A. E. Inv. Corp. v. Link Builders, Inc.

Decision Date18 February 1974
Docket NumberNo. 241,241
Citation214 N.W.2d 764,62 Wis.2d 479
PartiesA. E. INVESTMENT CORP., Respondent, v. LINK BUILDERS, INC., Defendant, DeQuardo, Robinson, Crouch & Associates, Inc., Appellant.
CourtWisconsin Supreme Court

Niebler & Niebler, John H. Niebler, Menomonee Falls, for appellant.

Charne, Glassner, Tehan, Clancy & Taitelman, Milwaukee, for respondent.


The demurrer to the cause of action is based on the single ground that the facts stated therein are not sufficient to constitute a cause of action. The defendant defines the question raised on the demurrer as being whether the defendant had a 'duty to protect the subtenant plaintiff's future economic interests from loss allegedly resulting from a condition of the building.' It responds to that question only by attempting to show that an architect owes no duty to a person with whom he is not in privity of contract. As a consequence, the defendant relies on the narrow argument that it has no responsibility for any economic loss to the plaintiff because it has no duty to the plaintiff at all and no responsibility to be answerable for any damages, irrespective of the nature of the loss.

Unfortunately, this approach to the question deprives this court from making any policy determination in respect to whether damages for economic losses of the type claimed herein should be allowed if we should conclude that the plaintiff has stated a cause of action.

We believe that the narrow concept of duty relied on by the defendant architect has long been discarded in Wisconsin law. The duty of any person is the obligation of due care to refrain from any act which will cause foreseeable harm to others even though the nature of that harm and the identity of the harmed person or harmed interest is unknown at the time of the act. This is the view of the minority in Palsgraf v. Long Island R. R. Co. (1928), 248 N.Y. 339, 162 N.E. 99. This court, by implication at least, adopted that view in Pfeifer v. Standard Gateway Theater, Inc. (1952), 262 Wis. 229, 55 N.W.2d 29, and expressly adopted the Palsgraf minority rationale in Klassa v. Milwaukee Gas Light Co. (1956), 273 Wis. 176, 77 N.W.2d 397. The history of this court's rejection of the no duty-no liability concept of the majority in Palsgraf is capsulized in Schilling v. Stockel (1965), 26 Wis.2d 525, 531, 133 N.W.2d 335, 338. We therein said:

'Commencing in 1952, with Pfeifer v. Standard Gateway Theater, Inc. (1952), 262 Wis. 229, 55 N.W.2d 29, we ruled on a number of cases in which we rejected 'the no-duty formula of Palsgraf and Waube (Waube v. Warrington, 216 Wis. 603, 258 N.W. 497),' to use the phraseology of Longberg v. H. L. Green Co. (1962), 15 Wis.2d 505, 516, 113 N.W.2d 129, 114 N.W.2d 435. See Colla v. Mandella (1957), 1 Wis.2d 594, 598, 85 N.W.2d 345, 64 A.L.R.2d 95, and Klassa v. Milwaukee Gas Light Co. (1956), 273 Wis. 176, 77 N.W.2d 397. Duty is still an important factor in determining whether an act is negligent. E.g. Szep v. Robinson (1963), 20 Wis.2d 284, 121 N.W.2d 753. However, once an act has been found to be negligent, we no longer look to see if there was a duty to the one who was in fact injured.'

A defendant's duty is established when it can be said that it was foreseeable that his act or omission to act may cause harm to someone. A party is negligent when he commits an act when some harm to someone is foreseeable. Once negligence is established, the defendant is liable for unforseeable consequences as well as foreseeable ones. In addition, he is liable to unforeseeable plaintiffs.

Pfeifer v. Standard Gateway Theater, Inc. (1952), 262 Wis. 229, 240, 55 N.W.2d 29, 35, stated:

'If the jury does determine that there was negligence, and that such negligence was a substantial factor in producing the injury, it is then for the court to decide as a matter of law whether or not considerations of public policy require that there be no liability.'

The consistent analyses of this court reveal that the question of duty is not an element of the court's policy determination. It is, rather, an ingredient in the determination of negligence. We stated in Schilling v. Stockel, supra, 26 Wis.2d page 531, 133 N.W.2d page 338, '. . . once an act has been found to be negligent, we no longer look to see if there was a duty to the one who was in fact injured.' In Cirillo v. Milwaukee (1967), 34 Wis.2d 705, 711, 150 N.W.2d 460, 463, we said:

'This court has often stated that 'harm must be reasonably foreseen as probable by a person of ordinary prudence under the circumstances, if conduct resulting in such harm is to constitute negligence.' There is no necessity, however, that the actual harm that resulted from the conduct be foreseen.'

Kemp v. Wisconsin Electric Power Co. (1969), 44 Wis.2d 571, 581, 172 N.W.2d 161, followed the same rationale.

In Schilling v. Stockel, supra, 26 Wis.2d page 532, 133 N.W.2d page 338, we said:

'In the Klassa Case, 273 Wis. at page 182, 77 N.W.2d (397) at page 401, we quoted approvingly the analysis of the Minnesota court in Christianson v. Chicago, St. P., M. & O.R. Co. (1896), 67 Minn. 94, 97, 69 N.W. 640, 641:

"Otherwise expressed, the law is that if the act is one which the party ought, in the exercise of ordinary care, to have anticipated was liable to result in injury to others, then he is liable for any injury proximately resulting from it, although he could not have anticipated the particular injury which did happen. Consequences which follow in unbroken sequence, without an intervening efficient cause, from the original negligent act, are natural and proximate; and for such consequences the original wrongdoer is responsible, even though he could not have foreseen the particular results which did follow."

As held in Schilling, once it is determined that a negligent act has been committed and that the act is a substantial factor in causing the harm, the question of duty is irrelevant and a finding of non-liability can be made only in terms of public policy.

In the instant case, consistent with the rationale of the above cases, the defendant's alleged failure to properly take into account the condition of the subsoil when designing and supervising the construction of the building was an act or omission that would foreseeably cause some harm to someone. The duty was to refrain from such act or omission. Where, as here, it is alleged that the architect knew the purpose for which the building was being constructed, it was clearly foreseeable that a future tenant of the building was within the ambit of the harm. Hence, the harm to the particular plaintiff was foreseeable, although under the methodology of this court, it is not necessary that either the person harmed or the type of harm that would result be foreseeable. The act or omission in the face of foreseeable harm was negligence.

The defendant places heavy emphasis on a series of recent cases decided by this court. Scheeler v. Bahr (1969), 41 Wis.2d 473, 164 N.W.2d 310; Fitzgerald v. Ludwig (1969), 41 Wis.2d 635, 165 N.W.2d 158; and Thomas v. Kells (1971), 53 Wis.2d 141, 191 N.W.2d 872. These cases, since they are concerned with special types of legal relationships, are out of the mainstream of negligence law in Wisconsin. The first two are concerned with the duties of an owner and occupier of land in respect to a plaintiff who comes upon the premises. Unless the landowner, by his conduct, places himself within an exception of the common law, he has an immunity from liability for negligence to one who comes upon his land. 1 The case of Thomas v. Kells speaks of parental duty. That case, like the two others relied upon by the defendant, has its origins in common law immunity. It is concerned with the inroads on the doctrine of parental immunity commenced in Goller v. White (1963), 20 Wis.2d 402, 122 N.W.2d 193. All three of these cases, although fully consonant with the present law in their narrow field, are inappropriate in describing the general duty that an alleged tortfeasor has in the ordinary negligence case.

The complaint on its face spells out facts sufficient to constitute a cause of action. The defendant architect failed to provide for soil conditions and as a result the floor settled. Because a harm to someone could be foreseen, the architect was guilty of negligence. If, as it is alleged in the complaint, such conduct was a substantial factor in causing the damage, the defendant is liable unless otherwise exonerated.

On the state of this record, the demurrer was properly overruled unless it is apparent that public policy reasons dictate the liability ought not follow.

The defendant placed its entire reliance upon the argument that there was no duty to the particular plaintiff, because there was no privity of contract with it. The privity-of-contract defense is, however, a legal defense; and as a legal defense, it was substantially shattered with the mandate of MacPherson v. Buick Motor Co. (1916), 217 N.Y. 382, 111 N.E. 1050. The reasoning of MacPherson was specifically applied to architects in the case of Inman v. Binghamton Housing Authority (1957), 3 N.Y.2d 137, 164 N.Y.S.2d 699, 143 N.E.2d 895. The universal acceptance of the MacPherson approach was recognized by Prosser, in Law of Torts (4th ed.), sec. 104, p. 681, when he stated:

'It is now the almost universal rule that the contractor is liable to all those who may foreseeably be injured by the structure, not only when he fails to disclose dangerous conditions known to him, but also when the work is negligently done. This applies not only to contractors . . . but also to . . . supervising architects and engineers.'

This court in Fisher v. Simon (1961), 15 Wis.2d 207, 112 N.W.2d 705, held a building contractor liable to third persons, stating:

'We can perceive no justifiable reason why a building contractor should be relieved from all liability to third persons for his negligence after completion and acceptance of the work...

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