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Paulan v. Sigmund3/23/2005
. Kenneth R. Paulan hired Robert Sigmund to install two skylights in a home and Sigmund damaged the roof of the home by cutting three roof trusses. Paulan appeals from a judgment dismissing Sigmund's insurer, American Family Mutual Insurance Company. He also challenges on appeal the dismissal of his tort claim against Sigmund and the circuit court's determination that damages would be limited to the lesser of the cost of repair or the diminution in value. We conclude that the economic loss doctrine does not preclude possible recovery by Paulan for his tort claim and that the circuit court's coverage decision cannot stand in light of the reinstatement of Paulan's tort claim. We reverse the judgment and order and remand for further proceedings.
. The facts are simple. Pursuant to a written proposal submitted by Sigmund, Paulan hired Sigmund to install two skylights in the family room of the home owned by Paulan. Paulan purchased the skylights, and they were provided to Sigmund for installation. During the installation process, Sigmund cut three roof trusses. Paulan alleges that the cutting of the roof trusses rendered the home structurally unsafe, prevented the completion of shingling the roof, left the home not properly protected from the weather, and as a result, the home could not be occupied for a significant period. Paulan claims that Sigmund breached the terms of the written proposal by failing to perform work in a good and workmanlike manner. He also claims that Sigmund was negligent in cutting the roof trusses. He seeks to recover the cost of repairing physical damage to the home and damages for the loss of use of the home and the permanent diminution in value.
. American Family issued a commercial general liability (CGL) policy to Sigmund. American Family denied that there was coverage for Paulan's claims and asserted it had no duty to defend Sigmund. American Family's motion to bifurcate the action so that the coverage issue could be resolved was granted, although the circuit court denied the request to stay the remaining portion of the action.
. Sigmund moved for partial summary judgment to dismiss the negligence claim and to limit damages to the lesser of the cost of repair or the diminution in value. American Family's motion for summary judgment followed months later. The circuit court concluded that there was no coverage because Sigmund intentionally cut the trusses and consequently, there was no accident or "occurrence." American Family was dismissed from the action. After that ruling, the circuit court granted Sigmund's motion to dismiss the negligence claim, based on the economic loss doctrine, and the motion to limit damages.
. The economic loss doctrine preserves the distinction between contract and tort recovery based on the concept that contract law, and not tort law, is better suited for dealing with purely economic loss. Insurance Co. of N. Am. v. Cease Elec. Inc., 2004 WI 139, , __Wis. 2d __, 688 N.W.2d 462. It works a limitation on damages by confining parties to their contractual remedies when asserting an economic loss claim. Id., . The application of the doctrine to a set of facts is a question of law we decide independently of the circuit court's decision. Id., . Here the application of the doctrine is controlled by Cease Electric.
. Cease Electric was hired by Cold Spring Egg Farm, Inc., to wire a ventilation system in a barn. Id., . After the work was completed, the ventilation system failed and nearly 18,000 chickens died. Id., . The action brought by Cold Spring and its insurer to recover damages for loss of income and loss of the chickens alleged that Cease Electric was negligent in not wiring the backup thermo
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