Digicorp, Inc. v. Ameritech Corp.

Digicorp, Inc. (plaintiff) was an authorized distributor for Ameritech Corp. (defendant). Digicorp wanted to sell an Ameritech calling plan through Bacher Communications (Bacher) (plaintiff). An Ameritech representative outlined in a letter the criteria for using another company’s salespeople and stated that Ameritech would hold Digicorp responsible for all salespeople. The agreement made Digicorp responsible for the actions of all salespeople, including Bacher employees. Ameritech was permitted to terminate the contract if Digicorp submitted any sales contracts containing forged signatures. The Ameritech representative failed to tell Digicorp before the agreement was executed that Bacher salesman Dann Krinsky had forged customers’ signatures while working for another Ameritech distributor. Krinsky sold Ameritech calling plans for Digicorp while employed by Bacher. Ameritech learned that most of those plans had forged customer signatures and terminated the agreement with Digicorp. Digicorp sued Ameritech for intentional misrepresentation. Bacher also claimed against Ameritech. The jury awarded damages to Digicorp and Bacher. Affirming, the court of appeals held that Ameritech's fraud came within the fraudulent-inducement exception to the economic-loss doctrine and that the doctrine did not apply to Bacher’s claim because Bacher and Ameritech lacked contractual privity. Ameritech petitioned the Wisconsin Supreme Court for review.