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Kaloti Enterprises7/8/2005
rranty" and thus "fail to allege any wrongdoing by defendants independent of . . . breach of contract and warranty." Id. Put another way, it was the performance of the contract that was really at issue, e.g., whether the product provided met the plaintiff's expectations, and thus contract law remedies, not tort remedies, were appropriate. See id.
In Wisconsin, federal courts applying Wisconsin law have attempted to predict how the Wisconsin Supreme Court would rule. See Cooper Power Sys., Inc. v. Union Carbide Chems. & Plastics Co., 123 F.3d 675, 682 (7th Cir. 1997) (predicting that Wisconsin would not allow an intentional misrepresentation claim seeking to recover economic damages); Budgetel Inns, Inc. v. Micros Sys., Inc., 8 F. Supp. 2d 1137, 1149 (E.D. Wis. 1998) (predicting that Wisconsin would provide a general fraud in the inducement exception); Raytheon Co. v. McGraw-Edison Co., 979 F. Supp. 858, 872 (E.D. Wis. 1997) (predicting that Wisconsin would adopt the narrow Huron Tool exception for fraud in the inducement claims).
Then, in Douglas-Hanson Co. v. BF Goodrich Co., 229 Wis. 2d 132, 598 N.W.2d 262 (Ct. App. 1999), the court of appeals held that there was a general fraud in the inducement exception to the economic loss doctrine. Id. at 137-38 (concluding that "the economic loss doctrine does not preclude a plaintiff's claim for intentional misrepresentation when the misrepresentation fraudulently induces a plaintiff to enter into the contract"); see also Kailin v. Armstrong, 2002 WI App 70, , 252 Wis. 2d 676, 643 N.W.2d 132 (applying the general fraud in the inducement exception as articulated in Douglas-Hanson). The Douglas-Hanson defendants petitioned this court for review, and due to a 3-3 decision by the participating justices, the court of appeals decision was affirmed. Douglas-Hanson Co. v. BF Goodrich Co., 2000 WI 22, -2, 233 Wis. 2d 276, 607 N.W.2d 621.
We were subsequently asked to consider the same question in Digicorp. Five justices participated in Digicorp, and we again issued a split decision, with Justice Prosser joining Justice Crooks' lead opinion, Justice Sykes concurring in part and dissenting in part, and Justices Bradley and Bablitch dissenting. Digicorp, 262 Wis. 2d 32, n.2. Justices Crooks and Prosser agreed on a Huron Tool-type exception, while Justices Bradley and Bablitch stated that the Douglas-Hanson general fraud in the inducement exception should have been adopted. Digicorp, 262 Wis. 2d 32, n.2. Justice Sykes, however, stated in her dissent that she would not adopt any exception to the economic loss doctrine for fraud. Id. Therefore, as the lead opinion summarized, "A majority [held] that a fraud in the inducement exception to the economic loss doctrine exists, but there an even split as to what the fraud in the inducement exception entails." Id.
We were again asked to address whether there was a fraud in the inducement exception to the economic loss doctrine in Tietsworth. The Tietsworth plaintiffs alleged that they had been fraudulently induced by a motorcycle manufacturer to buy motorcycles with defective cam bearing mechanisms. Tietsworth, 270 Wis. 2d 146, .
In Tietsworth, we explained that, in Digicorp, " majority of the justices participating . . . overruled Douglas-Hanson to the extent that it recognized a broad exception to the economic loss doctrine for all claims of fraud-in-the-inducement of a contract." Tietsworth, 270 Wis. 2d 146, . As to the Huron Tool-type exception applied in the Digicorp lead opinion, we decided that the facts of the Tietsworth case would not satisfy such an exception, as the fraud alleged in Tietsworth "plainly pertain to the character and quality of the go
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