Lake Altoona Rehab. & Prot. Dist. v. Jereczek

Lake Altoona Rehabilitation & Protection District (Lake District) (plaintiff) oversaw the maintenance of Lake Altoona. Arvid Jereczek was a seller of frac sand, a sand used in fracking. Lake District contracted with Jereczek, giving him the exclusive right to purchase sand Lake District dug up from the bottom of Lake Altoona. Jereczek was required to purchase at least 2,000 tons of sand at a rate of $1.50 per ton for five years. If Jereczek determined that the sand sold to him could not be used as frac sand, he had the right to cancel the contract with 30 days’ written notice. The Lake District made no warranty regarding the sand’s ability to be used as frac sand. In addition, the contract did not assume that Jereczek would actually be able to sell the sand as frac sand. In June 2012, Jereczek could no longer sell sand from Lake District as frac sand, and he stopped using sand from Lake District. However, Jereczek did not give the required 30 days’ written notice until October 2013. There was no dispute that the sand had no value and that, as a result, Lake District could not resell it after Jereczek’s refusal. Lake District brought suit against Jereczek, demanding, among other things, payment for the time period from July 2012 to November 2013. The trial court found that frustration of purpose barred Lake District’s lawsuit and entered judgment in favor of Jereczek. Lake District appealed to the Wisconsin Court of Appeals.