Osowski V Baxter

Key Facts

Transaction Type

Issues

• The court needed to determine if venue is proper in the Eastern District of Wisconsin for Osowski's misrepresentation and fraud claims against the Baxters. Osowski argued venue is proper because a substantial part of the events or omissions giving rise to his claims occurred in Wisconsin, where communications originated, where Osowski signed the Vessel Survey Agreement, where he received the survey report, and where he paid the survey fee. The Baxters argued venue is improper because all defendants reside in Iowa and the survey was conducted there. The court adopted a holistic approach considering the plaintiff's reliance and detrimental effects, finding that communications and documents were directed at Osowski in Wisconsin, making venue proper under § 1391(b)(2).
• The court needed to determine if venue is proper in the Eastern District of Wisconsin for Osowski's common law negligence claim. The court noted that while the crux of the alleged negligence occurred in Iowa (where the survey was conducted and Michael failed to supervise Edmond), the negligence claim arises from the same nucleus of operative facts as the properly venued misrepresentation and breach of contract claims. The court applied the doctrine of pendent venue, which allows a claim that is not properly venued standing alone to be heard by a court as long as another properly venued claim arising out of a common nucleus of operative facts is also brought at the same time in the same district. Therefore, the negligence claim is properly venued alongside the other claims.
• The court needed to determine if venue is proper in the Eastern District of Wisconsin for Osowski's breach of contract claim. The court considered factors including where the conduct underlying the breach occurred and where performance under the contract was to take place. While the survey itself was performed in Iowa, the court found that the contract was signed in Wisconsin, communications about the survey results were sent to Osowski in Wisconsin, the survey report was delivered to his email in Wisconsin, and payment was made from his Wisconsin bank account. The court concluded venue is proper because the false communications and inaccurate information in the survey report are the events underlying the breach of contract claim, and these were directed at Osowski in the Eastern District of Wisconsin.

Holdings

Legal Principles

• Under 28 U.S.C. § 1391(b)(2), venue is proper in a judicial district where a substantial part of the events or omissions giving rise to the claim occurred. Courts should adopt a holistic approach considering all events that form the historical predicate for the suit and have a close nexus to the claim, rather than focusing solely on defendants' activities. The crux of the parties' disagreement concerns which actions are most relevant to the venue analysis—the defendants' communication of the alleged misrepresentation or the plaintiff's receipt of the alleged misrepresentation.
• A negligence claim under Wisconsin common law requires a plaintiff to prove four elements: (1) existence of a duty of care on the part of the defendant; (2) breach of that duty of care; (3) causal connection between defendant's breach and plaintiff's injury; and (4) actual loss or damage resulting from the breach.
• In venue challenges under Rule 12(b)(3), the plaintiff bears the burden of establishing that venue is proper in the chosen district. The court may look beyond mere complaint allegations when venue is challenged and need not view allegations as the exclusive basis for its decision. The plaintiff must establish venue is proper in the chosen district.

Precedent Name

• Est. of Moore v. Dixon
• Hispec Wheel & Tire, Inc. v. Tredit Tire & Wheel Co.
• Hoida, Inc. v. M & I Midstate Bank
• Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. Dist. of Texas
• Imperial Crane Servs., Inc. v. Cloverdale Equip. Co.
• Deb v. SIRVA, Inc.
• Pacer Glob. Logistics, Inc. v. Nat'l Passenger R.R. Corp.
• Robillard v. Knutson
• Master Tech Prods., Inc. v. Smith
• PKWare, Inc. v. Meade
• Allstate Life Ins. Co. v. Stanley W. Burns, Inc.
• Schwarz v. Sellers Markets, Inc.

Cited Statute

• Wisconsin theft-by-fraud statutes
• Federal Rule of Civil Procedure 12(b)(3)
• 28 U.S.C. § 1406(a)
• Wisconsin Deceptive Trade Practices statute
• 28 U.S.C. § 1391

Judge Name

Passage Text

• Under Wisconsin law, while each cause of action for misrepresentation or fraud requires the defendant to make a false or untrue representation, a necessary element of each claim is that the plaintiff relied on the false representation to his detriment. See K & S Tool & Die Corp. v. Perfection Mach. Sales, Inc., 2007 WI 70, ¶ 19, 301 Wis. 2d 109, 121-22, 732 N.W.2d 792, 798-99 (for Wis. Stat. §100.18 claim); Malzewski v. Rapkin, 2006 WI App 183, ¶¶ 17, 19–21, 296 Wis. 2d 98, 111–14, 723 N.W.2d 156, 162–63 (for intentional misrepresentation, strict responsibility misrepresentation, negligent misrepresentation, and theft-by-fraud claims). In other words, although the defendant may have made the false representation, it is the plaintiff's reliance and the alleged detrimental effects of that reliance at the heart of such fraud claims. See Hispec Wheel & Tire, Inc. v. Tredit Tire & Wheel Co., No. 3:04-CV-340RM, 2005 WL 1983846, at *7 (N.D. Ind. Aug. 11, 2005). Thus, because the plaintiff's detrimental reliance on the false representation is 'indispensable to a valid fraud claim,' see id., numerous courts in this circuit have concluded that venue 'is proper in the district to which a document containing the misrepresentation at issue was sent,' Dixon, 460 F. Supp. 2d at 936 (internal quotation and citations omitted); see also Sarantakis, 2003 WL 1338087, at *7 ('Telephone conversations and correspondence can support venue under § 1391(b)(2) depending on the nature of the contacts and their relationship to the claim.')
• In this case, Osowski alleges the Baxters made misrepresentations in the Vessel Survey Agreement and the survey report. The Baxters sent the Agreement to Osowski in Wisconsin and Osowski signed the Agreement in Wisconsin. (Osowski Aff. ¶¶ 10–11; Ex. C.) Edmond contacted Osowski in Wisconsin during the inspection and allegedly made false statements regarding the condition of the boat. (Id. ¶¶ 14–16, Ex. B, E.) The Baxters sent Osowski a copy of the survey report to his email in Wisconsin. (Id. ¶ 19, Ex. F.) And Osowski paid the Baxters' survey fee from his Wisconsin bank account. (Id. ¶ 20.) Thus, a substantial portion of the events giving rise to Osowski's misrepresentation and fraud claims against the Baxters occurred in Wisconsin. For this reason, venue is proper in this district under § 1391(b)(2).
• Specifically, these courts consider 'of all the events that form the 'historical predicate' for the suit and that have a 'close nexus' to the claim to determine whether venue is proper in a given district.' Robillard, 2025 WL 1895986, at *5 (internal citation omitted). While the Seventh Circuit has not addressed this issue, I agree with the reasoning of those district courts in this circuit adopting the majority view of a holistic approach.

Damages / Relief Type