Opinion
January 5, 1954 —
February 2, 1954.
APPEAL from an order of the county court of Jefferson county: L. L. DARLING, Judge. Affirmed.
For the appellant there were briefs by Quarles, Spence Quarles, attorneys, and Kenneth P. Grubb and Richard S. Gibbs of counsel, all of Milwaukee, and oral argument by Mr. Grubb and by Mr. Franklin W. Stevenson of Hartford, Connecticut.
For the respondent there was a brief by Rogers, Vance Hallfrisch, attorneys, and Wright Hallfrisch of counsel, all of Fort Atkinson, and oral argument by Wright Hallfrisch.
This is an action to recover damages from the defendant because of representations made to plaintiff by defendant's agents. These representations are alleged to have been falsely and fraudulently made with intent to deceive the plaintiff. After issue had been joined, each side moved for summary judgment. The trial court digested the pleadings as follows:
"For the purpose of passing upon the motions before the court the material allegations of the complaint allege that: Plaintiff is a sole proprietor of a steam laundry; defendant is a foreign corporation engaged in a business of inspecting and insuring steam boilers; for a considerable period of time prior to the time in question, plaintiff had dealt with defendant and its agents with respect to inspections of plaintiff's boiler and insuring plaintiff against loss occasioned by defects thereof; in the summer of 1950 an agent of the defendant company inspected the boiler in question and advised plaintiff that if certain minor repairs were made the boiler would be in an insurable condition; the repairs were made at a cost to plaintiff of $81.15; on September 25, 1950, agents of defendant again inspected the boiler after which they `falsely and fraudulently, and with intent to deceive the said plaintiff,' stated and represented to him that the boiler was highly unsafe for operation and that it was imperative that the same be removed from the building as no longer safe for operation, and on the basis of the foregoing inspection and representations, demanded and required that said boiler be replaced and a new or otherwise insurable boiler be installed as a condition to the writing of insurance by the said defendant company. And that the foregoing were statements and representations of fact; in addition, defendant and its agents `falsely and fraudulently represented to the plaintiff that they would not only refuse to continue to insure the old boiler in the premises of the plaintiff' but would not insure it in anyone else's premises thereafter; relying upon `the false and fraudulent misrepresentations plaintiff was induced to sell the boiler, for which he obtained $364.02 and procured and installed a new one at a cost of $5,873.82; on October 24, 1950, an inspection of the boiler was made by a representative of the industrial commission of Wisconsin which established that said boiler was in September, 1950, in `good, sound, workable, and insurable condition, needing only minor repairs,' which an inspection in January, 1951, later confirmed, after minor repairs were made; after minor repairs and subsequent inspections were made to said boiler it was sold to and installed in a creamery in Iowa and insured by defendant; the misrepresentations as to the condition of the boiler were made with the intent to deceive the plaintiff and for the purpose of inducing him to act upon them to gain for defendant the advantage of reducing the risk incident to the insurance risk which defendant had previously assumed and which it was contemplated would continue; because of plaintiff's lack of knowledge concerning the safety factors of steam boilers and because of the superior knowledge of defendant's agents and the representations that defendant would not insure the boiler for plaintiff, or anyone else, plaintiff relied on defendant's agents' statements, all to his damage.
"In answer to the complaint defendant admits its identity and its field of business activity and that it carried the insurance coverage on plaintiff's boiler, according to a certain contract of insurance; admits the inspection of July, 1950, but denies that the necessary repairs were minor or that when made the boiler would then be in a satisfactory and insurable condition; admits the inspection of September 25, 1950, but denies that the inspectors made any false or fraudulent representations, but alleges that plaintiff's attention was called to certain defects still existing which in defendant's inspectors' opinion made the continued operation of the boiler hazardous, and that while it might, by repairs, be made temporarily fit for further service such repairs were not considered warranted because of its age and condition, and their recommendation was that the boiler be discontinued from service and a new boiler substituted; admits that through its agent defendant informed plaintiff it would continue to insure plaintiff against risks covered by its policy of insurance for only a limited period of time until the boiler then in service could be replaced; admits plaintiff was advised that defendant would not insure boiler in anyone else's premises, but that such representations were neither false nor fraudulent; denies any knowledge sufficient to form a belief as to price plaintiff obtained from old boiler or how much he was required to pay for new one; on information and belief alleges that plaintiff's boiler had been in operation since 1919 and that an identical new boiler could have been obtained for $2,180; admits the inspection of the boiler by a representative of the industrial commission but, on information and belief alleges such inspection was not a full, complete, or thorough inspection and denies that said inspection established that the boiler in question was in good, sound, workable, or insurable condition, needing only minor repairs; admits the inspection in January, 1951, and, controverting only whether the repairs made at that date were minor or major, admits that both the Biefeld Company and Mr. Edgar, the representative of the industrial commission, were of the opinion that the boiler was then in good, sound, workable, satisfactory, and insurable condition; admits, through inadvertence, defendant insured the boiler in the premises of another in the state of Iowa, but alleges on discovery of such fact the policy covering such boiler was promptly canceled; admits its agents intended to reduce the risk incident to the insurance which defendant had previously written and also the risk of injury and damage to the plaintiff and its property and its customers; denies plaintiff was induced to or did act upon any false or fraudulent misrepresentations of defendant or its agents, and denies that there were any false or fraudulent misrepresentations and denies that by reason of the conduct of the parties plaintiff has sustained damages in any sum, but on the contrary has been benefited.
"For a separate defense to the complaint defendant sets forth provisions of the policy of insurance in effect during the period referred to in the complaint, which policy provides for permission given to the defendant to make inspection of the boiler and the premises in which it is located and upon the discovery of a dangerous condition with respect to the boiler to suspend the insurance, upon compliance with certain conditions as to notice. Also is set forth a provision of the policy with reference to its cancellation upon ten days' notice and then alleges, in substance, that defendant is the sole judge as to whether it shall accept or continue insurance of a risk it deems undesirable and that no requirement was imposed upon plaintiff to continue its insurance with defendant company, and he could have continued to operate the boiler at his own risk or obtained insurance elsewhere.
"In a reply to a demand made of plaintiff by defendant to admit or deny certain material facts, plaintiff admits that the fair and reasonable value of the old boiler on the day it was sold was $364.02 and that the fair and reasonable value of the new boiler purchased by him, as installed, was $5,873.82, and, admits `that by reason of the replacement of the old boiler with the new boiler, and based upon amount received for the old boiler and the cost of the new boiler, including installation, that proper accounting procedure would require that entries be made on plaintiff's books which would reflect an increase in book value of assets of $5,509.80.' The other replies to the demands I do not consider are presently material to the issue before the court.
"To a similar pleading as that referred to in the preceding paragraph defendant admits with some reservation that the state of Wisconsin requires annual inspection of steam boilers but waives such inspection by industrial commission agents provided a boiler is subject to periodic inspection by an insurance company authorized to insure boilers in the state; admits that similar regulations apply in the state of Iowa and that defendant is licensed to do business of insuring and inspecting boilers in both Wisconsin and Iowa; admits that G. D. Rice and J. C. Tonks, the inspectors referred to in the complaint, were agents of the defendant at the times mentioned in the complaint, `but only in so far as they acted within the scope of their authority as defendant's boiler inspectors; admits that one A. Reid is an employee and agent of the defendant company, but only in so far as he acts within the scope of his authority as a boiler inspector of the defendant; admits that A. Reid made an external inspection of the boiler in question on May 22, 1951, in the premises of the Leon Creamery at Leon, Iowa, but alleges that he did not make a complete inspection and denies that at said time and place he found the boiler to be in an insurable condition; admits that A. Reid made a written report of such inspection to defendant company and to one G. B. Larson and to the state of Iowa authorities, but denies that in said reports any reference was made to the insurability or insurance condition of said boiler and denies that A. Reid approved the writing of insurance on the boiler or that shortly after defendant insured it; admits that the first knowledge defendant had that it has insured the boiler in question for another owner was letters written to it by plaintiff's attorneys in August and October, 1951; admits it canceled insurance on boiler, effective December 16, 1951, but denies that cancellation resulted from information received through plaintiff's attorneys but was in fact the result of inspections made by defendant's inspectors following receipt of A. Reid's inspection of May 22, 1951; denies information sufficient to form a belief as to whether subsequent to cancellation of policy in December, 1951, the boiler was inspected by state of Iowa inspectors and approved for use in that state at pressures up to 100 pounds per square inch.'"
The trial court filed a memorandum decision on March 11, 1953, in which it determined that the record showed issues of fact that were not resolved by the pleadings. However, the court determined that the plaintiff, upon the record to that time, had not shown that he suffered damages and without a showing of damages the plaintiff would not be entitled to a judgment. Therefore, the trial court directed the entering of a judgment dismissing the plaintiff's complaint. Thereafter the plaintiff served and filed a motion for a rehearing, and subsequently served and filed a motion for permission to file an amended complaint. Further affidavits were filed in support of said motions that contained allegations respecting damages.
The trial court then drafted a second memorandum decision, in which it determined that the defendant was not entitled to summary judgment, and granted the plaintiff leave to file an amended complaint. An order was entered on May 25, 1953, denying both motions for summary judgment, denying the motion for a rehearing, but granting the plaintiff's motion for leave to serve and file an amended complaint. The defendant appeals from that order.
Upon this appeal the defendant contends that its conduct constituted nothing more than a refusal to continue business relations with the plaintiff except upon terms acceptable to the defendant and that it had an absolute right so to do under the terms of the policy; that there were no fraudulent misrepresentations of material facts upon which the plaintiff relied, or had any right to rely, but that any statements by the defendant's agents were mere expressions of opinion, and even though said opinions were at variance with the opinions of other people that does not give rise to a cause of action; that any representations, if made, were representations of future actions, promises, or hopes, which are not actionable; that the affidavits filed in support of its motion for a directed verdict established a good cause for the opinion that the boiler was defective; that any material issues raised by the pleadings were legal rather than factual and therefore the motion of the defendant for summary judgment should have been granted; and finally, that the court's permission to plaintiff to amend his complaint was an abuse of discretion.
Many decisions of this court are cited in both briefs as to the purpose and application of the summary-judgment statute. It has been held many times by this court that if there is any substantial issue of fact presented by the pleadings, the motion for summary judgment should be denied. Citations on that point are unnecessary. We agree with the trial court that the pleadings did raise issues of material fact.
Admissions made pursuant to sec. 327.22, Stats., are binding upon the party making them to the extent that they are complete. For example, the plaintiff admitted, pursuant to demand: "That the fair and reasonable value of the Leffel boiler on the date the same was sold by plaintiff to Otto Biefeld Company was the sum of three hundred sixty-four and 02/100 dollars ($364.02)." That statement by itself is incomplete. It does not tell whether the boiler on that date was installed in the plant or whether it had been removed from the plant. Such an admission, therefore, may be completed by the showing of additional facts. There was no error in the denial of defendant's motion for summary judgment.
Sec. 269.44, Stats., gives the trial court great discretion in permitting amendments to pleadings. Under the liberal rules of pleading permitting amendments now in effect, certainly the trial court did not abuse its discretion in granting leave to serve and file an amended complaint. Thus, other issues of fact may be raised. Until the case is finally at issue we feel that further comment on the pleadings and issues would be improper.
By the Court. — Order affirmed.