State v. Dale C. Ploeckelman, 2007 WI App 31
For Ploeckelman: Rand Krueger
¶18 A representation can be acts or conduct. See Stecher v. State, 168 Wis. 183, 186, 169 N.W. 287 (1918). In Kaloti Enters., Inc. v. Kellogg Sales Co., 2005 WI 111, 283 Wis. 2d 555, 699 N.W.2d 205, our supreme court laid out the circumstances where a failure to disclose can constitute a representation. The court concluded:
a party to a business transaction has a duty to disclose a fact where: (1) the fact is material to the transaction; (2) the party with knowledge of that fact knows that the other party is about to enter into the transaction under a mistake as to the fact; (3) the fact is peculiarly and exclusively within the knowledge of one party, and the mistaken party could not reasonably be expected to discover it; and (4) on account of the objective circumstances, the mistaken party would reasonably expect disclosure of the fact.
Id., ¶20. If a duty to disclose exists, the failure to disclose is a representation. See Id., ¶13 (When there is a duty to disclose a fact, the law has treated the failure to disclose that fact “as equivalent to a representation of the nonexistence of the fact.”); see also Ollerman v. O’Rourke Co., 94 Wis. 2d 17, 26, 288 N.W.2d 95 (1980).
¶20 Additionally, the Restatement (Second) of Torts § 529 (1977), provides that a fraudulent misrepresentation includes “[a] representation stating the truth so far as it goes but which the maker knows or believes to be materially misleading because of his failure to state additional or qualifying matter .…” Both parties argue the representation at issue is the quality of the milk, which the milk hauler altered with Ploeckelman’s knowledge. However, Ploeckelman also made a representation as to the ownership of the milk to Mullins Cheese, which entitled him to payment based on the milk’s quality. Ploeckelman admitted he knew his milk quality was being altered by the milk hauler. This knowledge makes his representation to Mullins Cheese regarding his milk materially misleading because he failed to disclose the milk quality tampering, which raised the price of the milk.