Richard Bright D/B/A Augusta Dairies v. Land O'lakes, Inc. And Norris Creameries, Inc.

844 F.2d 436, 10 Fed. R. Serv. 3d 1051, 1988 U.S. App. LEXIS 5168
CourtCourt of Appeals for the Seventh Circuit
DecidedApril 6, 1988
Docket86-1848, 86-1946, 86-1947, 86-2225, 86-2231, 86-2495 and 86-2496
StatusPublished
Cited by39 cases

This text of 844 F.2d 436 (Richard Bright D/B/A Augusta Dairies v. Land O'lakes, Inc. And Norris Creameries, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Richard Bright D/B/A Augusta Dairies v. Land O'lakes, Inc. And Norris Creameries, Inc., 844 F.2d 436, 10 Fed. R. Serv. 3d 1051, 1988 U.S. App. LEXIS 5168 (7th Cir. 1988).

Opinion

HARLINGTON WOOD, Jr., Circuit Judge.

Plaintiff-appellant Richard Bright, a dairy distributor in Wisconsin, sued defendants-appellees Land O’Lakes, Inc. and Norris Creameries, Inc., both dairy processors, when his distributor’s agreement with them was cancelled. The parties stipulated that Land O’Lakes and Norris were liable for the cancellation under the Wisconsin Fair Dealership Law. 1 Bright appeals the district court’s decision on summary judgment that Wisconsin law did not allow recovery of punitive damages in connection with the termination of the distribution contract. The defendants cross-appeal the district court’s denial of their motion for judgment notwithstanding the verdict, in which they sought to exclude the testimony of Bright’s expert, and the district court’s award of attorney’s fees, expert witness expenses, and accountant fees to Bright under the WFDL. We affirm.

I. BACKGROUND

Bright distributed dairy products for a variety of dairy processors under the name of Augusta Dairies. In July 1981 Bright signed an agreement with defendant Land O’Lakes to distribute Land O’Lakes products in parts of the Wisconsin counties of Eau Claire and Jackson. Bright received compensation for hauling products from a Chippewa Falls, Wisconsin milk bottling plant to Land O’Lakes sub-distributors and for supplying Land O’Lakes products to Bright’s own retailers. This arrangement lasted five months until Land O’Lakes closed the Chippewa Falls plant and asked Bright to pick up dairy products from its St. Paul, Minnesota plant. Shortly thereafter, in December 1981, pursuant to an oral agreement, Land O’Lakes granted Bright another, and much larger, distribution area, which included forty-four new retailers. 2 With this influx of new business Bright bought additional trucks, trailers, freezers, and other equipment. His tax returns for 1981 and 1982 showed net losses.

In February 1983 Land O’Lakes sold the St. Paul plant to defendant Norris Creameries. Bright continued to pick up the Land O’Lakes branded products from Norris. By the first week of July, 1983, Norris Creameries had decided to terminate Bright’s distributorship. In the few days before Bright’s distributorship was terminated, and before Bright received notice of the termination, Norris Creameries repre *438 sentatives told several of Bright’s retail customers that Bright would no longer be distributing Land O’Lakes dairy products. The representatives told the customers that they should place direct orders with Norris Creameries if they wanted to continue to receive Land O’Lakes products. Bright alleges that some of these retail customers may have understood the representatives to mean that, because Bright distributed solely Land O’Lakes products, the cessation of the distributorship meant Bright would no longer be conducting any dairy distribution as Augusta Dairies.

Finally, Norris Creameries advised Bright on the evening of July 6, 1983, that his distributorship was terminated, effective immediately. By this time, in addition to his twenty-six original customers and the forty-four customers he picked up at the time of the oral agreement, Bright had acquired another thirty-three new customers. Bright sued both Land O’Lakes and Norris Creameries in Wisconsin Circuit Court; the defendants removed the case to federal district court in the Western District of Wisconsin.

II. DISCUSSION

Punitive Damages

Bright argues that in addition to the damages the jury awarded him on his contractual and statutory claims, he is also entitled to punitive damages on his tort claim. In granting defendants’ motion for summary judgment, the district court held, however, that Bright’s claim for punitive damages could not succeed because Wisconsin does not recognize a right to punitive damages in connection with a breach of contract. When reviewing a district court’s grant of summary judgment, we must decide whether the documents in the record “show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c); see DeValk Lincoln Mercury, Inc. v. Ford Motor Co., 811 F.2d 326, 329 (7th Cir.1987) (explaining summary judgment determination requires not only that there are no material factual issues but also that movant is entitled to judgment as a matter of law). In this case the district court concluded that irrespective of the facts, Wisconsin would not recognize Bright’s claim to punitive damages as a matter of law. The district court’s conclusion that Wisconsin would not recognize such a right in this situation was a legal determination. In re Burlington Northern, Inc., 832 F.2d 430, 433 (7th Cir.1987). We review a district court’s legal determinations de novo. United States v. Montoya, 827 F.2d 143, 146 (7th Cir.1987); Gianukos v. Loeb Rhoades & Co., 822 F.2d 648, 652 (7th Cir.1987).

Bright relies principally on a 1978 case decided by the Supreme Court of Wisconsin to support his claim of entitlement to punitive damages. In Anderson v. Continental Ins. Co., 85 Wis.2d 675, 271 N.W.2d 368 (1978), a suit brought by an insured against his insurer, the court explained at some length the place of punitive damages in a case initially arising around a contractual relationship:

By virtue of the relationship between the parties created by the contract, a special duty arises, the breach of which duty is a tort and is unrelated to contract damages. This tort of bad faith or malicious and intentional harassment by one party to a contract directed toward the other party, who seeks to assert his contract claim, has been referred to as a “tortious breach of contract.” While that term may be a convenient shorthand method of denominating the intentional conduct of a contracting party when it acts in bad faith to avoid its contract obligations, it is confusing and inappropriate, because it could lead one to believe that the wrong done is the breach of the contract. It obscures the fact that bad faith conduct by one party to a contract toward another is a tort separate and apart from a breach of contract per se and it fails to emphasize the fact that separate damages may be recovered for the tort and for the contract breach.
When it is recognized that recovery is sought for the tort and not for the breach of contract, the cliches which are relied upon by the defendants — e.g., “Pu *439 nitive damages are not allowed for a mere breach of contract” — become irrelevant. The question whether punitive damages are permissible thus is not to be disposed of on grounds that what the plaintiffs assert is a breach-of-contract action, but rather must be considered under a discussion of whether the facts surrounding the tort of bad faith evidence such conduct that punitive or exemplary damages are permissible....

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844 F.2d 436, 10 Fed. R. Serv. 3d 1051, 1988 U.S. App. LEXIS 5168, Counsel Stack Legal Research, https://law.counselstack.com/opinion/richard-bright-dba-augusta-dairies-v-land-olakes-inc-and-norris-ca7-1988.