Legal Memorandum: Economic Loss Doctrine in WI

Issue: Under Wisconsin law, does the economic loss doctrine defeat a statutory cause of action?

In short, it does not.  The following authorities are instructive:

Below v. Norton, 310 Wis. 2d 713, 751 N.W.2d 351 (2008).  The Wisconsin Supreme Court determined that the economic loss doctrine defeats all common-law claims of intentional misrepresentation arising out of a real estate transaction.  The economic loss doctrine did not, however, defeat plaintiff’s statutory misrepresentation claim under Wis. Stat. § 100.18.

Rowan v. Bourget, 337 Wis. 2d 89, 803 N.W.2d 868 (Ct. App. 2011) (unpublished).  “In response to Below, the Wisconsin legislature enacted Wis. Stat. § 895.10, allowing claims for intentional misrepresentation in residential real estate transactions.”

Shister v. Patel, 322 Wis. 2d 222, 776 N.W.2d 632 (Ct. App. 2009).  “We note that earlier this year the legislature abrogated the holding in Below with respect to the ability of a buyer in a residential real estate transaction to bring a tort action against a seller for intentional misrepresentation.”

Stuart v. Weisflog’s Showroom Gallery, Inc., 308 Wis. 2d 103, 746 N.W.2d 762 (2008).  “We hold that the ELD is inapplicable to the Stuarts’ claims, and therefore, the ELD does not apply to bar those claims.  If we were to apply the ELD to bar the HIPA claims, we would be ignoring the public policies that are the basis for the HIPA.  We are satisfied that the ELD cannot apply to statutory claims, including those under HIPA, because of such public policies.”

Thelen v. Cremer, 334 Wis. […]