Penny L. Springer v. Nohl Electric Products Corporation, 912 N.W.2d 1

Background

Mrs. Springer sued for her husband’s mesothelioma death, naming Powers Holdings, Inc. (Powers) and FBE2 though the asbestos exposures occurred decades earlier at FBE1, a predecessor whose assets were sold to FBE2 in 1983.
FBE2 acquired FBE1’s assets by an asset purchase agreement that expressly disclaimed assumption of most FBE1 liabilities; FBE2 (and later Powers) never manufactured or sold asbestos products.
Powers moved for summary judgment arguing it was not liable as a successor; the circuit court granted the motion and dismissed Powers and FBE2.
On appeal the court of appeals held that determinations of a “fraudulent transaction” should be governed by the Wisconsin Uniform Fraudulent Transfer Act (WUFTA) badges-of-fraud and remanded for a jury determination.
The Wisconsin Supreme Court granted review to decide whether WUFTA governs the common-law “fraudulent transaction” exception to successor non-liability and whether any remand was necessary.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does the WUFTA govern the common-law fraudulent-transaction exception to successor non-liability?	Springer argued the transfer should be judged using WUFTA badges of fraud.	Powers argued WUFTA does not supplant the common-law successor-liability doctrine.	WUFTA does not control; the common-law fraudulent-transaction exception remains separate.
Whether the asset transfer from FBE1 to FBE2 was fraudulent so as to impose successor liability on Powers	Springer contended FBE1 transferred assets to evade future asbestos liability, invoking the fraud exception.	Powers maintained there was no basis for successor liability: FBE2/Powers did not exist during exposure and never dealt in asbestos.	Court did not reach merits of fraudulent-transfer facts because claim for successor liability was not plead.
Whether summary judgment dismissal of Powers was erroneous	Springer later asserted successor-liability theories in response to summary judgment.	Powers sought judgment on the original tort theory; record showed FBE2/Powers couldn't be causal actors.	Summary judgment for Powers affirmed: pleadings did not state a successor-liability claim and factual record shows Powers could not have caused the injury.
Whether court may sua sponte reject complaint for failure to plead successor liability without additional briefing	Springer argued she should have opportunity to amend and that parties never challenged pleading sufficiency.	Court noted summary-judgment review requires examining pleadings and the deficiency was manifest; plaintiff conceded she had not pled common-law fraud at argument.	Court concluded it may decide pleading sufficiency in reviewing summary judgment and affirmed dismissal; dissent argued this deprived Springer of notice and opportunity to amend.

Key Cases Cited

Fish v. Amsted Indus., Inc., 126 Wis. 2d 293 (Wis. 1985) (describing general rule that asset purchaser does not assume seller's liabilities and listing exceptions)
Leannais v. Cincinnati, Inc., 565 F.2d 437 (7th Cir. 1977) (articulating exceptions to successor non-liability)
Chaveriat v. Williams Pipe Line Co., 11 F.3d 1420 (7th Cir. 1993) (discussing fraudulent-transaction exception and its roots in fraudulent-conveyance law)
Raytech Corp. v. White, 54 F.3d 187 (3d Cir. 1995) (holding intent to escape liability is required for fraudulent-transaction exception)
United States v. Bestfoods, 524 U.S. 51 (U.S. 1998) (statutes must speak directly to abrogate common-law principles)
Columbia Propane, L.P. v. Wis. Gas Co., 261 Wis. 2d 70 (Wis. 2003) (explaining commercial rationale for purchaser non-liability)