Safe Place Case Analysis

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The statute of repose has a rich history that is not touched by the opinion and which provides fertile ground for arguing that this case was incorrectly decided, should parties adversely affected by this decision wish to challenge the precedent in the Supreme Court.

The statute of repose for defects in building design was originally codified as sec. 893.155, and provided that no action could be brought against "any person performing or furnishing the design, planning, supervision of construction or construction of such improvement to real property, more than six years after the performance or furnishing of such services and construction."

The statute continued, "This limitation shall not apply to any person in actual possession and control as owner, tenant or otherwise, of the improvement at the time the defective and unsafe condition of such improvements constitutes the proximate cause of the injury for which it is supposed to bring an action."

In Kallas Millwork Corp. v. Square D Co., 66 Wis.2d 382, 391-392, 225 N.W2d 454 (1975), however, the Supreme Court held the statute unconstitutional on equal protection grounds, concluding, "it is ludicrous to permit a recovery against a manufacturer of a negligently formulated mortar or adhesive, but to deny a recovery against an architect who negligently designed a cornice or façade so that its fall was inevitable."

The statute was then amended to include materialmen and land surveyors within the ambit of the statute, and renumbered sec. 893.89. The new statute no longer contained the explicit exemption of owners from the statute.

Nevertheless, the legislative history made clear that the exemption still existed. Another equal protection challenge was made, this time challenging that distinction between those making the improvements, and the owners and occupants of the property. Hartland-Richmond Town Ins. Co. v. Wudtke, 145 Wis.2d 682, 429 N.W.2d 496 (Ct.App.1988).

The court of appeals found there was a rational basis for this distinction, reasoning, "Architects, contractors, and others associated with the construction of a building leave the building site following completion and thereafter have limited, if any, contact with the structure. An owner or occupant, on the other hand, continues in possession of the building and is charged with maintaining the property and identifying reasonably discoverable defects or deficiencies." Id., 145 Wis.2d at 689.

The next year, however, the Supreme Court overruled Wudtke, in Funk v. Wollin Silo & Equipment, Inc., 148 Wis.2d 59, 77, 435 N.W.2d 244 (1989), holding, "the arbitrary non-inclusion of property owners and tenants was not cured by the addition of land surveyors and materialmen to the protected class. Although the legislature purported to cure the under-inclusiveness which invalidated the statute considered in Kallas, it failed to do so in a meaningful way."

The court found two faults with the statute (in addition to a general and unabashed hostility to statutes of repose per se. Id., at 70-73).

First, the court noted, "the fundamental fact is that builders in no event would be liable for injuries resulting from negligent maintenance of those in control of the building. Nor, in fact, absent safe place concerns, would an owner be liable, even initially, for errors in design or construction that were not reasonably ascertainable by the owner or tenant. The reality is that, even without the special interest immunity statute in question here, those in the construction business are not legally liable for injuries that were caused by the errors or omissions of others — those in ‘control.’ Control, as envisaged by the statute, is a distinction without relevance." Id., at 74-75.

Second, the court found it unfair that an owner would be liable for a design defect that was wholly the fault of the architect, who would be immune, even from contribution. Id., at 75-76.

The statute was then amended again, in 1993, adding, among other provisions, the current subsec. (4)(c): "This section does not apply to any of the following: … An owner or occupier of real property for damages resulting from negligence in the maintenance, operation or inspection of an improvement to real property." In addition, the statute of repose is now 10 years, rather than six.

The legislative intent is clear: to whatever extent it can, without running afoul of the Equal Protection Clause, the Legislature wants to keep owners of property liable for failing to inspect property and remedy design defects, while giving repose to architects, etc., 10 years after they complete the job. Any ambiguity in the statute, or conflict between the statute and another statute, should be viewed with this intent in mind, and construed against the owner’s immunity, unless that interpretation would run afoul of the Equal Protection Clause.

A conflict with another statute does exist — sec. 101.11, the safe place statute — which provides, in part, "Every employer and every owner of a place of employment or a public building now or hereafter constructed shall so construct, repair or maintain such place of employment or public building as to render the same safe."

The court of appeals is correct when it holds, "to the extent Mair’s safe place claim is based on defective construction of the bathroom floor, the claim is barred by the ten-year statue of repose."

However, if we assume (as we must at the summary judgment stage) that, "according to industry standards, the drain should be level with the floor," then the owner’s failure to discover that a recessed drain is improper violates the safe place statute, and constitutes negligence in operation and inspection, even if it is not negligence in maintenance.

Furthermore, the Supreme Court’s discussion of the predecessor statute of repose in Funk suggests that some safe place claims against an owner are not barred by the statute of repose: "Nor, in fact, absent safe place concerns, would an owner be liable, even initially, for errors in design or construction that were not reasonably ascertainable by the owner or tenant."

A recessed drain is not a hidden defect, but one in the open. If it is not industry standard, then the defect is reasonably ascertainable by inspection.

This points to another flaw in the majority opinion — the conclusion that the owner had no actual or constructive notice of the defect, because "No one had ever fallen in this location before, and there is no evidence that Trollhaugen knew, or in the exercise of reasonable care should have known, that the condition was unsafe."

However, the fact that no one had ever fallen before is not dispositive of the constructive notice issue. The issue in cases involving constructive notice is not whether anyone had ever been injured before, but the length of time that the dangerous condition was present. Kaufman v. State St. Ltd. P’ship, 187 Wis.2d 54, 59, 522 N.W.2d 249, 251-252 (Ct.App.1994).

If the recessed drain is not industry standard, as Mair’s expert attested, and that defect is reasonably ascertainable by inspection, which it is, then the court’s second conclusion — "there is no evidence that Trollhaugen knew or in the exercise of reasonable care should have known, that the condition was unsafe" — is contrary to the evidence presented by Mair.

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The court’s holding also takes the distinction in the safe place statute between structural defects and unsafe conditions associated with the structure of the building, and turns the distinction on its head. For the former, the statute creates liability, even without notice; for the latter, notice, either actual or constructive, is required.

The court’s interpretation, however, makes it easier to recover for unsafe conditions associated with the structure of the building, than it is for structural defects, because the statute of repose will only apply to structural defects.

The Legislature has clearly indicated, via the safe place statute, and its volleying with the Supreme Court over the statute of repose, that it intends for liability to be imposed on the property owner in situations such as this. And liability can be imposed without running afoul of the Equal Protection Clause, because the defect is in the open and thus, "reasonably ascertainable" with inspection by the owner, who has a continuing duty to inspect the property.

Thus, the decision in this case is suspect, and even if it becomes precedent, attorneys should preserve challenges in similar cases for potential review in the Supreme Court.

– David Ziemer

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David Ziemer can be reached by email.