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James Cape suit returned to circuit court

By Paul Snyder

James Cape & Sons Co.’s case against a former employee and two other construction firms is heading back to circuit court with some momentum for the now-defunct company.

“This is very favorable for Cape,” said Matthew Flynn, an attorney representing Cape in the Milwaukee office of Quarles & Brady LLP. “The court of appeals was quite explicit in its judgment and now the circuit court has to take that into account.”

The Wisconsin Supreme Court on Wednesday refused to review Cape’s case against Daniel Beaudoin, the company’s former project manager, as well as Manitowoc-based Vinton Construction Co. and Holmen-based Streu Construction Co.

Cape went out of business in 2005. The company’s lawsuit claims it is owed money it lost because Beaudoin shared the company’s bid numbers with Vinton and Streu.

A Racine County Circuit Court judge dismissed the suit, and said Beaudoin was partially motivated to help Cape by preventing the company from overextending itself with too many contracts.

A state court of appeals reversed the ruling in September.

“Imagine if that decision had been upheld,” said Brian Mullins, a construction attorney in the Madison office of Axley Brynelson LLP. “Someone in a competing company could convince their competition’s employee to cheat the company, because it’s in their best interest. The competing companies, in this case Vinton and Streu, would be immune of liability.”

According to the appellate court decision, the employer, not the employee, should decide how best to make money and grow.

Mullins, who is not associated with the case, said the appellate court decision helps to clarify when employers should be held responsible for their actions.

Attorneys for Vinton and Streu petitioned for a Supreme Court review, but the justices declined Wednesday without elaborating.

“Obviously it’s disappointing,” said Sean Bosack, an attorney in the Milwaukee office of Godfrey & Kahn SC representing Vinton. “We wish they would’ve granted review. But we will continue to vigorously defend the case.”

According to a study commissioned for the lawsuit by Cape’s attorneys, a bid-rigging scheme from 1997 to 2004 influenced bids on $224.4 million in contracts, $176.3 million of which went to Streu, Vinton or Cape.

Cape won $26.4 million worth of those contracts, Streu, which is no longer in business, got $82.7 million and Vinton $67.1 million.

Cape’s receiver, Michael Polsky, did not return repeated calls for comment.

Flynn declined to say how much money Cape is seeking in the lawsuit, but he said the bid-rigging scheme cost the company dearly.

“Cape was driven out of business,” he said. “Putting damages on that would result in a significant amount.”

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