Grube v. Daun, Nos. 91-2312

CourtCourt of Appeals of Wisconsin
Writing for the CourtANDERSON
Citation496 N.W.2d 106,173 Wis.2d 30
PartiesGordon J. GRUBE and Julie Grube, Plaintiffs, v. John L. DAUN, Louis Achter and Secura Insurance, Defendants. Gordon J. GRUBE and Julie Grube, Plaintiffs-Appellants, v. Jerry THIEL, Defendant-Respondent. Gordon J. GRUBE and Julie Grube, Plaintiffs, v. Jerry THIEL, Defendant. Gordon J. GRUBE and Julie Grube, Plaintiffs-Appellants-Respondents, v. John L. DAUN and Louis Achter, Defendants-Respondents, Secura Insurance, Defendant-Co-Appellant. d
Decision Date11 November 1992
Docket NumberNos. 91-2312,91-2322

Page 106

496 N.W.2d 106
173 Wis.2d 30
Gordon J. GRUBE and Julie Grube, Plaintiffs,
v.
John L. DAUN, Louis Achter and Secura Insurance, Defendants.
Gordon J. GRUBE and Julie Grube, Plaintiffs-Appellants,
v.
Jerry THIEL, Defendant-Respondent.
Gordon J. GRUBE and Julie Grube, Plaintiffs,
v.
Jerry THIEL, Defendant.
Gordon J. GRUBE and Julie Grube, Plaintiffs-Appellants-Respondents,
v.
John L. DAUN and Louis Achter, Defendants-Respondents,
Secura Insurance, Defendant-Co-Appellant. d
Nos. 91-2312, 91-2322.
Court of Appeals of Wisconsin.
Submitted on Briefs June 30, 1992.
Opinion Released Nov. 11, 1992.
Opinion Filed Nov. 11, 1992.

Page 110

[173 Wis.2d 45] On behalf of plaintiffs-appellants-respondents Gordon J. Grube and Julie Grube, the cause was submitted on the briefs of Lutz, Burnett & McDermott of Chilton and Jerome L. Fox of Olson, Winter and Fox, Two Rivers.

On behalf of defendant-co-appellant Secura Ins., the cause was submitted on the briefs of John D. Claypool and Michael S. Siddall of Herrling, Clark, Hartzheim & Siddall, Ltd., Appleton.

On behalf of defendant-respondent Jerry Thiel, the cause was submitted on the brief of Keith G. Ondrasek of Keith G. Ondrasek, S.C., Chilton.

On behalf of defendant John L. Daun, the cause was submitted on the brief of William F. Fale of Fale, Fale & Hemsing, Sheboygan.

On behalf of defendant-respondent Louis Achter, the cause was submitted on the brief of Gordon E. Stillings of Franzoi & Franzoi, S.C. of Menasha and Gordon K. Aaron of Axel, Aaron & Goldman, Milwaukee.

Before NETTESHEIM, P.J., and BROWN and ANDERSON, JJ.

ANDERSON, Judge.

Gordon and Julie Grube appeal from the portion of an order granting Jerry Thiel's motion for summary judgment. They also appeal from the portion granting partial summary judgment to John Daun and Louis Achter. Secura Insurance (Secura) appeals the denial of summary judgment on Louis Achter's claims against Secura. 1

Page 111

Because we conclude that an "as is" clause is not necessarily a bar to claims based on negligence and misrepresentation when a real estate sales agent has made affirmative representations about an aspect of the property, we reverse the portion of the trial court's order granting summary judgment to Thiel and Daun. We also reverse that portion of the trial court's order granting [173 Wis.2d 46] partial summary judgment to Achter because a claim for strict responsibility for misrepresentation may not be stated against a former owner of the property who does not gain financially from a subsequent sale. Finally, we affirm that portion of the trial court's order denying Secura's motion for summary judgment because Secura is estopped from raising any challenges to coverage and therefore must indemnify Achter up to the limits of his policy.

FACTS

In 1974, Louis Achter bought from his father a farm located in the town of Brothertown in Calumet county. While either Louis or his father owned the property, an underground gasoline tank was installed for the farm's fuel storage. In 1978, Achter noticed that this fuel tank was leaking and he had the gasoline pumped out of the tank. He then stopped using the fuel tank. Achter never told anyone about the gasoline leak. 2

Secura provided insurance coverage for Achter from 1975 until 1986. The relevant parts of the farmowners policy state:

[173 Wis.2d 47] We will pay all sums arising out of any one loss which an insured person becomes legally obligated to pay as damages because of bodily injury or property damage covered by this policy.

If a claim is made or suit is brought against the insured person for liability under this coverage, we will defend the insured person at our expense, using lawyers of our choice. We are not obligated to defend after we have paid an amount equal to the limit of our liability. We may investigate or settle any claim or suit as we think appropriate.

In 1985, Achter sold the property to John Daun. Later that year, Daun sold a portion of the land and several buildings to Gordon and Julie Grube on an "as is" basis. The preprinted offer to purchase stated, "Seller warrants and represents to Buyer that Seller has no notice or knowledge of any ... (c) structural or mechanical defect of material significance in property, including inadequacy for normal use of mechanical systems, sanitary disposal systems and of well, and of unsafe well water according to state standards." The "as is" clause was written in as an exception to these warranties and representations and reads: "Buyer is buying the property in a [sic] as is condition without any warranties." Daun provided the Grubes with water and septic tests which were a condition of closing. After the Grubes took possession of the property, they discovered that the wells had been contaminated by the leaks from the underground gasoline tank. The Wisconsin Department of Natural Resources confirmed the existence of pollutants on the Grubes' land and assessed the cost of decontamination at over $90,000.

In December of 1988, the Grubes filed a complaint against Daun. Later amendments named Achter and Secura as additional defendants. Daun filed a cross-[173 Wis.2d 48] claim against Achter. Achter also filed a third-party complaint against Secura demanding

Page 112

that Secura provide Achter with both a defense and insurance coverage under his farmowners policy.

In October of 1989, the Grubes brought a separate action against Jerry Thiel, Daun's real estate broker. In February of 1990, the two suits were consolidated.

Daun filed a motion for summary judgment on the Grubes' claims. Achter filed motions for summary judgment against the claims of the Grubes, against the cross-claim of Daun, and on his own third-party claim against Secura. Thiel joined all motions of Daun and Achter against the Grubes. Secura filed a motion for summary judgment on Achter's third-party claim and the claims of the Grubes.

The trial court granted summary judgment dismissing all claims against Thiel, which consisted of negligence, intentional misrepresentation, strict responsibility for misrepresentation, negligent misrepresentation and violation of sec. 100.18, Stats., deceptive advertising practices. The court held that the negligence and misrepresentation claims were barred by the inclusion of an "as is" clause in the sales contract which eliminated any duty to inspect or disclose. It also held that there was no evidence of a "deceptive practice" within the meaning of sec. 100.18 and questioned whether the section applied in the real estate sales context.

The trial court also dismissed the Grubes' claims against Daun for breach of warranty, negligent misrepresentation, intentional misrepresentation, and strict responsibility for misrepresentation. The court reasoned that the breach of warranty and misrepresentation claims were barred by the "as is" clause, which eliminated any duty for Daun to investigate possible problems. Further, the court held there was no showing [173 Wis.2d 49] that Daun knew about the defects in the land or that he made any statements to the Grubes; therefore, Daun could not be held liable for misrepresentation.

The court granted summary judgment to Achter dismissing the Grubes' claim of strict responsibility for misrepresentation. The court did not explain its holding; it simply stated that the facts did not disclose any basis for this claim.

Finally, the trial court denied Secura's motion for summary judgment. The court held that the Grubes' claims against Achter fell within the policy's coverage and that the exclusion for damage to the insured's own property did not apply as the property was no longer owned by Achter. The court limited its holding, however, by stating, "[T]he insured's potential liability, however, must be limited to coverage for negligent acts."

The Grubes appeal the dismissal of all of their claims against Daun, the dismissal of one claim against Achter, and the dismissal of their case against Thiel. Secura appeals the denial of its motion for summary judgment against Achter. The appeals were consolidated by order of this court.

SUMMARY JUDGMENT OF THE GRUBES AGAINST THIEL

The first issue the Grubes raise is whether a real estate broker is protected from liability for misrepresentations and a failure to investigate by the insertion of an "as is" clause in the purchase contract when neither the broker nor the seller knew the land was contaminated. We conclude that a broker may be liable for misrepresentation when he or she makes a positive representation about an aspect of the property even if the property is sold "as is." For that reason, we reverse.

[173 Wis.2d 50] Thiel was Daun's real estate broker in the 1985 sale to the Grubes of the land and buildings at issue. Thiel also showed the property to the Grubes prior to their purchase. The land was sold to the Grubes on an "as is" basis, which Thiel pointed out to the Grubes before they signed the contract. It was several years after the purchase when the Grubes discovered that the wells on the property were contaminated by gasoline, a condition which existed before they bought the property.

As we stated before, the Grubes brought five causes of action against Thiel: (1) negligence, (2) negligent misrepresentation, (3) intentional misrepresentation, (4) strict responsibility, and (5) deceptive or misleading

Page 113

advertising in violation of sec. 100.18, Stats. The trial court dismissed all five claims upon Thiel's motion for summary judgment.

When reviewing the trial court's decision on a motion for summary judgment, we apply the same analysis as does the trial court. Driver v. Driver, 119 Wis.2d 65, 69, 349 N.W.2d 97, 100 (Ct.App.1984). The Wisconsin Supreme Court has summarized that analysis as follows:

The court must initially examine the pleadings to determine whether a claim has been stated and whether a material issue of fact is presented. If the complaint states a claim and the pleadings show the...

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144 practice notes
  • Cnh Am. Llc v. Int'l Union, No. 09–2001.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • May 16, 2011
    ...and negligent misrepresentation require proof of a material, false representation and detrimental reliance. See Grube v. Daun, 173 Wis.2d 30, 496 N.W.2d 106, 114 (Wis.Ct.App.1992); see also Ramsden v. Farm Credit Servs. of N. Cent. Wis. ACA, 223 Wis.2d 704, 590 N.W.2d 1, 5 (Wis.Ct.App.1998)......
  • Gennari v. Weichert Co. Realtors
    • United States
    • New Jersey Superior Court – Appellate Division
    • March 15, 1996
    ...defendant had an economic interest in the transaction. Gauerke v. Rozga, 112 Wis.2d 271, 332 N.W.2d 804, 807-09 (1983); Grube v. Daun, 173 Wis.2d 30, 496 N.W.2d 106, 114-15 (1992), review denied, 497 N.W.2d 130 (Wis.1993); Page 536 Reda v. Sincaban, 145 Wis.2d 266, 426 N.W.2d 100, 102, revi......
  • Fire Ins. Exchange v. Basten, No. 94-3377-FT
    • United States
    • United States State Supreme Court of Wisconsin
    • June 20, 1996
    ...exclusive means by which determinations of insurance coverage can be made is found in the appellate court's decision in Grube v. Daun, 173 Wis.2d 30, 496 N.W.2d 106 (Ct.App.1992) where the court noted that "[t]here are several procedures insurers can use to raise the coverage issue and thus......
  • Richey v. Patrick, No. 94-50
    • United States
    • United States State Supreme Court of Wyoming
    • October 18, 1995
    ...her agent from claims premised upon nondisclosure. See, e.g., Kaye v. Buehrle, 8 Ohio App.3d 381 , 457 N.E.2d 373 (1983). Grube v. Daun, 173 Wis.2d 30, 496 N.W.2d 106, 117 (1992). Furthermore, two other courts, in dicta, have concurred with the reasoning expressed by the Ohio and Wisconsin ......
  • Request a trial to view additional results
144 cases
  • Cnh Am. Llc v. Int'l Union, No. 09–2001.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • May 16, 2011
    ...and negligent misrepresentation require proof of a material, false representation and detrimental reliance. See Grube v. Daun, 173 Wis.2d 30, 496 N.W.2d 106, 114 (Wis.Ct.App.1992); see also Ramsden v. Farm Credit Servs. of N. Cent. Wis. ACA, 223 Wis.2d 704, 590 N.W.2d 1, 5 (Wis.Ct.App.1998)......
  • Gennari v. Weichert Co. Realtors
    • United States
    • New Jersey Superior Court – Appellate Division
    • March 15, 1996
    ...defendant had an economic interest in the transaction. Gauerke v. Rozga, 112 Wis.2d 271, 332 N.W.2d 804, 807-09 (1983); Grube v. Daun, 173 Wis.2d 30, 496 N.W.2d 106, 114-15 (1992), review denied, 497 N.W.2d 130 (Wis.1993); Page 536 Reda v. Sincaban, 145 Wis.2d 266, 426 N.W.2d 100, 102, revi......
  • Fire Ins. Exchange v. Basten, No. 94-3377-FT
    • United States
    • United States State Supreme Court of Wisconsin
    • June 20, 1996
    ...exclusive means by which determinations of insurance coverage can be made is found in the appellate court's decision in Grube v. Daun, 173 Wis.2d 30, 496 N.W.2d 106 (Ct.App.1992) where the court noted that "[t]here are several procedures insurers can use to raise the coverage issue and thus......
  • Richey v. Patrick, No. 94-50
    • United States
    • United States State Supreme Court of Wyoming
    • October 18, 1995
    ...her agent from claims premised upon nondisclosure. See, e.g., Kaye v. Buehrle, 8 Ohio App.3d 381 , 457 N.E.2d 373 (1983). Grube v. Daun, 173 Wis.2d 30, 496 N.W.2d 106, 117 (1992). Furthermore, two other courts, in dicta, have concurred with the reasoning expressed by the Ohio and Wisconsin ......
  • Request a trial to view additional results

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