Schreiber Foods, Inc. v. LEI WANG
651 F.3d 678
7th Cir.2011Background
- Diversity case; Wisconsin law governs; Schreiber sues Lei Wang for fraud seeking tort remedies.
- Parties: Lei Wang (foreign broker) and Mature Sky as intermediary; Schreiber alleges Yili intended to buy via Mature Sky.
- Schreiber substituted RMW-2 for D70 and concealed prior customs issue; shipment occurred but was not accepted by Yili.
- Schreiber contract was with Mature Sky, not directly with Yili; Lei Wang allegedly misrepresented Yili’s commitment.
- District court granted summary judgment: economic-loss doctrine bars the fraud claim; issue is whether doctrine applies.
- Court’s focus: whether Wisconsin’s economic-loss doctrine (and its exceptions) bars Schreiber’s tort claim against Lei Wang.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the interwoven fraud exception defeats the economic-loss doctrine | Schreiber argues Lei Wang’s fraud affected a contract-related risk and should be actionable in tort. | Wang contends the misrepresentation concerns contract risk and is within the interwoven exception to the doctrine. | Yes; interwoven exception applies and bars tort recovery. |
| Whether the services exception salvages the fraud claim | Cease Electric/related authorities suggest services provision could exempt from the doctrine. | Contract is for sale of goods, not predominantly services; services exception does not apply. | No; contract is for goods; services exception does not apply. |
Key Cases Cited
- Miller v. United States Steel Corp., 902 F.2d 573 (7th Cir. 1990) (Wisconsin doctrine; prefer contract law for commercial disputes)
- Kaloti Enterprises, Inc. v. Kellogg Sales Co., 699 N.W.2d 205 (Wis. 2005) (extraneous versus interwoven fraud distinction in Wisconsin doctrine)
- Digicorp, Inc. v. Ameritech Corp., 662 N.W.2d 652 (Wis. 2003) (fraud exceptions to economic-loss doctrine)
- All-Tech Telecom, Inc. v. Amway Corp., 174 F.3d 862 (7th Cir. 1999) (contractual remedies negate need for tort remedies for misrepresentation in goods contracts)
- Insurance Co. of North America v. Cease Electric Inc., 688 N.W.2d 462 (Wis. 2004) (services provider exception to economic-loss doctrine extended to all providers of services)