Below v Norton (WI)

297 Wis 2d 781, 728 NW2d 156 (Wis 2008)

Facts: Shannon Below (Below) purchased a house from Dion and Dana Norton (Nortons) in 2004. Shortly after purchasing the home she discovered the sewer line between the house and the street was broken. In the property description report the Nortons listed a broken bathtub drain as the only plumbing defect.

After learning of the defect Below filed an action against the Nortons, asserting five causes of action: (1) intentional misrepresentation; (2) misrepresentation in violation of Wisconsin Statutes Sections 895.80 and 943.20(1)(d); (3) false advertising misrepresentation in violation of Section 100.18; (4) strict responsibility misrepresentation; and (5) negligent misrepresentation. After Below failed to file an amended complaint, the circuit court granted the Nortons' motion to dismiss holding that the Economic Loss Doctrine barred Below's tort misrepresentation claims.

Holding: Reversed and remanded in part, affirmed in part. The appellate court found the Economic Loss Doctrine does not apply to a false advertising claim under Section 100.18. The court further found that Below's pleadings, if proven true at trial, would support a judgment on the claim. Therefore, this claim was reversed and remanded for further proceedings.

The court went on to affirm the dismissal of Below's other tort claims. The court held that the Economic Loss Doctrine applies to situations where the theory of damages is purely economic and the parties' relationship is governed by a contract for a product. Finally the court extended the theory to residential real estate transactions. Prior courts had already extended it to commercial real estate transactions. The court stated that this would not leave purchasers unprotected, as they would still have breach of contract claims in some instances.

Opinion Year: 
By: ATG Underwriting Department | Posted on: Tue, 10/28/2008 - 6:01pm