Faxon Sales Inc v. U-Line Corporation
ORDER signed by Judge J.P. Stadtmueller on 10/31/2017: GRANTING 22 Defendant's Motion to Dismiss and DISMISSING CASE. (cc: all counsel) (jm)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
FAXON SALES, INC.,
Case No. 17-CV-872-JPS
Plaintiff Faxon Sales Inc. (“Faxon”) was formerly a distributor of
refrigerators and ice makers manufactured by Defendant U-Line
Corporation (“U-Line”). In mid-2016, U-Line elected to terminate the
parties’ relationship as provided in the terms of their distributor agreement.
Faxon claims that this termination, made without good cause, amounted to
a violation of the franchisee protection laws of several northeastern States.
Faxon’s theory in this case is that despite express disavowals in the contract
of a franchisor-franchisee relationship, the parties entered into such a
relationship accidentally. It is this accidental franchise relationship which
forms the basis for Faxon’s claims.
U-Line has filed a motion to dismiss, arguing that the claims are
without merit and that the suit is untimely pursuant to the contract, which
provides a one-year statute of limitations for actions arising from it. For the
reasons stated below, the Court agrees with U-Line that Faxon’s action is
time-barred in this Court.
Federal Rule of Civil Procedure 12(b)(6) provides for dismissal of
complaints which fail to state a viable claim for relief. Fed. R. Civ. P.
12(b)(6). In reviewing the complaint, the Court is required to “accept as true
all of the well-pleaded facts in the complaint and draw all reasonable
inferences in favor of the plaintiff.” Kubiak v. City of Chicago, 810 F.3d 476,
480 (7th Cir. 2016) (citation omitted). The statute of limitations, an
affirmative defense, cannot be resolved via a motion to dismiss unless the
allegations themselves demonstrate that the claim is time-barred. See U.S.
Gypsum Co. v. Ind. Gas Co., Inc., 350 F.3d 623, 626 (7th Cir. 2003); Walker v.
Thompson, 288 F.3d 1005, 1009 (7th Cir. 2002).
Faxon is a Connecticut corporation that operates in the northeastern
United States. U-Line is based in Milwaukee. The two companies first
encountered each other in the early 1990s, when Faxon took over as a
distributor of U-Line refrigerators and ice makers from its predecessor,
Appliance Distributors of Ct., Inc. (“ADC”).
Three brothers of the O’Brien family owned ADC, which has been
dissolved, and they continue to own and operate Faxon. Faxon had two
major divisions, one supplying plumbing products and the other
distributing appliances, including U-Line’s products. By the end of the
parties’ relationship in 2016, eighty percent of Faxon’s appliancedistribution sales were generated from selling U-Line products.
Faxon and U-Line entered into a distributor contract granting Faxon
an exclusive right to distribute U-Line products in several areas in the
northeastern United States. The most recent iteration of this agreement was
executed in 2014.1 In the contract, the parties agreed that either could
The Court can consider the terms of the agreement without transforming
U-Line’s motion from a motion to dismiss into a motion for summary judgment,
since the document is central to the case and Faxon, which attached the document
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terminate the relationship without cause on thirty days’ notice. (Docket #201 ¶¶ 5–6). They further agreed that any disputes “arising out of or relating
to this Agreement, or any other aspect of the parties’ relationship, shall be
commenced no later than one (1) year following the date any such claim
arises.” Id. ¶ 7(d). Finally, the parties agreed that “[n]o franchise
relationship is created by the entering into or performance of this
Agreement,” nor would the parties be “joint ventures or partners,” nor
would one act as “the agent, employee or fiduciary of the other.” Id. ¶ 20(e).
The parties coexisted amicably for many decades, but things
changed suddenly in 2016. U-Line notified Faxon by letter dated May 30,
2016 that it elected to terminate its relationship with Faxon effective June
25, 2016. In the letter, U-Line stated that “any and all relationships between
[U-Line] and [Faxon] shall terminate” as of June 25, 2016, including the
relationship “as set forth in their Distributor Agreements.” (Docket #20-2 at
1). The letter gave no reason for the termination, and U-Line has never
contended that the termination was for cause. The termination went
forward as indicated in the letter, and the loss of U-Line products has
devastated Faxon’s appliance-distribution division. Furthermore, on June
7, 2016, Faxon learned in response to an email it sent to U-Line that U-Line
would not repurchase any of its inventory from Faxon. (Docket #20-3).
Faxon filed this action on June 22, 2017, which is more than a year
from the date of the termination letter and June 7, 2016 email, but within a
year of the effective date of the termination. In the amended complaint,
Faxon does not assert any breach of the parties’ contract. Rather, it asserts
to its complaint, does not challenge its authenticity. See Fed. R. Civ. P. 12(d); Hecker
v. Deere & Co., 556 F.3d 575, 582 (7th Cir. 2009).
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that U-Line violated the following laws by its without-cause termination
and its refusal to repurchase inventory: (1) the Connecticut Franchise Act
(“CFA”), Conn. Gen. Stat. § 42-133 et seq.; (2) the Connecticut Unfair Trade
Practices Act (“CUPTA”), Conn. Gen. Stat. § 42-110a et seq.; (3) the Rhode
Island Fair Dealership Act (“RIFDA”), 6 R.I. Gen. Laws § 60-50-1 et seq.; (4)
the New York Unfair Trade Practices Act (“NYUTPA”), N.Y. G.B.L. § 349;
(5) the Massachusetts Consumer Protection Act (“MCPA”), Mass. Gen.
Laws ch. 93A, § 1 et seq.; and (6) the New Hampshire Consumer Protection
Act (“NHCPA”), N.H. Rev. Stat § 358-A:1 et seq.
Among other requirements, the CFA and RIFDA prohibit a
franchisor from terminating a franchise relationship without good cause
and impose notice and inventory repurchasing obligations on any
attempted termination. Conn. Gen. Stat. § 42-133f; 6 R.I. Gen. Laws § 6-504(a). The CUPTA prohibits unfair or deceptive business practices, and a
claim under this statute can be premised on an underlying CFA violation.
Conn. Gen. Stat. § 42-110b; Bentley v. Greensky Trade Credit, LLC, 156 F. Supp.
3d 274, 288–89 (D. Conn. 2015). Similarly, the NYUTPA, MCPA, and
NHCPA broadly proscribe deceptive and unfair trade practices. N.Y. G.B.L.
§ 349; Mass. Gen. Laws ch. 93A, § 2(a); N.H. Rev. Stat. § 358-A:2.
Wisconsin’s Borrowing Statute
The Court finds that this action is untimely. To reach that conclusion,
the Court must answer a series of questions. The first and easiest question
is: whose law should apply to the statute-of-limitations analysis? The
jurisdiction—as this Court does in this case—to apply the choice-of-law
rules of the states in which they sit. Klaxon Co. v. Stentor Elec. Mfg. Co., 313
Page 4 of 17
U.S. 487, 496 (1941). Thus, this Court must apply Wisconsin’s choice-of-law
rules to decide whose statute of limitations applies. McMahon v. Pa. Life Ins.
Co., 891 F.2d 1251, 1257 (7th Cir. 1989).2
Wisconsin, like many states, has enacted a special choice-of-law rule
for potential conflicts between state statutes of limitation. It is called a
“borrowing statute,” and it is found at Wis. Stat. § 893.07. The statute
(1) If an action is brought in this state on a foreign cause of
action and the foreign period of limitation which applies has
expired, no action may be maintained in this state.
(2) If an action is brought in this state on a foreign cause of
action and the foreign period of limitation which applies to
that action has not expired, but the applicable Wisconsin
period of limitation has expired, no action may be maintained
in this state.
Wis. Stat. § 893.07. Put simply, Section 893.07 requires that in a case
involving a foreign cause of action, the shortest statute of limitations—
whether from Wisconsin or the foreign state—must apply. Terranova v.
Terranova, 883 F. Supp. 1273, 1277 (W.D. Wis. 1995); Wenke v. Gehl Co., 682
N.W.2d 405, 411 (Wis. 2004); Guertin v. Harbour Assurance Co. of Berm., Ltd.,
415, N.W.2d 831, 835 (Wis. 1987) (“The manifest intent of the legislature in
enacting this borrowing statute was to adopt the shortest possible limitation
period for actions litigated in this state potentially subject to more than one
statute of limitations.”).
Faxon says that the Court must “analyze the limitation of actions as if it
were the supreme court of the state for each state in which Faxon brings a statutory
claim.” (Docket #26 at 12). Under Klaxon, this is flat wrong. Because Faxon got off
the rails early in its statute-of-limitations argument, the remainder of its briefing
on the matter is largely unhelpful.
Page 5 of 17
Foreign Causes of Action
This leads the Court to the next questions to be addressed in the
limitations inquiry: are the causes of action in this case “foreign,” and, if so,
whose limitations period is shorter? On the first part, the Court finds that
all of Faxon’s claims are without doubt “foreign.” All of its myriad claims
are for violations of rights created by the legislatures of other States. None
of them raise questions of substantive Wisconsin law. Although the acts
causing the injuries—U-Line’s decision to terminate and not to repurchase
Faxon’s inventory—arguably occurred in Wisconsin, it would be specious
indeed to claim that a foreign State’s statutory cause of action is not to be
considered “foreign.” From this Court’s research, it appears that no
Wisconsin courts have expressly considered the question of how to
characterize foreign statutory causes of action, most decisions dealing
instead with common-law causes of action, whether sounding in contract
or tort, that exist in both Wisconsin and the foreign State. See, e.g., Abraham
v. Gen. Cas. Co. of Wis., 576 N.W.2d 46, 54 (Wis. 1998); Guertin, 415, N.W.2d
at 833; see also Johnson v. Deltadynamics, Inc., 813 F.2d 944, 945 (7th Cir. 1987).
But in McMahon, the Seventh Circuit faced an analogous situation.
There, a Wisconsin plaintiff entered into an employment contract with a
California defendant to perform work in Ontario. McMahon, 891 F.2d at
1258. The plaintiff sued on a theory of violation of the obligation of good
faith and fair dealing arising from the parties’ contract. Id. at 1259. While
Wisconsin and California both impose such a duty in contracts generally,
only California permitted a freestanding cause of action for its breach in
employment cases. Id. The Seventh Circuit concluded that California’s
statute of limitations should apply, since the plaintiff’s cause of action arose
only under foreign law and thus “is truly a ‘foreign cause of action’.” Id.
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Likewise, here the specific statutory rights to which Faxon clings arose
under the applicable State’s own laws, making them genuinely “foreign” in
the most fundamental sense of the word.3
Moreover, Faxon’s claims are, in essence, claims of tortious injury to
Faxon’s statutory rights. In tort cases, Wisconsin courts have determined
that a “foreign” cause of action is one where the injury occurred outside this
State. Guertin, 415 N.W.2d at 835; Faigin, 98 F.3d at 270.4 In this case, Faxon
suffered loss in its home state of Connecticut, or perhaps even in each
relevant State for an identifiable sum of loss incurred in that State as a result
of U-Line’s conduct. Either way, Faxon does not operate in Wisconsin, so
none of its loss occurred here. See Bell v. Employers Mut. Cas. Co. of Des
Moines, Iowa, 542 N.W.2d 824, 833 (Wis. Ct. App. 1995); Terranova, 883 F.
Supp. at 1278 (finding that “each of these tort claims is a foreign cause of
This is true even though Wisconsin has its own unfair practices and fair
dealership laws, for though Wisconsin and the other states have analogous rights,
there has been no contention that they are coterminous. In fact, Faxon’s allegations
reveal noticeable differences in the nature of the rights provided by each state and
the scope of the available remedies. See generally (Docket #20). This Court is not
prepared to call each statutory right identical simply because they exist in the same
general realm. This fact distinguishes this case from Office Supply Co., Inc. v.
Basic/Four Corp., 538 F. Supp. 776, 782 (E.D. Wis. 1982), where the court found that
a contract claim was not foreign where Wisconsin and California each allowed for
run-of-the-mill breach of contract actions.
It is important to appreciate that when determining what state’s
substantive law should apply in a particular case, Wisconsin courts assess the
parties’ contacts with each state and each state’s interests in the dispute. Guertin,
415 N.W.2d at 834. But in resolving choice-of-law questions about the applicable
limitations period, the rules are simple and straightforward, looking to specific
locations of certain portions of the relevant conduct. Id. at 834–35. The decision to
treat limitations questions in this way reflects a policy judgment of the Wisconsin
legislature to avoid uncertainty as to such matters and promote expedient
resolution of disputes, and hopefully obviate court intervention to answer such
questions. Id.; Faigin, 98 F.3d at 270.
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action under § 893.07 because the economic effects were felt only in
California, the place of plaintiffs’ residence”). The fact that U-Line’s injuryproducing conduct occurred here is irrelevant to determining the place of
injury. Studio & Partners, s.r.l. v. KI, No. 06-C-628, 2007 WL 3342597, at *3
(E.D. Wis. Nov. 7, 2007) (“[T]he injury occurs where it is felt rather than
where it originates: [t]he [place of injury] rule asks the practical question
‘who became poorer and where did they become poorer?’”) (internal
The existence of the parties’ contract does not weigh against this
conclusion. In breach of contract cases, the Wisconsin Supreme Court
instructs that an action is not foreign if the last significant event giving rise
to the claim occurred in Wisconsin. Abraham v. Gen. Cas. Co. of Wis., 576
N.W.2d 46, 53–54 (Wis. 1998); Terranova, 883 F. Supp. at 1278. In this case,
had there been a breach of contract claim, one might argue that U-Line’s
purported breach emanated from its termination decision, which occurred
in Wisconsin. See CMFG Life Ins. Co v. Credit Suisse Sec. (USA) LLC, No. 14–
cv–249–wmc, 2015 WL 4647000, at *5 (W.D. Wis. Aug. 5, 2015).
Recall, however, that Faxon has not asserted any breach of contract
claim against U-Line. In fact, Faxon’s theory of the case is that despite
express disavowals of a franchise relationship in the parties’ agreement,
they nevertheless formed an accidental franchise as provided for and
protected by certain state laws. Under this theory, it becomes clear that
although the relationship originally sprang from a contract, the injury
asserted is only to statutory rights, not rights arising from the contract
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directly. Thus, each cause of action asserted by Faxon is “foreign” within
the meaning of Section 893.07.5
The Shortest Limitations Period
This leaves the question of whose limitations period is shorter, the
foreign jurisdictions’ or Wisconsin’s. But within this question, the Court
faces another quandary: which limitations period under Wisconsin law
should it select for the comparison? Put differently, what is the “applicable
Wisconsin period of limitation” under Section 893.07? See Wis. Stat. §
893.07(2). Several candidates jump out: (1) the limitations period for claims
under the Wisconsin Fair Dealership Law (“WFDL”), which is one year,
Wis. Stat. § 893.93(3)(b); (2) the limitations period for claims under the
Wisconsin Deceptive Trade Practices Act (“WDTPA”), which is three years,
Wis. Stat. § 100.18(b)(3); and (3) the limitations period of one year provided
in the parties’ contract.6
Characterizing the statutory claims in this case as different from standard
contract claims is also consistent with the policy animating Wisconsin’s borrowing
statute. The statute “effectuates a Wisconsin legislative choice-of-law policy that
the shortest possible limitations period should govern actions litigated here that
could have been brought elsewhere, thereby eliminating any incentive plaintiffs
might have to forum shop for a more favorable limitations period.” Terranova, 883
F. Supp. at 1277 (citing Guertin, 415 N.W.2d at 835). Assuming for the sake of
argument that the proper characterization of Faxon’s claims is unclear—and
certainly characterization questions within choice of law are not always easy, see
63B Am. Jur. 2d Prods. Liab. § 1390—in order to ensure that Wisconsin’s policy
objectives are achieved, the Court is obliged to rely upon the shortest permissible
statute of limitations for these claims.
Like some of the other states at issue in this case, Wisconsin also has its
own unfair competition statute, Wis. Stat. § 100.20, but a claim may be made by a
private person under this Act only upon the defendant’s violation of an order
issued by the Wisconsin Department of Agriculture, Trade and Consumer
Protection. See id.; Wyatt v. Philip Morris USA, Inc., No. 09–C–0597, 2013 WL
4046334, at *5 (E.D. Wis. Aug. 8, 2013). No such order has been cited as relevant to
this case. Additionally, another Wisconsin law applicable to franchise
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Against the backdrop of well-settled Wisconsin law, the Court
concludes that the contractual limitations period must control. Wisconsin
courts allow parties to bind themselves by contract to limitations periods
shorter than those provided by statute. State Dep’t of Pub. Welfare v. LeMere,
120 N.W.2d 695, 699 (Wis. 1963); Lundberg v. Interstate Bus. Men’s Accident
Ass’n, 156 N.W. 482, 484 (Wis. 1916); Keiting v. Skauge, 543 N.W.2d 565, 567
(Wis. Ct. App. 1995). Parties can do so for contractual, tort, or statutory
claims. See Heimeshoff v Hartford Life & Acc. Ins. Co., 134 S. Ct. 604, 611 (2013);
Wechsler v. HSBC Bank USA, N.A., 15-CV-5907 (JMF), 2016 WL 1688012, at
*4 (S.D.N.Y. Apr. 26, 2016) (“Contractual limitations periods are frequently
applied to statutory claims.”). “The dominant view in contract law is that
contractual limitations periods shorter than the statute of limitations are
permissible, provided they are reasonable.” Doe v. Blue Cross & Blue Shield
United of Wis., 112 F.3d 869, 874 (7th Cir. 1997). This rule is “consistent with
the principle of party autonomy that underlies the law of contracts.” Id.
In this case, the contractual limitations period governs claims
“arising out of or relating to this Agreement, or any other aspect of the
parties’ relationship,” (Docket #20-1 ¶ 7(d)), broad language which
undoubtedly encompasses Faxon’s statutory unfair competition and fair
dealership claims arising out of the parties’ relationship founded upon the
contract, Town Bank v. City Real Estate Dev., LLC, 793 N.W.2d 476, 484 (Wis.
2010) (Wisconsin courts seek to ascertain and enforce the true intentions of
the contracting parties, primarily by resort to the contract language itself,
which is construed according to its plain and ordinary meaning).
relationships is the Wisconsin Franchise Investment Law, Wis. Stat. § 553.01, but
this regulates the initiation of a franchise relationship, whereas the WFDL controls
termination, which is the situation faced here.
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The O’Briens, faced with a major contraction of otherwise applicable
statutes of limitation, suggest their lack of sophistication as a reason to find
the provision unenforceable. (Docket #26 at 13–14). They do so without
citation to pertinent authority, and the Court is not persuaded that a family
that has successfully run a corporation for decades prior to signing the
operative agreement in 2014 is in an unequal bargaining position relative to
another family-run corporation. Commercial parties are generally held to
their promises, “ensuring that each party receives the benefit of their
bargain.” Daanen & Janssen, Inc. v. Cedarapids, Inc., 573 N.W.2d 842, 846 (Wis.
1998); State Farm Mut. Auto Ins. Co. v. Ford Motor Co., 592 N.W.2d 201, 206
(Wis. 1999) (“Contract law. . .is based on obligations imposed by bargain,
and it allows parties to protect themselves through bargaining.”). Because
agreements struck between commercial parties generally do not involve
large disparities in bargaining power, courts have “no reason to intrude
into the parties’ allocation of the risk.” E. River S.S. Corp. v. Transamerica
Delaval, Inc., 476 U.S. 858, 872–73 (1986). Consequently, it is disingenuous
to claim that the O’Briens needed superior sophistication to comprehend
the plain text of the contractual limitations period.
Next, Faxon posits that the contractual limitations period is
unreasonable because it amounts to a waiver of rights and that, to be
enforceable, it needed to be made more prominent in the agreement and
more clearly define what was being waived. (Docket #26 at 13–14). This
argument fails too. First, a limitations period in a contract is not a waiver of
rights—it is simply a time limit on the assertion of those rights. Faxon’s
cited case, Atkins v. Swimwest Family Fitness Center, 691 N.W.2d 334, 339
(Wis. 2005), dealt with a liability waiver for injuries, but Faxon does not
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explain the analogy between a waiver of liability and an agreed-upon
period in which claims can be filed.
Second, however harsh the limitations period may be, it applies
equally to both parties, indicating that it is no more unfair as to Faxon than
to U-Line. See Levin v. Perkins, 107 N.W.2d 492, 495 (Wis. 1961) (even
unequal contractual terms are enforceable where there is adequate
consideration). Further, the O’Briens offer no reason, other than their “good
faith belief” that their claims did not accrue until June 25, 2016, (Docket #26
at 14), that they did not or could not have filed suit during the applicable
time period, See Chilcote v. Blue Cross & Blue Shield United of Wis., 841 F.
Supp. 877, 879 (E.D. Wis. 1993). Given the commercial nature of the parties
and the transaction, the Court is not convinced that the family’s
inadvertence constitutes sufficient cause to ignore the language of the
Finally, Faxon argues that the contractual limitations period is
unenforceable in light of anti-waiver provisions of the other states’ laws,
which provide that parties’ rights thereunder cannot be waived by contract.
(Docket #26 at 12–13). But these are irrelevant, since Wisconsin’s borrowing
statute points us to Wisconsin law for statute of limitations questions.
Because of this, only a Wisconsin anti-waiver provision could have any
effect. Wisconsin’s own franchise law, the WFDL, does indeed have an antiwaiver provision, but notably the WFDL also provides a one-year
limitations period. Wis. Stat. § 893.93(3)(b). This strongly suggests that a
one-year limitations period for claims like Faxon’s would be viewed as
reasonable in Wisconsin courts. Consequently, the Court finds that the oneyear period agreed upon by Faxon and U-Line is neither unreasonable nor
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The foregoing analysis demonstrates that the parties’ agreed
limitations period is the proper basis for the Court’s comparison between
Wisconsin law and the foreign laws’ limitations periods. Those foreign
statutes of limitation all exceed one year, and thus the one-year contractual
limitations period must be applied to Faxon’s claims. See Conn. Gen. Stat. §
42-110g(f) (three years); Corsello v. Verizon N.Y., Inc., 967 N.E.2d 1177, 1185
(N.Y. 2012) (three years for NYUPTA claims); Mass. Gen. Laws c. 260, § 5A
(four years); N.H. Rev. Stat. § 508:4, I (three years); Wis. Stat. § 893.07(2).
Having determined that Plaintiff’s causes of action are all foreign,
that Wisconsin law supplies the shortest statute of limitations, and that the
limitations period is one year, the Court must finally analyze when
Plaintiff’s claims accrued. U-Line asserts that its letter of May 30, 2016, or
its email of June 7, 2016, triggered Faxon’s claims and, as a result, the claims
are untimely. Faxon contends that the effective date of the termination, June
25, 2016, controls, thus rendering its action, which was filed on June 22,
2017, compliant with the contractual limitations period.
The contract does not say much about claim accrual. It simply
provides that claims must be made within one year “following the date any
such claim arises.” (Docket #20 ¶ 7(d)). As a general matter, under
Wisconsin law, a cause of action accrues when there is a claim capable of
present enforcement. Effert v. Heritage Mut. Ins. Co., 466 N.W.2d 660 (Wis.
Ct. App. 1990). Which action—the sending of the notice of termination letter
(as well as the June 7, 2016 email about inventory repurchasing) or the
actual termination a month later—marks the accrual of Faxon’s claims?
This question is best answered by reference to Wisconsin’s fair
dealership and unfair trade practices statutes, which provide close
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analogues of the rights conferred in the foreign statutes relied upon by
Faxon. First is the WFDL, which is closely related to Faxon’s two claims
arising under the Connecticut and Rhode Island fair dealership laws. Under
the WFDL, a claim for failure to have good cause for termination usually
accrues upon sending the notice of termination, not the effective date of the
termination. Les Moise, Inc. v. Rossignol Ski Co., Inc., 361 N.W.2d 653, 658
(Wis. 1985); Wis. Music Network, Inc. v. Muzak Ltd. P’ship, 822 F. Supp. 1332,
1335 (E.D. Wis. 1992).7
Here, Faxon’s claim is that U-Line failed to identify good cause for
terminating the parties’ relationship. In some cases, conduct occurring
between the time of the notice and the effective date of the termination
bears on the propriety of the termination. For instance, one company might
send a notice to another that it needs to cure identified deficiencies in
performance. See Chili Implement Co., Inc. v. CNH Am., LLC, 865 N.W.2d 885,
2015 WL 1934520, at *5 (Wis. Ct. App. 2015). In such cases, a claim for
omissions relating to good cause” after the notice is sent—that is, whether
there was a cure. Id.
However, Faxon says nothing about U-Line’s post-notice conduct.
Indeed, from the allegations of the amended complaint, it appears the
termination went forward as scheduled. There are no facts alleging that any
It would not be illogical to find that Faxon’s claims did not accrue until it
suffered financial harm in Connecticut; indeed, this the rule in most tort cases. See
Hennekens v. Hoerl, 465 N.W.2d 812, 816 (Wis. 1991). But the Wisconsin Supreme
Court has decided that question differently in this specific circumstance, Les Moise,
361 N.W.2d at 658, and this Court is not free to find otherwise. Consequently,
Faxon’s reliance on a host of out-of-state, non-precedential opinions on the matter
of accrual is unavailing. See (Docket #26 at 15–17).
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post-notice conduct affected whether or not U-Line had good cause for
termination. Nor are there any allegations suggesting the notice of
termination or the June 7, 2016 email were ambiguous. See Benson v. City of
Madison, 897 N.W.2d 16, 32 (Wis. 2017). U-Line simply told Faxon that
termination would occur on a future date certain, and so it did. Likewise,
in the June 7, 2016 email, U-Line unequivocally stated that it would not
repurchase Faxon’s inventory. The dates of the letter and email were the
first dates on which Faxon could have sustained a claim for violations of its
The other pertinent law is the WDTPA, Wis. Stat. § 100.18, which is
analogous to the remainder of Faxon’s claims arising under consumer
protection and unfair practices statutes of Connecticut, Massachusetts,
New Hampshire, and New York.8 Claims under the WDTPA accrue upon
the “occurrence of the unlawful act or practice which is the subject of the
action.” Wis. Stat. § 100.18(11)(b)(3). According to Wisconsin courts, accrual
does not depend upon the plaintiff’s discovery of the violation or whether
he has suffered any injury at the time of the violation. Selzer v. Brunsell Bros.,
Ltd., 652 N.W.2d 806, 815 (Wis. Ct. App. 2002); Kain v. Bluemound E. Indus.
Park, Inc., 635 N.W.2d 640, 645 (Wis. Ct. App. 2001). Thus, like the WFDL,
In language and purpose, the NYUTPA claim is probably more closely
related to Wisconsin’s unfair competition law, Wis. Stat. § 100.20, than it is to the
WDTPA. See N.Y. G.B.L. § 349. As noted above, however, private rights of action
under Section 100.20 are extremely limited. See supra note 6. Thus, the Court
concludes that the WDTPA accrual framework is a better comparison.
Additionally, while Section 100.20 spells out no specific limitations period, it ties
private claims to a violation of a regulation promulgated under the statute. This
suggests that, like the WFDL and WDPTA, claims under Section 100.20 accrue
upon a violation of a particular regulation, not whenever the plaintiff suffers harm.
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Faxon’s statutory claims that are analogous to the WDTPA all accrued at
the moment of U-Line’s adverse actions, not at some later date when Faxon
finally suffered damages. As a result, all of Faxon’s claims accrued either
on May 30, 2016, the date of U-Line’s notice of termination, or on June 7,
2016, the date of the email concerning repurchasing inventory.9
Having tread a long and winding path through choice-of-law rules
and the nuances of Wisconsin’s borrowing statute, the Court finally reaches
its ultimate conclusion: Faxon’s claims accrued either on the date of ULine’s notice of termination or its June 7, 2016 email, which renders Faxon’s
complaint untimely under the applicable one-year limitations period
provided in the parties’ agreement. As a result, the Court must dismiss this
action. At the same time, this Court expresses no opinion on the timeliness
of Faxon’s claims in the courts of any other State.
IT IS ORDERED that Defendant’s motion to dismiss (Docket #22)
be and the same is hereby GRANTED; and
IT IS FURTHER ORDERED that this action be and the same is
The Court has emphasized throughout that the claims in this case are not
for breach of contract. However, even if one applied the accrual analysis for breach
of contract claims, the result is the same. Breach of contract claims accrue at the
moment of the breach, not when the injury occurs. CLL Assoc. Ltd. P’ship v.
Arrowhead Pac. Corp., 497 N.W.2d 115, 117 (Wis. 1993) (“In Wisconsin, a 90-year
line of precedent holds that ‘[i]n an action for breach of contract, the cause of action
accrues and the statute of limitations begins to run from the moment the breach
occurs. This is true whether or not the facts of the breach are known by the party
having the right to the action.’”) (quoting State v. Holland Plastics Co., 506, 331
N.W.2d 320, 325 (1983)).
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The Clerk of the Court is directed to enter judgment accordingly.
Dated at Milwaukee, Wisconsin, this 31st day of October, 2017.
BY THE COURT:
J. P. Stadtmueller
U.S. District Judge
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