Donna Brenner v. National Casualty Company
2017 WI 38
| Wis. | 2017Background
- Charter Manufacturing leased an industrial building from Garland Brothers for ~20 years under a triple-net lease and installed heat‑treatment furnaces that protruded through holes in a metal grate floor above a below‑grade pit.
- At lease end Charter removed the furnaces, leaving holes covered by unmarked, untethered plywood boxes; Garland Brothers inspected the premises before taking possession and did not object.
- Garland Brothers later sold the property to Milwaukee World Festival, Inc. (MWF) "as‑is." MWF knew of the pit from inspections and environmental reports but did not remove the plywood covers before hiring Hunzinger to renovate.
- A Hunzinger employee, Russell Brenner, removed one plywood box, fell through a hole, and was seriously injured; the Brenners sued MWF, Garland Brothers, and Charter (among others).
- The trial court granted summary judgment for Charter based on caveat emptor (Restatement (Second) of Torts § 352); the court of appeals affirmed; MWF appealed to the Wisconsin Supreme Court.
- The Supreme Court affirmed: it declined to adopt Restatement (Third) § 51 comment t, held caveat emptor applies to former commercial tenants like Charter, and found no applicable exception (Restatement (Second) § 353) because Garland Brothers had reason to know of the hazard.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a former commercial tenant (Charter) can owe a continuing duty to subsequent entrants after surrendering possession | Brenner/MWF: a former possessor who created a risk should remain liable; Restatement (Third) § 51 (comment t) supports continuing duty | Charter: caveat emptor bars liability once possession transfers; former tenants are treated like vendors under Restatement (Second) § 352 | Held: Former commercial tenants are treated like vendors for caveat emptor; Charter had no continuing duty after surrendering possession |
| Whether Wisconsin should adopt Restatement (Third) § 51 (including comment t) to impose duties on former possessors | MWF: § 51 better reflects modern premises liability and should replace the ‘‘archaic’’ caveat emptor rule | Charter/Govt interests: adopting comment t would unduly expand liability, create unforeseeable exposure, upset settled bargains, and impose insurers on former possessors | Held: Court declined to adopt § 51 comment t; rejected sweeping change because of destabilizing retroactive/consequential effects |
| Whether the caveat emptor doctrine (Restatement (Second) § 352) applies to a former tenant who relinquished possession | MWF: § 352 applies only to vendors who sold property, not former tenants who merely vacated | Charter: a departing tenant occupies the vendor role on surrender and is subject to caveat emptor | Held: Caveat emptor applies to former commercial tenants who relinquished possession; tenant placed in vendor position on surrender |
| Whether the exception for concealment/non‑disclosure (Restatement (Second) § 353) defeats caveat emptor here | MWF: Charter concealed or failed to disclose the holes; § 353 removes vendor immunity | Charter: Garland Brothers (the vendee) knew or had reason to know of the condition; no § 353 exception | Held: § 353 inapplicable because Garland Brothers had reason to know (annual inspections, negotiations about filling the pit, final walkthrough and release); Charter immune |
Key Cases Cited
- Behrendt v. Gulf Underwriters Ins. Co., 318 Wis. 2d 622 (Wis. 2009) (articulates general duty to refrain from acts that unreasonably threaten others and frames duty analysis)
- Ollerman v. O'Rourke Co., Inc., 94 Wis. 2d 17 (Wis. 1980) (explains caveat emptor in real‑estate transactions and limited disclosure duties)
- Fisher v. Simon, 15 Wis. 2d 207 (Wis. 1961) (recognizes caveat emptor but carves narrow exceptions for builder‑vendors and disclosure duties)
- Antoniewicz v. Reszcynski, 70 Wis. 2d 836 (Wis. 1975) (abolished status‑based invitee/licensee distinction; duty is ordinary care under circumstances)
- Barnard v. Kellogg, 77 U.S. 383 (U.S. 1870) (classic statement of caveat emptor in sales law)
- Brock v. Rogers & Babler, Inc., 536 P.2d 778 (Alaska 1975) (applies vendor‑style caveat emptor protection to former lessee who relinquished possession)
- Great Atl. & Pac. Tea Co. v. 408 N.E.2d 144 (Ind. Ct. App. 1980) (similar conclusion that successor in possession assumes responsibility; former possessor not ordinarily liable)
- Preston v. Goldman, 720 P.2d 476 (Cal. 1986) (rejected imposing ongoing liability on former possessors due to insurance and control concerns)