Justia Contracts Opinion Summaries

Articles Posted in Wisconsin Supreme Court
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The Supreme Court affirmed the decision of the court of appeals reversing in part the circuit court's determination that the price for certain property was $16.6 million and granting County Visions Cooperative fifteen days to exercise its right of first refusal at that price, holding that a circuit court may set an exercise price that exceeds the appraised value of the burdened property.The circuit court granted Country Visions specific performance of its right of first refusal to a property that Archer-Daniel-Midland Co. was attempting to sell. At issue was whether the circuit court correctly set the price at which Country Visions could exercise its right of first refusal. The court of appeals concluded that the circuit court did not err in how it determined the appropriate right of first refusal exercise price but remanded the case for a determination of whether the $16.6 million price included personal property. The Supreme Court affirmed, holding (1) the circuit court properly considered the unique synergies that the property provided when it set the exercise price higher than the appraised value; but (2) remand was necessary to determine whether the $16.6 million exercise price included more than what was called for in the right of first refusal contract. View "Country Visions Cooperative v. Archer-Daniels-Midland Co." on Justia Law

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The Supreme Court affirmed in part and reversed in part the decision of the court of appeals affirming the circuit court's order for judgment in favor of Mohns, Inc. and the award of compensatory damages for breach of contract and unjust enrichment, as well as punitive damages, holding that the damages award must be set aside.Specifically, the Supreme Court held (1) the circuit court properly exercised its discretion when it imposed judgment on liability as a sanction for the discovery violations of BMO Harris Bank National Association; (2) the damages award for unjust enrichment was in error because the law does not permit recovery of damages for both breach of contract and unjust enrichment arising from the same conduct; and (3) because punitive damages are recoverable only in tort the punitive damages award must be set aside because it was based upon an award of damages for the contract claims. The Court remanded the matter to the circuit court to modify the order for judgment. View "Mohns Inc. v. BMO Harris Bank National Ass'n" on Justia Law

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The Supreme Court affirmed the decision of the court of appeals affirming the circuit court's dismissal of Chris Hinrichs and Autovation Limited's (collectively, Hinrichs) common law misrepresentation claims against the DOW Chemical Company and reversing the circuit court's dismissal of Hinrichs' statutory claim under Wis. Stat. 100.18, holding that the court of appeals did not err.Specifically, the Supreme Court held that, with regard to Hinrichs' common law claims, neither the "fraud in the inducement" exception nor the "other property exception" to the economic loss doctrine applied to allow Hinrichs' common law claims to go forward. With regard to Hinrichs' statutory claims the Court held (1) the economic loss doctrine does not serve as a bar to claims made under section 100.18; (2) because one person can be "the public" for purposes of section 100.18(1), the court of appeals did not err in determining that dismissal for failure to meet "the public" factor of the section 100.18 claim was in error; and (3) the heightened pleading standard for claims of fraud does not apply to claims made under section 100.18 and that Hinrichs' complaint stated a claim under the general pleading standard. View "Hinrichs v. DOW Chemical Co." on Justia Law

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The Supreme Court affirmed the decision of the court of appeals affirming the judgment of the circuit court granting summary judgment dismissing Rural Mutual Insurance Company's subrogation claims pursuant to a subrogation waiver, holding that the subrogation waiver was valid and enforceable.Rural Mutual brought this action against Lester Buildings, LLC, Phoenix Insurance Company, Van Wyks, Inc., and West Bend Mutual Insurance Company after a barn collapsed due to strong winds and Rural Mutual paid more than $650,000 to the barn owner, Jim Herman, Inc. (Herman). The circuit court concluded that the claims were barred pursuant to a subrogation waiver contained in Lester Buildings' contract with Herman, Rural Mutual's insured, and further concluded that Wis. Stat. 895.447 did not void that subrogation waiver. The Supreme Court affirmed, holding (1) section 895.447 did not void the subrogation waiver in the contract because the waiver did not limit or eliminate tort liability; and (2) the subrogation waiver was not an unenforceable exculpatory contract contrary to public policy. View "Rural Mutual Insurance Co. v. Lester Buildings, LLC" on Justia Law

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The Supreme Court affirmed the judgment of the court of appeals affirming the decision of the circuit court granting summary judgment in favor of Hiscox Insurance Company on Leicht Transfer & Storage Company's complaint seeking coverage for its losses under a commercial crime insurance policy issued to it by Hiscox, holding that Leicht's losses were not covered under the policy.Pallet Central Enterprises, Inc. forged delivery tickets and used them to bill Leicht for the sale and delivery of pallets that Pallet Central never sold or delivered. Leicht sought coverage for its losses under the policy issued to it by Hiscox. Hiscox denied coverage. Leicht sued for breach of contract, arguing that the forged delivery tickets comprised "directions to pay" within the meaning of the "forgery or alteration" insuring agreement of the Hiscox policy. The circuit court granted summary judgment for Hiscox, and the court of appeals affirmed. The Supreme Court affirmed, holding (1) the delivery tickets did not qualify as "written...directions to pay a sum certain in money"; and (2) the policy did not provide coverage for forged documents that were not themselves "directions to pay," but which were used as proxies for such documents. View "Leicht Transfer & Storage Co. v. Pallet Central Enterprises, Inc." on Justia Law

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At issue was the circuit court’s role in determining the proper forum of dispute resolution when a subsequent contract, if enforceable, does not contain an arbitration clause that is present in an initial contract.The Supreme Court reversed the decision of the court of appeals reversing the non-final order of the circuit court denying a motion to compel arbitration pursuant to the initial agreement in this case, as well as the circuit court’s granting of a motion for declaratory judgment that the subsequent agreement was a valid contract, holding that, if valid, the subsequent agreement released certain parties from the agreement to arbitrate contained in the initial agreement, and the cause must be remanded to determine whether the subsequent agreement was a valid contract.The circuit court concluded that even though the initial agreement required arbitration, it was superseded by the subsequent agreement, which did not require the parties to submit to arbitration. The court of appeals concluded that arbitration was required pursuant to the initial agreement. The Supreme Court reversed, holding that, under the circumstances of this case, the determination of arbitrability must be decided by the circuit court rather than an arbitrator and that genuine issues of material fact existed as to whether the subsequent agreement was a valid contract. View "Midwest Neurosciences Associates, LLC v. Great Lakes Neurosurgical Associates, LLC" on Justia Law

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The Supreme Court may question a university’s decision to suspend a tenured faculty member and must not defer to the university’s procedure for suspending and dismissing tenured faculty members.Marquette University suspended Dr. John McAdams, a tenured faculty member, because of a blog post. McAdams brought a breach of contract claim against the University, arguing that the parties' contract guaranteed the right to be free of disciplinary repercussions under the circumstances of this case. The University argued that courts may not question its decision so long as the University did not abuse its discretion, infringe any constitutional rights, act in bad faith, or engage in fraud. The circuit court concluded that it must defer to the University’s resolution of McAdams’ claims. The Supreme Court reversed, holding (1) the University’s internal dispute resolution process is not a substitute for McAdams’ right to sue in Wisconsin courts; and (2) the University breached its contract with McAdams when it suspended him for engaging in activity protected by the contract’s guarantee of academic freedom. View "McAdams v. Marquette University" on Justia Law

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At issue was whether a contract executed by Becker Property Services LLC and Cintas Corporation No. 2 containing indemnification and choice-of-law provisions entitled Cintas to indemnification for damages caused by its own negligence.The parties agreed that Ohio’s law controlled the interpretation of their contract but disagreed over whether that provision should be enforced. The circuit court concluded that the contract did not require Becker to defend or indemnify Cintas for its own negligence under Wisconsin law, adding that, if Ohio law had applied instead, the indemnification provision would have been sufficient to require Becker to indemnify Cintas for its own negligence. The court of appeals reversed, holding that, even under Wisconsin law, the contract required Becker to defend and indemnify Cintas for its own negligence. The Supreme Court held (1) no public policy required the Court to preempt the parties’ agreement that Ohio law would control the contract; and (2) the contract’s indemnification agreement unambiguously required Becker to defend and indemnify Cintas even for its own negligence. View "Cintas Corp. No. 2 v. Becker Property Services LLC" on Justia Law

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The business-owners liability insurance policy in this case did not provide coverage for a negligent supervision claim arising out of an alleged employee’s intentional act of physically punching a customer in the face.The circuit court granted summary judgment in favor of the Insurer, concluding that there was no coverage under the policy for either the employee’s intentional act or the negligent supervision claim against the employer arising out of the employee’s intentional act. The court of appeals reversed. The Supreme Court reversed, holding that where the negligent supervision claim pled rested solely on the employee’s intentional and unlawful act without any separate bais for a negligence claim against the employer, no coverage existed. View "Talley v. Mustafa" on Justia Law

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The Supreme Court reversed the decision of the court of appeals affirming the circuit court’s determination that real estate broker Mark McNally was entitled to a commission pursuant to a listing contract between the parties.Capital Cartage, Inc. argued before the Supreme Court that McNally was not entitled to a commission because the offer to purchase McNally procured contained substantial variances from the seller’s terms as set forth in the listing contract. The Supreme Court held (1) Kleven v. Cities Service Oil Co., 126 N.W.2d 64, is the law with regard to determining whether a substantial variance exists between a listing contract and an offer to purchase; (2) applying this standard, in the context of the sale of a business with real estate where the sale did not go through, McNally did not procure an offer to purchase “at the price and on substantially the terms set forth” in the listing contract; and (3) therefore, McNally was not entitled to a commission. View "McNally v. Capital Cartage, Inc." on Justia Law