Be Careful What you Say: Limits on Statements of Puffery and Determination of Puffery as a Matter of Law
Real Estate Law Update 08/05/13 David P. Muth, Natalie R. Remington
Puffery is generally viewed as a nonbinding promise concerning the quality of goods (i.e., world's greatest hamburgers sold here). Puffery is not a new concept under Wisconsin law, but what constitutes puffery remains a frequently litigated issue. In United Concrete & Construction, Inc. v. Red-D-Mix Concrete, Inc., 2013 WI 72, the Wisconsin Supreme Court not only further defined the limits of puffery, but also instructed trial courts how to approach questions of puffery in cases before them.
United Concrete ("United") purchased certain batches of concrete from Red-D-Mix that United maintained were defective. Specifically, United claimed the concrete generated excessive "bleed water" that damaged United's projects. United sued Red-D-Mix for, among other things, violations of Wis. Stat. § 100.18 alleging that Red-D-Mix made certain statements of fact about Red-D-Mix's product that were untrue. In particular, United alleged that a Red-D-Mix sales representative stated that problems United had previously experienced with Red-D-Mix's concrete - the excessive "bleed water" - had been resolved. Red-D-Mix did not deny that its sales representative made such a statement, but it challenged whether the statement could constitute an actionable untrue statement under Wis. Stat. § 100.18, instead characterizing the statement as puffery.
The trial court agreed with Red-D-Mix and dismissed United's Wis. Stat. § 100.18 claim on the grounds that the statement constituted puffery. The Court of Appeals reversed the trial court and held that whether the statement constituted puffery could only be decided at trial. The Wisconsin Supreme Court overruled the Court of Appeals, and held that a trial court could determine puffery before trial. The Wisconsin Supreme Court found that because there was no factual dispute about what was stated, a trial court is free to decide that a statement does or not does constitute puffery as a matter of law.
In regard to the specifics of the United case, the court found the statement by Red-D-Mix's sales representative that the prior problem with excessive bleed water had been resolved was not puffery, and was a representation of fact. In so doing, the court stated "we would be hard pressed to invent a hypothetical statement less similar to the vague and amorphous hype typically classified as puffery than a specific reference to a specific problem in a relationship between two specific parties in a highly specialized industry."
What does this mean for you? First, a trial court can decide on summary judgment whether or not a statement constitutes puffery as a matter of law, thereby potentially limiting the expense of defending and prosecuting puffery claims. Second, representations as to the character of goods directed at specific concerns of a customer or related to a prior defect may now give rise to actionable quasi-warranty claims. Third, make certain your sales representatives are properly trained as to what may be actionable statements as opposed to mere puffery to reduce your exposure.
If you have any questions concerning puffery or misrepresentation claims including products you sell or purchase, please contact David Muth at (414) 277-5621 / [email protected], Natalie Remington at (414) 277-5443 / [email protected], or your Quarles & Brady attorney.