Robert Wargaski v. NCI Group, Inc. ( 2019 )

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
December 4, 2019
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.
Appeal No. 2018AP2014 Cir. Ct. No. 2018SC85
STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT III
ROBERT WARGASKI,
PLAINTIFF-APPELLANT,
V.
NCI GROUP, INC.,
DEFENDANT-RESPONDENT.
APPEAL from a judgment of the circuit court for Forest County:
LEON D. STENZ, Judge. Affirmed.
¶1 SEIDL, J.1 Robert Wargaski appeals a judgment dismissing his
small claims action against NCI Group, Inc. (NCI), in which he alleged a violation
of the Magnuson-Moss Warranty Act (MMWA) stemming from his purchase of
1
This appeal is decided by one judge pursuant to WIS. STAT. § 752.31(2) (2017-18). All
references to the Wisconsin Statutes are to the 2017-18 version unless otherwise noted.
No. 2018AP2014
metal roofing panels.2 Wargaski argues that the circuit court erred by enforcing a
forum-selection clause in the warranty at issue. We disagree and affirm.
BACKGROUND
¶2 Wargaski owns a parcel of real property in Forest County that
contains numerous outbuildings. In 2002, he decided to replace the roof on one of
these buildings. Accordingly, he purchased metal roofing panels from Argonne
Lumber & Supply, Inc. (Argonne Lumber), and had them installed on the building
by a local carpenter. The invoice from that sale describes the panels as “Midland
Metals Slimline 12 [inch] Wide Metal.”
¶3 Thirteen years later, Wargaski contacted Joe Sample, a regional
manager for American Building Components, Inc. (ABC), about making a
warranty claim regarding faded paint on the roofing panels.3 Sample informed
Wargaski that ABC could not locate an invoice from Midland Metals to Argonne
Lumber and, therefore, ABC could not “do a claim for the main reason we
manufacture the steel only …. The steel is painted by a coating facility, without
the coil information from the original order, we have no one to go back on.”
¶4 Wargaski subsequently filed the present action in Forest County
small claims court. In his complaint, he alleged that there was a twenty-year
limited paint warranty applicable to the panels, although he acknowledged that
2
See 15 U.S.C. §§ 2301-2312 (2018). All references to the United States Code are to the
2018 version unless otherwise noted.
3
It is undisputed that ABC was fulfilling sales of Midland Metals materials in 2002 and
that ABC is now a division of NCI. It is also undisputed that NCI is a Nevada corporation with
its principal place of business in Texas.
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No. 2018AP2014
“[o]ver time, the hard copies have been disposed of.” His sole claim was for
“breach of warranty … pursuant to the [MMWA].”4
¶5 In its answer, NCI stated it was attaching a “copy of ABC’s written
[twenty-five-year] warranty” that was in effect at the time Wargaski purchased his
roofing panels. That warranty stated, in relevant part, that “[t]he laws of the State
of Texas shall govern the rights and duties of the parties under this agreement and
jurisdiction and venue is fixed in Harris County, Texas.” Based on this warranty
provision, NCI raised an affirmative defense “that the jurisdiction and venue is
fixed in Harris County, Texas, and therefore, the present action should be
dismissed because it has been filed in the wrong jurisdiction and venue.”
¶6 Wargaski then filed a series of affidavits. As relevant to this appeal,
he averred in one of these affidavits that he believed the warranty at issue was
included “in the box” with the roofing panels. Further, he averred that the “boxes
would have been opened by the carpenter, who installed the roofing. I do not
know what the carpenter did with any warranty enclosures. I was not present
when the boxes were opened.”
¶7 NCI subsequently filed a motion to dismiss, arguing, in pertinent
part, that the circuit court should enforce the warranty’s forum-selection clause.
Wargaski opposed the motion, raising two primary arguments. First, he argued
that the forum-selection clause was not conspicuously disclosed as required by the
MMWA. And second, he argued the forum-selection clause violated the public
policy underlying the MMWA.
4
Wargaski’s complaint did not specify which provision of the MMWA he was alleging
NCI violated.
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No. 2018AP2014
¶8 At a hearing, the circuit court determined that the forum-selection
provision was enforceable. Consequently, the court entered a judgment dismissing
the case without prejudice. Wargaski now appeals.
DISCUSSION
¶9 On appeal, Wargaski argues that the circuit court erred by enforcing
the warranty’s forum-selection clause. As a preliminary matter, the parties dispute
whether we should treat the court’s decision as a grant of a motion to dismiss or a
grant of summary judgment. This dispute commonly arises in appeals concerning
the enforceability of a forum-selection clause. See, e.g., Converting/Biophile
Labs., Inc. v. Ludlow Composites Corp., 2006 WI App 187, ¶¶2, 13, 296 Wis. 2d
273, 722 N.W.2d 633; Johnson v. Holland Am. Line-Westours, Inc., 206 Wis. 2d
562, 568 n.5, 557 N.W.2d 475 (Ct. App. 1996). We have consistently resolved
such disputes by “treating the issue [i.e., the enforceability of a forum-selection
clause] under the law of summary judgment.” See Converting/Biophile Labs.,
296 Wis. 2d 273, ¶13.
¶10 In doing so, we have recognized that when we frame the appeal as a
review of a grant of summary judgment and the circuit court framed its order as a
grant of a motion to dismiss, “[t]hat altered stance does not change our standard of
review, however. Motions to dismiss and for summary judgment both are subject
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No. 2018AP2014
to our de novo review.” Id. As such, we treat the court’s decision as a grant of
summary judgment.5
¶11 Summary judgment is appropriate if the record demonstrates there
is no genuine issue as to any material fact and the moving party is entitled to
judgment as a matter of law. WIS. STAT. § 802.08(2). The summary judgment
methodology is well established, and we need not restate it here. See Tews v.
NHI, LLC, 2010 WI 137, ¶4, 330 Wis. 2d 389, 793 N.W.2d 860.
¶12 Forum-selection clauses are presumptively valid in Wisconsin.6
Converting/Biophile Labs., 296 Wis. 2d 273, ¶22. As a result, we will refuse to
enforce such a clause “only if there is a quantum of procedural unconscionability
plus a quantum of substantive unconscionability.” Pietroske, Inc. v. Globalcom,
Inc., 2004 WI App 142, ¶1, 275 Wis. 2d 444, 685 N.W.2d 884. We address
Wargaski’s arguments regarding both forms of unconscionability in turn.
5
We note that Wargaski’s sole claim of error in regards to whether the circuit court
improperly viewed NCI’s motion as a motion to dismiss as opposed to a motion for summary
judgment is that his affidavits should have been considered by the court at the motion hearing.
As we consider Wargaski’s affidavits in this appeal under our de novo standard of review, we
agree with NCI that, assuming the court erred, any such error was harmless.
6
NCI argues that we should apply Texas law to determine if the forum-selection clause
is enforceable, based upon the warranty’s statement that the “laws of Texas shall govern the
rights and duties of the parties under this agreement.” However, NCI provides no citation to any
case where a Wisconsin court has applied the laws of a foreign jurisdiction to determine the
enforceability of a forum-selection clause. We need not consider arguments unsupported by
citation to proper legal authority. See State v. Pettit, 171 Wis. 2d 627, 646-47, 492 N.W.2d 633(Ct. App. 1992).
In any event, after arguing that the forum-selection clause would be enforceable under
Texas law, NCI’s response brief proceeds to argue that Texas and Wisconsin apply the same
standard to determine if a forum-selection clause is enforceable. Wargaski concedes this point in
his reply brief. When the laws of “two states are the same, we apply Wisconsin law.” Deminsky
v. Arlington Plastics Mach., 2003 WI 15, ¶20, 259 Wis. 2d 587, 657 N.W.2d 411.
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No. 2018AP2014
A. Procedural unconscionability
¶13 Wargaski contends that the warranty’s forum-selection clause is
procedurally unconscionable because the warranty was provided inside of the box
containing the roofing panels. He asserts that this fact establishes a “public policy
violation to support procedural unconscionability.” In support, he relies on
16 C.F.R. § 700.11(b) (2015),7 which states, in relevant part, that a written
warranty “must be conveyed at the time of sale of the consumer product.”
¶14 Wargaski’s argument as to how this regulation was violated is
cursory, at best. He reasons that the “key word conveyed … means more than
referring to the warranty in the sale contract” and that “[c]oncealment inside the
box would not ‘convey’ that warranty information prior to sale.” He fails,
however, to explain why the word “convey” carries the significance he attributes
to it within the context of 16 C.F.R. § 700.11(b), or why the warranty referenced
in the sales contract was not conveyed to him by placement in the box of roofing
panels he purchased.
¶15 This failure is fatal to Wargaski’s procedural unconscionability
argument. As relevant here, the verb “convey” is defined as “to cause to pass
from one place or person to another.”8 Convey, WEBSTER’S THIRD NEW
INTERNATIONAL DICTIONARY (1993). Because Wargaski presents no developed
argument as to why Argonne Lumber’s inclusion of the warranty in the box of
7
All references to the Code of Federal Regulations are to the 2015 version unless
otherwise noted.
8
We may look to a recognized dictionary to establish the common and ordinary accepted
meaning of an undefined term in an administrative regulation. See Door Cty. Highway Dep’t v.
DILHR, 137 Wis. 2d 280, 293-94, 404 N.W.2d 548 (Ct. App. 1987).
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No. 2018AP2014
roofing panels did not cause the warranty to pass to him at the time of the sale, we
decline to address his argument further. See Industrial Risk Insurers v. American
Eng’g Testing, Inc., 2009 WI App 62, ¶25, 318 Wis. 2d 148, 769 N.W.2d 82 (we
will not abandon our neutrality to develop arguments for a party).
B. Substantive unconscionability
¶16 Wargaski next contends that the forum-selection clause is
substantively unconscionable, for three reasons. First, he states that the “evidence
is in Forest County, and a jury view in Texas is impossible.” He provides no
citation to any legal authority, however, supporting the proposition that a court’s
inability to allow for a jury view renders a forum-selection clause substantively
unconscionable. We therefore decline to address this argument further. See State
v. Pettit, 171 Wis. 2d 627, 646-47, 492 N.W.2d 633 (Ct. App. 1992) (noting we
typically do not address undeveloped arguments or arguments unsupported by
citation to applicable legal authority).
¶17 Second, citing 15 U.S.C. § 2310(d)(1)(A), Wargaski argues that he
“has the right to file suit” in Wisconsin. Section 2310(d)(1)(A) does provide that,
generally, a consumer seeking relief under the MMWA “may bring suit for
damages and other legal and equitable relief in any court of competent jurisdiction
in any State or the District of Columbia.” But Wargaski does not explain why a
warranty’s specific forum-selection clause may not be given preference over this
general provision. Moreover, he fails to refute NCI’s argument on this very point,
including its assertion that “[a]ll reported cases uniformly enforce specific
forum[-]selection clauses in consumer warranty cases over the more general
provisions of 15 U.S.C.A. 2310(d)(1)(A).” Consequently, we decline to address
this argument further. See Pettit, 171 Wis. 2d at 646-47; Schlieper v. DNR, 188
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No. 2018AP2014
Wis. 2d 318, 322, 525 N.W.2d 99 (Ct. App. 1994) (unrefuted arguments may be
deemed conceded).
¶18 Finally, relying upon our decision in Leasefirst v. Hartford Rexall
Drugs, Inc., 168 Wis. 2d 83, 483 N.W.2d 585 (Ct. App. 1992), Wargaski argues
that the “prohibitive cost” of traveling to Texas is sufficient to show that the
forum-selection clause is substantively unconscionable. Wargaski is correct that
in Leasefirst we held that the “considerable inconvenience and expense” that a
plaintiff would incur if a forum-selection clause were enforced supported a
determination that the clause at issue was substantively unconscionable. Id. at
90-91.
¶19 However, that conclusion was driven by the fact that the
forum-selection clause at issue in Leasefirst granted the defendant corporation
“the exclusive and absolute right to pick any forum where [the defendant
corporation] does business.” Id. at 86, 90. We observed that if such a broad
forum-selection clause were enforceable, the defendant corporation could
conceivably choose “Hawaii as a possible forum if [the defendant corporation] did
business in Hawaii,” even if the underlying dispute had no connection whatsoever
to Hawaii. Id. at 91 n.3.
¶20 That same concern does not apply to the forum-selection clause at
issue here. To explain, the forum-selection clause in this case specifically fixes
jurisdiction and venue in a particular Texas county. Given that NCI’s principal
place of business is undisputedly in Texas and NCI has customers spread across
the country, we agree with NCI that “[i]t is not unreasonable or unconscionable for
[NCI’s] limited warranty to clearly and unambiguously provide” that jurisdiction
and venue are fixed in Texas.
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No. 2018AP2014
¶21 In all, we conclude that Wargaski cannot overcome the presumption
that the forum-selection clause at issue is enforceable. He has not shown either a
quantum of procedural or substantive unconscionability associated with that
clause. Because both showings are necessary before we may “refuse to enforce”
the clause, we affirm. See Pietroske, 275 Wis. 2d at 447-48.
By the Court.—Judgment affirmed.
This opinion will not be published. See WIS. STAT. RULE
809.23(1)(b)4.
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