Amendment
Case Analysis
Dec.
21, 2005
The
court notes that the case has already produced “seemingly unending appellate
proceedings.” Unfortunately, unless the Supreme Court again accepts review
and again reverses the court of appeals, the case will result in precedent that
is both inconsistent with the principles of previous Supreme Court decisions and
common sense.
The
court writes, “Wisconsin Stat. sec. 802.09(1) provides that leave to amend
a pleading ‘shall be freely given at any stage of the action when justice
so requires.’”
The
full text is as follows: “A party may amend the party’s pleading once
as a matter of course at any time within 6 months after the summons and complaint
are filed or within the time set in a scheduling order under s. 802.10. Otherwise
a party may amend the pleading only by leave of court or by written consent of
the adverse party; and leave shall be freely given at any stage of the action
when justice so requires.”
The
motion to amend obviously was not filed within 6 months; it was filed several
years after the original summons and complaint.
The
question thus is whether justice requires amendment, an issue governed by the
Supreme Court’s holding in Sutter v. State, 69 Wis.2d 709, 233 N.W.2d 391
(1975).
In
Sutter, the plaintiff alleged breach of contract, and was awarded judgment in
the trial court. The Supreme Court reversed, and remanded with directions to enter
judgment in favor of the defendant. Upon remittitur, the plaintiff moved to amend
its action to allege a tort claim — misrepresentation in the inducement to
the contract.
The
circuit court denied the motion, and on a second trip to the Supreme Court, the
court affirmed the circuit court’s decision not to allow the amendment, reasoning,
“Reversal in the interest of justice is not required in this case. …
The plaintiffs were represented by competent counsel. … All questions of
law and fact were available to the plaintiffs. No inadvertent mistake was made,
but a deliberate choice of strategy taken. Justice does not require that plaintiffs
be twice afforded their day in court.” Sutter, 233 N.W.2d at 396.
The
court in the case at bar distinguished Sutter, because the case in Sutter went
to trial, while this case “never proceeded past a complaint, dismissal, and
seemingly unending appellate proceedings.”
However,
the principle in Sutter is the same. All questions of law and fact were available
to the plaintiff, but instead of pursuing them all, the plaintiff made a deliberate
choice to pursue only the tort and statutory remedies.
Had
plaintiff prevailed on the statutory and tort claims, he could possibly have recovered
double damages, punitive damages, and actual attorney fees. Under a contract theory,
only actual damages could be recovered.
The
court of appeals noted, “At the time that Tietsworth filed the tort claims,
the law was unclear whether those claims were viable under the dictates of the
economic loss doctrine. The Supreme Court clarified the law in this area in its
decision in that case. The supreme court specifically stated that the economic
loss doctrine would not bar Tietsworth’s contract and warranty claims against
Harley-Davidson (cites omitted).”
The
first two sentences in this passage are indisputably true, but the third is a
nonsequitur. It is self-evident (and was self-evident to the plaintiff when the
lawsuit was originally filed) that the economic loss doctrine does not bar the
contract and warranty claims; the doctrine only bars tort claims.
A
party can bring contract claims regardless of whether he can also bring tort claims
or whether the doctrine limits him to contract remedies.
Thus,
while it was an open question whether the tort claims were viable at the time
the complaint was filed, no reasonable person could plausibly claim that it was
an open question whether the contract claims were viable.
They
were; Tietsworth simply chose not to pursue them, because the remedies weren’t
as appealing. Justice does not require that Tietsworth be given an opportunity
to seek those contract remedies now, after turning up his nose at them initially
and losing the attempt to obtain more lucrative tort remedies.
As
the Supreme Court in this case noted, “The doctrine generally ‘requires
transacting parties in Wisconsin to pursue only their contractual remedies when
asserting an economic loss claim (emphasis added)(cite omitted).’” Tietsworth,
677 N.W.2d at 241.
The
economic loss doctrine is not a doctrine under which a plaintiff has either contract
remedies or tort remedies; it is a doctrine that assumes contract remedies are
available, and only determines whether tort remedies can be recovered as well.
If it were
an either/or situation, justice would require that the plaintiff be allowed to
pursue contract remedies after the court held that tort remedies were unavailable.
However,
where the plaintiff knew it could seek contract remedies ab intitio, but made
a deliberate choice not to pursue them, justice does not require that he be able
to at this juncture.
The
court notes in its discussion of the equities of permitting amendment, “[Harley-Davidson]
has known since the date of the supreme court’s decision in this case, March
26, 2004 that these [contract and warranty] claims exist and that the highest
court in this state concluded that Tietsworth was entitled to pursue them.”
This ignores that Tietsworth (or his attorney at least) knew he was entitled to
pursue contract and warranty claims in 2001, when they filed the suit; they simply
chose not to.
-
David Ziemer
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David
Ziemer can be reached by email.
