Paulson v. Olson Implement Co., Inc.

319 N.W.2d 855, 107 Wis. 2d 510
CourtWisconsin Supreme Court
DecidedJune 2, 1982
Docket81-545
StatusPublished
Cited by32 cases

This text of 319 N.W.2d 855 (Paulson v. Olson Implement Co., 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
Paulson v. Olson Implement Co., Inc., 319 N.W.2d 855, 107 Wis. 2d 510 (Wis. 1982).

Opinion

WILLIAM G. CALLOW, J.

This is an appeal from judgments of the circuit court for Columbia county entered by Judge Howard Latton dismissing this breach of warranty action against defendants Olson Implement Company, Inc., and Super Steel Products Corporation. 1 On December 7, 1981, the court of appeals certified this case to us pursuant to sec. (Rule) 809.61, Stats., for resolution of the following issue: “Is privity of contract necessary to enable a purchaser to maintain an action for economic loss resulting from breach of an express warranty by the defendant to the purchaser?” Because we have reached the conclusion that privity existed between the plaintiffs and defendants, we are not presented with the issue posited by the court of appeals. Our finding of privity necessitates that we reach the additional issue of what constitutes reasonable and timely notice in order to finally terminate the time-consuming and costly litigation the parties have endured in this case.

The facts generating this litigation may be summarized as follows: The plaintiff corporation, Breezy Prairie Farms, Inc., had two stockholders, Ronald Paulson and Kenneth Wachholz, who are neighboring dairy and grain *513 farmers (hereinafter plaintiff corporation referred to as Paulson and Waehholz). In the fall of 1975 the plaintiffs contacted Lawrence Olson, of Olson Implement Company, Inc., to inquire about a grain drying and handling facility for their corn harvest. In January of 1976 Olson, accompanied by David Miller of Super Steel Products Corporation, went to the Paulson home to discuss such a facility with both Paulson and Waehholz. Paulson testified they informed Olson and Miller that they “definitely wanted something to keep up with [their] daily harvesting schedule, and that [they] were harvesting approximately 5000 bushels a day and [they] wanted a dryer that would dry what [they] harvested in one day, or 5000 bushels.” After they had looked over Super Steel’s literature on drying bins, they testified Miller informed them that Super Steel was experimenting with a new stirating device, a “seven screw, seven auger stirator,” and that it would more than double the capacity of the 30-foot drying bin advertised in the brochure (which had three auger stirators and dried 2,400 bushels of corn in twenty-four hours). Paulson testified that Olson and Miller then left the farm to “figure out a facility and come back and give us a price on it.”

On March 11, 1976, Olson and Miller returned to the Paulson farm with a written proposal, on a Super Steel form, setting forth the specifications and cost of a seven auger stirator drying bin and a storage bin. No contract was signed or agreement reached on the purchase of the facility, and Olson and Miller left the farm to enable the plaintiffs to discuss the proposal and the financing arrangements. On March 17,1976, the plaintiffs gave Olson a check for $2,000 as a down payment to hold the price on the bin. Plaintiffs were given a receipt which Paul-son described at trial: “It’s got our name across the heading, ‘Breezy Prairie Farm, Columbus, Wisconsin. *514 Merchandize [sic] Sold.’ It’s got ‘Cash, $2,000.00. Sold by L. Olson. Down Payment on Bin Job. See Order Super Steel. Paid Check 340, $2,000.00.’ And my signature is on the bottom.”

Throughout the summer of 1976 Paulson and Wach-holz had contact with Olson regarding whether they would purchase the bin if they obtained additional acreage and whether their crop was coming along well enough to warrant purchasing the bin. On or about September 20, 1976, Paulson and Wachholz went to Olson’s office and signed an agreement to purchase the drying facility. According to the plaintiffs’ testimony, at the time of the signing of the purchase agreement, Olson affirmed Miller’s earlier representations that the drying equipment would dry 5,000 bushels of corn in a twenty-four-hour period.

After receiving their drying bin, Paulson and Wach-holz dried three or four bins containing 5,000 bushels of corn and discovered that instead of twenty-four hours it took approximately forty to fifty hours to dry. Paul-son phoned Olson to complain about this, and both Miller and Olson stopped by the farm on several occasions in 1976 to discuss any problems with the facility. On one of these occasions, the defendants recommended increasing the drying temperature to alleviate the problem. This was done, but it provide no improvement in the drying time. Olson then replaced a drying fan with a new one from his shop. Paulson testified this “made no difference.”

Paulson testified at trial that in 1977 Miller put a new drying floor in the facility because “[h]e felt the floor was restricting the air flow.” Plaintiffs continued to have problems drying corn in 1977 and continued to complain to Olson. Wachholz and Paulson stated nothing was done about their complaints and that it took them forty to fifty hours to dry 5,000 bushels of corn. Plain *515 tiffs’ harvest time was delayed, and they were forced to leave 325 acres of corn standing in the field until the spring of 1978.

The failure of the facility to dry 5,000 bushels in twenty-four hours continued into 1978, requiring Paul-son and Wachholz to secure storage space for the corn they could not put in the dryer. This involved considerable expense in hauling and securing off-farm storage. On October 5, 1978, Paulson and Wachholz commenced suit against Olson Implement Company, Inc., Super Steel Products Corporation, and Specialized Products, Inc., 2 alleging breach of warranty as the grain drying unit never dried 5,000 bushels of corn in twenty-four hours. 3

The jury returned a special verdict on August 1, 1980, finding that both Olson Implement Company, Inc., and Super Steel Products Corporation warranted that the drying equipment sold to the plaintiffs had a drying capacity of 4,800 to 5,000 bushels of corn in a twenty-four hour period; that the plaintiffs relied upon this warranty in purchasing the equipment; and that they were damaged as a result of their reliance on the warranty. The trial court, in a decision and order following the verdict, responding to motions by the defendants, dismissed the action against both defendants for the following reasons.

*516 The action was dismissed against Super Steel because “there [was] no privity of contract between the plaintiff and Supersteel [sic],” and the trial court determined that “privity is a requirement for an action on warranty, whether express or implied.” The action was dismissed against Olson Implement because the plaintiffs’ pleading did not allege having given notice within sec. 402.607, Stats., and because the trial court determined “as a matter of law a two year delay in giving notice would be unreasonable.”

We begin our review of this case with an examination of whether privity existed between Paulson and Wach-holz and defendant Super Steel. Defendant Super Steel bases its defense on lack of privity on the assertion that it was not a party to the September 20, 1976, sales contract between plaintiffs and Olson Implement. 4

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Brame v. General Motors LLC
E.D. Wisconsin, 2021
Estate of Alfred John Capelli v. Alfred M. Habel
2020 WI App 15 (Court of Appeals of Wisconsin, 2020)
Deutsche Bank National Trust Company v. Thomas P. Wuensch
2018 WI 35 (Wisconsin Supreme Court, 2018)
Blitz v. Monsanto Co.
317 F. Supp. 3d 1042 (W.D. Wisconsin, 2018)
Emirat AG v. High Point Printing LLC
248 F. Supp. 3d 911 (E.D. Wisconsin, 2017)
Naparala v. Pella Corp.
106 F. Supp. 3d 715 (D. South Carolina, 2015)
Don-Rick, Inc. v. QBE Americas
995 F. Supp. 2d 863 (W.D. Wisconsin, 2014)
Terrill v. ELECTROLUX HOME PRODUCTS, INC.
753 F. Supp. 2d 1272 (S.D. Georgia, 2010)
St. Paul Mercury Ins. Co. v. THE VIKING CORP.
539 F.3d 623 (Seventh Circuit, 2008)
Lamont v. Winnebago Industries, Inc.
569 F. Supp. 2d 806 (E.D. Wisconsin, 2008)
Wilson v. Tuxen
2008 WI App 94 (Court of Appeals of Wisconsin, 2008)
Manitowoc Marine Group, LLC v. Ameron International Corp.
424 F. Supp. 2d 1119 (E.D. Wisconsin, 2006)
Steele v. Pacesetter Motor Cars, Inc.
2003 WI App 242 (Court of Appeals of Wisconsin, 2003)

Cite This Page — Counsel Stack

Bluebook (online)
319 N.W.2d 855, 107 Wis. 2d 510, Counsel Stack Legal Research, https://law.counselstack.com/opinion/paulson-v-olson-implement-co-inc-wis-1982.