Opinion
8:01CV338
August 5, 2002
MEMORANDUM AND ORDER
This matter is before the court on the motion of defendants/counter-plaintiffs/third-party plaintiffs Case Corporation and Case Credit Corporation (hereinafter, collectively, Case) for partial summary judgment on the issue of choice of law, Filing No. 38.
Summary judgment is proper if no disputed issues of material fact exist and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The court must view the evidence and the inferences which may be reasonably drawn from the evidence in the light most favorable to the nonmoving party. Enterprise Bank v. Magna Bank, 92 F.3d 743, 747 (8th Cir. 1996). Where unresolved issues are primarily legal as opposed to factual, summary judgment is particularly appropriate. Mansker v. TMG Life Ins. Co., 54 F.3d 1322, 1326 (8th Cir. 1995).
Case seeks partial summary judgment on the issue of choice of law. Case contends that Nebraska law should govern all claims except its tort claims for false representation and conspiracy to defraud and its contract claims to enforce personal guarantees. Case contends that these claims should be resolved under the laws of the state of Wisconsin, where Case has its principal place of business. Plaintiffs, on the other hand contend that Nebraska law should govern all claims and also assert that resolution of the issue is premature.
In diversity cases, the forum state's choice of law rules govern. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). Nebraska follows the Restatement (Second) of Conflicts of Laws. Inacom Corp. v. Sears, Roebuck Co., 254 F.3d 683, 687 (8th Cir. 2001). When the relevant legal principles are the same in both states, "what has come to be called a false conflict" is presented and the court need not resolve the choice of law issue. See A.P. Leonards v. Southern Farm Bureau Cas. Ins. Co., 279 F.3d 611, 612 (8th Cir. 2002).
With respect to the tort claims, the court finds there is no substantial difference between Nebraska law and Wisconsin law with respect to the elements of claims for misrepresentation or conspiracy to defraud. Compare Kailin v. Armstrong, 643 N.W.2d 132, 145 (Wis.App. 2002) (stating the elements of a claim for intentional misrepresentation are "a statement of fact that is untrue, made with the intent to defraud, and for the purpose of inducing the other party to act on it, which the other party relies on to his or her detriment, where the reliance is reasonable"), and Modern Materials, Inc. v. Advanced Tooling Specialists, Inc., 557 N.W.2d 835, 840 (Wis.Ct.App. 1996) (noting a civil claim of conspiracy to commit a wrong includes the elements of both civil conspiracy and underlying wrong; civil conspiracy requires: (1) the formation and operation of the conspiracy; (2) the wrongful act or acts done pursuant thereto; and (3) the damage resulting from such act or acts), with Four R Cattle Co. v. Mullins, 570 N.W.2d 813, 816 (Neb. 1997) ("[i]n order to maintain an action for fraudulent misrepresentation, a plaintiff must allege and prove the following elements: (1) that a representation was made; (2) that the representation was false; (3) that when made, the representation was known to be false or made recklessly without knowledge of its truth and as a positive assertion; (4) that it was made with the intention that the plaintiff should rely upon it; (5) that the plaintiff reasonably did so rely; and (6) that the plaintiff suffered damage as a result"), and Upah v. Ancona Bros. Co., 521 N.W.2d 895, 901 (Neb. 1994) (a claim of civil conspiracy is not actionable in itself, but serves to impose vicarious liability for the underlying wrongs of those who are party to the conspiracy). Accordingly, there is no conflict and the court will apply the law of the forum. Moreover, even if a conflict were shown, the court would find that Nebraska law applies. Section 145 of the Restatement governs choice of law decisions regarding tort issues generally, stating as follows:
The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties . . . [including]
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury occurred,
(c) the domicil[e], residence, nationality, place of incorporation and place of business of the parties, and
(d) the place where the relationship, if any, between the parties is centered.
Restatement (Second) of Conflict of Laws § 145. In making choice of law decisions involving fraud claims where a plaintiff's acts in reliance on the fraud took place in a state other than that where the false representations were made, the court must determine the state which "has the most significant relationship to the occurrence and the parties." Id., § 148. To make this determination, the court should consider:
(a) the place, or places, where the plaintiff acted in reliance upon the defendant's representations,
(b) the place where the plaintiff received the representations,
(c) the place where the defendant made the representations,
(d) the domicil[e], residence, nationality, place of incorporation and place of business of the parties,
(e) the place where a tangible thing which is the subject of the transaction between the parties was situated at the time, and
(f) the place where the plaintiff is to render performance under a contract which he has been induced to enter by the false representations of the defendant.Id. § 148(2). Applying those factors, the court finds that Nebraska law has the most significant relationship to the torts at issue. Case maintains its headquarters in Wisconsin, but most of the conduct comprising and resulting from the alleged misrepresentations and conspiracies occurred in Nebraska. Case may have received and relied upon the alleged misrepresentations in Wisconsin, but the remaining factors favor Nebraska. See, e.g. Inacom Corp., 254 F.3d at 687 (8th Cir. 2001). Accordingly, the court will apply Nebraska law to the tort claims.
With respect to the contract claims, Nebraska courts generally give effect to parties' choice of law. Vanice v. Oehm, 526 N.W.2d 648, 651 (Neb. 1995). "The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement directed to that issue." Restatement (Second) of Conflict of Laws § 187(1). The chosen state's law will apply unless: 1) another state has a materially greater interest in the issue; and 2) the chosen law would violate a fundamental policy of the state with the greater interest. Id.; JRT, Inc. v. TCBY Systems, Inc., 52 F.3d 734, 739 (8th Cir. 1995). Most of the contracts at issue in this case have a choice of law provision specifying that Wisconsin law will apply. Generally, the rights created under a suretyship (which would include a guaranty agreement) are determined by the law governing the principal obligation. Restatement (Second) of Conflict of Laws § 194. The contracts giving rise to the obligations secured by the guaranties specify that Wisconsin law applies. There has been no showing that another state has a materially greater interest in the contract issues or that application of Wisconsin law to the contract claims would violate any fundamental policies. Accordingly, the court will apply Wisconsin law to the contract claims at issue.
IT IS THEREFORE ORDERED the motion of defendants/counter-plaintiffs/third-party plaintiffs for partial summary judgment on the issue of choice of law is granted.
Nebraska law will be applied to tort claims in this action; Wisconsin law will be applied to contract claims in this action.