Breach of Contract – Misrepresentation

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WI Court of Appeals – District II

Case Name: Carolyn Ann Bacovsky v. Sarah J. Fetzer, et al.

Case No.: 2018AP1347

Officials: Reilly, P.J., Gundrum and Hagedorn, JJ.

Focus: Breach of Contract – Misrepresentation

Carolyn Ann Bacovsky appeals from an order granting summary judgment to Sarah J. Fetzer, Lamar Paul Leitzke, Cheryl Marquardt, and Menomonee River Condominium Association, Inc. (MRCA). This case arises from the sale of a condominium unit in Menomonee Falls on November 13, 2015. Bacovsky purchased the unit from Fetzer and Leitzke, who used Marquardt as their real estate broker. Four days after closing, Bacovsky discovered ceiling leaks in the upstairs hallway of the unit. She reported the leaks to MRCA’s president, who acknowledged that the situation had been going on for “a while” and advised her to “watch and wait.” Bacovsky continued to experience leaks throughout the winter months.

After ice cleared off of the roof, MRCA repaired it, and the ceiling leaks stopped. However, Bacovsky believed that there was mold in the unit and took steps to remediate it, hiring a company to remove drywall and other materials. Unsatisfied with the results, and believing that the mold was adversely affecting her health, Bacovsky deemed the unit uninhabitable, moved out, and stopped paying the mortgage. Eventually, the bank foreclosed on the unit. Bacovsky subsequently filed suit against Fetzer, Leitzke, Marquardt, and MRCA, generally alleging claims of breach of contract, negligence, and misrepresentation. She sought to recover her down payment on the unit, the money she spent trying to fix it, and the expenses she incurred after she deemed it uninhabitable and moved out.

After conducting discovery, Fetzer, Leitzke, Marquardt, and MRCA moved for summary judgment. Essentially, they argued that there was insufficient evidence to go forward, as Bacovsky could not prove her case without expert testimony, which she did not have. Following a hearing on the matter, the circuit court agreed and granted summary judgment. Bacovsky now appeals. We review de novo the grant or denial of summary judgment, employing the same methodology as the circuit court. Green Spring Farms v. Kersten, 136 Wis. 2d 304, 314-15, 401 N.W.2d 816 (1987). Summary judgment is proper when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. WIS. STAT. § 802.08(2) (2017-18). In deciding if genuine issues of material fact exist, we draw all reasonable inferences in favor of the nonmoving party. Metropolitan Ventures, LLC v. GEA Assocs., 2006 WI 71, ¶20, 291 Wis. 2d 393, 717 N.W.2d 58.

However, we disagree with the circuit court’s decision to dismiss the entire case. As noted, Bacovsky raised claims of misrepresentation, which related to the roof. Fetzer and Leitzke did not disclose a defect in the roof in the real estate condition report that they prepared with Marquardt in 2015. However, they disclosed a defect in the roof in the report that they prepared with Marquardt the year before. According to Bacovsky, she relied upon the 2015 report and would not have purchased the unit had she been aware of the roof’s problems, which revealed themselves four days after closing.

On this record, drawing all reasonable inferences in favor of Bacovsky, we conclude that her misrepresentation claims can go forward against Fetzer, Leitzke, and Marquardt. Bacovsky’s failure to provide expert testimony is not fatal to these claims. That is because “[l]ay opinion evidence is generally permitted when such opinion is based on matters about which the witness is actually competent to testify, such as … the witness[’s] opinion as to value of property the witness owns.” Poston v. Burns, 2010 WI App 73, ¶22, 325 Wis. 2d 404, 784 N.W.2d 717 (citation omitted). In this case, Bacovsky can offer testimony about the value of her property as it was impacted by the alleged misrepresentations about the roof.

For these reasons, we affirm in part, reverse in part, and remand for further proceedings. No costs to the parties other than MRCA.

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.