Gauerke v. Rozga

332 N.W.2d 804 (1983)

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Gauerke v. Rozga

Wisconsin Supreme Court
332 N.W.2d 804 (1983)

Facts

Robert and Ann Rozga (defendants) listed their Wisconsin hotel for sale. The Rozgas told their realtor, Gudim Realty, Inc. (Gudim) (defendant) that the hotel property was five and a half acres with 600 feet each of river frontage and highway frontage. The Rozgas approved a specification sheet for the property that included those dimensions. Kenwood and Elisabeth Gauerke (plaintiffs) were hotel buyers represented by Robert Frost Realty, Inc. (Frost) (defendant). Marvin Schulz (defendant), a Frost broker, obtained the specification sheet for the Rozgas’ property from Gudim and gave the Gauerkes the specification sheet with Frost’s logo at the top. The Gauerkes purchased the property based on the representations about the property’s dimensions but later realized that the property was actually much smaller. The Gauerkes sued the Rozgas, Gudim, Gudim’s insurer, Frost, Frost’s insurer, and Schulz, seeking damages for the misrepresentation regarding the property’s dimensions. All parties except Frost, Frost’s insurer, Schulz (collectively, the Frost parties), and Gudim settled before trial. At trial, the court instructed the jury that a defendant is strictly responsible for a misrepresentation if the defendant made a representation as a fact based on his own personal knowledge or in circumstances in which the defendant necessarily should have known the truth or untruth of the statement. The jury found Gudim and the Frost parties strictly responsible for the misrepresentation, determined damages of $10,000, and apportioned 40 percent to the Frost parties and 60 percent to Gudim. Gudim subsequently settled, and the court entered judgment against the Frost parties for $4,000. The Frost parties appealed, asserting that strict responsibility was inapplicable because Schulz, as Frost’s agent, could not have known the property’s dimensions without an investigation. The Frost parties alternatively argued that the trial court should have added the words “without an investigation” to the strict-responsibility instruction so that liability would have been proper only if Schulz had known the truth or untruth of the statement regarding the property’s dimensions without an investigation. The Frost parties also asserted that the jury should have been required to ascertain the Gauerkes’ negligence in not independently investigating the property dimensions and compare that negligence to the other parties’ strict responsibility to reduce the Gauerkes’ damages. The appellate court rejected the arguments and affirmed the trial court, and the Frost parties appealed to the Wisconsin Supreme Court.

Rule of Law

Issue

Holding and Reasoning (Ceci, J.)

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