01-0090 Columbia Propane, L.P. v. Wisconsin Gas Co., et al.

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“First, characterizing Columbia Propane’s claim against Wisconsin Gas as a claim to enforce a contract overlooks the underlying torts asserted, which are the primary claims that need to be tried. The asset purchase agreement is the source of Columbia Propane’s right, if any, to recover against Wisconsin Gas, but if that agreement is interpreted to impose liability on Wisconsin Gas for the torts alleged in the complaint, Columbia Propane will need to prove those torts just as it would in an action against People’s Gas. Second, if we characterize Columbia Propane’s claim against Wisconsin Gas as a contract claim, the application of a contract statute of limitations is problematic. The statute of limitations on a contract claim begins to run on the date of the breach. Assuming for purposes of illustration that Wisconsin Gas agreed to assume liability for the torts alleged in Columbia Propane’s complaint, when did the breach of that agreement occur? Wisconsin Gas suggests it has not breached its agreement with People’s Gas until there is a judgment against People’s Gas for tort damages that Wisconsin Gas is obligated to pay, is asked to pay, and refuses to pay. But who does Columbia Propane sue to obtain that judgment? As we pointed out in Tift v. Forage King Industries, Inc., 102 Wis. 2d 327, 331, 306 N.W.2d 289 (Ct. App. 1981), reversed on other grounds, 108 Wis. 2d 72, 77, 322 N.W.2d 14 (1982), generally when a corporation is purchased by a second corporation, the first disappears as a legal entity and, consequently, cannot be sued. If we adopt Wisconsin Gas’s approach, it is difficult to see when a plaintiff could ever recover for the selling corporation’s tort from the purchasing corporation, even though the latter agreed to assume liability for the tort. Finally, allowing direct suit in tort against a purchasing corporation that has agreed to assume the selling corporation’s liability for that tort is consistent with the manner of asserting claims where other grounds for successor liability are asserted.”

Affirmed in part, and Reversed in part.

Dist IV, Wood County, Conway, J., Vergeront, P.J.

Attorneys:

For Appellant: Michael B. Apfeld, Milwaukee; Michael Ash, Milwaukee; John L. Clancy, Milwaukee

For Respondent: Charles P. Graupner, Milwaukee; William A. Metcalf, Wisconsin Rapids