Hackel, Jon v. National Feeds, Inc. et al

Filing 221

ORDER re 212 Memorandum in Support of Proposed Jury Instructions and Special Verdict filed by National Feeds, Inc., Ohio Casualty Insurance Company. It is ordered that defendant's challenges to plaintiff's misrepresentation claims are rejected. The court will provide instructions to the jury on these claims and the special verdict form will ask the jury to assess liability as to these two claims. Signed by District Judge William M. Conley on 1/10/14. (voc)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

JOHN HACKEL,
Plaintiff,

OPINION AND ORDER

v.
12-cv-642-wmc
NATIONAL FEEDS, INC., OHIO
CASUALTY INSURANCE CO.,
UNITED PET FOODS, INC., and
CINCINNATI INSURANCE CO.,
Defendants,
NATIONAL FEEDS, INC., and OHIO
CASUALTY INSURANCE CO.,
Cross Claimants,
v.
UNITED PET FOODS, INC., and
CINCINNATI INSURANCE CO.,
Cross Defendants.

Defendant National Feeds, Inc. objects to the inclusion of questions concerning
plaintiff’s misrepresentation claims on the liability special verdict form, arguing that
these claims are barred by the economic loss doctrine. (Dkt. #212.) These arguments
really amount to a very late motion to reconsider its summary judgment decision since
the court rejected them at that time. Regardless, the court will reject them again here.
First, as to National’s challenge to plaintiff’s position that the economic loss
doctrine does not apply to plaintiff’s statutory misrepresentation claim under Wis. Stat. §
100.18, recent case law reaffirms the Wisconsin Supreme Court’s holding in Kailin v.
Armstrong, 2002 WI App 70, ¶¶ 42-43, 252 Wis. 2d 676, 643 N.W.2d 132. In Kailin,

the supreme court explained the distinction between this statutory claim and a common
law misrepresentation claim as follows:
The legislature has plainly chosen in § 100.18 to provide
protection and remedies for false advertising that do not exist
at common law. The underpinnings of the economic loss
doctrine—protecting parties' freedom to allocate economic
risk by contract, encouraging the purchaser to assume,
allocate, or insure against that risk, and maintaining the
fundamental distinction between tort and contract law—are
either irrelevant to, or inconsistent with, that legislative
choice.
Id. at ¶ 42.1
In response, National argues that a more recent case -- Kaloti Enters., Inc. v. Kellogg
Sales Co., 2005 WI 111, 283 Wis. 2d 555, 699 N.W.2d 205 -- somehow alters the
holding in Kailin. As National acknowledges, Kaloti does not overrule Kailin. Instead,
the Wisconsin Supreme Court explained an exception to common law misrepresentation
claims in Kaloti. 2005 WI ¶¶ 12, 27 (noting common law intentional misrepresentation
claim at issue and deciding whether economic loss doctrine barred that claim). Again,
however, there is no indication that such a common law exception should apply to a
statutory claim created by the Wisconsin Legislature like plaintiff’s § 100.18 claim since
the economic loss doctrine does not apply in the first instance to statutory remedies any
more than to those created by contract. On the contrary, the Wisconsin Supreme Court
reaffirmed its holding in Kailin in a more recent opinion, which actually post-dates Kaloti.
See Below v. Norton, 2008 WI 77, ¶ 42, 310 Wis. 2d 713, 751 N.W.2d 351 (explaining

1

While the jury instructions and verdict form label plaintiff’s claim as “intentional
misrepresentation,” the claim is a § 100.18 claim as described in the instructions.
2

that the economic loss doctrine “still leaves statutory and contractual remedies available
where misrepresentation occurred,” discussing plaintiff’s § 100.18 claim); see also Shister v.
Patel, 2009 WI App 163, ¶ 7 n.5, 322 Wis. 2d 222, 776 N.W.2d 632 (citing Kailin and
Below).2
Second, National argues that all of plaintiff’s misrepresentation claims should be
dismissed because they do not fall within the fraudulent inducement exception to the
economic loss doctrine. (National’s Br. (dkt. #212) 4-5.) This argument is something of
a strawman, because plaintiff never argued and need not demonstrate that his negligent
misrepresentation claim falls within the fraudulent inducement exception.

Instead,

plaintiff argued and the court found that a genuine issue of material fact exists as to
whether all of plaintiff’s tort claims fall within the damage to other property exception to
the economic loss doctrine. National offers no support for its implicit argument that both
exceptions must apply for plaintiff to proceed on his negligent misrepresentation claim,
nor can the court articulate a cogent argument why this should be so. Assuming that the
jury finds that no reasonable farmer would have foreseen the risk of injury alleged here,
plaintiff’s negligent misrepresentation claim falls outside of the economic loss doctrine,
without the need to consider whether it also survives because of the fraudulent
inducement exception.

2

National’s other issues with plaintiff’s § 100.18 claim concern whether the claim was
made to the public. As discussed extensively in the court’s summary judgment opinion,
this is an issue for the jury, and the jury instructions describe the public statement
element as a necessary finding for National to be found liable. (See 12/9/13 Op. & Order
(dkt. #155) 27-28.)
3

ORDER
IT IS ORDERED that defendant National Feeds, Inc.’s challenges to plaintiff’s
misrepresentation claims are rejected. The court will provide instructions to the jury on
these claims and the special verdict form will ask the jury to assess liability as to these
two claims.
Entered this 10th of January, 2014.
BY THE COURT:
/s/
________________________________________
WILLIAM M. CONLEY
District Judge

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