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Casenotes

Wisconsin
Misrepresentation

Blanchar v Lake Land Builders, Inc, 2008 AP 1282 (Wis Ct App 2008)

Facts:Gene Blanchar purchased a residential lot from Chad Strutzel, the lone shareholder of Lake Land Builders, Inc (Lake Land). There was an agreement between both parties that if Blanchar did not contract with Lake Land to build a home on the lot then Blanchar would owe another $10,000 for the residential lot. According to Blanchar he opted to contract with Lake Land to construct a home on the lot by Strutzel's misrepresentations. The first statement Blanchar claims was a misrepresentation regarded the possibility of savings being passed onto Blanchar for brick work if Strutzel could get the bricks for a cost lower than estimated. Then, Blanchar claimed Strutzel said he would insure the premises during construction. This statement was important because a tornado did destroy the house before construction was complete.

Blanchar filed a complaint claiming Strutzel's misrepresentations on behalf of Lake Land violated Wisconsin Statutes Section 100.18. Strutzel proceeded to move for summary judgment, arguing Blanchar was not a member of "the public" at the time of the alleged misrepresentations and, therefore, was not covered by Section 100.18. The trial court agreed with Strutzel and granted the motion. Blanchar appealed.

Holding:Affirmed in part and reversed and remanded in part. The court of appeals addressed the issue of whether Blanchar was a member of "the public" for purposes of his Section 100.18 claim first. A claim for Section 100.18(1) misrepresentation has three elements: (1) the defendant made a representation to "the public" with the intent to induce an obligation; (2) the representation was untrue, deceptive, or misleading; and (3) the representation caused the plaintiff a pecuniary loss.

Only the first element was in dispute in this case. The statute does not define who is a member of "the public" so the court looked to other court decisions in Wisconsin defining "the public." In State v Automatic Merchandisers of America, Inc, 64 Wis 2d 659, 221 NW2d 683 (Wis. 1974), the most important factor in determining whether the plaintiff was a member of the public was whether there was some particular relationship between the parties. The Wisconsin Supreme Court has recently indicated a "particular relationship" depends upon its own facts and circumstances and must be tested by the statute in the light of such facts and circumstances.

Based on the undisputed facts, the court of appeals concluded no jury could reasonably find Blanchar and Lake Land had a "particular relationship" because the alleged misrepresentations occurred after Blanchar and Strutzel engaged in the sort of interactions that are common between custom home builders and buyers. The court went on to say it was not suggesting a "particular relationship" could never exist between custom home builders and buyers, but the facts and circumstances are different in each case.

The court also disagreed with Strutzel's argument that Blanchar was bound to select Lake Land as the builder of his house. The agreement stated Blanchar could choose Lake Land and if he did not then he would have to pay an extra $10,000 for the lot. This contingency, the court said, was insufficient to transform the custom home builder-buyer relationship into the type of "particular relationship" that would take the parties outside the statute's reference to "the public."

The court of appeals reversed the circuit court's decision to grant the motion for summary judgment to Strutzel because Blanchar was a member of "the public" under Section 100.18(1).

[Last update: 6-11-09]