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Insurance Co. of North America v. Cease Electric Inc.12/17/2003
. Cease Electric Inc., d/b/a Zillmer Electric and Pekin Insurance Company appeal from a judgment awarding Cold Spring Egg Farm, Inc., and Insurance Company of North America damages for losses sustained due to the failure of a ventilation system Cease Electric installed in one of Cold Spring's hen barns and double taxable costs pursuant to Wis. Stat. ยง 807.01(3) (2001-02). The appellants present two primary challenges to the judgment on appeal. First, the appellants argue that the trial court erred in refusing to impose sanctions against Cold Spring for its alleged spoliation of evidence. We conclude that Cold Spring's conduct does not qualify as spoliation because the record fails to demonstrate that Cold Spring knew, or should have known, at the time of the destruction of the evidence that litigation was a distinct possibility and that Cold Spring knew, or should have known, that the evidence would be relevant to such litigation. The appellants also submit that the economic loss doctrine precludes Cold Spring's recovery under any tort theory. We hold that the purpose of the transaction between Cold Spring and Cease Electric was for services and the economic loss doctrine has not been expanded to cover services. We affirm.
. Cold Spring raises chickens to produce eggs at its egg farm. In the summer of 1996, Cold Spring hired Cease Electric to upgrade the ventilation system in one of its barns. The ventilation systems are required to bring fresh, cooler air into the barns so that the birds have sufficient oxygen to live. Cold Spring purchased new fans for the system from Aerotech, Incorporated.
. Prior to the installation of the new ventilation system, each ventilating fan had its own individual thermostat and operated independently of all other ventilating fans. The new ventilation system was designed so that a single controller would operate all of the fans in stages. As the temperature in the barn rose, the fan control would engage different fans to bring fresh air into the barn. As the temperature in the barn fell, the controller would turn off the fans accordingly. In addition to the primary fan control, the ventilation system was designed by the manufacturer to have a backup thermostat. In its instructions, the manufacturer recommended the use of a backup thermostat as a safety device in the event that the primary fan control failed to operate. The manufacturer also recommended wiring the backup thermostat to a power source that was separate from the power source for the primary fan control. Cold Spring retained Cease Electric to install the ventilation system's component parts, including the primary fan control and the backup thermostat. Brian Cease, who passed away in December 1997, installed the main fan control unit and the backup thermostat.
. In November 1996, Cold Spring terminated its relationship with Cease Electric. Cold Spring had become concerned that Cease Electric was not completing the projects correctly or in a timely fashion.
. On January 8, 1997, approximately three months after Cease Electric had completed wiring the ventilation system in the barn, the ventilation system failed. As a result of this failure, approximately 17,000 chickens died.
. On the day of the loss, Scott Hartwig, the manager of the Cold Spring operation, called Carroll Electric, a Cease Electric competitor, to the barn to respond to the situation. Al Dittmar, one of Carroll Electric's electricians, replaced the main fan control unit as well as the backup thermostat. Hartwig recalls Dittmar giving him the former primary fan control but not the old backup thermostat. He recalls that the replaced primary fan control had been placed in the office at Cold Spr
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