it took with respect to the
concrete. The counterclaim is not before us.
6
No. 2011AP1566
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, 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
10
Red-D-Mix also argued to the circuit court that the
assignments were unsupported by consideration and that no
warranties were given. It does not raise the former, and
mentions the latter only in a passing footnote without citation
or elaboration. We will therefore address neither. See State
v. Gracia, 2013 WI 15, ¶28 n.13, 345 Wis. 2d 488, 826 N.W.2d 87("[W]e do not usually address undeveloped arguments.") (citation
omitted). Extensive litigation regarding various insurance
issues also took place at the circuit court. Those issues have
not been presented for our review.
11
United did not appeal the dismissal of its tort claims so
we do not discuss them further.
7
No. 2011AP1566
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. § 100.18claim, 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
"presents a 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 REVIEW
8
No. 2011AP1566
¶12 As noted, we review a summary judgment order. In such
instances, we approach the issues independently of the lower
courts, while applying the same standards they did. Admanco,
Inc. v. 700 Stanton Drive, LLC, 2010 WI 76, ¶14, 326
Wis. 2d 586, 786 N.W.2d 759. Those standards require us to
answer whether any genuine issues of material fact are in
dispute rendering a trial necessary. Id., ¶28. In so doing, we
examine the summary judgment record while considering the facts
in the light most favorable to the party opposing summary
judgment——here, United——and assuming the truth of its
allegations. Kraemer Bros., Inc., 89 Wis. 2d at 567. If there
is but a single reasonable inference to be drawn from the
undisputed facts, and if that inference favors the movant,
summary judgment is proper. Grams v. Boss, 97 Wis. 2d 332, 338,
294 N.W.2d 473 (1980), abrogated on other grounds by Olstad v.
Microsoft Corp., 2005 WI 121, 284 Wis. 2d 224, 700 N.W.2d 139.
IV. DISCUSSION
¶13 Red-D-Mix challenges the court of appeals decision on
four main grounds: 1) that United was not a member of the public
vis-à-vis Red-D-Mix and consequently cannot bring suit pursuant
to Wis. Stat. § 100.18; 2) that the misrepresentations were mere
puffery and therefore not prohibited by that statute; 3) that
some claims are barred by the economic loss doctrine; and 4)
that all claims are foreclosed by the speculativeness of the
requested damages. We hold that the first issue was not
properly preserved by Red-D-Mix in its petition for review and
accordingly decline to address it. As to the second issue, we
9
No. 2011AP1566
conclude that the truth or falsity of the statements in question
was ascertainable, and thus the § 100.18 claim should have been
submitted to a trier of fact. With respect to the third issue,
we agree with Red-D-Mix that United cannot file suit in the
homeowners' names because they have no cause of action under the
economic loss doctrine. On the final issue, we hold that the
speculativeness of damages should not have prompted the grant of
summary judgment, but we overrule language from the court of
appeals' opinion prematurely construing the legal significance
of the assignments.
A. UNITED'S WIS. STAT. § 100.18 CLAIM SURVIVES SUMMARY
JUDGMENT
¶14 Red-D-Mix asserts that summary judgment was correctly
granted on the Wis. Stat. § 100.18 claim because United was not
a member of the public, as required by the provision, and
because the misrepresentations here were mere puffery as a
matter of law. We do not reach the first argument, as Red-D-Mix
failed to raise it in its petition for review, and we reject the
second one, as the statements do not represent puffery.
1. Red-D-Mix Failed to Preserve Its Argument That United Is
Not a Member of the Public
¶15 Wisconsin Stat. § 100.18 creates civil liability for
certain kinds of fraudulent representations. In essence, as
relevant here, it exposes a corporation to lawsuits for damages
if it uses untrue statements to sell its wares to the public.
To make out a claim under the statute, therefore, a plaintiff
must show, inter alia, "that the defendant made a representation
10
No. 2011AP1566
to the public with the intent to induce an obligation . . . ."
State v. Abbott Labs., 2012 WI 62, ¶37, 341 Wis. 2d 510, 816
N.W.2d 145 (emphasis added) (citation omitted); see also K&S
Tool & Die Corp. v. Perfection Mach. Sales, Inc., 2007 WI 70,
¶20, 301 Wis. 2d 109, 732 N.W.2d 792 (collecting cases
construing the "member of the public" language in § 100.18).
¶16 By supreme court rule, "[i]f a petition [for review]
is granted, the parties cannot raise or argue issues not set
forth in the petition unless ordered otherwise by the" court.
Wis. Stat. § (Rule) 809.62(6). In its petition for review, Red-
D-Mix framed its issues as, first, whether it is a "question of
law or a question of fact whether a statement made by a seller
of a product is sufficient to support a misrepresentation claim
or is instead inactionable puffery" and, second, whether it is
permissible for "a contractor [to]
circumvent . . . Linden . . . and initiate a cause of action it
admits belongs to its customers . . . ." It said nothing in
either that section or its discussion section about being a
member of the public. Indeed, the only mention of that issue in
the petition for review appears in its recitation of the
procedural history. In granting the petition, we did not
instruct the parties to brief or argue any additional issues.
Quite to the contrary, we specifically informed Red-D-Mix that
it was not to "raise or argue issues not set forth in the
petition for review," and cited to § 809.26(6).
¶17 Red-D-Mix now asks us to forgive the omission because
the "member of the public" issue "is an essential element of
11
No. 2011AP1566
[its] [Wis. Stat.] § 100.18 claim," which can be reduced to the
proposition "that when the facts are undisputed, the Court, as a
matter of law, should decide if a § 100.18 claim must be
dismissed." As a result, Red-D-Mix says, "the issue of whether
the statement was made to the public is before this Court along
with every other element of misrepresentation that United saw
fit to address." We are unpersuaded. The two questions are
manifestly discrete. The statements could be puffery and not
made to a member of the public; they could be made to a member
of the public but not puffery; they could be neither or both.
The puffery issue is raised in the petition for review and
discussed at length. The member of the public issue is
completely absent. To adopt Red-D-Mix's interpretation of Wis.
Stat. § (Rule) 809.62(6) would be to render the provision
meaningless. A party could then guarantee our review of any
issue by simply mentioning the statute associated with a certain
claim and nakedly asserting that the lower court erred in its
ruling on that statute, even when there were numerous unrelated
issues stemming from the same statute. Such a construction
requires this court to do all the labor reasonably expected of
counsel, and we do not accept it. Cf. Johnson v. Blackburn, 227
Wis. 2d 249, ¶29 n.11, 595 N.W.2d 676 (1999) (declining to
address an issue not raised in the petition for review, even
though the unraised issue related to the same statute as the
raised issue).
¶18 Red-D-Mix chose to exclude the question of whether
United was a member of the public from the petition for review,
12
No. 2011AP1566
and we honor that choice. The court of appeals' disposition of
the matter stands.
2. The Contested Statements Were Not Puffery
¶19 The circuit court thought the comments the Red-D-Mix
salesman, Clark, made at his meeting with United were puffery as
a matter of law and as a result could not support a Wis. Stat.
§ 100.18 claim. Conversely, the court of appeals thought it
could not be determined whether they were puffery on summary
judgment at all. We take a third route: the remarks were not
puffery, but that conclusion could and should have been reached
by the trial judge during the summary judgment proceedings.
a) Clarifying the Misrepresentations at Issue
¶20 Before getting into the merits of the dispute, it is
important to clarify exactly which statements are at issue.
Beginning at the circuit court, Red-D-Mix has consistently taken
the position that the misrepresentation consisted only of
Clark's statements to the effect that Red-D-Mix's concrete was
"good and durable." Notably, Red-D-Mix takes the position that
the court should not factor into its puffery analysis the fact
that Clark, in addition to the more general endorsement of the
product, specifically reassured United that its previous
concerns with the concrete had been addressed and those
particular problems——i.e., the issues flowing from excessive
bleed water——were no longer occurring. In support, Red-D-Mix
notes that United offered no averments in its third and final
amended complaint regarding an exchange at the meeting over the
previous problems United had encountered with Red-D-Mix's
13
No. 2011AP1566
product. Like the circuit court and the court of appeals, we
take a broader view than does Red-D-Mix.
¶21 As a notice pleading state, Wisconsin law requires
only that a complaint "set forth the basic facts giving rise to
the claims." Apple Hill Farms Dev., LLP v. Price, 2012 WI App
69, ¶17, 342 Wis. 2d 162, 816 N.W.2d 914 (citing Wis. Stat.
§ 802.02(1)(a)). The purpose of a complaint in a notice
pleading jurisdiction is to provide "sufficient detail" such
"that the defendant, and the court, can obtain a fair idea of
what the plaintiff is complaining, and can see that there is
some basis for recovery." Midway Motor Lodge of Brookfield v.
Hartford Ins. Grp., 226 Wis. 2d 23, 35, 593 N.W.2d 852 (Ct. App.
1999) (internal quotation marks and citation omitted).
¶22 United satisfied that standard here. While it is true
that United did not characterize Clark in its complaint as
speaking specifically to the bleed water problems it had in the
past, it did alert Red-D-Mix to its accusation that Clark had
misrepresented the quality of his company's concrete at the 2007
meeting. By the time summary judgment pleadings were filed,
Red-D-Mix was well aware of United's reliance upon Clark's
purported declaration that the bleed water problems had been
rectified. Indeed, in Red-D-Mix's own motion for summary
judgment, it attached excerpts from a deposition with Hippert,
the president of United, at which he made abundantly clear that
he recalled seeking at the meeting "some guarantee from them
that they had solved that problem" with the bleed water and that
in response Clark "assured us that they had cured their
14
No. 2011AP1566
problems . . . ." Unsurprisingly, in light of that transcript,
the attorneys debated the significance of the assurance at
length during the summary judgment hearing, and both the circuit
court and court of appeals took it into account. Red-D-Mix had
more than adequate notice of the statements to prepare its
defense and respond to United's case, both of which it did
thoroughly. There is no defect in the pleadings and we
incorporate the statements into the allegations in our puffery
analysis.
b) The Statements Were Not Puffery
¶23 Having resolved that threshold issue, we will now
demonstrate why Clark's statements were not puffery, and why the
circuit court should have held as much at summary judgment.
¶24 We begin with some brief background. The concept of
puffery is as old as our legal system. See Stefan J. Padfield,
Is Puffery Material to Investors? Maybe We Should Ask Them, 10
U. Pa. J. Bus. & Emp. L. 339, 350-53 (2008) (tracing the roots
of puffery to the ancient doctrine of caveat emptor, or "buyer
beware"). An early American case succinctly summarized its
underlying rationale: "[t]he law recognizes the fact that men
will naturally overstate the value and qualities of the articles
which they have to sell. All men know this, and a buyer has no
right to rely upon such statements." Kimball v. Bangs, 11 N.E.
113, 114 (Mass. 1887). Some years later, Judge Learned Hand
elaborated, categorizing "some kinds of talk" as that "which no
sensible man takes seriously, and if he does he suffers from his
credulity. If we were all scrupulously honest, it would not be
15
No. 2011AP1566
so; but, as it is, neither party usually believes what the
seller says about his own opinions, and each knows it." Vulcan
Metals Co. v. Simmons Mfg. Co., 248 F. 853, 856 (2d Cir. 1918).
¶25 Consistent with other jurisdictions, Wisconsin has
adopted these same essential principles into its common law. In
our state, a salesperson engages in puffery when he gives voice
to "the exaggerations reasonably to be expected of a seller as
to the degree of quality of his product, the truth or falsity of
which cannot be precisely determined." State v. Am. TV &
Appliance of Madison, Inc., 146 Wis. 2d 292, 301-02, 430
N.W.2d 709 (1988)(internal quotation marks and citation
omitted). Exaggerations of this sort do not subject the speaker
to liability under Wis. Stat. § 100.18 because they convey only
the seller's opinion and are "not capable of being substantiated
or refuted . . . ." Tietsworth v. Harley-Davidson, Inc., 2004
WI 32, ¶44, 270 Wis. 2d 146, 677 N.W.2d 233 (internal quotation
marks and citation omitted).
¶26 Clark's promise to United that Red-D-Mix had remedied
the bleed water issues cannot reasonably be regarded as puffery
under the aforementioned definitions. Excessive bleed water is
a technical problem, with a technical definition and a technical
solution. To gather information on this technical issue, both
parties retained experts who undertook extensive investigations
into the precise composition of the concrete used in the
relevant properties, and then submitted elaborate reports on
that composition. There is nothing in the record to suggest
that a trier of fact, properly instructed and assisted by expert
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No. 2011AP1566
testimony, would be unable to ascertain whether Red-D-Mix used
an acceptable combination of ingredients in its concrete or did
not. Cf. Fireman's Fund Ins. Co. v. United States, 92 Fed. Cl.
598, 627, 657 (2010) (discussing excessive bleed water in
concrete amongst other technical problems occurring as a result
of the particular composition of concrete). In fact, we would
be hard pressed to invent a hypothetical statement less similar
to the vague and amorphous hype typically classified as puffery
than a specific reference to a specific problem in a
relationship between two specific parties in a highly
specialized industry. See, e.g., Tietsworth, 270 Wis. 2d 146,
¶43 (classifying as puffery claims that a product was "a
masterpiece" and of "premium quality"); Am. TV, 146 Wis. 2d at
299 (judging the endorsement of a product as "the finest" to be
puffery); Consol. Papers, Inc. v. Dorr-Oliver, Inc., 153
Wis. 2d 589, 594, 451 N.W.2d 456 (Ct. App. 1989) (explaining why
an advertisement promising that a product had a "long equipment
life" was puffery).
¶27 To attack this straightforward application of well-
established law, Red-D-Mix emphasizes two facts: 1) that the
salesman did not work at the company during the earlier
problems; and 2) that the earlier problems related to basements
17
No. 2011AP1566
and not outdoor projects. Neither has any bearing on the
puffery inquiry.12
¶28 To explain, the reason that a valid defense of puffery
defeats a Wis. Stat. § 100.18 suit is that the defense
undermines part of the statute's first element: that the
defendant related a misrepresentation of fact. Am. TV, 146
Wis. 2d at 302. This is so because a salesperson who simply
declares that his product is the "best" or the like, is not
representing a fact at all, let alone misrepresenting one.
Rather, he is merely delivering a nebulous, abstract, highly
generalized pitch for his wares. By contrast, when Clark told
United that the problem with the bleed water had been fixed, he
was very much making a specific, factual statement. That he may
not have been familiar with the problems prior to the
conversation, or had any idea whether they had been addressed or
not, does not transform the factual statement into puffery, for
12
Red-D-Mix also insists that the statements cannot support
a Wis. Stat. § 100.18 action because they looked only to the
future, not the past. Not so. Clark told United that a
specific problem that had occurred historically was no longer an
issue. Whether Red-D-Mix fixed a defect is a factual question
about the past, not the future. To hold otherwise would be to
permit suppliers to make whatever outlandish claims they could
dream up to move their products without fear of lawsuit, because
every such claim could be categorized as one relating to the
future sale of the product and not its present condition.
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No. 2011AP1566
it does not render this highly specific comment any more general
than it would have been otherwise.13
¶29 Our conclusion is bolstered by the absurd and
pernicious consequences that would follow if we gave our stamp
of approval to Red-D-Mix's theory. To reiterate Judge Hand's
explication, salespeople should not be punished for trying to
improve their sales with claims "which no sensible man takes
seriously, and if he does he suffers from his credulity."
Vulcan Metals Co., 248 F. at 856. It is surely not so naïve,
though, for a potential customer to expect a salesperson to
speak the truth when he represents, on behalf of his company,
that a specific problem that had cropped up in the past between
the same two parties, relating to the same product, had been
solved. Cf. Radford v. J.J.B. Enters., Ltd., 163 Wis. 2d 534,
544-45, 472 N.W.2d 790 (Ct. App. 1991) (holding that a boat-
owner did not engage in puffery when he assured the individual
purchasing the boat from him that its hull was sound and all dry
rot had been removed). A world in which companies are relieved
of liability when their representatives make statements of the
sort Clark made is a world in which companies have every
13
United has also contended that Red-D-Mix conveyed false
information in violation of Wis. Stat. § 100.18 when Clark told
Hippert and Kluess that it was using a new plant and the same
supplier as M&M Concrete, the company United turned to after it
ended its earlier relationship with Red-D-Mix. Our analysis
focuses on the specific promise that the bleed water problem had
been remedied, as that promise lies at the heart of the case.
These other closely related statements are not puffery for the
same reasons.
19
No. 2011AP1566
incentive to keep their salespeople in the dark about the flaws
in their products, and salespeople have every incentive to
confidently deliver as many unfounded promises as they can,
while the "sensible man" suffers the consequences. That is not
the world common law courts envisioned in developing the concept
of puffery.
¶30 We need not dwell long on dispatching Red-D-Mix's
other line of attack: that the earlier problems involved
basements while the defects giving rise to the present
litigation involved outdoor projects. For one thing, this
distinction, whatever its truth, does not go towards puffery.
Even if Clark did mean only that the concrete was no longer
excessively bleeding in such a way as to damage basements, the
truth or falsity of that statement is just as capable of
ascertainment as the truth or falsity of a more general
assurance that the concrete was not bleeding overmuch, indoors
or outdoors. And, in any event, the summary judgment materials
made clear beyond doubt that United believed Clark was indeed
making that more general assurance, and that the assurance was
proven untrue by the deterioration of the concrete Red-D-Mix
supplied. In the excerpted transcript of Hippert's deposition
that Red-D-Mix attached to its motion for summary judgment, he
characterized the earlier problem as the inability to "get a
concrete that we could pour and finish without it bleeding
substantially" and then elaborated that "in general, it's
bleeding, but our primary focus was on basements." Such
testimony makes plain that United believed the earlier bleeding
20
No. 2011AP1566
problem was the same as the one afflicting the later deliveries
of concrete, and that those later problems contradicted Clark's
promise. Incontrovertibly, then, Red-D-Mix had the opportunity
to rebut the claim before the circuit court, and this argument
is meritless. The statements were not puffery, and United
therefore had a colorable claim under Wis. Stat. § 100.18.14c) Puffery Is Not Always a Question of Fact, Nor One of Law
¶31 One final question on the subject remains, namely,
whether puffery is a matter for the judge at summary judgment or
the trier of fact at trial. The answer is dictated by our
foregoing analysis: it depends.
¶32 Below, the court of appeals made the blanket assertion
that "[w]hether a statement is puffery is a question of fact."
United Concrete, No. 2011AP1566, ¶13 (citation omitted). Unlike
the panel, we do not understand the law to accord puffery any
unique status in summary judgment proceedings. Rather, like
most other issues, it is best decided by a court on summary
judgment when there are no genuine issues of material fact in
dispute and when, viewing the record in the light most favorable
to the party opposing summary judgment, the single reasonable
inference to be drawn from the facts favors the movant.
14
Red-D-Mix argues in the alternative that if the
statements were not puffery, they were inactionable on the
grounds they constituted opinion. For the same reasons that we
reject its puffery argument, we reject its opinion argument.
Radford v. J.J.B. Enters., Ltd., 163 Wis. 2d 534, 544-45, 472
N.W.2d 790 (Ct. App. 1991) (disposing of opinion and puffery
issues simultaneously and with identical reasoning).
21
No. 2011AP1566
Admanco, Inc., 326 Wis. 2d 586, ¶28; Grams, 97 Wis. 2d at 338.
Where this cannot be said, as will often be the case, it should
go to the jury.
¶33 The benefits of our approach are readily apparent.
Most obviously, it conforms to clear, well-established,
universal summary judgment procedure, with which our circuit
court judges are intimately familiar and long accustomed to
applying. Cf. Wis. Stat. § 801.01(2) (providing that summary
judgment is allowed "in circuit courts of this state in all
civil actions and special pleadings . . . except where different
procedure is prescribed by statute or rule.").
¶34 In the same vein, it simply does not make sense to
assume that puffery is, always and everywhere, a matter for the
jury. When there is no reasonable interpretation of the record
that would evidence puffery, it wastes the taxpayers' and the
parties' time and money, not to mention scant judicial
resources, to assemble a jury and submit to it the question.
Cf. Yahnke v. Carson, 2000 WI 74, ¶20, 236 Wis. 2d 257, 613
N.W.2d 102 (noting that "the purposes of summary judgment
procedure in this state" are to "avoid[] unnecessary trials and
conserv[e] the resources of the courts and litigants alike").
¶35 The dispute at hand proves our point. Unless the
meeting between Clark and United took place on "opposite day,"15
15
"'Opposite Day' is a fictitious holiday, usually
celebrated by school-aged children, in which statements on that
day are intentionally false, but taken to mean the opposite by
listeners aware that the holiday is being celebrated." Attorney
Grievance Comm'n of Md. v. Siskind, 930 A.2d 328, 343 n.9 (Md.
2007) (citations omitted).
22
No. 2011AP1566
there is no defensible view of the record to support the
conclusion that Clark's statements constituted puffery. For
purposes of summary judgment, Red-D-Mix assumed that Clark
promised the previous issues with bleed water had been resolved.
In ruling on the motion, then, the circuit court had no need to
wonder whether the statements had actually been made, nor to
consider the credibility of Red-D-Mix's salesman versus the
credibility of United's employees or any other matter within the
sole province of the trier of fact. See, e.g., Fischer v.
Cleveland Punch & Shear Works Co., 91 Wis. 2d 85, 92, 280
N.W.2d 280 (1979) ("The credibility of witnesses and the weight
given to their testimony are matters left to the jury's
judgment . . . .") (citation omitted). The judge had only to
ask whether the truth or falsity of the statements was
ascertainable. For the reasons we surveyed above, it was well
within his competence to find, as a legal matter, that it was.
¶36 To support its contrary view, the court of appeals
relied upon a lone footnote from one of its previous opinions.
See Lambert v. Hein, 218 Wis. 2d 712, 724 n.4, 582 N.W.2d 84(Ct. App. 1998). Its reliance was misplaced. In the cited
footnote, the court of appeals held that the trial judge
correctly let the jury consider whether the phrase "quality
construction," as used in the real estate industry, was puffery.
Id. It further held that "whether 'puffery' may be construed as
a warranty depends on the objective context in which the
statement is made" and that in the case at bar "competing
affidavits" precluded the granting of summary judgment. Id.23
No. 2011AP1566
Neither holding is in conflict with our own today. The latter
conclusion——that puffery may also be a warranty in certain
contexts——does not speak to whether a statement is puffing in
the first place. The former conclusion——that whether a
particular phrase in a particular industry constituted puffery
was rightly determined by the jury——is in perfect harmony with
our own position that the question of puffery is sometimes
appropriate for disposition at summary judgment, and sometimes
not. Lambert does not impose an absolute bar on circuit courts
dealing with puffery on motions for summary judgment, and the
court of appeals below should not have expanded its narrow,
fact-specific holding as it did.
¶37 The approach we take here is consistent with the well-
reasoned precedent of other jurisdictions. A number of courts
have refrained from drawing a bright line around puffery in
terms of whether it presents a question of fact or of law,
recognizing, as we do, that while it is usually a question of
fact it can at times be a question of law, and that courts
should apply the usual summary judgment standard to figure out
which label fits more closely in a given case. See Donald
Braman et al., Some Realism About Punishment Naturalism, 77 U.
Chi. L. Rev. 1531, 1571 n.146 (2010) ("Many of the issues in
puffery . . . are often resolved as matters of law rather than
fact.") (emphasis added); Snyder v. Farnam Cos., 792 F. Supp. 2d
712, 723 (D.N.J. 2011) (observing that puffery "is normally a
question of fact for the jury") (emphasis added) (internal
quotation marks and citation omitted); Redmac, Inc. v.
24
No. 2011AP1566
Computerland of Peoria, 489 N.E.2d 380, 382 (Ill. Ct. App. 1986)
("Whether the issue [of puffery] is one of law or fact may be
debatable; however, it is generally considered a question of
fact . . . .") (emphasis added) (citations omitted). A
substantial majority of decisions resolving the puffery question
do not purport to apply a blanket rule; they simply determine,
with reference to the specific facts and allegations and the
general rules of summary judgment, whether the question can be
resolved as a matter of law by the court or instead requires the
consideration of the jury. See, e.g., Park Rise Homeowners
Ass'n v. Resource Const. Co., 155 P.3d 427, 435 (Colo. Ct. App.
2006) ("Turning to the phrase 'quality construction,' we reject
the . . . argument that, as a matter of law, the phrase cannot
be treated as puffery . . . .") (emphasis added); In re Level 3
Commc'ns, Inc. Sec. Litig., 667 F.3d 1331, 1340 (10th Cir. 2012)
("Many of the statements in plaintiff's complaint are, as a
matter of law, nothing more than puffery.") (emphasis added).
¶38 Though such decisions do not explicitly endorse our
conclusion that puffery is ordinarily a matter of fact, but
sometimes one of law, they follow the same rule we set forth
here. For rather than treating puffery as either always or
never a question of fact, they simply apply the time-tested
summary judgment standards to the specific motions under
25
No. 2011AP1566
review.16 In sum, the circuit court should have held as a matter
of law that the remark was not puffery for purposes of summary
judgment, and on remand it is instructed to do so.17
B. UNITED'S REMAINING CLAIMS SURVIVE SUMMARY JUDGMENT IN
PART
¶39 Having disposed of United's Wis. Stat. § 100.18 claim,
we are left with the balance of its complaint. Recall that in
addition to § 100.18, United relied upon theories of breach of
contract, breach of express warranty, breach of implied
warranty, indemnification, and contribution. These claims were
brought both in its own name and through its assignments from
the homeowners. The circuit court found all of them failed at
summary judgment on account of either the economic loss
doctrine, the speculativeness of the requested damages, or both.
On appeal, the court of appeals reached the opposite conclusion
16
To the extent other jurisdictions do employ language
implying a more categorical distinction, we respectfully
disagree with them for the reasons stated. See, e.g., Newcal
Indus., Inc. v. Ikon Office Solution, 513 F.3d 1038, 1053 (9th
Cir. 2008) ("[T]he determination of whether an alleged
misrepresentation 'is a statement of fact' or is instead 'mere
puffery' is a legal question that may be resolved" without the
jury's involvement) (internal quotation marks and citation
omitted).
17
Our determination that the statements were not puffery
for summary judgment purposes does not mean that United
automatically prevails on its Wis. Stat. § 100.18 claim. That
determination will be made by the jury, and the parties are
still entitled to submit evidence to the jury regarding whether
the statements were actually made, whether they constituted
misrepresentation under the statute, and so on.
26
No. 2011AP1566
on each point. Both courts were partly correct and partly
incorrect, compelling us to affirm in part and reverse in part.
1. United's Claims Through the Assignments are Impermissible
¶40 Before explaining why the claims United asserted
through the assignments are impermissible, we pause to rebut the
concurrence's unfounded and unshared assertion that no such
claims exist.
¶41 To be sure, the complaint did not explicitly indicate
that United was suing Red-D-Mix through the assignments in the
homeowners' name. Nevertheless, that has been the uncontested
view of everyone involved in the case from its inception to the
present day. In the circuit court, both parties proceeded with
the understanding that United was suing both in its own name and
that of the homeowners. The circuit court itself memorialized
that understanding in its summary judgment order, dismissing
"all claims asserted by United . . . through the assignments
from the property owners . . . ." (Emphasis added.) All the
briefs at the court of appeals refer to claims being filed
through the assignments, as does the court of appeals' opinion
and the petition for review. Neither party denies at this late
date, nor did they ever, that United filed claims through the
assignments in the homeowners' name.
¶42 Alone among every attorney or judge who has ever
participated in this case, from its commencement to today, Chief
Justice Abrahamson and the two justices joining her in the
concurrence, believe United did not sue in the homeowners' name
in addition to its own. Contrary to their suggestion, we are
27
No. 2011AP1566
not here adopting "Red-D-Mix's mistaken depiction of the
complaint," concurrence, ¶68, we are adopting the depiction
shared by the attorney who drafted and filed the complaint, the
attorney who responded to it, the circuit court that ruled on
it, and the three judges on the court of appeals panel who heard
the case before us. Perhaps the most definitive statement on
the matter comes from the lawyer who has represented United
throughout these proceedings, who wrote in her response to Red-
D-Mix's motion for summary judgment that her client was
"asserting causes of action in its own name as well as on behalf
of the property owners as alternative theories of recovery."
(Emphasis added.) This unequivocal sentence was penned by the
same person who signed the complaint itself. It is difficult to
comprehend why the concurring justices believe they understand
the nature of the complaint better than its author.
¶43 The concurrence's unexplained assertions
notwithstanding, we do not believe the circuit court or parties
will have to guess as to which claims were filed in the
homeowners' name, given that all of them have repeatedly
referred to those claims throughout the litigation, including
the circuit court in the very order the concurrence paraphrases.
See id., ¶65 (noting that the circuit court summary judgment
order dismissed "claims asserted through the assignments from
the property owners . . . ."). The concurrence thinks we should
be more "precise in telling the circuit court which parts of the
complaint it should strike." Id., ¶70. We do not share its
doubts over the circuit court's abilities, or think any more
28
No. 2011AP1566
precision is required, as it already dismissed the claims
asserted through the assignments and thus presumably knows what
those claims are.
¶44 In profoundly misleading fashion, the concurrence
suggests that United agrees that the assignments are a "red
herring" in the same sense that the concurrence uses that term.
Id., ¶66. United calls the assignments a "red herring" in its
brief here with respect to its argument on damages, and the term
was employed in the same context at oral argument. As shown
below, we agree with United on that point. Neither United nor
anyone else, aside from the concurrence, has ever contended that
the assignments are a "red herring" in the sense that United did
not sue through them. Everyone else has taken the exact
opposite position at every stage of the litigation.
¶45 The concurrence helpfully attaches the complaint. We
might just as easily attach the numerous documents making
abundantly clear how novel the concurrence's interpretation of
that complaint is. To name just a few of these documents, there
is United's brief opposing summary judgment, the circuit court
order, the briefs at the court of appeals, the court of appeals'
opinion, and the petition for review. Trees should not have to
die in order for us to substantiate such an obvious and
uncontested point, so we decline to add any appendices of our
own.
¶46 Returning from the concurrence's imagined version of
the case to the actual dispute, consider again the court of
appeals opinion. In reversing the trial judge, the court of
29
No. 2011AP1566
appeals' entire analysis of Linden occupies two sentences,
quoted here in full:
The trial court concluded that the homeowners could
not sue Red-D-Mix on their own, and so had no rights
to assign, because a property owner cannot sue a
subcontractor directly. See Linden, 283 Wis. 2d 606,
¶¶17, 32. While 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.
United Concrete, No. 2011AP1566, ¶11. This is a rather
confusing train of thought. The court of appeals accurately
sums up the trial judge's reasoning, but then proceeds to ignore
his conclusion. If the circuit court was in fact correct that
the homeowners cannot sue Red-D-Mix, rendering the assignments
nullities, then summary judgment was in fact properly granted on
the claims United brought through the assignments. Rather than
resolving that issue, the court of appeals decided instead to
address only the claims in United's own name and the potential
claims by the homeowners against United. In other words, the
"may" in the paragraph quoted above leaves a crucial question
unanswered, and creates needless uncertainty on remand.
¶47 Linden answers the question definitively. There, we
held that the economic loss doctrine18 prevents a homeowner from
18
The economic loss doctrine, as interpreted by Linden v.
Cascade Stone Co., Inc., 2005 WI 113, 283 Wis. 2d 606, 699
N.W.2d 189, was raised and fully briefed at the court of
appeals, and discussed by that court, and it was raised in the
petition for review and fully briefed here. It is properly
before us.
30
No. 2011AP1566
suing a subcontractor in tort for purely economic loss. Linden,
283 Wis. 2d 606, ¶¶26-31. Expounding, we determined that a tort
suit does not lie "when . . . the defective product is a
component part of an integrated structure or finished product"
and the damage is solely "to an integrated product, which
results in only economic loss," rather than physical harm or
personal injury. Id., ¶28 (internal quotation marks and
citation omitted). To hold otherwise, we reasoned, "would
require a finding of property damage in virtually every case in
which" the only harm that occurs is to the product itself, "and
would prevent contractual rules from serving their legitimate
function in governing commercial transactions." Id., ¶27
(internal quotation marks and citation omitted).
¶48 The claims United asserted against Red-D-Mix through
the assignments squarely fit within the class of lawsuits
governed by Linden. United had a contract with Red-D-Mix, and
contracts with the homeowners. No contract existed between Red-
D-Mix and the homeowners. With only two exceptions,19 the
19
There is evidence in the record suggesting that two
properties did suffer damage outside of the concrete itself, one
involving grass growing in a driveway and problems with
landscaping, the other involving unusual wear and tear to a
carpet. At the summary judgment hearing, counsel for Red-D-Mix
suggested that these two claims could not be dismissed under the
economic loss doctrine. It was a prudent concession. See
Linden, 283 Wis. 2d 606, ¶6 ("Economic damages" covered by the
doctrine "do not include losses due to . . . damage to other
property.") (citation omitted). Because these homeowners'
claims are not barred by the economic loss doctrine, and because
damages as a general matter are not fatally speculative, see
infra ¶55, they should be included in the case that goes to
trial.
31
No. 2011AP1566
damages were to the installed concrete itself, and there were no
physical injuries or personal harm. In short, the three parties
stood in the same position as those discussed in Linden.20
¶49 Although the plaintiffs in Linden abandoned their
contract claims before their case reached our court, id., ¶31,
we nevertheless spoke unequivocally on the subject. In
situations like these, we said, "homeowners retain contractual
remedies against the general contractors, who in turn have their
own remedies against the subcontractors." Id., ¶30. That is to
say, contractual claims should be brought between parties in
privity of contract. The homeowners and Red-D-Mix were not in
privity, and United cannot create a cause of action for its
customers where none lies.21
¶50 United attempts to distinguish Linden on two principle
grounds.22 Neither is convincing. First, it stresses that
20
United argued to the circuit court that Linden applies
only to subcontractors and not suppliers, and that Red-D-Mix can
only be characterized as the latter. It does not press that
argument here so we do not take it up in detail. Suffice it to
say, as we do above, that the parties stand in the same position
vis-à-vis one another as did the parties in Linden in all
relevant respects.
21
Both parties grant that if any property owners sue
United, it can then bring Red-D-Mix in as a third-party
defendant.
22
In addition to these two points, United maintains that
Red-D-Mix conceded the assignments' validity in a prior motion
during the litigation over insurance coverage in the case. It
provides no citations and scant argument in support. We read
the motion simply as arguing, in a largely unrelated proceeding,
that the homeowners transferred whatever rights they might have
had to sue Red-D-Mix to United, not that they necessarily
enjoyed such rights.
32
No. 2011AP1566
"privity of contract exists between the opposing parties" here,
while it did not in Linden. This is true, but immaterial. The
privity of contract between United and Red-D-Mix has nothing to
do with the relationship between the homeowners and Red-D-Mix,
or the ability of the former to sue Red-D-Mix. If the
homeowners cannot file an action against Red-D-Mix, then United
cannot do so in their name.
¶51 Lastly, United urges us to accept the claims on the
basis that Linden imposed no bar on third-party contract
beneficiary actions. We grant that Linden left unsettled the
permissibility of such suits. Id., ¶31. That question will
remain open, as United did not claim, in its complaint, that it
was exercising any rights to sue on behalf of the homeowners as
third-party beneficiaries.
¶52 To summarize, Linden precludes United from suing Red-
D-Mix in the name of the homeowners. The circuit court properly
dismissed those claims on summary judgment, and the court of
appeals improperly reinstated them. It is reversed insofar as
it did so, and those claims will not go to trial.
2. United's Claims in Its Own Name are Permissible
¶53 The circuit court rejected United's claims brought in
its own name on the grounds that damages were too speculative.
In the court of appeals' judgment, however, they were
sufficiently concrete to justify a trial. We agree with the
33
No. 2011AP1566
court of appeals, though we overrule its premature determination
regarding the effect of the assignments.23
¶54 In order to survive summary judgment, a complaint
sounding in contract must allege damages. See, e.g., Black v.
St. Bernadette Congregation of Appleton, 121 Wis. 2d 560, 566,
360 N.W.2d 550 (Ct. App. 1984). Such allegations must reflect
"[t]he fundamental idea in allowing damages for breach of
contract," that is, "to put the plaintiff in as good a position
financially as he would have been in but for the breach" by
giving the aggrieved party "what he contracts for or its
equivalent." Cent. Brown Cnty. Water Auth. v. Consoer,
23
United objects to Red-D-Mix's briefing of this issue on
the grounds that it was not presented in the petition for
review. Although the word "damages" does not appear in the
petition's statement of issues, the question of whether damages
are speculative is closely intertwined with the question of
whether the action is barred by Linden, which was raised. An
examination of our own discussion shows as much, as does
inspection of the court of appeals opinion, the briefs, or the
arguments to the trial court. In a word, Red-D-Mix has always
taken the position that the claims asserted through the
assignments are invalid because the property owners cannot sue
Red-D-Mix under Linden, and that is one of the reasons why
United's own damages (which are in part claimed on behalf of the
owners) are speculative. It has taken that position at every
stage of litigation and in every court, and it took it in its
petition for review. In this sense, the two issues are not only
linked, each is part and parcel of the other.
Moreover, even though the petition did not specifically
mention damages in its framing of the issue, it did discuss it
at some length in the argument section of the petition, putting
both United and the court on notice that it was inherent in the
issue raised. To refuse to address it would be to adopt a
crimped reading of our procedural rules, and would impair the
comprehensiveness of our decision and create unnecessary
ambiguity on remand.
34
No. 2011AP1566
Townsend, Envirodyne, No. 09-C-0131, 2013 WL 501419, unpublished
slip op. at *10 (E.D. Wis. Feb. 11, 2013) (quoting Schubert v.
Midwest Broad. Co., 1 Wis. 2d 497, 502, 85 N.W.2d 449 (1957) and
DeSombre v. Bickel, 18 Wis. 2d 390, 398, 118 N.W.2d 868 (1963)).
A party satisfies its burden at summary judgment with respect to
damages if it advances evidence that it did not "receive[] the
benefit of its bargain." Id. One way of making this showing is
to submit evidence that raises a material question of fact as to
whether a product or service provided "was of lesser quality"
than guaranteed under the agreement, and whether its defects led
the plaintiff to incur "costs needed to repair the alleged
defects." Id. As a more general matter, to be recoverable in a
contract claim, damages have to "flow[] from the breach."
Denhart v. Waukesha Brewing Co., 21 Wis. 2d 583, 595, 124
N.W.2d 664 (1963) (citation omitted), and they "must be
reasonably foreseeable at the time the contract was made as a
probable result of the breach." Peterson v. Cornerstone Prop.
Dev., LLC, 2006 WI App 132, ¶50, 294 Wis. 2d 800, 720 N.W.2d 716(internal quotation marks and citation omitted).
¶55 The record contains evidence suggesting that flatwork
required replacement because of the deterioration in Red-D-Mix's
concrete. United has already replaced one driveway, belonging
to the Beyers, pursuant to a settlement with the aggrieved
35
No. 2011AP1566
party.24 Another couple, the Michaels, demanded a reservation of
rights to sue United in return for executing the assignment,
entitling them to hale United into court at any time. Replacing
the work done for either the Beyers or the Michaels would not
have been necessary if United had procured durable concrete from
Red-D-Mix. The latter's failure to supply such concrete
breached its contract with United, and the cost of replacement
is directly attributable to that failure, i.e., it "flow[s] from
the breach." Denhart, 21 Wis. 2d at 595. Furthermore, a
competent supplier of concrete knows that if it sells a
substandard product, the end-users will likely see their
properties marred. Red-D-Mix was aware of that inevitability as
well, or should have been, so the damages were "reasonably
foreseeable at the time the contract was made as a probable
24
In its initial brief, Red-D-Mix submits that the Beyers
should be excluded from the equation because evidence of its
case in small claims court was only given to the circuit court
presiding over this matter after summary judgment was entered
below. However, it concedes that "reference to" the small
claims litigation was made prior to that date in circuit court,
and that the stipulation and order calling for the replacement
preceded the summary judgment hearing. Red-D-Mix does not
challenge the veracity of United's representations to the
circuit court regarding the Beyers' case, nor the nature of the
order. The trial judge was made adequately aware of the case
and United's reliance upon it for us to consider it here.
36
No. 2011AP1566
result of the breach." Peterson, 294 Wis. 2d 800, ¶50.25
Damages are not speculative.
¶56 One final point. The above-quoted passage from the
court of appeals opinion regarding the assignments creates
confusion on the question of damages, in addition to the
ambiguity it inserts into the economic loss doctrine. To repeat
the most essential sentence, the court of appeals announced 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 homeowners' potential
breach-of-contract claims." United Concrete, No. 2011AP1566,
¶11. In the preceding section we had occasion to comment on the
problematic ambiguity of the term "may" in the first sentence.
Now, we must overrule the premature statement made in the
second.
¶57 As shown above, there was sufficient evidence in the
record regarding damages for United to survive summary judgment.
The court of appeals did not need to construe the legal
significance of the assignments in order to reach its result,
let alone to do so with no explanation, no consideration of the
25
Obviously, nothing in this opinion should be taken to
limit United, in its showing of damages, to expenses undertaken
with respect to the Beyers' and Michaels' properties. We focus
on those properties only because they are sufficient for United
to surmount the hurdle of summary judgment. United is entitled,
like all plaintiffs, to prove up to the jury's satisfaction any
damages that stem from the breach and which were reasonably
foreseeable by Red-D-Mix at the time it contracted to supply the
relevant concrete to United.
37
No. 2011AP1566
assignments' terms, and no citation to authority. We overrule
its comments on the status of the assignments. If the
assignments become relevant in any further proceedings before
the circuit court, they can be interpreted afresh at that time.
V. CONCLUSION
¶58 As shown above, 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,26 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.
¶59 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. We
affirm in part, reverse in part, and remand with instructions.
26
See supra note 19.
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By the Court.—The decision of the court of appeals is
affirmed in part and reversed in part, and the cause is remanded
to the circuit court with instructions.
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¶60 SHIRLEY S. ABRAHAMSON, C.J. (concurring). I agree
with the court of appeals' unpublished per curiam opinion in
this case. Like the court of appeals, I would reverse the order
for summary judgment and remand the matter to the circuit court
for trial without any specific instructions.
¶61 I have trouble with the majority opinion's instruction
to the circuit court "to dismiss the claims asserted through the
assignments, and to allow the remaining claims to proceed to
trial." Majority op., ¶¶3, 59. To take a page out of the
majority opinion's play on the word "concrete," I suggest that
the majority opinion's instruction "to dismiss [United
Concrete's] claims asserted though the assignments" is not
concrete enough.
¶62 Just what claims does the majority have in mind that
have to be dismissed? Why make the circuit court and the
parties guess which claims the majority wants dismissed? Just
tell us!
¶63 As I read the complaint, which I have attached hereto
as Exhibit A, United Concrete has not asserted any claims
through the assignments. United Concrete's complaint has seven
numbered claims. All the claims United Concrete asserts in the
complaint are for injuries United Concrete alleges it has
suffered as a result of Red-D-Mix's conduct.
¶64 The circuit court order dismissed United Concrete's
entire complaint. The substantive portion of the dismissal
order reads as follows:
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NOW, THEREFORE, IT IS HEREBY ORDERED AND ADJUDGED that
Red-D-Mix Concrete, Inc.'s motion for summary judgment
is granted. The Court rules that all claims asserted
by United Concrete & Construction, Inc. through the
assignments from the property owners and all tort
based claims are precluded by the holding in Linden v.
Cascade, 2005 WI 113, 283 Wis. 2d 606, 699 N.W.2d 189and the Economic Loss Doctrine.
IT IS FURTHER ORDERED AND ADJUDGED that, with respect
to the Plaintiff's Wis. Stat. § 100.18 claim, the
statements made by Red-D-Mix Concrete, Inc.'s salesman
constitute "puffery" and are not actionable under the
statute.
IT IS FURTHER ORDERED AND ADJUDGED that, with respect
to United Concrete & Construction, Inc.'s remaining
claims, the Plaintiff has not sufficiently established
damages, to support its claims (emphasis added).
¶65 This circuit court order organizes United Concrete's
complaint into four categories of claims: (1) claims asserted
through the assignments from the property owners; (2) tort based
claims; (3) Wis. Stat. § 100.18 claim; and (4) remaining claims.
The circuit court order does not make clear which of the seven
claims in United Concrete's complaint it viewed as being based
on the assignments.
¶66 The reality of this case is that the whole issue of
the assignments is, as United Concrete has maintained, a "red
herring,"1 diverting attention from the real issues: Did Red-D-
1
Others have viewed the discussion of the assignments in
this case as a "red herring." At oral argument, Justice
Roggensack commented about the assignments to Red-D-Mix's
counsel during rebuttal as follows:
Whatever is going on here [with the assignments], to
me it feels like a "red herring," what's going on with
the homeowners. They're not here. We've got a
dispute between Red-D-Mix and United and that's what I
think we're gonna focus on here.
2
No. 2011AP1566.ssa
Mix violate Wis. Stat. § 100.18, did Red-D-Mix breach the
contract, and is United Concrete's claim for damages
speculative?
¶67 The majority opinion confirms the reality of this
case, explaining at ¶41: "The complaint did not explicitly
indicate that United was suing Red-D-Mix through the assignments
in the homeowners' name."
¶68 While recognizing the reality of this case, the
majority opinion sometimes accepts Red-D-Mix's mistaken
depiction of the complaint.2 Indeed, the majority opinion
repeatedly vacillates between reality and spin.
¶69 The majority opinion's adoption of Red-D-Mix's
mistaken depiction of the complaint rather than the reality of
the complaint culminates in the majority opinion's instruction
to the circuit court "to dismiss the claims asserted through the
assignments, and to allow the remaining claims to proceed to
trial."
¶70 I vote for concrete reality. The majority opinion
should be precise in telling the circuit court which parts of
the complaint it should strike.
An audio recording of the oral argument can be found on the
Supreme Court's website at http://www.wicourts.gov/opinions/
soralarguments.htm, at 1:13:58 – 1:14:15.
2
See, for example, ¶¶39, 41, 43, 48 of the majority
opinion, treating the complaint as if United Concrete's claims
for "breach of contract, breach of express warranty, breach of
implied warranty, indemnification, and contribution" were
"brought both in [United Concrete's] own name and through its
assignments from the homeowners."
3
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¶71 I am authorized to state that Justices ANN WALSH
BRADLEY and N. PATRICK CROOKS join this opinion.
4
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EXHIBIT A
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2
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3
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4
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5
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6