Please ensure Javascript is enabled for purposes of website accessibility

Plaintiff can add new claims after remand

By: dmc-admin//December 21, 2005//

Plaintiff can add new claims after remand

By: dmc-admin//December 21, 2005//

Listen to this article

What the court held

Case: Tietsworth v. Harley-Davidson, Inc., No. 2004AP2655

Issue: Can a plaintiff amend his complaint to pursue contract remedies after the supreme court has held his tort claims were properly dismissed pursuant to the economic loss doctrine.

Holding: Yes. Where the Supreme Court specifically held that the plaintiff could proceed only in contract, justice requires that the plaintiff be allowed to amend his complaint to add contract claims.

Counsel: Guri Ademi, Cudahy; Shpetim Ademi, Cudahy; David J. Bershad, New York, NY; Michael M. Buchman, New York, NY; Frank T. Crivello II, Milwaukee, for appellant; Robert L. Binder, Milwaukee; W. Stuart Parsons, Milwaukee; Patrick W. Schmidt, Milwaukee; Kelly H. Twigger, Milwaukee, for respondent.

The Wisconsin Court of Appeals held on Dec. 13 that, where the Supreme Court dismissed a plaintiff’s tort claims pursuant to the economic loss doctrine, the plaintiff must be allowed to amend his complaint to add contract claims.

On June 28, 2001, Steven C. Tietsworth filed a proposed nationwide class action against Harley-Davidson, Inc., alleging problems with the design, manufacture, and sale of a particular model of motorcycle.

Tietsworth’s causes of action included: (1) a violation of sec. 100.18 (the “Deceptive Trade Practices Act” or “DTPA”); (2) negligence; (3) strict products liability; and (4) common-law fraudulent concealment. Tietsworth did not allege breach of contract or any warranty claims.

Harley-Davidson moved to dismiss the complaint on the basis that Tietsworth’s claims were premature as they incurred no actual injury, either personal or economic.

Harley-Davidson also argued that plaintiffs’ tort claims were barred by the economic loss doctrine, and that the statutory fraud under sec. 100.18, and the common law fraudulent concealment claims should be dismissed for lack of particularity.

On Feb. 27, 2002, the trial court granted the motion to dismiss. Tietsworth appealed only the dismissal of its DTPA and the fraudulent concealment claims. The court of appeals reversed, and reinstated the actions. Tietsworth v. Harley-Davidson, Inc., 2003 WI App 75, 261 Wis. 2d 755, 661 N.W.2d 450.

The Supreme Court granted review, and reversed the court of appeals, holding that the economic loss doctrine bars the tort claims. The court wrote, “The plaintiffs may have contract remedies — breach of contract/warranty or rescission and restitution — but may not pursue a tort claim for misrepresentation premised on having purchased allegedly defective motorcycles.”

Tietsworth v. Harley-Davidson, Inc., 2004 WI 32, par. 37, 270 Wis. 2d 146, 677 N.W.2d 233.

Other than reversing the court of appeals, however, the Supreme Court gave no further instructions on remand.

Upon remittitur to the circuit court, Tietsworth moved the trial court to reopen the matter pursuant to sec. 808.08(3), and for leave to amend the complaint pursuant to sec. 802.09, in order to pursue contract and warranty remedies.

Milwaukee County Circuit Court Judge Michael D. Guolee denied the motion, and dismissed the complaint, holding that a trial court may not allow amendment of pleadings after the Supreme Court has affirmed a judgment dismissing a case. Tietsworth appealed, and the court of appeals reversed in a decision by Judge Ted E. Wedemeyer, Jr.

The court first held that the trial court had authority under sec. 808.08(3) to grant the motion to reopen.

The statute provides that, when a remittitur is received in the trial court, a party may move for further proceedings within one year after receipt of the record.

The court found, “The mandate by the supreme court in this case simply ‘reversed the decision of the court of appeals’ and remanded the matter to the trial court. The Supreme Court’s decision did not affirm a judgment of dismissal or direct that a judgment of dismissal be entered. The only trial court order, which this court reversed on appeal, was dismissal of the tort claims.”

The court added, “This action involved a matter not specifically resolved by the Supreme Court and was not inconsistent with the mandate. The mandate left open the opportunity for the plaintiffs to pursue contract and warranty claims. The opinion itself suggested that this option was available as a remedy to the plaintiffs.”

Harley-Davidson argued that, if the Supreme Court had intended to permit Tietsworth to have the opportunity to amend its complaint, it would have directed that the action be remanded for further proceedings. Rejecting the argument, the court noted that the Supreme Court cannot order a party to file an amended complaint.

The court distinguished Sutter v. State, 69 Wis.2d 709, 233 N.W.2d 391 (1975), in which the Supreme Court held that a party could not amend a complaint to include tort claims after losing on its contract claims in a previous trip to the Supreme Court. In Sutter, the case had previously been tried, while in Tietsworth’s case, there had been no trial, but only motions and “seemingly unending appellate proceedings.”

Thus, the court held that the trial court had authority to grant the motion to reopen, and should have.

The court further held, under sec. 802.09(1), the trial court should have granted the motion to amend the complaint. The statute provides that leave to amend a pleading “shall be freely given at any stage of the action when justice so requires.”

The court reasoned, “At the time that Tietsworth
filed the tort claims, the law was unclear as to 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. Tietsworth, 270 Wis. 2d 146, pars. 36, 37. The Supreme Court specifically stated that the economic loss doctrine would not bar Tietsworth’s contract and warranty claims against Harley-Davidson. Id.”

Related Links

Wisconsin Court System

Related Article

Case Analysis

For support, the court cited Wussow v. Commercial Mechanisms, Inc., 97 Wis. 2d 136, 293 N.W.2d 897 (1980), in which the Supreme Court allowed amendment of a complaint to add a punitive damages claim, after the parties had settled the question of compensatory damages.

The court concluded, “There is no dispute that the amended complaint arises out of the same transaction or set of facts. There is no dispute that Harley-Davidson is well aware of the transactions at issue here and what Tietsworth’s claims are. It has known since the date of the Supreme Court’s decision in this case, March 26, 2004, that these claims exist and that the highest court in this state concluded that Tietsworth is entitled to pursue them.”

Accordingly, the court reversed, and remanded with specific directions to allow Tietsworth to file an amended complaint asserting the contract and warranty claims.

Click here for Case Analysis.

David Ziemer can be reached by email.

Polls

Should Steven Avery be granted a new evidentiary hearing?

View Results

Loading ... Loading ...

Legal News

See All Legal News

WLJ People

Sea all WLJ People

Opinion Digests