Appeals court upholds award

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The Milwaukee Metropolitan Sewerage District must pay a business owner $1.08 million for structural damages caused by groundwater leaking into the deep tunnel system, the 1st District Court of Appeals has ruled.

The lawsuit was brought by the owners of Pre-Pac Produce Distributors Inc., a company that buys potatoes from across the country and packages them for market sales. The building at the center of the lawsuit is a warehouse at 107 E. Lincoln Ave., Milwaukee.

The trial court, according to court records, found that 2.8 million gallons of water a day leaks into the tunnel. More than 4,300 gallons a day leaks into the tunnel from Tom Cianciola’s Pre-Pac Produce property.

In July 1988, MMSD obtained an easement from the then-owners of Pre-Pac Produce, Frank and Shirley Cianciola, for $1. The easement was needed to build the portion of the deep tunnel system that runs below the property.

According to court records, the district agreed to indemnify the owners from damages resulting from construction or operation of the tunnel system.

The construction resulted in soil compaction under the Pre-Pac Produce property, according to court records. The compaction resulted in the building settling and structural damage.

The owner complained in 1991, and engineers hired by the district recommended the Cianciolas be paid for the repairs. The owners were paid $81,866.

The owners were told the building would no longer settle, according to court records.

“In 1992 a consultant suggested to MMSD that because of continuing damage that the property across the street from the Lincoln property was incurring, MMSD should completely line the tunnel in the area of the Lincoln property,” according to the appellate decision. “MMSD declined to follow this suggestion. As a result, the Lincoln property continues to settle.”

When MMSD refused to pay for further damage, the owners sued in Milwaukee County Circuit court on June 4, 2007, alleging the district failed to maintain the tunnel.

Both the trial and appellate courts agreed with Brent Nistler, a lawyer for the Cianciolas, that the statute of repose, which protects against lawsuits in cases more than 10 years after the end of a construction project, did not apply in this case because of the initial contract between the owners and MMSD.

“The contract is breached in each instance that damage is caused because MMSD does not maintain the tunnel in good order and condition,” Appeals Court Judge Joan Kessler wrote. “The statute of limitations does not expire on Cianciola’s breach of contract claims so long as the tunnel is not maintained as required by the warranty in MMSD’s contract with Cianciola.”

Marie Rohde can be reached at [email protected].