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1325 North Van Buren5/17/2005
ic loss] rule to apply). 276 Wis. 2d 361, -36 (some citations omitted). Thus, the supreme court concluded, in no uncertain terms, "that the economic loss doctrine is inapplicable to claims for the negligent provision of services." Id., .
As such, we must now consider the nature of the agreement between 1325 and T-3 to determine whether the economic loss doctrine applies. Here, we are concerned with a contract for the provision of "construction administration and management services." Such services are not contemplated by the U.C.C. and its protections and remedies. Although T-3 argues that only about $176,000 of the approximately $6 million contract price was allocated as the fee for construction management services, and, therefore, this cannot be considered a contract for services, we are not persuaded that that is dispositive. That is, it appears that while well over $5 million of the contract price may have been allocated for the cost of construction, that construction was being performed by subcontractors. To an extent, T-3 was merely the conduit through which the money flowed. T-3 was hired to manage the construction of the building; as part of that duty, it hired, and therefore also had to pay, subcontractors to perform work on the building. As such, it would be reasonable to conclude that the money was being utilized by T-3 to pay subcontractors in the course of its management of the construction, and was not paid to T-3 for any product it was personally constructing. Indeed, we have not been pointed to anything in the record indicating that T-3 performed any of the construction, and it conceded at oral argument that it had no design authority. As such, it does not seem reasonable to conclude that because only approximately $176,000 of the $6 million contract was specifically allocated to pay T-3 for its construction management services, that this was actually a contract for a product and not a contract for services.
Moreover, any distinction between the circumstances in Cease Electric and those here do not work to render this contract any less of a service contract. The circumstances in Cease Electric were straight forward--Cease Electric was provided with the component parts, given a one-page wiring schematic, and asked to install a ventilation system. The supreme court concluded that Cease Electric was hired to perform a service, and rejected Cease Electric's argument that it provided a product. Here, the facts are quite different. The agreement between 1325 and T-3 is considerably more sophisticated and extensive, but boiled down to its essence, it is still a contract for services. T-3 was supplied with the plans for the renovation, concededly had no design authority to alter those plans, and was hired to manage the construction and renovation of the warehouse. Such an agreement is not a contract for a product.
Furthermore, "mindful of the ramifications that would accompany a decision to extend the doctrine" to contracts for services, the supreme court noted that "Wisconsin courts have previously held that claims for professional malpractice lie both in tort and contract[, and b]ecause actions against professionals often involve purely economic loss without personal injury or property damage, the economic loss doctrine could be used to effectively extinguish such causes of action in tort." Id., (citations omitted). Thus, it was unwilling to put itself in the position of having to decide whether an exception should be made for some or all professional groups, id., , and instead decided to create a bright-line rule for service contracts, id., . Accordingly, any argument to the contrary--that the economic loss doctrine should apply to contracts for professional serv
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