Rotor-Aire, Inc. v. Marth

275 N.W.2d 701, 87 Wis. 2d 773, 1979 Wisc. LEXIS 1907
CourtWisconsin Supreme Court
DecidedFebruary 27, 1979
DocketNo. 76-122
StatusPublished

This text of 275 N.W.2d 701 (Rotor-Aire, Inc. v. Marth) 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
Rotor-Aire, Inc. v. Marth, 275 N.W.2d 701, 87 Wis. 2d 773, 1979 Wisc. LEXIS 1907 (Wis. 1979).

Opinion

WILLIAM G. CALLOW, J.

This is an appeal from a judgment awarding damages to the plaintiff for the cost of helicopter flight lessons given to the defendant. We affirm the trial court’s finding that the defendant’s implied promise to pay for flight instruction was not contingent on the sale of a helicopter to him at dealer’s cost; we modify the judgment, however, in light of our conclusion that it is contrary to public policy under these circumstances to permit recovery for lessons given before the instructor received his FAA certification.

In the summer of 1972, William Marth spoke to representatives of the R. J. Enstrom Corporation about the possibility of establishing a helicopter dealership and of using a helicopter to sell real estate. Enstrom representatives invited him to a February 16, 1973, helicopter demonstration in Madison where he met Robert De More, of Enstrom, and Claude Frickelton, who was interested in establishing a Madison dealership for Enstrom. Assuming that Enstrom would award Frickelton the dealership, Marth wrote a letter to Frickelton and De More on February 19, 1973, setting forth the terms of a proposal for a subdealership in the Milwaukee area. The “Frickel-ton proposal” confirmed the details of a tentative agreement reached during a discussion between the parties and proposed that both Frickelton and Marth, as dealer and subdealer, would each order a helicopter at dealer’s cost. Marth was to provide the down payment for one, to be held in an escrow account and released if Marth became [776]*776licensed as a commercial helicopter pilot before June 1, 1973. When qualified as a pilot, Marth would provide the balance.

Frickelton did not become the Enstrom dealer. Enstrom awarded the dealership to Edward Morgan and Gerald Opgenorth, who were in the process of forming a corporation to operate the dealership under the name of Rotor-Aire, Inc. De More gave Morgan and Opgenorth Marth’s letter setting forth his proposal for a subdealership. Marth testified that on April 6, 1973, Morgan phoned to ask if he wanted to go through with the Frickelton proposal. Morgan and Opgenorth met with Marth in West Bend on April 7, 1973. Testimony as to what happened at the meeting is in conflict. Marth testified that Morgan and Opgenorth asked if Marth would pay the retail price for the helicopter and that he responded with a definite “no.” According to Marth, at the close of the meeting, the parties agreed that they would abide by the Frickelton proposal. At trial, Morgan and Opgenorth denied any agreement to follow the Frickelton proposal. They testified that they rejected the proposal and told Marth they did not want him as a subdealer. They testified they told Marth that he would have to pay retail price for a helicopter, but explained that if he later became a salesman, he would get a percentage of the profit on any helicopter he sold. Morgan recalled that, while Marth first insisted he wanted to buy a helicopter at dealer’s cost, he finally agreed to buy it at retail price. Morgan characterized the resulting agreement as follows: Marth would buy a helicopter at retail price if he could learn to fly. Subsequent helicopter sales by Marth would result in a percentage of the profit being paid to Marth. Marth would begin flight lessons from Rotor-Aire as soon as possible at a rate of $80 per hour. Opgenorth testified that there would be no subdealership.

Beginning on or about May 5, 1973, Marth traveled back and forth from West Bend to Madison for sixteen [777]*777flight lessons from Morgan. Morgan had completed a helicopter instructor’s course but had not taken the final “check ride” with a Federal Aviation Administration examiner. On May 10, 1978, Morgan received an FAA instructor’s rating. He had given Marth 5.8 hours of flight instruction before May 10. Morgan testified that at the April 7 meeting he told Marth he did not yet have the instructor’s rating.

Morgan testified that Marth was having difficulty with his lessons and was not progressing well. The lessons continued throughout the month of May, 1973. Marth gave Morgan a $1,000 check dated May 22 to be applied toward the cost of the lessons. Marth testified that he brought the check after repeatedly asking whether he should make payments and being told that it would be taken care of later. He said that only after he gave Morgan the check was he told that the charge for the lessons was $80 per hour. Morgan testified, on the other hand, that Marth brought the check in response to Morgan’s request for part payment for the lessons.

Marth testified that around the time he delivered the check he asked to see the invoice on the Rotor-Aire helicopter, which was similar to the one he was going to buy, in order to prepare to obtain financing. Morgan gave him the invoice which showed the retail price and dealer’s discount, and Marth remarked that it was “in the range [he] figured at $42,000.” The retail figure shown was $48,922; the 15 percent dealer discount brought the cost to Rotor-Aire to $42,462.45. Morgan neither admitted nor denied with certainty that he showed Marth an invoice for the Rotor-Aire helicopter..

Marth recalled that on May 31, 1973, before a flight lesson, Morgan told him that he and Opgenorth wanted to meet with him later that day. He testified that following the instruction he was told that because of unforeseen financial difficulty, Rotor-Aire would not be able to [778]*778sell him the helicopter at dealer’s cost. Morgan testified that before the lesson he did not ask Marth to meet but that afterwards they began to figure out the cost of Marth’s helicopter and their differences became apparent. Opgenorth stated that Morgan told him after the May 31 lesson he and Marth began to talk about the price of the helicopter; it then appeared that Marth thought he was going to get a discount. Opgenorth told Marth he remembered that the April 7 agreement called for the retail price. Marth left, stopped payment on his check, and cancelled his lessons. Morgan had given Marth 23.3 hours of flight instruction. On June 24, 1973, Opgenorth went to West Bend and offered to sell Marth a helicopter at dealer’s cost. Marth refused the offer.

Rotor-Aire sued Marth in contract for the cost of the lessons. Marth’s answer asserted, among other things, that the agreement was as outlined in the Frickelton proposal and that Rotor-Aire breached the agreement by telling Marth it would not sell him a helicopter at cost, thus relieving Marth of any obligation to Rotor-Aire. Marth counterclaimed against Rotor-Aire and began a third-party action against Morgan and Opgenorth seeking damages based on their alleged fraud, deceit, and misrepresentation. The trial court overruled Morgan and Opgenorth’s demurrer to the third-party complaint. Issue was joined, and the case tried to the court on March 15, 1976. The trial court found that there was an implied contract to pay the reasonable value of the flight instruction, which it determined to be $80 per hour, and that payment for the lessons was not contingent on Rotor-Aire’s selling Marth a helicopter at dealer cost. The court determined that Morgan and Opgenorth did not falsely or fraudulently induce Marth to take the lessons. It rendered judgment for the plaintiff in the amount of $1,929.24, dismissing the defendant’s counterclaim and third-party complaint. The defendant appeals from the judgment.

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Bluebook (online)
275 N.W.2d 701, 87 Wis. 2d 773, 1979 Wisc. LEXIS 1907, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rotor-aire-inc-v-marth-wis-1979.