Duty
Case Analysis
June
21, 2006
Although
the opinion affirms the court of appeals’ decision, it does so on different
grounds, and the difference is not an improvement in the law.
The
majority rejects the dissent’s contention that it has confused the law concerning
duty in Wisconsin, but the dissent’s contention is on very solid ground.
The
majority wrote in a footnote, “the majority opinion clearly concludes that
M&I and McDonald Title have a duty to exercise ordinary care under the circumstances.
What
the majority opinion turns on is whether the circumstances of this case require
M&I and McDonald Title to undertake all the affirmative acts that Hoida requests.”
What
the majority opinion ignores is that breach of duty, causation, and damages were
not at issue. Thus, to hold that there was no tort is necessary to conclude that
there was no duty.
At
the court of appeals level, the court wrote, “Domaszek [the loan officer
for the project] and McDonald admit in testimony to the second element of negligence,
breach of duty; they acknowledge that lien waivers were not obtained.” Hoida,
Inc., v. M&I Midstate Bank, 2004 WI App 191, 276 Wis.2d 705, 688 N.W.2d 691,
696-697.
The
court also wrote, “The parties agreed that the issue was whether M&I
and McDonald, in their respective capacities on the Villager project, owed any
duties to Hoida.” Id., at 695.
The
court of appeals held that, because everyone in Wisconsin owes a duty of care,
and the other three elements were uncontested, the negligence claim was met; however,
the court denied liability on public policy grounds, specifically, that liability
would contravene Chapter 779, as the Supreme Court majority also found.
Wisconsin’s
case law would be far clearer had the court of appeals’ decision remained
the relevant law, resting solely on policy considerations; the Supreme Court’s
conclusion that no tort occurred, even though all the elements except duty were
not in dispute, can only invite creative attempts to avoid law that was thought
well-settled in Gritzner v. Michael R., 2000 WI 68, 235 Wis.2d 781, 611 N.W.2d
906 — that everyone owes a duty to all others to refrain from any act that
will cause foreseeable harm to others.
Also
troublesome is the majority’s extremely narrow view of what constitutes foreseeable
harm.
The
majority wrote, “Neither M&I nor McDonald Title reasonably could have
foreseen that the general contractor and the owner would act together to forge
the architect’s signature on Application and Certification for Payment forms
and to convert the loan proceeds for the project to their own use.”
This
is simply contrary to common experience. Theft is always foreseeable; if it was
not, the bank would have loaned all the money upfront, without imposing measures
to ensure it was being used appropriately.
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David Ziemer
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David
Ziemer can be reached by email.
