March 14, 2022 – The Wisconsin Court of Appeals has held that statutes of repose and limitation bar a lawsuit filed by homeowners over the installation and repairs to stone cladding on their house.
Wascher v. ABC Insurance Company, 2020AP1961 (Feb. 9, 2022), the Court of Appeals District III held that neither the doctrine of equitable estoppel, the repair doctrine, nor the continuous treatment rule operated to extend the statutes of repose or limitation.
Problems With Stone
Thomas and Pamela Wascher hired Mathwig Builders (Mathwig) as the general contractor for the construction of their house in Greenville.
Jeff M. Brown is a legal writer for the State Bar of Wisconsin, Madison. He can be reached by
email or by phone at (608) 250-6126.
Mathwig hired two subcontractors to supply and install stone cladding on the house – Carved Stone (the supplier) and Natural Surfaces (the installer).
An inspector for the Town of Greenville granted the Waschers permission to occupy the house on Nov. 3, 2008. They moved in in mid-November, 2008.
Early in 2009, the Waschers noticed effervescence and a white substance seeping through the horizontal stone on the patio. In 2010, the effervescence had spread all over the stone on both horizontal and vertical surfaces.
Ongoing Repairs and a Release
The Waschers paid Carved Stone to repair the stone cladding. One of the company’s employees discovered that flashing had not been installed behind the stone – an oversight that allowed water to get behind the stone and into the patio.
In the summer of 2012, the Waschers saw stone falling off the outside vertical walls of their house. They again paid Carved Stone to repair the stone.
The Waschers claim that Carved Stone performed repairs on the house until 2017.
The Waschers filed a lawsuit against Natural Surfaces, Mathwig’s insurer, and the sub-contractors’ insurers on Nov. 20, 2018.
An Outagamie County Circuit Court dismissed the lawsuit in part, concluding that the Waschers’ negligence claims were barred by the economic loss doctrine.
When the defendants moved for summary judgment, the circuit court granted the motion for the breach of contract claims, ruling that the claims were barred by the statute of limitations and that equitable estoppel didn’t apply.
Seventeen Days Late
Writing for a three-judge panel, Presiding Judge Lisa Stark held that the statute of repose barred the Waschers’ negligence claims.
Wis. Stat. section 839.89 establishes a 10-year statute of repose for actions for injuries that result from improvements to real property, with the period commencing “immediately following the substantial completion of the improvement.”
The court of appeals held that in the Waschers’ case, the 10-year statute of repose began to run on Nov. 3, 2008, the date the town granted the Waschers permission to occupy the house.
In doing so, the court turned down the Waschers’ arguments that house was not substantially completed on Nov. 3, 2008 because the attic hadn’t been approved and the flashing had not been installed on that date.
Because the Waschers filed their lawsuit on Nov. 20, 2018, their negligence clams were barred by the statute of repose.
Six Years Late
Next, the court of appeals ruled that the six-year statute of limitations for contract actions (section 839.43(1)) barred the Waschers’ breach of contract claims.
The Waschers argued that a subsection of the statute of repose, section 839.89(3)(b), extended the time they had to file their lawsuit because the property damage occurred between eight and 10 years after substantial completion.
That section should supplant the six-year statute of limitations, the Waschers argued, and allow their claims to go forward because the defendants had damaged them between Nov. 3, 2015 and Nov. 3, 2018.
But Judge Stark pointed out that the court of appeals had rejected the same argument in
Kalahari Dev., LLC v. Iconica, Inc., 340 Wis. 2d 454, 811 N.W.2d 825 (2012).
Judge Stark then explained that the six-year statute of limitations barred the Waschers’ contract claims because such contract claims accrue upon breach, and any breach must have occurred before Nov. 3, 2008, the date the house was approved for occupancy.
Because the Waschers didn’t file suit until November 2018, they missed the deadline imposed by the statute of limitations by four years, Judge Stark wrote.
No Evidence of Concealment>
The court of appeals then held that nether the statute of limitations nor the statue of repose were extended by equitable estoppel, the repair doctrine, or the continuous treatment rule.
The Waschers argued that the “concealed deficiencies or defects” exception to the statute of repose set forth in section 893.89(4)(a) applied in their case. The court of appeals disagreed.
“Although the placement of the stone cladding on the house may have hidden the mortar from view and obscured the fact that flashing had not been installed, there is no evidence to suggest that Defendants placed the stone on the home with intent to conceal any alleged defects from the Waschers,” Judge Stark wrote.
Equitable Estoppel Doesn’t Apply
The doctrine of estoppel didn’t apply, Judge Stark explained, because the Waschers showed no evidence that they failed to file their lawsuit in time because they relied on any act or representation by Mathwig.
Nor could the Waschers show that Carved Stone or Natural Surfaces committed any fraudulent or inequitable conduct that the Waschers relied upon in delaying the filing of their lawsuit, Judge Stark noted.
The repair doctrine – which tolls a statute of limitations when multiple parties jointly repair construction defects – didn’t apply, Judge Stark wrote, because “no Wisconsin court has addressed or adopted the repair doctrine. We decline to do so as a matter of first impression in this case.”
In addition, no Wisconsin case applied the continuous treatment rule – which tolls the statute of limitations when a physician treats a patient for an ongoing problem – to a construction case, Judge Stark noted.