Review granted in 'Below v. Norton'

(2005AP2855)

This case could determine if the economic loss doctrine applies to a residential real estate transaction between private individuals.

The economic loss doctrine is intended to bar tort claims for purely economic losses in situations when the relationship between two parties involves a contract for a product. The Supreme Court has previously applied this rule of law to a commercial real estate transaction, but has not previously decided whether the doctrine applies to sales of residential real estate.

In this case, Shannon Below had purchased a home from Dion and Dana Norton and sued after discovering a break in the sewer line between the home and the street. Below asserted five causes of action, including false advertising and four forms of misrepresentation. She attempted to amend her complaint to include breach of contract, but the trial court ruled it wasn’t properly filed. The trial court further ruled that Below had not alleged a proper claim for false advertising and that the other common law misrepresentation claims were barred by the economic loss doctrine.

The Court of Appeals [2007 WI APP 9] ruled that Below’s claim of false advertising was not barred by the economic loss doctrine and reversed that part of the decision, but affirmed the dismissal of the common law misrepresentation claims due to the economic loss doctrine. From Milwaukee County.