REVIEW of a decision of the Court of Appeals. Affirmed and cause remanded.
¶1 ANNETTE KINGSLAND ZIEGLER, J. This is a review
of a published decision of the court of appeals
that reversed and remanded an order of the Racine County Circuit Court, Judge
Stephen A. Simanek presiding, which granted summary judgment to Oracular
Milwaukee, Inc., Oracular, Inc., Oracular of Minnesota, LLC, and Oracular of
Michigan, Inc. (collectively Oracular) and dismissed Racine County's
breach of contract claim. Racine County
alleged that Oracular, a computer systems and programming consultant, breached
the Consulting Service Agreement (the Agreement) entered into between the
parties. The circuit court granted
summary judgment to Oracular on the grounds that Racine County's
failure to name an expert witness was deficient as a matter of law. According to the circuit court, the Agreement
was effectively a contract for professional services, for which the basis of
liability is a claim of negligence. Racine County
was therefore required to present expert testimony in order to demonstrate that
Oracular's performance fell below the standard of care in the computer
consulting industry. The circuit court
denied Racine County's
motion for reconsideration, and Racine
County appealed.
¶2 The court of appeals reversed and remanded, concluding that Racine
County was not required to present expert testimony because Oracular's alleged
breaches of the Agreement were within the realm of the average juror's ordinary
experience. Contrary to the circuit
court's conclusion, the court of appeals held that for purposes of this case,
computer consultants are not "professionals" and thereby not subject
to professional standards of care.
Instead, the court concluded that the Agreement between Racine County and Oracular was
a simple contract for services.
¶3 Oracular petitioned this court for review, and we accepted. Though on different grounds, we affirm the
decision of the court of appeals and remand to the circuit court for further
proceedings.
¶4 The issue before this court is whether in order to survive summary
judgment, Racine
County
was required to name an expert witness when the complaint alleged that Oracular
breached the parties' Consulting Service Agreement by failing to institute the
software as promised.
¶5 We conclude that in order to survive summary judgment, Racine County was not required
to name an expert witness. As alleged, Racine County's breach of
contract claim does not present issues so unusually complex as to require
expert testimony as a matter of law. In
so concluding, we do not close the door to the possibility that expert
testimony may later assist the trier of fact in evaluating the breach of
contract claim. Rather, we decide that
based upon the pleadings and affidavits, Racine County
was not required to name an expert witness in order to proceed. Moreover, the breach of contract claim
presents numerous genuine issues of material fact which otherwise preclude
summary judgment. Accordingly, though on
different grounds,
we affirm the decision of the court of appeals and remand to the circuit court
for further proceedings.
I.
FACTUAL BACKGROUND AND PROCEDURAL POSTURE
¶6 On November 10, 2003, Racine County
submitted a Request for Proposal (RFP) to prospective vendors, "seeking a
qualified consultant to upgrade [its] current Peoplesoft World software to
Peoplesoft One 8.0 and install Peoplesoft One Human Resource and Payroll
modules." In essence, Racine County
sought the assistance of a computer consultant, comprised of a "Project
Manager/Project Team," in the upgrade of its human resources, payroll, and
financial software systems. According to
the RFP, the project would include "software installation, data conversion
(for payroll only), integration with other applications, final implementation,
going live on Peoplesoft One, and training," and completion of the project
would "result in a fully operational system tailored to the needs of Racine County."
¶7 In outlining the project's scope, the RFP provided that
"[t]he Project Manager will be involved with defining the project scope
and creating the organization and structure needed to complete a successful
upgrade and implementation." In
addition, the RFP assigned the Project Manager training responsibilities:
Training: The Project Manager will:
a. Identify,
recommend and coordinate Racine
County's training needs.
b. Specify
the type——
i.
Formal
JDE training
ii.
Internal
workshops
iii.
Web
training
c. Assist
in the proper training of the County's project team to gain the necessary
understanding of the capabilities of the software.
d. Assist
in understanding the software's rich functionality to better identify and
establish accurate and realistic goals and objectives.
e. Provide
effective communication and debriefing of the instructor(s) allowing the
Project Manager to assist Racine
County to refine the
scope of business process analysis.
¶8 The RFP further provided that the project was to be completed in
three stages. Phase 1, titled "Set
up of Infrastructure and Configurative Network Computing," required the
consultant to "install and configure Peoplesoft One 8.0 on the deployment
server and set up a minimum of three fat client stations that will all run
locally." Phase 2 was titled
"Complete install, set up and training for new Peoplesoft One Human
Resources/Payroll." Within that
phase, the RFP outlined the current and required functionality of Racine County's
human resources and payroll systems.
Phase 3 was titled "Upgrade current functioning modules from
Peoplesoft World to Peoplesoft One."
¶9 Finally, the RFP listed several "Proposal
Requirements." Relevant to this
case, the RFP provided that "[v]endors shall submit a detailed
proposal" that includes a "Project Task List":
a.
Break down the work program into the three
phases ('1' through '3') as stated above . . . .
b.
Break
down each phase into technical and application activities.
c.
Submit a proposed GANT [sic] Chart
schedule listing all procedures including training for each phase of the
project. Identify the task name,
duration (no. of days), start date, finish date and party responsible for each
task.
¶10 On December 3, 2003, Oracular submitted to Racine County
a "Proposal for PeopleSoft Consulting" (the proposal). In the proposal's "Executive
Summary," Oracular stated its "intent to work with Racine County
to implement OneWorld as a new baseline enterprise software
solution." Oracular wrote that it
would "combine the talents of [its] consulting organization with the
talents of the Racine County
staff in order to complete this project on time and on budget." The proposal's "Preliminary Project
Plan" indicated that Oracular would "[p]lan a staggered approach to
begin each major area of accomplishment while focusing on a combined Go-Live
date of September 1, 2004."
Oracular also wrote, however, that "[a] detailed work plan will be
completed prior to beginning the project and will need to be verified by the
project team at that time."
¶11 The proposal also included a list of "Project
Assumptions." Two of those
assumptions were categorized as "Training & Education":
·
Racine
County will construct all
end-user procedures and training materials for the project.
·
All core training will be conducted internally
and delivered by the project consulting staff.
Training is to include guidance to key users on set-up or end-user
procedure and training manuals.
¶12 Finally, to complete the project, Oracular proposed a seven-phase
plan. Those seven phases were broken
down in a Gantt chart, attached to the proposal as Addendum A. The Gantt chart listed a project duration of
170 working days and a "Go-Live" date of September 6, 2004.
¶13 On January 12, 2004, Oracular submitted to Racine County
an additional addendum to its proposal, which made minor budget
adjustments. The addendum also provided:
"After reviewing and adjusting the proposed project plan we have
identified a total of 862 hours required to perform tasks by Racine County
financial representatives. This
dedication will be required from January 19, 2004 through September 10, 2004
for a total of 35 weeks."
¶14 Racine
County
selected Oracular as the vendor for its software upgrade project. On February 2, 2004, the parties entered into
a "Consulting Service Agreement," which incorporated by reference the
RFP, the proposal, Addendum A to the proposal, and the January 12, 2004, addendum
to the proposal. In the event of a
conflict or inconsistency among the documents, the Agreement instituted the
following prioritization: (a) the Agreement, (b) Addendum A to the proposal,
(c) the January 12, 2004, addendum to the proposal, (d) the proposal, and (e)
the RFP. Pursuant to the Agreement, the
total amount of the project was not to exceed $389,250. Oracular agreed to provide consulting
services to Racine County, and Racine County
agreed to accept consulting services and pay Oracular, on certain terms,
including:
a.
Proposal cost and project plan are based on
requirements outlined in the Request for Proposal submitted by Racine County except for the
following modifications:
i.
Project completion of Phase 1 through Phase 3
shall be started in a staggered approach with a combined Go-Live goal of
September 7, 2004.
In addition, the Agreement
included a termination provision, which provided that "[e]ither party may
terminate this Agreement and/or outstanding Project Proposals by written notice
of not less than fifteen days."
¶15 For reasons which we will discuss infra, Racine County terminated the
Agreement on February 16, 2006, and commenced this lawsuit against Oracular on
September 26, 2006. The complaint
alleged two causes of action: breach of contract and fraudulent representations
in violation of Wis. Stat. § 100.18
(2007-08). In particular, Racine County alleged that the
staff provided by Oracular was "for all practical purposes,
incompetent" and that Oracular misrepresented "a time table for
completion and implementation of the project." Oracular denied the allegations and
counterclaimed for breach of contract, quantum meruit, and promissory estoppel.
¶16 On October 1, 2007, Oracular moved for summary judgment on Racine County's
breach of contract claim. As its primary
grounds, Oracular asserted that Racine
County failed to carry
its burden of proving that Oracular breached the standard of care. According to Oracular, the Agreement in this
case was a contract for professional services, specifically computer software
programming services. Therefore, citing Hoven
v. Kelble, 79 Wis. 2d 444,
463, 256 N.W.2d 379
(1977), and Micro-Managers, Inc. v. Gregory, 147 Wis. 2d 500, 513, 434 N.W.2d 97 (Ct. App. 1988),
Oracular argued that Racine
County was required to
prove negligence. To do so, Racine County
needed expert testimony to demonstrate that Oracular's performance fell below
the standard of care in the computer consulting industry. Because Racine County
failed to name an expert witness, Oracular argued that it was entitled to
judgment as a matter of law on the breach of contract claim.
¶17 In opposition to Oracular's motion for summary judgment, Racine County
challenged Oracular's attempt to transform the breach of contract claim into a
negligence claim. Racine County
argued that expert testimony is not necessary to prove that Oracular breached
the Agreement by not completing the project on time and by failing to provide
competent training. Instead, Racine County employees were
capable of presenting the necessary "fact testimony" to prove that
Oracular did not provide the services contracted for.
¶18 Racine
County submitted employee
affidavits in support of its allegation that Oracular missed the original
project deadline (the Agreement's "Go-Live goal" date of September 7,
2004), as well as several succeeding promised deadlines. According to Racine County's Finance
Director, Douglas Stansil, "the project was, at most, 34% complete"
as of September 7, 2004. Stansil further
claimed that Oracular missed a September 27, 2004, extension deadline,
a September 2005 extension deadline, a December 2005 extension deadline, and
finally, a January 2006 extension deadline.
According to Stansil, by the time the Agreement was terminated on
February 16, 2006, "the project as a whole was still not more than 53%
done," and without a fully integrated software system, the project
"was of absolutely no value to Racine
County and was absolutely useless to Racine County."
¶19 Racine
County also submitted
several employee affidavits in support of its allegation that Oracular failed
to provide the contracted-for training.
For example, the affidavits of Racine County's
Human Resources Manager and payroll coordinator state that one of Oracular's
training consultants was herself unfamiliar with the software. In addition, Racine County's
systems analyst stated in his affidavit that Oracular's project manager
admitted that Oracular staffed the project for failure from the beginning. Racine
County argued to the
circuit court that these affidavits make evident that the employees' testimony,
without the aid of an expert witness, is sufficient to prove that Oracular
breached the Agreement.
¶20 On November 30, 2007, the circuit court granted Oracular's motion
for summary judgment and dismissed Racine
County's breach of
contract claim. At the motion hearing,
the court stated that the summary judgment dispute "boil[s] down to . . . the necessity or lack
of necessity of expert testimony to prove essentially what is pled as a breach
of contract." The court was
persuaded that "no matter what nomenclature" is used, "the basis
of liability is essentially negligence."
As support, the court cited Micro-Managers for the conclusion
that if a contract is viewed as the rendering of professional services, then
the basis of liability is a claim of negligence in failing to perform the
services with due care. See 147 Wis. 2d at 513. At issue in Micro-Managers was a
contract for the design and development of computer software. Id.
at 503-04. Given the complexity of
developing a functioning computer system, the circuit court concluded that
expert testimony is required in order for Racine County to prove that Oracular
breached the Agreement: "[A]s a matter of
law I believe the county would need to withstand the motion for summary
judgment, someone with a degree of expertise opining that Oracular's
performance fell below the standard of care required of a normal computer
consultant when engaged in a consulting contract." Racine
County moved for
reconsideration, which the circuit court denied on December 6, 2007.
¶21 On April 8, 2009, the court of appeals reversed the order granting
summary judgment to Oracular and remanded the case. Racine
County v. Oracular Milwaukee, Inc.,
2009 WI App 58, 317 Wis. 2d 790, 767 N.W.2d 280. Adopting an eight-factor test,
the court concluded that computer consultants like Oracular do not constitute
"professionals" for purposes of determining whether they are subject
to professional standards of care. See
id., ¶¶32-33. Therefore, the Agreement between Oracular and
Racine County was not a contract for
professional services but rather a simple contract for services. Id.,
¶33.
¶22 The court of appeals further concluded that Racine County is not required
to present expert testimony to recover on its breach of contract claim because
the alleged breaches are "within the realm of the ordinary experience of
the average juror." Id., ¶42. Expert testimony is required "when the
jury will be presented with complex [or] esoteric issues" because it will
assist the trier of fact. Id., ¶35
(citing Netzel v. State Sand & Gravel Co., 51 Wis. 2d 1, 7, 186 N.W.2d 258 (1971)); see
Wis. Stat. § 907.02. The court concluded that in this case, Racine County
alleges two major breaches of contract, neither of which is complex or
esoteric: the failure to provide training for Racine County's employees who
would be using the software and the failure to fulfill the contract on a timely
basis. Oracular, 317 Wis. 2d 790, ¶¶36, 37. Furthermore, the court of appeals decided
that it would reach the same result even if the Agreement between Oracular and Racine County was a
professional services contract:
Contrary to the circuit court's holding, expert
testimony is not required as a matter of law to prove negligence in performance
of a professional services contract. Hoven
and Micro-Managers require only that, in actions on professional
services contracts, negligence must be established for recovery; neither of
those cases mandate[s] expert testimony on professional services contracts.
Id., ¶39. In this case,
Racine County
did not allege that Oracular breached the Agreement by failing to comply with
industry standards; rather, Racine
County alleged that
Oracular breached the Agreement by not completing the project by the date
agreed to and by failing to provide competent training. Id.,
¶42.
¶23 Though on different grounds, we now affirm the decision of the
court of appeals and remand to the circuit court for further proceedings.
II.
STANDARD OF REVIEW
¶24 "'Whether the circuit court properly granted summary judgment
is a question of law that this court reviews de novo.'" Hocking v. City of Dodgeville, 2009 WI
70, ¶7, 318 Wis. 2d 681, 768 N.W.2d 552 (quoting Schmidt
v. N. States Power Co., 2007 WI 136, ¶24, 305 Wis. 2d 538, 742 N.W.2d 294). We apply the same standards as those used by
the circuit court, which are set forth in Wis. Stat. § 802.08. Id.; see also Noffke v. Bakke, 2009
WI 10, ¶9, 315 Wis. 2d 350, 760 N.W.2d 156. In addition, whether expert testimony is
necessary to prove a given claim is a question of law that we review
de novo. See Trinity
Lutheran Church v. Dorschner Excavating, Inc., 2006 WI App 22, ¶26, 289 Wis. 2d 252, 710 N.W.2d 680.
III. ANALYSIS
¶25 Summary judgment shall be granted "if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to any material
fact and that the moving party is entitled to a judgment as a matter of
law." Wis. Stat. § 802.08(2).
To make its determination, the court decides whether there is a genuine
issue of material fact; the court does not decide the fact. Grams v. Boss, 97 Wis. 2d 332, 338, 294 N.W.2d 473 (1980); see also
Camacho v. Trimble Irrevocable Trust, 2008 WI App 112, ¶11, 313 Wis. 2d 272, 756 N.W.2d 596. The court should "carefully
scrutinize[]" the materials offered by the moving party, Grams, 97
Wis. 2d at 339, and should not
grant summary judgment "unless the moving party demonstrates a right to a
judgment with such clarity as to leave no room for controversy," id.
at 338.
¶26 The party opposing summary judgment "may not rest upon the mere
allegations or denials of the pleadings" but instead, through affidavits
or otherwise, "must set forth specific facts showing that there is a
genuine issue for trial." Wis. Stat. § 802.08(3). If "for reasons stated," that party
cannot by affidavit present facts essential to justify its opposition, the
court may refuse the motion for summary judgment or may order a continuance to
permit such discovery to be had. § 802.08(4).
¶27 In this case, the circuit court improperly granted summary judgment
to Oracular. Based upon the pleadings
and affidavits, Racine
County was not required
to name an expert witness as a matter of law.
Moreover, the breach of contract claim presents numerous genuine issues
of material fact which preclude summary judgment.
A.
Expert Testimony
¶28 "The requirement of expert testimony is an extraordinary
one." White v. Leeder, 149 Wis. 2d 948, 960, 440 N.W.2d 557 (1989). Expert testimony is often required when
"unusually complex or esoteric" issues are before the jury because it
serves to assist the trier of fact. See
Wis. Stat. § 907.02;
White, 149 Wis. 2d at
960; City of Cedarburg Light & Water Comm'n v. Allis-Chalmers Mfg. Co.,
33 Wis. 2d 560, 567, 148 N.W.2d 13 (1967). In contrast, expert testimony is not
necessary to assist the trier of fact concerning matters of common knowledge or
those within the realm of ordinary experience.
See Netzel, 51 Wis. 2d at 6; Cramer v.
Theda Clark Mem'l Hosp., 45 Wis. 2d 147, 150, 172 N.W.2d 427 (1969). In fact, if the court or jury is able to draw
its own conclusions without the aid of expert testimony, "the admission of
such testimony is not only unnecessary but improper." Cramer, 45 Wis. 2d at 151. Of course, the admission of expert testimony
is within the sound discretion of the circuit court. Kerkman v. Hintz, 142 Wis. 2d 404, 422, 418 N.W.2d 795 (1988). Expert testimony is admissible provided that
the witness is "qualified as an expert by knowledge, skill, experience,
training, or education," and the testimony "will assist the trier of
fact to understand the evidence or to determine a fact in issue." Wis.
Stat. § 907.02.
¶29 In this case, in order to survive summary judgment, Racine County was not required
to name an expert witness. As a
preliminary point, Racine County
alleged breach of contract, not negligence.
There is no allegation that Oracular's performance failed to meet the
standards of the computer consulting industry——whatever those may or may not be. Accordingly, the issue is not whether Racine County is required to
present expert testimony in order to demonstrate that Oracular's performance
fell below the industry standard of care. Instead, the issue is whether in order to
survive summary judgment, Racine County
was required to name an expert witness when the complaint alleged that Oracular
breached the parties' Agreement.
¶30 As it was alleged in the complaint and presented in the affidavits,
Racine County's
breach of contract claim does not present issues so "unusually complex or
esoteric," White, 149 Wis. 2d at 960, as to demand
the assistance of expert testimony. See Wis. Stat. § 907.02.
Rather, the alleged breaches concern matters of common knowledge and are
within the realm of ordinary experience.
See Netzel, 51 Wis. 2d at 6; Cramer, 45
Wis. 2d at 150. In particular, Racine County
alleges that Oracular breached the Agreement by not completing the project on
time and by failing to provide competent training. On those alleged breaches, the trier of fact
is capable of drawing its own conclusions without the assistance of expert
testimony. See Cramer, 45 Wis. 2d at 151; Wis. Stat. § 907.02.
¶31 Based on its affidavits, Racine County
intends to produce evidence that Oracular breached the Agreement by not
completing the project on time. Racine County will argue that
the Agreement expressly states that "[p]roject completion of Phase 1
through Phase 3 shall be started in a staggered approach with a combined
Go-Live goal of September 7, 2004." If September 7, 2004, was intended as the
project deadline, see discussion of "Genuine Issues of Material
Fact" infra Part III.B., the fact-finder is capable of determining
for itself whether the project was indeed completed by that time. Similarly, the fact-finder can evaluate
whether the deadline was repeatedly modified and repeatedly missed, as Racine County intends to
argue. The question of whether the
software installation project was completed by a specified date is distinct
from the complexity of the work that goes into the installation——complexity that Racine County concedes. The former is not so "unusually complex
or esoteric," White, 149 Wis. 2d at 960, as to require
the assistance of expert testimony. See
Wis. Stat. § 907.02.
¶32 Racine
County
also intends to produce evidence that Oracular breached the Agreement by
failing to provide competent training.
As shown in the affidavits, several Racine County
employees will testify that one of Oracular's training consultants was herself
unfamiliar with the software and that Oracular's project manager admitted that
the project was staffed for failure.
Based upon that evidence, the fact-finder is capable of drawing upon
common knowledge and ordinary experience to determine whether Oracular provided
competent training. See Netzel,
51 Wis. 2d at 6; Cramer, 45
Wis. 2d at 150; Wis. Stat. § 907.02.
¶33 We conclude only that in order to survive summary judgment, Racine County was not required
to name an expert witness. In so
concluding, we do not close the door to the possibility that expert testimony
may later assist the trier of fact in evaluating Racine County's
breach of contract claim. Our point is
only that in the posture of summary judgment, Racine County
was not required to name an expert witness as a matter of law.
B.
Genuine Issues of Material Fact
¶34 We also conclude that the breach of contract claim presents
numerous genuine issues of material fact which preclude summary judgment at
this time. See Wis. Stat. § 802.08(2).
To demonstrate, we need point to only the most glaring of examples. See id. (precluding summary
judgment if there is a "genuine issue as to any material fact"
(emphasis added)). Whether the
Agreement's "Go-Live goal of September 7, 2004," was intended as a
firm deadline or only a target completion date presents a genuine issue of
material fact. See Younger v.
Rosenow Paper & Supply Co., Inc., 51 Wis. 2d 619,
629-30, 188 N.W.2d 507
(1971) ("While the legal effect to be given an agreement may, in a proper
case, be determined on a motion for summary judgment, where there is a dispute
as to the intent of the parties to the agreement, a fact issue is presented,
and summary judgment is inappropriate." (emphasis omitted)(footnotes
omitted)); Lemke v. Larsen Co., 35 Wis. 2d 427, 431, 151 N.W.2d 17 (1967). Likewise, Oracular's assertion that the
collaborative language used in the RFP and the proposal imposed "bilateral
performance" obligations on the parties, some of which were out of
Oracular's control, is disputed by Racine
County and therefore
presents a genuine issue of material fact.
Finally, there is a factual dispute as to which party is responsible for
the suspension of the project between the end of September 2004 and March 2005. Pursuant to Wis. Stat. § 802.08(2), any and all
of these genuine issues of material fact preclude summary judgment at this
time.
IV.
CONCLUSION
¶35 In summary, we conclude that in order to survive summary judgment, Racine County was not required
to name an expert witness. As alleged, Racine County's breach of
contract claim does not present issues so unusually complex as to require
expert testimony as a matter of law. In
so concluding, we do not close the door to the possibility that expert
testimony may later assist the trier of fact in evaluating the breach of
contract claim. Rather, we decide that
based upon the pleadings and affidavits, Racine County
was not required to name an expert witness in order to proceed. Moreover, the breach of contract claim
presents numerous genuine issues of material fact which otherwise preclude
summary judgment. Accordingly, though on
different grounds, we affirm the decision of the court of appeals and remand to
the circuit court for further proceedings.
By the Court.—The decision of the court of
appeals is affirmed, and the cause remanded to the circuit court for further
proceedings consistent with this opinion.