Construction & Public Contract Law Section Blog: Do Not Overreact to the Wosinski Decision :

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  • Construction & Public Contract Law Section Blog
    February
    14
    2018

    Do Not Overreact to the Wosinski Decision

    Brian R. Smigelski

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    While a recent Wisconsin Court of Appeals decision may appear to weaken the statute of repose governing construction projects, attorneys should thoroughly analyze all the issues before deciding if a construction claim is timely. Brian Smigelski discusses the effect of the decision in Wosinski v. Advanced Cast Stone Co.

    In Wosinski v. Advanced Cast Stone Co.1, the District I Wisconsin Court of Appeals recently affirmed a jury verdict/trial court decision that the fraud/concealment exception to the statute of repose (Wis. Stat. section 893.89(4)(a)) applied, and thus, the 10-year statute of repose did not bar the plaintiffs’ construction defect claims against the contractor in a personal injury action.

    While at first blush the Wosinski court’s liberal interpretation of the fraud/concealment exception may appear to undermine any defense by a contractor against a stale claim, this is not the case for several reasons:

    Brian R. Smigelski com brs dewittross Brian R. Smigelski, Marquette 1987, is a shareholder with DeWitt Ross & Stevens s.c., Brookfield, where he concentrates his practice in civil litigation, with an emphasis in construction law.

    First, Wosinski may be narrowly construed to apply to the facts in that case. The Wosinski court provided little analysis in determining that the specific and unique facts before it were sufficient to sustain the jury’s finding that the fraud/concealment exception applied. Given this, a party may certainly seek to argue that the facts in its case are readily distinguishable and Wosinski therefore does not govern its dispute.

    Second, attorneys in a run‑of-the-mill construction defect case should still seriously consider the one-two punch of the breach of contract statute of limitations and the Economic Loss Doctrine.

    This powerful combination was demonstrated in Kalahari Development, LLC v. Iconica, Inc.2 In Kalahari, the court of appeals considered the interplay between the statute of repose and the breach of contract statute of limitations, Wis. Stat. section 893.43. The plaintiff in that case contended that the statute of repose superseded the breach of contract statute of limitations for a construction defect. The court disagreed, and held that they operated independently. Thus, regardless of whether the statute of repose applied, the defendant could still rely upon the applicable statute of limitations to bar the claim.3

    While a plaintiff may try to circumvent the six‑year breach of contract statute of limitations by bringing a negligence action and contending that the discovery rule delays the accrual of the cause of action (and thus the commencement of the period of limitations), this tactic should be barred by the Economic Loss Doctrine. As the Kalahari court also concluded, with some exceptions, the Economic Loss Doctrine generally bars tort claims arising out of a contractor’s work on a construction project.4

    Finally, the Wisconsin legislature is also currently considering legislation – Assembly Bill 773/Senate Bill 645 – that would shorten the exposure period for injuries caused by improvements to real property from 10 years to six years under Wis. Stat. section 893.89. If passed, this legislation could also enhance the effect of the statute of repose in barring a construction defect claim by reducing the exposure period to six years.

    Accordingly, the impact of Wosinski should be carefully considered before concluding that a typical construction defect claim is unlikely to be time‑barred.

    Endnotes

    1 2017 WI App 51, 377 Wis. 2d 596, 901 N.W.2d 797

    2 2012 WI App 34, 340 Wis. 2d 454, 811 N.W.2d 825

    3 Id. at ¶ 11.

    4 Id. at ¶ 24.





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