Baldewein Co. v. Tri-Clover, Inc.

2000 WI 20, 606 N.W.2d 145, 233 Wis. 2d 57, 2000 Wisc. LEXIS 20
CourtWisconsin Supreme Court
DecidedFebruary 29, 2000
Docket99-0541-CQ
StatusPublished
Cited by34 cases

This text of 2000 WI 20 (Baldewein Co. v. Tri-Clover, Inc.) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baldewein Co. v. Tri-Clover, Inc., 2000 WI 20, 606 N.W.2d 145, 233 Wis. 2d 57, 2000 Wisc. LEXIS 20 (Wis. 2000).

Opinions

DIANE S. SYKES, J.

¶ 1. This case is before the court on certification from the United States Court of Appeals for the Seventh Circuit pursuant to Wis. Stat. § 821.01 (1997-98) and Circuit Rule 52. The essential question is: when is a dealership "situated in this state" under Wis. Stat. § 135.02(2),1 thereby entitling the dealer to protection under the Wisconsin Fair Dealership Law (WFDL)?2 Based upon the language of the statute, as well as its history and purposes, we adopt a test similar to the multiple factor test advanced [62]*62in Ziegler Co. v. Rexnord, Inc., 139 Wis. 2d 593, 606, 407 N.W.2d 873 (1987), which considers the dealership's total involvement and investment in promoting and selling the grantor's products or services in the State of Wisconsin.

¶ 2. This case arises out of. the termination of a 56-year relationship between the Baldewein Company (Baldewein) and Tri-Clover, Inc. (Tri-Clover). Baldewein is an Illinois corporation with its principal place of business in Franklin Park, Illinois. Baldewein sells sanitary pumps, valves, fittings, and tubing for use in the food, dairy, and pharmaceutical industries. From 1940 until 1996, Baldewein was a distributor for Tri-Clover, a manufacturer of fittings, valves, pumps, and tubing. Tri-Clover is a Delaware corporation with its headquarters, distribution center, and principal place of business in Kenosha, Wisconsin.

¶ 3. Baldewein and Tri-Clover operated under oral agreements for most of their relationship. On May 24, 1985, the two entered into a written distributor agreement that amended the terms of the previous oral agreements and provided that Wisconsin law would [63]*63govern the relationship. The agreement granted Baldewein a nonexclusive right to promote and sell TriClover products in a territory consisting of Baldewein's "normal marketing area," which included the entire United States and several foreign countries. Although Tri-Clover was later purchased by the Alfa-Laval Group, the agreement appears to have been unaffected by the change in Tri-Clover's ownership, and the parties continued to operate under it until Tri-Clover terminated the relationshp in June 1996.

¶ 4. Prior to the termination, Baldewein derived some 80 to 90 percent of its total revenue from the sale of Tri-Clover's products. The vast majority of that business, however, was conducted outside the State of Wisconsin, primarily in Illinois, where Baldewein was headquartered. In fact, based upon sales figures from both Baldewein and Tri-Clover, the district court concluded that although Baldewein always had some TriClover sales in Wisconsin, for at least the first 51 years of the parties' relationship, over 99 percent of Baldewein's Tri-Clover sales took place outside this state.

¶ 5. Between 1992 and 1996, when the relationship was terminated, Baldewein's Wisconsin sales of Tri-Clover products were showing slight increases, averaging between 3.9 and 4 percent of its total annual Tri-Clover sales during those years. This development appears to have coincided with the hiring of two Wisconsin residents who solicited sales for Baldewein in this state. It is not clear, however, whether these salespeople devoted all of their time to developing the Wisconsin market for Baldewein's Tri-Clover product line, or whether Wisconsin was only part of their assigned territory. At no time did Baldewein ever have [64]*64an office, warehouse or other facility in Wisconsin, or invest in any physical plant or inventory in this state.

¶ 6. During the fiscal years 1993-1995, Baldewein spent approximately $40,000 per year on advertising. It is not clear from the record, however, how much of this advertising budget was devoted exclusively to Wisconsin or could be apportioned in some pro rata way to the development of the Wisconsin market. Nor is there any indication of how much Baldewein spent on advertising in the years prior to 1993, either generally or in Wisconsin in particular. There is a reference in the record to "advertising and mailings" being sent to some 111 customers and prospective customers in Wisconsin, but it is not specific as to time.

¶ 7. On June 29, 1996, Tri-Clover changed its nationwide distribution system and terminated its relationship with Baldewein. In March 1997, Baldewein brought a diversity suit in the United States District Court for the Eastern District of Wisconsin, claiming damages under the Wisconsin Fair Dealership Law. Tri-Clover counterclaimed, seeking damages based upon Baldewein's failure to pay for products it had purchased on account.

¶ 8. Both parties filed cross-motions for summary judgment. The district court, the Honorable Rudolph T. Randa, granted Tri-Clover's motion, relying on Swan Sales Corp. v. Joseph Schlitz Brewing Co., 126 Wis. 2d 16, 374 N.W.2d 640 (Ct. App. 1985) and an unpublished federal district court opinion, Lewis Communications v. Athletic Business Publications, No. 97-C-132-S (W.D. Wis. Oct. 7, 1997). Judge Randa determined that in order to be "situated in this state" within the meaning of the WFDL, a dealership must have some meaningful connection with this state, as [65]*65represented by a "not-insignificant amount of sales in Wisconsin compared to its overall sales" of the grantor's products. Baldewein Co. v. Tri-Clover, Inc., No. 97-C-213, slip op. at 19 (E.D. Wis. Mar. 9,1998).

¶ 9. Judge Randa concluded that to hold otherwise would mean "any nationwide or worldwide dealership could obtain for itself the protections of the WFDL by the simple trick of a Wisconsin choice-of-law provision and a single sale to the State." Baldewein, slip op. at 15. He found that Baldewein's sales of TriClover products in Wisconsin, which at no time were greater than 7.3 percent and which averaged 3.5 percent to 4 percent of its total Tri-Clover sales in the last five years of the parties' relationship, were not sufficient to qualify Baldewein as a dealership "situated in this state" under the WFDL.

¶ 10. Baldewein appealed the district court's decision to the United States Court of Appeals for the Seventh Circuit. The Seventh Circuit certified the case to us to interpret the "situated in this state" language in the statute. We are therefore presented with a question of law, which we review independently. Although we are not bound by the federal court's interpretation of Wisconsin law, Daanen & Janssen, Inc. v. Cedarapids, Inc., 216 Wis. 2d 395, 400, 573 N.W.2d 842 (1998), it is nonetheless helpful to our analysis.

¶ 11. In any case of statutory interpretation we must give effect to the intent of the legislature. Matter of Sullivan, 218 Wis. 2d 458, 464, 578 N.W.2d 596 (1998). We first look for that intent in the language of the statute itself. If we find that the language of the statute is ambiguous, we will look beyond it to the scope, history, context, subject matter, and object of the [66]*66statute.

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Cite This Page — Counsel Stack

Bluebook (online)
2000 WI 20, 606 N.W.2d 145, 233 Wis. 2d 57, 2000 Wisc. LEXIS 20, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baldewein-co-v-tri-clover-inc-wis-2000.