Court Opinion

ID: 9488242
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:40:01.932605+00
Date Added: 2024-06-11T17:52:46.610336
License: Public Domain

FLAUM, Circuit Judge,
concurring in the judgment.
I too believe that the district court improperly dismissed Cadek’s claims for lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1). Cadek pled sufficient facts to allege that Great Lakes had engaged in fraud by its misrepresentation, and that he was therefore entitled to punitive damages, thus enabling him to meet the amount in controversy requirement.
First, Cadek sufficiently pled fraud by alleging a misrepresentation of fact by Great Lakes. Cadek expressly alleged that: (1) Great Lakes operated an automobile race track; (2) fire is a common hazard at race tracks; (3) Great Lakes had a fire truck and fire extinguishers on the race track on the date of the accident; and (4) Great Lakes’ fire fighting capabilities did not include the fire truck or the fire extinguishers, but only included an exterior spigot and garden hose. Although Great Lakes did not make any oral representations to Cadek, reviewing the allegations in the light most favorable to Cadek, Gould v. Artisoft, Inc., 1 F.3d 544, 546 (7th Cir.1993), Great Lakes’ conduct of placing the equipment on location, and keeping it there after it became dysfunctional, affirmatively misrepresented that the fire engine was manned and the extinguishers operational. See Lundin v. Shimanski 124 Wis.2d 175, 368 N.W.2d 676, 681 n. 5 (1985) (“a misrepresentation can be conveyed in one’s actions as well as by spoken words”); Goerke v. Vojvodich, 67 Wis.2d 102, 226 N.W.2d 211, 214 (1975) (recognizing that conduct can serve as a misrepresentation of fact). The fire truck’s presence at the race track could lead a reasonable person to believe that the truck and extinguishers were functional and capable of fighting fires.
I also agree that Great Lakes’ alleged fraud, which endangered Cadek’s physical safety, potentially could warrant punitive damages, and thereby allow him to meet the jurisdictional amount in controversy requirement, see 28 U.S.C. § 1332(a), and survive dismissal under 12(b)(1). We look to Wisconsin law in determining whether punitive damages are recoverable damages for the alleged tort. See Sharp Elecs. Corp. v. Copy Plus, Inc., 939 F.2d 513, 515 (7th Cir.1991). Under this state law, punitive damages are available for fraud. Jeffers v. Nysse, 98 Wis.2d 543, 297 N.W.2d 495, 499 (1980); see also Sharp, 939 F.2d at 515. While alleged tortious conduct must ordinarily rise to a level of wilful or wanton disregard for rights or interests to recover punitive damages, see Loehrke v. Wanta Builders, Inc., 151 Wis.2d 695, 445 N.W.2d 717, 721 (1989), the level of misconduct is lower when a defendant’s actions endanger the life and safety of others and the defendant has knowledge of the potentially dangerous situation. Wangen v. Ford Motor Co., 97 Wis.2d 260, 294 N.W.2d 437, 462 (1980); Walter v. Cessna Aircraft, 121 Wis.2d 221, 358 N.W.2d 816, 823 (Ct.App.1984). In the instant case, Cadek alleged sufficient facts that Great Lakes engaged in:
conduct the defendant knows or should have reason to know, not only that his conduct creates an unreasonable risk of harm, but also that there is a strong prob*1214ability, although not a substantial certainty, that the harm will result but, nevertheless, he proceeds with this conduct in reckless or conscious disregard of the consequences ...
Lundin, 368 N.W.2d at 687, n. 14 (quoting J. Ghiardi and J. Kirchner, Punitive Damages Law and Practice, ch. 5, § 5.01 at 8-9 (1984)). Cadek sufficiently pled that Great Lakes should have recognized the risks that accompany the absence of adequate fire fighting capabilities on an active race track and, in light of the frequency of fires on automobile race tracks, proceeded with its conduct and disregarded the potential harms, which ultimately became a reality. Thus, Cadek adequately alleged facts and circumstances showing a wilful disregard for his rights, making it clear that he “could recover punitive damages under the circumstances alleged in the complaint,” Sharp, 939 F.2d at 515, and meet the jurisdictional requirements.