Farmer can bring tort case, but not UCC claim, rules Wisconsin Court of Appeals.

Byline: David Ziemer

In an unusual twist, a dairy farmer may pursue tort remedies against the seller of diseased cattle, but not contract remedies.

The Wisconsin Court of Appeals held on May 20 that the farmer's failure to timely notify the seller of the breach foreclosed his remedies under the Uniform Commercial Code (UCC), but not his misrepresentation claims.

In August 2001, Michael and Marcia Wilson bought 50 dairy cows from Robert Tuxen.

In June 2002, the Wilsons discovered that some of the cows were infected with Johne's disease, a fatal, contagious disease typically acquired during the first six months of a cow's life. Such cows must be slaughtered.

In September 2002, the Wilsons filed suit against Tuxen, alleging five contract claims, six tort claims, and breach of implied warrant under sec. 95.195.

Because the Wilsons did not give notice of breach within a reasonable time, as required by sec. 402.607, the circuit court dismissed the contract claims and the claim for breach of implied warranty under sec. 95.195.

The Wilsons then moved to amend the complaint to add five claims under sec. 95.19(2).

The circuit court permitted only two of the claims to be added -- for selling infected livestock -- but not the three claims alleging misrepresentation that the livestock were not diseased.

On motion for summary judgment, the court held that the tort claims were barred by the economic loss doctrine, and that the sec. 95.19 claims did not create a claim apart from the underlying tort, and thus, were also barred.

The Wilsons appealed, and the Court of Appeals affirmed in part, and reversed in part, in a decision by Judge Gregory A. Peterson.

Tort Claims

The court first held that the economic loss doctrine bars the Wilsons from recovering in tort for the cows purchased from Tuxen. Such losses are loss in value of the product -- a direct economic loss, rather than damage to other property.

However, the court held they could recover in tort for infecting one of the Wilsons' other calves.

The court reasoned, Unlike the cows Tuxen sold the Wilsons, the calf was purchased elsewhere and therefore is literally 'property other than the product itself.'

The court reversed the grant of summary judgment on this claim.

The court next held that the statutory claims under sec. 95.19 are not barred by the economic loss doctrine.

That statute provides remedies specifically for the sale of diseased livestock, and provides, A person who violates [sec. 95.19] is...