Title: Brenner v. National Casualty Co.

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2017 WI 38 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2014AP2376 
COMPLETE TITLE: 
Donna Brenner, as Personal Representative for 
the Estate of Russell T. Brenner and Donna 
Brenner, Individually, 
          Plaintiffs-Respondents, 
v. 
 
Amerisure Mutual Insurance Company, Garland 
Brothers Joint Venture and Garland Brothers, 
Inc., 
          Defendants, 
 
Charter Manufacturing Co. and Ace American 
Insurance Company, 
          Defendants-Respondents, 
 
National Casualty Company and Milwaukee World 
Festival, Inc., 
          Defendants-Appellants-Petitioners. 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at: 365 Wis. 2d 476, 872 N.W.2d 124 
(2015 WI App 85 – Published) 
 
 
OPINION FILED: 
April 18, 2017 
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
October  26, 2016 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit 
 
COUNTY: 
Milwaukee 
 
JUDGE: 
Richard J. Sankovitz 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
      
 
DISSENTED: 
      
 
NOT PARTICIPATING: BRADLEY, R.G., J. did not participate.    
 
 
 
ATTORNEYS: 
 
 
For 
the 
defendants-appellants-petitioners, 
there 
were 
briefs by Pamela M. Schmidt and Scopelitis, Garvin, Light, 
Hanson & Feary, P.C., Milwaukee, and oral argument by Pamela M. 
Schmidt. 
 
 
 
2 
For the plaintiffs-respondents, there was a brief by Susan 
R. Tyndall, Timothy S. Trecek and Habush Habush & Rottier, S.C., 
Milwaukee, and oral argument by Susan R. Tyndall. 
 
 
 
2017 WI 38
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2014AP2376 
(L.C. No. 
2012CV12446) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Donna Brenner, as Personal Representative for 
the Estate of Russell T. Brenner and Donna 
Brenner, Individually, 
 
          Plaintiffs-Respondents, 
 
     v. 
 
Amerisure Mutual Insurance Company, Garland 
Brothers Joint Venture and Garland Brothers, 
Inc., 
 
          Defendants, 
 
Charter Manufacturing Co. and Ace American 
Insurance  
 
Company, 
 
          Defendants-Respondents, 
 
National Casualty Company and Milwaukee World 
Festival,  
 
Inc., 
 
          Defendants-Appellants-Petitioners. 
 
 
 
FILED 
 
APR 18, 2017 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed. 
 
No. 
2014AP2376   
 
2 
 
¶1 
DANIEL KELLY, J.   The question before the court is 
whether Charter Manufacturing Company ("Charter"), the former 
long-term tenant of property owned by Garland Brothers Joint 
Venture ("Garland Brothers"), could be liable for injuries to 
Russell T. Brenner, a construction worker who labored at the 
former Garland Brothers building after it had been sold to 
Milwaukee World Festival, Inc. ("MWF"). 
I. 
FACTUAL BACKGROUND 
¶2 
For 21 1/2 years, Garland Brothers owned the property 
located at 607 Polk Street in the city of Milwaukee (the 
"Property").  For 20 of those years, Charter housed its wire 
manufacturing business at the Property under a triple net lease.1  
One of Charter's tasks in making the facilities operational was 
the installation of heat treatment furnaces in a below-grade 
"pit" in one of the buildings.  The furnaces extended up from 
the pit and through a hole cut into the metal grate floor above 
it. 
                                                 
1 A "triple net lease" is one in which the tenant is 
typically 
responsible 
for 
expenses 
such 
as 
maintenance, 
insurance, real estate taxes, and utilities, in addition to its 
lease payments.  See, e.g., Lease, Black's Law Dictionary (10th 
ed. 2014) (defining a "net-net-net lease," also referred to as a 
"triple net lease," as "[a] lease in which the lessee pays all 
the expenses, including mortgage interest and amortization, 
leaving the lessor with an amount free of all claims."); see 
also N.J. Indus. Props., Inc. v. Y.C. & V.L., Inc., 495 
A.2d 1320, 1321 (N.J. 1985) (explaining that a "triple net 
lease" is a lease in which "the tenant [is] responsible for 
maintaining the premises and for paying all utilities, taxes, 
and other charges associated with the property."). 
No. 
2014AP2376   
 
3 
 
¶3 
Fast forwarding 20 years, Charter notified Garland 
Brothers that it would terminate its lease at the end of 2009.  
The lease obligated Charter to remove its machinery (including 
the 
heat 
treatment 
furnaces) 
from 
the 
Property 
before 
surrendering possession.  Additionally, Garland Brothers asked 
Charter to perform several maintenance and repair tasks.  One 
such request was to fill in the pit where the heat treatment 
furnaces had been located.  Garland Brothers later revoked this 
request in exchange for Charter's commitment to leave the pit in 
a "clean and safe condition." 
¶4 
Charter hired Pieper Electric to help it remediate the 
Property before the end of the lease.  Pieper Electric, in turn, 
subcontracted with Harrison Metals to remove the heat treatment 
furnaces.  Completion of that task left holes in the metal grate 
floor through which the furnaces had once protruded.  Because 
the holes could pose a danger, Harrison Metals created short 
plywood boxes to cover them.  Harrison Metals did not mark the 
boxes to indicate their function or tether them in place.  In 
late 
December 
2009, 
Garland 
Brothers 
performed 
a 
final 
walkthrough of the Property with its experts and Charter 
representatives. 
 
Because 
Garland 
Brothers 
had 
performed 
numerous inspections throughout the life of the lease, the heat 
treatment furnaces would have been conspicuous by their absence 
during this final walkthrough.  Garland Brothers did not raise 
any concerns about the pit, the holes in the floor above it, or 
the method of covering them. 
No. 
2014AP2376   
 
4 
 
¶5 
Charter released possession of the Property to Garland 
Brothers on December 31, 2009.  Garland Brothers thereafter 
maintained sole possession of the Property until MWF purchased 
it in "as-is, where-is" condition "with all faults" and took 
possession on May 3, 2011.  MWF had originally slated for 
demolition the building Charter had occupied but subsequently 
changed its plans. 
¶6 
MWF 
was 
on 
the 
Property 
multiple 
times 
before 
purchasing it. Its general counsel, for example, personally 
conducted walkthroughs of the Property while Charter was still 
occupying it and observed the heat treatment furnaces extending 
through the metal grate floor.  MWF also had a designer inspect 
the building several times and had the designer specifically 
consider the feasibility of creating an entryway where the heat 
treatment furnaces stood.  MWF's construction director was also 
on the Property prior to the purchase to plan for future work.  
Environmental tests performed as part of due diligence in the 
sale of the Property also identified the existence of the pit. 
¶7 
After completing the purchase of the Property, MWF 
hired Hunzinger Construction ("Hunzinger") to perform demolition 
and renovation work on the Property.  As part of their work, 
Hunzinger employees, including Mr. Brenner, removed the plywood 
boxes present in the building.  Mr. Brenner did not know that 
some of these boxes covered holes once occupied by the heat 
treatment furnaces.  Consequently, while removing one of these 
boxes, he fell through a hole and sustained severe injuries. 
No. 
2014AP2376   
 
5 
 
II. 
PROCEDURAL BACKGROUND 
¶8 
Mr. Brenner and his wife sued MWF, Garland Brothers, 
and Charter (as well as their insurers) alleging negligence and 
violation of Wisconsin's safe-place statutes.  As particularly 
relevant here, the Brenners said Charter was negligent because 
it concealed or failed to disclose to MWF the holes in the metal 
grate flooring under the plywood boxes. 
¶9 
Charter 
and 
Garland 
Brothers 
moved 
for 
summary 
judgment, relying primarily on the doctrine of caveat emptor as 
described in the Restatement (Second) of Torts § 352 (Am. Law 
Inst. 1965) (hereinafter "§ 352").  The circuit court dismissed 
both parties, concluding that the caveat emptor principle 
precluded judgment against them.2  The Brenners subsequently 
settled with Charter and Garland Brothers, which they documented 
with a settlement agreement that included a Pierringer release.3 
                                                 
2 The Honorable Richard J. Sankovitz, presiding. 
3 Pierringer v. Hoger, 21 Wis. 2d 182, 124 N.W.2d 106 
(1963).  "[A] Pierringer release, in effect, limits a second 
joint tort-feasor's liability to the amount reflecting its 
proportion of wrongdoing.  Stated differently, a Pierringer 
release operates to impute to the settling plaintiff whatever 
liability in contribution the settling defendant may have to 
non-settling defendants and to bar subsequent contribution 
actions the non-settling defendants might assert against the 
settling defendants."  VanCleve v. City of Marinette, 2003 WI 2, 
¶39, 258 Wis. 2d 80, 655 N.W.2d 113 (footnote and internal 
citation omitted). 
No. 
2014AP2376   
 
6 
 
¶10 MWF appealed Charter's dismissal.4  MWF's interest in 
this question is in ensuring it is exposed to no more than the 
correct 
quantum 
of 
liability. 
 
Notwithstanding 
Charter's 
dismissal from the case, if the matter proceeds to trial, a jury 
would 
need 
to 
apportion 
liability 
amongst 
all 
eligible 
defendants——even 
those 
who 
have 
been 
dismissed 
through 
settlements.  If the law of negligence makes Charter eligible 
for liability, MWF's exposure potentially decreases, resulting 
in a smaller judgment against it.  If Charter is not eligible 
for 
liability, 
the 
potential 
judgment 
against 
MWF 
could 
increase. 
¶11 On appeal, MWF argued that Charter was not a "vendor" 
under § 352, and even if it was, it would still be liable 
pursuant 
to 
the 
exception 
from 
exemption 
described 
in 
Restatement (Second) of Torts § 353 (Am. Law. Inst. 1965) 
(hereinafter "§ 353").  In a published decision, the court of 
appeals affirmed the circuit court's summary judgment in favor 
of Charter.5  The court of appeals based its opinion on the 
caveat emptor doctrine as described in § 352, concluding that 
Charter was a "vendor" within the meaning of the Restatement 
test.  It further found that, because MWF had reason to know of 
the danger posed by the wooden boxes that covered the holes, 
                                                 
4 MWF did not appeal the dismissal of Garland Brothers, and 
as to Charter, MWF appealed only the dismissal of the Brenners' 
negligence claim. 
5 Brenner v. Nat'l Cas. Co., 2015 WI App 85, ¶5, 365 
Wis. 2d 476, 872 N.W.2d 124. 
No. 
2014AP2376   
 
7 
 
§ 353 did not negate the immunity supplied by the caveat emptor 
doctrine.  We granted MWF's timely petition for review and now 
affirm the court of appeals. 
III. STANDARD OF REVIEW 
¶12 This matter is before us on review of a grant of 
summary judgment dismissing the Brenners' negligence claim 
against Charter.  Summary judgment is appropriate where there 
are no material facts in dispute and the moving party is 
entitled to judgment as a matter of law.  See Wis. Stat. 
§ 802.08(2) (2015-16).6  We review a grant of summary judgment de 
novo, applying the same methodology as the circuit court.  
Belding v. Demoulin, 2014 WI 8, ¶13, 352 Wis. 2d 359, 843 
N.W.2d 373. While our review is independent from the circuit 
court and court of appeals, we benefit from their analyses.  
Preisler v. Gen. Cas. Ins. Co., 2014 WI 135, ¶16, 360 Wis. 2d 
129, 857 N.W.2d 136.  Whether a duty exists under the 
circumstances, and the scope of any such duty, are questions of 
law we decide de novo.  Hocking v. City of Dodgeville, 2009 
WI 70, ¶7, 318 Wis. 2d 681, 768 N.W.2d 552. 
IV. 
DISCUSSION 
¶13 We must determine whether the law of negligence could 
make Charter liable to the Brenners.  Success in that endeavor 
requires establishing the following:  (1) a duty of care owed by 
Charter; (2) a breach of that duty; (3) a causal connection 
                                                 
6 All subsequent references to the Wisconsin Statutes are to 
the (2015-16) version unless otherwise indicated. 
No. 
2014AP2376   
 
8 
 
between the breach and the Brenners' injury; and (4) actual loss 
or damage resulting from the injury.  Gritzner v. Michael R., 
2000 WI 68, ¶19, 235 Wis. 2d 781, 611 N.W.2d 906.  On summary 
judgment, only the first issue——whether Charter owed the 
Brenners a duty of care——was at issue.  It is also the only 
element we address in our analysis here. 
¶14 MWF asks us to find that the tort-based duty of a real 
estate tenant continues even after the tenant vacates the 
property.  The Brenners say, and the circuit court and court of 
appeals agreed, that the caveat emptor doctrine terminated 
Charter's duty after it surrendered possession of the Property 
to Garland Brothers.  MWF tells us that caveat emptor is an 
archaic proposition and that we would do well to join the 
twenty-first century by abandoning this concept in favor of 
principles described in the Restatement (Third) of Torts: 
Physical 
and 
Emotional 
Harm 
§ 51 
(Am. 
Law 
Inst. 
2012) 
(hereinafter "§ 51").  MWF says the old ways, memorialized in 
§§ 352 and 353, create dangerous dynamics, the effects of which 
caused Mr. Brenner's injury.  Alternatively, if we should decide 
not to adopt the Restatement (Third) of Torts on this question, 
MWF says caveat emptor (as described in the Restatement (Second) 
of Torts) does not apply to long-term former tenants like 
Charter.  And if it does, MWF says, there are exceptions to this 
immunity from liability that operate against Charter under the 
facts of this case. 
No. 
2014AP2376   
 
9 
 
A. Charter's Duty 
1. General principles governing "duty" 
¶15 Before analyzing the caveat emptor doctrine, we must 
first describe the duty it is supposed to affect.  MWF says it 
is "unquestionable" that Charter would owe a duty to the 
Brenners absent the doctrine of caveat emptor "because everyone 
owes a duty to everyone else."  (Citing Behrendt v. Gulf 
Underwriters Ins. Co., 2009 WI 71, 318 Wis. 2d 622, 768 
N.W.2d 568.) 
¶16 This characterization of Behrendt suggests we have 
concluded that every negligence claim arrives at court with the 
first element already proven as a matter of law, or that we have 
eliminated the first line from the negligence quatrain.  We have 
not.  See, e.g., A.E. Inv. Corp. v. Link Builders, Inc., 62 
Wis. 2d 479, 484, 214 N.W.2d 764 (1974) ("Duty is still an 
important factor in determining whether an act is negligent."). 
¶17 What we said in Behrendt is that "everyone owes to the 
world at large the duty of refraining from those acts that may 
unreasonably threaten the safety of others." Behrendt, 318 
Wis. 2d 622, ¶17 (bracket and internal marks omitted) (quoting 
Alvarado v. Sersch, 2003 WI 55, ¶13, 262 Wis. 2d 74, 662 
N.W.2d 350).7  Immediately following this statement, however, we 
explained that "[w]hat is within the duty of ordinary care 
depends on the circumstances under which the claimed duty 
                                                 
7 This is the minority view of Palsgraf v. Long Island R.R. 
Co., 162 N.E. 99 (N.Y. 1928). 
No. 
2014AP2376   
 
10 
 
arises.  For example, what is comprised within ordinary care may 
depend on the relationship between the parties or on whether the 
alleged tortfeasor assumed a special role in regard to the 
injured party."  Behrendt, 318 Wis. 2d 622, ¶18 (quoting Hoida, 
Inc. v. M & I Midstate Bank, 2006 WI 69, ¶32, 291 Wis. 2d 283, 
717 N.W.2d 17).   
¶18 One of the most significant circumstances relating to 
the nature of Charter's duty in this case is the relationship 
between the parties, as evidenced by the sequence in which the 
defendant parties possessed the Property.  As relevant here, 
Charter was the first to possess.  Garland Brothers then took 
possession upon expiration of Charter's lease.  Finally, MWF 
gained possession of the Property through its purchase from 
Garland Brothers.   
¶19 Therefore, whether Charter is potentially liable in 
negligence to the Brenners depends on whether its duty "to the 
world at large . . . [to] refrain[] from those acts that may 
unreasonably threaten the safety of others," Behrendt, 318 
Wis. 2d 622, ¶17 (internal marks and citation omitted), extended 
to telling not just Garland Brothers, but all future strangers 
who may come into possession of the Property, that there were 
holes in the floor under the plywood boxes. 
¶20 The only support MWF identified for this proposition 
was § 51, in conjunction with its over-simplification of our 
holding in Behrendt.  So we review § 51 to determine whether it 
provides any insight on the nature of Charter's duty under these 
circumstances. 
No. 
2014AP2376   
 
11 
 
2. 
Restatement (Third) of Torts: Physical & Emotional Harm 
§ 51 
¶21 MWF urges us to adopt § 51 because it believes this 
provision describes a superior view of what the law of premises 
liability ought to be.  This section states: 
 
Subject 
to 
[Restatement 
(Third) 
of 
Torts: 
Physical & Emotional Harm] § 52, a land possessor owes 
a duty of reasonable care to entrants on the land with 
regard to: 
(a) 
conduct by the land possessor that creates 
risks to entrants on the land; 
(b) 
artificial conditions on the land that pose 
risks to entrants on the land; 
(c) 
natural conditions on the land that pose 
risks to entrants on the land; and 
(d) 
other risks to entrants on the land when any 
of the affirmative duties provided in Chapter 7 
is applicable.  
§ 51.  This provision does not define "land possessor," but we 
need only flip back to Restatement (Third) of Torts: Physical & 
Emotional Harm § 49 (Am. Law Inst. 2012) (hereinafter "§ 49") 
for assistance: 
 
A possessor of land is 
(a) 
a person who occupies the land and controls 
it; 
(b) 
a person entitled to immediate occupation 
and control of the land, if no other person is a 
possessor of the land under Subsection (a); or 
(c) 
a person who had occupied the land and 
controlled it, if no other person subsequently 
became a possessor under Subsection (a) or (b). 
§ 49.   
No. 
2014AP2376   
 
12 
 
¶22 If we were to adopt § 51 verbatim (incorporating the 
§ 49 definition), it would not bear the weight of MWF's 
proposition.  It does not, ex proprio vigore, apply to companies 
in Charter's position.  The unadorned language applies, instead, 
to a "land possessor."  The only party in this case that is a 
"land possessor" in relation to the Property is MWF.  But the 
language is not unadorned——it is festooned by eighteen pages of 
comments and illustrations (not including the Reporter's Note). 
¶23 MWF says we may engage comment t to § 51 to transfer 
its operation to former land possessors.  This comment, in 
relevant part,8 explains that "[a] former possessor who creates a 
risk of harm when in possession of the land continues to be 
subject to the ordinary duty of reasonable care provided in § 7 
for that risk, even after possession is relinquished to 
another."  § 51 cmt. t (emphasis added).  Similarly, comment h 
to § 49, entitled "Former possessors," states, in part:  "A 
person who has relinquished possession and control of land to 
another is not subject to the duties provided in §§ 51 to 53 of 
this Chapter, with one exception.  See § 51, Comment t." 
¶24 Thus, both §§ 49 and 51 turn our attention to 
Restatement (Third) of Torts: Physical & Emotional Harm § 7 (Am. 
Law Inst. 2010) (hereinafter "§ 7"), which imposes a general 
duty of care:  "An actor ordinarily has a duty to exercise 
reasonable care when the actor's conduct creates a risk of 
                                                 
8 Comment t is extensive——together with its illustrations, 
it encompasses nearly four pages of text.   
No. 
2014AP2376   
 
13 
 
physical harm."  § 7(a).  But this provision does not, on its 
own 
terms, 
say 
anything 
about 
land 
possessors, 
or 
the 
persistency of liability once possession of the land transfers 
to another.  Nor does it describe a principle or methodology by 
which we may derive the rule advocated by MWF.9 
¶25 Instead, 
the 
actual 
text 
of 
these 
Restatement 
provisions comprise a basically faithful, and unremarkable, 
rendition of the law as it currently exists in Wisconsin.  As 
the first comment to § 51 recognized, its primary purpose has 
nothing to do with this case——it is to clarify that a possessor 
of land owes a unitary duty of care to anyone who enters the 
land and that the land possessor's duty is not dependent upon 
the entrant's status:  "This Section rejects the status-based 
duty rules and adopts a unitary duty of reasonable care to 
entrants on the land."  § 51 cmt. a.  Like § 51, this court 
rejected status-based duties long ago.  See, e.g., Antoniewicz 
v. 
Reszcynski, 
70 
Wis. 2d 836, 
839, 
236 
N.W.2d 1 
(1975) 
(concluding that "the distinction between the duty heretofore 
owed by a land occupie[r] to licensees and to invitees should be 
abolished, and that the duty of the land occupier be that 
required in any negligence action——ordinary care under the 
                                                 
9 MWF did not address § 7 or its applicability in this case.  
Rather, it simply contends that § 51 itself imposes a duty of 
care on a former possessor of land. 
No. 
2014AP2376   
 
14 
 
circumstances."10  And our adoption of Palsgraf's minority view 
was already distant history before the advent of § 7.  See, 
e.g., A.E. Inv. Corp., 62 Wis. 2d at 483 (explaining that this 
court has adopted the Palsgraf minority view).  Thus, adopting 
the text of those sections would do little, if anything, to 
alter or advance the development of law in this state with 
respect to those general principles. 
¶26 It is apparent from our review of the relevant 
sections of the Restatement (Third) of Torts: Physical & 
Emotional Harm that the life of MWF's argument is not in the 
text of the various provisions, but only in the commentary.11  By 
itself, the text tells us nothing about the duties of former 
land possessors.  Thus, to reach MWF's conclusion we would need 
                                                 
10 However, 
the 
Antoniewicz 
court 
"decline[d] . . . to 
change the immunities which a land occupier enjoys in respect to 
trespassers."  Antoniewicz v. Reszcynski, 70 Wis. 2d 836, 839, 
236 N.W.2d 1 (1975). 
11 This is not the only instance in which the commentary 
reads substantive content into § 51 without the support of 
corresponding text.  For example, comment t says § 51 includes 
certain disclosure duties and liability time limits despite the 
absence of any such declaration, or even suggestion, in § 51's 
text.  See id. ("[t]his Section adopts the actual discovery 
aspect but not the 'should discover' portion of [Restatement 
(Second) of Torts] § 352" with respect to liability time 
limits). 
No. 
2014AP2376   
 
15 
 
to adopt not § 51, but comment t.12  We next turn to the law MWF 
would have us replace with this comment. 
B. 
Caveat Emptor 
¶27 "Caveat emptor" operates as a limited exception to the 
rule that "everyone owes to the world at large the duty of 
refraining from those acts that may unreasonably threaten the 
safety of others."  Behrendt, 318 Wis. 2d 622, ¶17 (bracket, 
internal marks, and citation omitted).  In Ollerman v. O'Rourke 
Co., Inc., 94 Wis. 2d 17, 288 N.W.2d 95 (1980), we explained 
that "[t]he traditional legal rule that there is no duty to 
disclose in an arm's-length transaction is part of the common 
law doctrine of caveat emptor which is traced to the attitude of 
rugged individualism reflected in the business economy and the 
law of the 19th century."  Id. at 29. 
¶28 Caveat emptor——or "buyer beware"——finds expression in 
§ 352, which states:  
Except as stated in [Restatement (Second) of Torts] 
§ 353, a vendor of land is not subject to liability 
for physical harm caused to his vendee or others while 
upon the land after the vendee has taken possession by 
any 
dangerous 
condition, 
whether 
natural 
or 
                                                 
12 We recognize that the ALI adopts the comments as well as 
the actual text of § 51, and that the comments express how the 
ALI would like courts to understand the text.  Thus, were we to 
adopt § 51 (as MWF requests), we would be inserting not just the 
few spare lines of the text into our law, but the 18 pages of 
copious comments and illustrations as well.  It would be 
imprudent to import so much material without closely examining 
it first, especially when the comments say so much that the text 
simply does not. 
No. 
2014AP2376   
 
16 
 
artificial, which existed at the time that the vendee 
took possession. 
§ 352.  We have recognized that the caveat emptor principle 
broadly applies to the transfer of real estate interests:   
 
[S]ecs. 352, 353 [of the Restatement (Second) of 
Torts], sets forth the broad principle that a vendor 
is not liable for bodily harm caused to his vendee, or 
others, after the vendee has taken possession except 
where the vendor has concealed or failed to disclose a 
dangerous condition known to him, but not to the 
vendee, and the vendor has reason to believe that the 
vendee will not discover it. 
Fisher v. Simon, 15 Wis. 2d 207, 214, 112 N.W.2d 705 (1961). See 
also Pines v. Perssion, 14 Wis. 2d 590, 594-95, 111 N.W.2d 409 
(1961) ("A tenant is a purchaser of an estate in land, and is 
subject to the doctrine of caveat emptor.")  
¶29 But we do not apply the rule to all real estate 
transactions.  In Fisher itself we found the rule inapplicable 
with respect to the owner of real estate who built a house 
thereon for the express purpose of selling it.  15 Wis. 2d at 
216, 219.  We analogized the transaction to the sale of chattels 
and borrowed from product liability principles in finding that 
the vendor owed a duty to his vendee.  Id.  In Pines, we found 
an implied warranty of habitability in a residential lease after 
surveying the legislative imposition of various health and 
safety requirements related to residential properties.  14 
Wis. 2d at 594-96.  And in Ollerman, we held that a real estate 
subdivider-vendor had "a duty to a 'non-commercial' purchaser" 
No. 
2014AP2376   
 
17 
 
to disclose material facts known to the vendor but that the 
purchaser would not readily discern.  94 Wis. 2d at 42.13   
¶30 These exceptions, however, are narrow and do not 
detract from the continuing health of the doctrine.  Indeed, the 
caveat emptor doctrine, as described in § 352, has retained its 
vitality in the years since Ollerman.  We remarked in Kaloti 
Enterprises, Inc. v. Kellogg Sales Co., hearkening back to 
Ollerman, that 
parties to a business transaction must "use their 
faculties and exercise ordinary business sense, and 
not [] call on the law to stand in loco parentis to 
protect them in their ordinary dealings with other 
business people."  Further, "in a free market the 
diligent should not be deprived of the fruits of 
superior skill and knowledge lawfully acquired." 
2005 WI 111, ¶18, 283 Wis. 2d 555, 699 N.W.2d 205 (bracket in 
Kaloti; 
internal 
citation 
omitted) 
(quoting 
Ollerman, 
94 
Wis. 2d at 30).14 
                                                 
13 We said in Ollerman v. O'Rourke Co., Inc., 94 Wis. 2d 17, 
288 N.W.2d 95 (1980), that "[t]his court has moved away from the 
rule of caveat emptor in real estate transactions, as have 
courts in other states."  Id. at 38 (emphasis added).  But this 
was in the context of discussing Restatement (Second) of Torts 
§ 551, which generally addresses "benefit of the bargain" 
considerations, 
not 
liability 
for 
physical 
injury 
after 
relinquishing possession of real estate.  The logic of caveat 
emptor does not apply with quite as much force to § 551 cases, 
and such cases certainly do not present the harmful dynamics we 
address in Section IV.C, infra.  Thus, we do not believe this 
statement gives us guidance in resolving this case. 
14 At one point, we did suggest we had abandoned this 
doctrine.  In a case involving the sale of real property we said 
"[t]he common law doctrine of caveat emptor has been abrogated 
in this state and elsewhere . . . ."  State v. Alles, 106 
Wis. 2d 368, 378, 316 N.W.2d 378 (1982).  We made that comment 
(continued) 
No. 
2014AP2376   
 
18 
 
¶31 Our court of appeals has not had any difficulty 
identifying the circumstances in which this doctrine applies, or 
in applying it.  For example, in Bagnowski v. Preway, Inc., a 
homeowner filed suit against the former owner, arguing that the 
former owner had negligently installed a chimney that caused a 
fire.  138 Wis. 2d 241, 244, 405 N.W.2d 746 (Ct. App. 1987).  On 
appeal, the court of appeals considered, inter alia, the 
instructions and special verdict form given to the jury, noting 
that they were based on §§ 352 and 353.  Bagnowski, 138 
Wis. 2d at 246-47.  Having concluded that the former homeowner 
was not a "builder-vendor" (as in Fisher) but rather a "private 
homeowner-vendor," the court of appeals found no error in the 
caveat emptor-based instructions and verdict form the circuit 
court had given the jury.  Bagnowski, 138 Wis. 2d at 248-49.   
¶32 In McCarty v. Covelli, 182 Wis. 2d 342, 514 N.W.2d 45 
(Ct. App. 1994), the court of appeals had to assign liability 
for an injury in a relational context similar to that in this 
case.  Mr. McCarty sustained an injury on a rental property 
while assisting an evicted tenant vacate the premises.    Id. at 
345.  He sued both the current and prior owners of the property.  
                                                                                                                                                             
in the context of a statute criminalizing the failure to 
disclose encumbrances in a real estate transaction, which 
removed from the ambit of the caveat emptor doctrine only the 
conduct proscribed by the statute.  However, we cited no 
authority to support such a broadly stark proposition beyond 
that specific circumstance.    We find that this orphan comment 
is not an accurate reflection of the law, either then or now, 
beyond the statute under consideration in that case. 
 
No. 
2014AP2376   
 
19 
 
Id.  The court had no difficulty identifying caveat emptor 
principles (as expressed in §§ 352 and 353) as the controlling 
decisional standards. McCarty, 182 Wis. 2d at 345-46.  Thus, as 
the court of appeals aptly noted in the decision we are 
reviewing, this doctrine still applies in Wisconsin.  See 
Brenner v. Nat'l Cas. Co., 2015 WI App 85, ¶28, 365 Wis. 2d 476, 
872 N.W.2d 124 (hereinafter "Brenner I"). 
¶33 MWF's argument, of course, is not so much that caveat 
emptor has fallen into desuetude in Wisconsin, but that the time 
has come for its demise:  "The Court should reject the outdated 
rule of caveat emptor implicit in [Bagnowski and McCarty] and 
embedded in the Restatement (Second) of Torts §§ 352 and 353 to 
bring Wisconsin premises liability law and the duties of land 
possessors into the 21st century by adopting the Restatement 
(Third) of Torts § 51."  Thus, we now consider whether it would 
be appropriate for us to adopt comment t to § 51. 
C. 
Comment t versus Caveat Emptor 
¶34 This is no small change that MWF asks of us.  The real 
estate transactions that created the question we are addressing 
here are entirely unremarkable——a commercial tenant vacated a 
commercial 
property 
and 
the 
owner 
(a 
commercial 
entity) 
subsequently sold the property to another commercial entity.  
These types of transactions are the daily fare of the commercial 
real estate world.  With respect to the structural elements of 
such transactions, there is nothing immediately apparent to 
distinguish them from those we are examining.  Consequently, 
whatever decision we make here will affect not just Charter, but 
No. 
2014AP2376   
 
20 
 
an untold (and certainly large) number of vendors who once owned 
Wisconsin real estate.  
¶35 Adopting 
comment 
t 
would 
dramatically 
unsettle 
property 
interests 
that 
thrive 
on 
stability. 
 
Divorcing 
liability for injuries caused by a dangerous condition from the 
ability to control for it would be just the first (but most 
obvious) upset attendant on adopting comment t.  For example, a 
land possessor could choose to mitigate, or even eliminate, the 
risk of injury through management practices rather than by 
repairing the dangerous condition.  It could accomplish this 
through the simple expedient of restricting access to dangerous 
areas entirely, or allowing access only to those who had been 
trained to safely engage the condition, or who had been warned 
of its existence.  A subsequent possessor, however, may simply 
leave the dangerous condition open to anyone who comes upon it.  
Thus, the former possessor's risk of exposure could be greatly 
expanded, or even created ab initio, by the acts of successors.  
The present rule accounts for this reality by logically and 
justifiably pairing potential liability with the opportunity to 
reduce, eliminate, or manage around it.  Allowing persistent 
exposure to liability without the concomitant ability to control 
for it is a rule with little to recommend to us.15 
                                                 
15 We are not the first to see the connection between caveat 
emptor and these circumstances:  
 
[T]he rationale underlying the general rule of nonliability 
 . . . [of] one who has transferred ownership and control 
is no longer held liable because (1) he no longer has 
(continued) 
No. 
2014AP2376   
 
21 
 
¶36 Second, comment t creates an entirely unforeseeable 
quantum of risk exposure.  A former possessor, for example, 
cannot anticipate how subsequent owners might use the property.  
The original possessor may allow only a very few people to enter 
the premises, but an owner at the second remove (or even more 
distant) may unforeseeably open the property to the public at 
large.  Because we establish negligence in relation to the act 
in question, rather than in relation to the person harmed, the 
former possessor might find itself liable to an immense 
population it had never expected. 
¶37 Third, comment t would make a former possessor the 
insurer of all its successors.  A former land possessor who 
created a risk of harm would remain subject to liability even 
after he disclosed the risk to the subsequent purchaser.  See 
§ 51 cmt. t, Illustration 11 (explaining that a former land 
possessor who created a risk of harm retains a duty of care 
under § 7 even after notifying the current land possessor of the 
risk and where the current land possessor chooses not to reduce, 
manage, or eliminate the risk of harm).  Because comment t would 
make the former possessor stand as the insurer of all subsequent 
possessors, this rule would perversely dampen the successors' 
incentive to manage the risk or repair the dangerous condition.   
                                                                                                                                                             
control and thus may not enter the property to cure any 
deficiency, and (2) he cannot control the entry of persons 
onto the property or provide safeguards for them.  
Preston v. Goldman, 720 P.2d 476, 479 (Cal. 1986). 
No. 
2014AP2376   
 
22 
 
¶38 Fourth, MWF would have us make former possessors stand 
as insurers to all successive possessors without indicating 
whether there is an insurance market in which former possessors 
could purchase coverage.  The Supreme Court of California 
recognized this potentially profound economic dislocation over 
three decades ago in Preston v. Goldman, 720 P.2d 476 (Cal. 
1986).  The court recognized that "[t]he ascription of liability 
in this context to a party with control is . . . reflected in 
the usually applicable insurance coverage."  Id. at 483.  So the 
court rejected the invitation to visit those uninsurable risks 
on former possessors, concluding that it would "continue[] to 
treat ownership and control as a fundamental requirement for 
ascribing liability."  Id.16  Imposing liability on unwitting 
former possessors who would have no apparent means of insuring 
their exposure is injudicious. 
¶39 Finally, adopting comment t carries the very real risk 
that we would be effectively renegotiating, retroactively and as 
a matter of law, an unknowable number of Wisconsin real estate 
transactions, 
including 
the 
ones 
before 
us. 
 
Contracts, 
including those for the lease or sale of real estate, 
incorporate the law extant at the time of execution.  See, e.g., 
Dairyland Greyhound Park, Inc. v. Doyle, 2006 WI 107, ¶60, 295 
                                                 
16 That Preston predates the Restatement (Third) of Torts is 
of no consequence on this point, as the parties provide no 
indication that the insurance industry currently offers coverage 
to former real estate possessors for the risk of liability 
comment t would create. 
No. 
2014AP2376   
 
23 
 
Wis. 2d 1, 719 N.W.2d 408.  Thus, when a vendee purchases 
Wisconsin real estate as-is, without warranty, its contract 
incorporates the caveat emptor doctrine.17  So too with leases.18  
Presumably, commercial entities like Charter, Garland Brothers, 
and MWF account for undisclosed and unknown risks when they 
negotiate the terms of their transactions.  As relevant here, a 
purchasing party that assumes those risks can, because of that 
assumption, negotiate a lower purchase price.  MWF, having 
reaped the financial benefit of a lower price in exchange for 
assuming those risks, would now enlist us in shifting some or 
all of those risks to Charter.  If we accepted that invitation, 
we would necessarily reallocate not just the benefit of the 
bargains in this case, but the benefits of all similar Wisconsin 
real estate transactions younger than the applicable statute of 
limitations.  Further, the disruption would not be limited to 
those transactions that have already occurred.  Prospectively, 
adopting comment t would likely distort the commercial real 
estate market, at least in the short term, as vendors inflate 
sales prices to reserve an actuarially-rational amount of funds 
                                                 
17 Barnard v. Kellogg, 77 U.S. 383, 394 (1870) ("The parties 
negotiated on the basis of caveat emptor, and contracted 
accordingly."). 
18 "[N]o action lies by a tenant against a landlord on 
account of the condition of the premises hired, in the absence 
of an express warranty or of active deceit.  This is a general 
rule of caveat emptor." Doyle v. Union Pac. R. Co., 147 
U.S. 413, 425 (1893) (internal marks and citation omitted). 
No. 
2014AP2376   
 
24 
 
against potential liability until the insurance market creates 
and prices appropriate policies or riders.19 
¶40 We decline MWF's invitation to adopt comment t because 
it would introduce dramatic changes to the duty a former land 
possessor owes under Wisconsin law, and would negatively impact 
settled expectations, and settled rights, between real estate 
vendors and vendees.  Further, MWF has identified no compelling 
reason to abandon the current state of our law, and certainly 
nothing important enough to justify the market dislocations 
comment t would likely cause.  We next consider whether Charter 
could be liable to the Brenners under existing Wisconsin law as 
reflected in §§ 352 and 353. 
D. Charter's liability to the Brenners 
¶41 To determine whether Charter could be liable to the 
Brenners under current Wisconsin law, we must answer two 
questions.  The first is whether caveat emptor governs the 
relationship between Charter and successive possessors of the 
                                                 
19 We 
could 
control 
for 
at 
least 
the 
retroactive 
consequences of adopting comment t by "sunbursting" the change 
so that it would apply only prospectively.  See Jacque v. 
Steenberg Homes, Inc., 209 Wis. 2d 605, 623-24, 563 N.W.2d 154 
(1997) (explaining that where the announcement of a new rule 
will result in an inequity if given retroactive effect, the 
court may instead apply the newly announced rule prospectively 
if there is a compelling judicial reason to do so).  We decline 
to consider this option because the nature and extent of the 
relationships and expectations we would be changing suggest 
that, on the record before us, we simply have insufficient 
information to determine whether the downstream consequences 
would actually represent a net improvement over the status quo. 
No. 
2014AP2376   
 
25 
 
Property.  The second is whether, if caveat emptor applies, any 
of the exceptions to the doctrine apply. 
1. 
Charter and the caveat emptor doctrine 
¶42 MWF argues that our caveat emptor cases apply only to 
vendors of land and that Charter cannot be a vendor of land 
because it was merely a former tenant that did not sell the 
Property to anyone.  Thus, according to MWF, when the circuit 
court and court of appeals denominated Charter a "vendor" within 
the meaning of § 352, they expanded the meaning of that term 
without warrant or justification. 
¶43 MWF's argument has some initial appeal.  By its own 
terms, § 352 applies only to vendors: 
Except as stated in [Restatement (Second) of Torts] 
§ 353, a vendor of land is not subject to liability 
for physical harm caused to his vendee or others while 
upon the land after the vendee has taken possession by 
any 
dangerous 
condition, 
whether 
natural 
or 
artificial, which existed at the time that the vendee 
took possession. 
§ 352.  However, because of the nature of Restatements, this 
provision describes the beginning of our inquiry, not the end.  
As significant and important as a Restatement is, it is not a 
code of laws.  Instead, Restatements "aim at clear formulations 
of common law and its statutory elements or variations . . . ."  
American 
Law 
Institute, 
Frequently 
Asked 
Questions, 
https://www.ali.org/publications/frequently-asked-questions/ 
(last visited Mar. 6, 2017).  They also attempt to "reflect the 
law as it presently stands or might appropriately be stated by a 
court."  Id.  Because the common law can vary across the States, 
No. 
2014AP2376   
 
26 
 
sometimes 
significantly, 
these 
goals 
can 
often 
be 
more 
aspirational than descriptive.20  Thus, because the Restatements 
are not, in themselves, authoritative, MWF's task goes beyond 
demonstrating that the text of § 352 excludes Charter from its 
operation.  It must also demonstrate that this exclusion either 
reflects the current state of the law in Wisconsin, or that this 
is a question of first impression, the answer to which should be 
guided by the logic of § 352's focus on vendors. 
¶44  We have not previously determined whether a former 
commercial tenant such as Charter is a vendor within the meaning 
of § 352.  See Brenner I, 365 Wis. 2d 476, ¶24 (recognizing that 
prior to its decision in this matter, no published Wisconsin 
case had considered whether a former tenant qualifies as a 
vendor under § 352).  So in determining whether commercial 
tenants occupy the same legal position as vendors for caveat 
emptor purposes, we will consider the logic behind the doctrine 
before deciding whether § 352 appropriately excludes commercial 
tenants from its terms. 
¶45 Freedom of contract and the right of inspection 
provide the primary justifications for the caveat emptor 
                                                 
20 The Restatements themselves recognize this.  For example, 
the Reporter's Note regarding comment t to § 51 frankly admitted 
the proposed rule was not a statement of the law all across the 
country:  "Courts are split on whether a former possessor who 
created a risk on the land remains subject to liability or 
whether 
transfer 
of 
the 
land 
absolves 
the 
possessor 
of 
liability, as provided in the Second Restatement."  § 51 
Reporter's Note cmt. t. 
No. 
2014AP2376   
 
27 
 
doctrine.  As the United States Supreme Court observed when our 
country was considerably younger,  
[n]o principle of the common law has been better 
established, or more often affirmed, both in this 
country and in England, than that in sales of personal 
property, in the absence of express warranty, where 
the buyer has an opportunity to inspect the commodity, 
and the seller is guilty of no fraud, and is neither 
the manufacturer nor grower of the article he sells, 
the maxim of caveat emptor applies. 
Barnard v. Kellogg, 77 U.S 383, 388 (1870).  A vendee wishing to 
ensure he does not take on more liability exposure than desired 
must inform himself of what he can about what he buys.  Bostwick 
v. Mut. Life Ins. Co. of N.Y., 116 Wis. 392, 400, 89 N.W. 538 
(1902), on reh'g, 116 Wis. 392, 92 N.W. 246 ("[T]he doctrine 
that one must observe what he has reasonable opportunity for 
knowing in matters of contract is within the rule of caveat 
emptor . . . .").  He may, of course, choose to negotiate an 
express warranty as a substitute for his inspection to cover the 
risk he takes for himself:  "And there is no hardship in it 
[caveat emptor], because if the purchaser distrusts his judgment 
he can require of the seller a warranty . . . ."  Barnard, 77 
U.S. at 388.  But if he chooses to purchase with neither an 
inspection nor a warranty, the caveat emptor doctrine holds him 
responsible for his decision.  Id. ("If he is satisfied without 
a warranty, and can inspect and declines to do it, he takes upon 
himself the risk that the article is merchantable."); Doyle v. 
Union Pac. R. Co., 147 U.S. 413, 425 (1893) ("This is a general 
rule of caveat emptor.  In the absence of any warranty, express 
No. 
2014AP2376   
 
28 
 
or implied, the buyer takes the risk of quality upon himself."); 
McBurney v. Young, 133 S. Ct. 1709, 1776 (2013) ("'Caveat emptor 
being the rule with us in the absence of a special agreement, it 
is just and essential to the protection of persons intending to 
purchase or take incumbrances that they be allowed the right of 
inspection.'" (quoting State v. Grimes, 84 P. 1061, 1073 (Nev. 
1906))). 
¶46 This rule grew out of the natural business dynamic 
that the person in the best position to adjudge potential risk 
is the one affected by it:  "[T]he law requires men, in their 
dealings with each other, to exercise proper vigilance, and 
apply their attention to those particulars which may be supposed 
to be within reach of their observation and judgment, and not 
close their eyes to the means of information which are 
accessible to them."  Bostwick, 116 Wis. at 400 (quoting Mamlock 
v. Fairbanks, 46 Wis. 415, 418, 1 N.W. 167 (1879)); see also 
Barnard, 77 U.S. at 388 ("Such a rule, requiring the purchaser 
to take care of his own interests, has been found best adapted 
to the wants of trade in the business transactions of life."). 
¶47 These principles instruct that caveat emptor should 
apply in the commercial tenancy context just as it does in the 
vendor-vendee 
relationship 
described 
in 
§ 352. 
 
The 
one 
difference is that a tenant will, when commencing the tenancy, 
occupy the position of a vendee with respect to the landlord, 
while at the end of the tenancy he will occupy the position of 
the vendor.  We will address the relationship from both 
perspectives. 
No. 
2014AP2376   
 
29 
 
¶48 When a lessor enters a lease, he is purchasing an 
interest in the estate.  See, e.g., Pines, 14 Wis. 2d at 594-95.  
Functionally, 
the 
tenant's 
purpose 
for 
entering 
that 
relationship is largely the same as that of a vendee——to obtain 
possession of the property and to put it to whatever use may be 
desirable, so long as it conforms to the terms of the tenancy.  
With respect to the condition of the property, therefore, they 
operate under similar risks.  The property either will or will 
not be suitable for their purposes, and it either will or will 
not contain dangerous conditions that could cause injury to them 
or others.   
¶49 The methods of controlling for that risk are the same 
for both the tenant and the vendee.  Both may inspect the 
premises prior to the transaction to discover defects or other 
dangerous conditions.  If not satisfied with their inspections, 
or if the inspection raises concerns about undiscoverable latent 
defects, both can negotiate warranties to cover the risk.  
Consequently, we have previously recognized that caveat emptor 
applies when a tenant executes a lease.  Id. ("A tenant is a 
purchaser of an estate in land, and is subject to the doctrine 
of caveat emptor.") 
¶50 At the termination of the tenancy, the lessee occupies 
the position of the vendor as he transfers possession of the 
property back to the landlord.  Just as the interests of a 
vendee and a tenant (to the extent they are relevant to this 
analysis) coincided at the beginning of the tenancy, so too do 
the relevant interests of a vendee and a landlord coincide at 
No. 
2014AP2376   
 
30 
 
the end.  The landlord, cognizant that the tenant has had 
exclusive possession of the property, must ensure he is 
receiving the property from the tenant in the condition required 
by the contract.  The landlord has the same opportunity as the 
vendee to control for the risk that it might be otherwise, 
either by requiring a warranty from the tenant (in the initial 
lease negotiation), or in a thorough inspection to ensure the 
property meets the condition required by the lease when the 
tenant vacates. 
¶51 The similarities between the commercial tenancy and 
vendor-vendee 
relationships 
extend 
to 
the 
intolerable 
consequences of not applying caveat emptor.  The former tenant, 
like the vendor, would suffer continuing exposure to liability 
even after he can no longer reduce, eliminate, or manage around 
the dangerous condition. The quantum of his exposure also slips 
beyond 
his 
control 
as 
the 
landlord 
or 
other 
successive 
possessors expose the property's dangerous condition in a way 
that may exacerbate, or even create, the potential for injury.  
He would also, like the vendor, stand as liability insurer to 
all subsequent possessors, and would similarly have no access to 
the insurance market (at least until the industry adapted). 
¶52 As did the circuit court and court of appeals, we find 
Brock v. Rogers & Babler, Inc., 536 P.2d 778 (Alaska 1975) and 
Great Atlantic & Pacific Tea Company, Inc., 408 N.E.2d 144 (Ind. 
Ct. App. 1980), instructive on this question.  Brock addressed 
whether a gravel excavation company that had remediated the 
property it leased into an artificial lake could be liable to a 
No. 
2014AP2376   
 
31 
 
child who almost drowned approximately three years after the 
company relinquished possession of the property.  536 P.2d at 
779.  The Supreme Court of Alaska applied § 352 and explained 
that although that section refers to vendors of land, its 
principle was nevertheless "broad enough to cover a former 
lessee who had relinquished his possessory interest in the 
premises."  Brock, 356 P.2d at 782.  It explained that liability 
is generally limited to those who are in possession and control 
of the property, and that those not in possession should not 
suffer liability because they have no authority or ability to 
prevent the injury from occurring.  Id. 
¶53 The 
Indiana 
Court 
of 
Appeals 
reached 
the 
same 
conclusion in Great Atlantic.  There, Great Atlantic leased a 
building in which an opening in the floor had been created for a 
conveyor belt to move stock from storage in the basement to the 
sales floor.  408 N.E.2d at 146.  When the lease terminated, 
Great Atlantic released possession to the landlord, which then 
offered the property for sale.  Id.  A prospective buyer fell 
into the conveyer-belt opening in the floor and sustained 
injuries.  Id.  The Indiana Court of Appeals took its cue from 
Brock, concluding that "[t]he new owner, upon assuming control 
and possession, becomes responsible for the safety of structures 
erected by his predecessors" and that "liability for injury 
ordinarily depends upon the power to prevent injury and, 
therefore, rests upon the person who has control and possession 
through ownership, lease, or otherwise."  See Great Atl., 408 
N.E.2d at 147-48. 
No. 
2014AP2376   
 
32 
 
¶54 Here, Charter leased the Garland Brothers' building 
for approximately 20 years under a triple net lease, meaning 
that——for purposes of the condition of the property——Charter had 
the type of exclusive possession and control that a fee owner 
would have.  At the end of the tenancy, Garland Brothers 
exercised its contractual right to thoroughly inspect the 
Property before Charter relinquished possession on December 31, 
2009.  Thereafter, Charter no longer had the right to access or 
control the Property, just like property vendors.  Consequently, 
when Mr. Brenner suffered his injuries in November 2011, Charter 
had exactly the same relationship to the Property as if it had 
been its fee owner, to wit, none. 
¶55 Because Charter, as a former tenant, stands in the 
same position as a vendor (for purposes of the caveat emptor 
doctrine described in § 352) and because MWF——not Charter——was 
in possession of the Property at the time of Mr. Brenner's 
injuries, Charter is immune from liability unless a recognized 
exception lifts the immunity and restores the potential for 
liability. 
2. 
Caveat emptor and its exceptions 
¶56 MWF argues that, under the facts of this case, § 353 
pushes Charter out from under the protective umbrella of the 
caveat emptor doctrine.  This section provides that: 
 
(1) 
A vendor of land who conceals or fails to 
disclose to his vendee any condition, whether 
natural 
or 
artificial, 
which 
involves 
unreasonable risk to persons on the land, is 
subject to liability to the vendee and others 
No. 
2014AP2376   
 
33 
 
upon the land with the consent of the vendee or 
his subvendee for physical harm caused by the 
condition after the vendee has taken possession, 
if 
 
(a) 
the vendee does not know or have reason to 
know of the condition or the risk involved, and 
 
(b) 
the vendor knows or has reason to know of 
the condition, and realizes or should realize the 
risk involved, and has reason to believe that the 
vendee will not discover the condition or realize 
the risk. 
 
(2) 
If 
the 
vendor 
actively 
conceals 
the 
condition, the liability stated in Subsection (1) 
continues until the vendee discovers it and has 
reasonable 
opportunity 
to 
take 
effective 
precautions against it.  Otherwise, the liability 
continues 
only 
until 
the 
vendee 
has 
had 
reasonable opportunity to discover the condition 
and to take such precautions. 
§ 353.  We have previously recognized the essence of the 
exception contained in § 353(1).  Fisher, 15 Wis. 2d at 214 
(caveat emptor does not apply "where the vendor has concealed or 
failed to disclose a dangerous condition known to him, but not 
to the vendee, and the vendor has reason to believe that the 
vendee will not discover it.").  We will apply the language of 
§ 353 (as MWF requested) to evaluate this part of its argument, 
but without opining on whether its text is an exacting statement 
of Wisconsin law.  Only if we conclude that MWF's argument would 
succeed under the language of § 353 will we determine whether it 
comports with Wisconsin law, or describes a standard we should 
adopt. 
No. 
2014AP2376   
 
34 
 
¶57 For purposes of our discussion here, § 353(1) requires 
the proponent of the rule to establish, inter alia, each of the 
following four elements: 
 
(1) 
The vendor concealed or failed to disclose to his 
vendee 
any 
condition, 
whether 
natural 
or 
artificial, that involves unreasonable risk to 
persons on the land; 
 
(2) 
The vendor knew or had reason to know of the 
condition, and realized or should have realized 
the risk involved;  
 
(3) 
The vendee did not know, or have reason to know, 
of the condition or the risk involved; and 
 
(4) 
The vendor had reason to believe that the vendee 
would not discover the condition or realize the 
risk.  
§ 353(1). 
¶58  MWF spent nearly its entire argument discussing these 
elements as between it and Charter.  But that is the wrong 
relationship to consider.  With respect to Charter, it is 
Garland Brothers, not MWF, that is the vendee.  So MWF's task is 
to demonstrate that the facts satisfy the elements of § 353(1) 
as between Charter and Garland Brothers.  If they do, only then 
would Charter's liability persist until (a) the vendee (or 
successors) has had a reasonable opportunity to discover the 
condition and to take effective precautions, or (b) the vendee 
discovers the dangerous condition and has reasonable opportunity 
to take effective precautions if the vendor has actively 
concealed the condition.  § 353(2). 
No. 
2014AP2376   
 
35 
 
¶59 For the sake of our analysis, we will assume MWF can 
establish the first two elements of the § 353(1) test, and 
proceed directly to the third element, which requires MWF to 
establish that Garland Brothers did not know, or have reason to 
know, of the danger presented by the holes in the floor under 
the plywood boxes.  The circuit court found that there was 
insufficient evidence to hold that Garland Brothers had actual 
knowledge of the dangerous condition but was silent as to 
whether it had reason to know of that condition.  For the 
following 
reasons, 
we 
believe 
the 
record 
unequivocally 
demonstrates that Garland Brothers had reason to know of the 
holes under the plywood boxes. 
¶60 First, the record establishes that Garland Brothers, 
through its agent, conducted an annual inspection of the 
Property over the course of Charter's 20-year tenancy.  During 
those annual inspections, there is no question that Garland 
Brothers would have seen the heat treatment furnaces extending 
upward through the holes in the metal grate floor.  Next, after 
Charter gave notice it was terminating the lease, Garland 
Brothers identified several requirements Charter was required to 
satisfy prior to vacating the Property.  Among them was that, 
after removing the heat treatment furnaces (as required pursuant 
to the lease's terms), Charter was to fill in the pit where the 
furnaces had been.  When Charter objected to that requirement, 
Garland Brothers agreed to substitute a requirement that Charter 
leave the pit in a "clean and safe condition." 
No. 
2014AP2376   
 
36 
 
¶61 Garland Brothers necessarily knew that removing the 
heat treatment furnaces would leave holes in the floor.  And it 
undoubtedly had an interest in knowing whether doing so would 
leave the Property in a dangerous condition.  Further, it had a 
reasonable motivation for determining whether Charter left 
behind dangerous conditions, and ample opportunity to discover 
whether it did. 
¶62 Garland Brothers' actions demonstrate it was satisfied 
Charter had left the Property in a safe condition.  When Garland 
Brothers completed its final walkthrough and inspection of the 
Property with Charter in late 2009, Garland Brothers did not 
raise any concerns about the condition in which Charter had left 
the pit or the corresponding holes in the metal grate floor.21  
It then executed a "Release Agreement" with Charter, in which it 
agreed that Charter had surrendered the Property "in the 
physical condition required under the Lease and [Garland 
Brothers] hereby releases Charter from any further liability or 
claims in connection with such obligation or in any way relating 
                                                 
21 The precise date on which Charter's contractor placed the 
plywood boxes over the holes in the metal grate floor is not 
clear.  The parties' briefs generally refer to them as having 
been in place no later than December 31, 2009, when Charter 
surrendered the Property to Garland Brothers.  However, one of 
the briefs filed on behalf of Charter suggests the contractor 
may not have put the boxes in place until after Charter vacated 
the Property.  MWF's argument presupposes that Charter knew, 
while it was yet in possession of the Property, that the boxes 
concealed holes in the floor.  Consequently, our analysis 
operates on that presupposition. 
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2014AP2376   
 
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to 
the 
physical 
condition 
of 
the 
Property 
or 
Charter's 
performance of its obligations under the Lease." 
¶63 We are convinced by this that Garland Brothers had 
reason to know of the holes in the floor underneath the plywood 
boxes.  We are not the only ones to arrive at that conclusion——
MWF argued the same thing itself while opposing Charter's motion 
for summary judgment, and for much the same reasons: 
Together, GBI[22] and GBJV,[23] failed to disclose 
not 
only 
the 
existence 
of 
the 
pit 
but, 
more 
importantly, that Charter had created holes in the 
floor above the pit. . . .  
GBI and GBJV should have known that the holes 
existed as the pit was the subject of negotiations 
when Charter terminated its lease and GBI conducted an 
inspection of the premises before accepting the 
premises from Charter on behalf of GBJV.  Further, GBI 
and GBJV are (or were) in the business of owning, 
managing and leasing industrial properties.  GBJV had 
leased the property to Charter for more than twenty 
years and GBI had, apparently, managed the lease for a 
lengthy time——conducting annual inspections. 
Yes, just so. 
¶64 Finally, as the circuit court ably described, MWF 
argued itself into a box canyon on this point.  By asserting 
that Garland Brothers is chargeable with constructive knowledge 
of the covered holes by virtue of its possession and control of 
the Property, it implicitly (but necessarily) argued that it 
should 
also 
be 
charged 
with 
that 
knowledge. 
 
MWF 
had 
                                                 
22 GBI was Garland Brothers' agent. 
23 GBJV is Garland Brothers. 
No. 
2014AP2376   
 
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approximately as much time, opportunity, and motivation to 
discover defects in the Property before Mr. Brenner's injury as 
did Garland Brothers.  Thus, if possession and control are 
enough to charge Garland Brothers with constructive knowledge of 
the covered holes, it must necessarily do the same for MWF.  So 
even if this analysis required us to examine the relationship 
between MWF and Charter, it would be impossible for MWF, because 
of its own argument, to establish the third element of § 353(1). 
¶65 As it is, however, the proper relationship to examine 
is the one that obtained between Charter and Garland Brothers.  
And because we find that Garland Brothers had reason to know of 
the holes covered by the plywood boxes, MWF cannot establish the 
third element of the § 353(1) analysis.  Inasmuch as this 
provision requires MWF to demonstrate all four elements, we 
conclude that § 353 does not remove the exemption from liability 
provided by the caveat emptor doctrine. 
V. 
CONCLUSION 
¶66 The doctrine of caveat emptor——"buyer beware"——has 
long been a part of the common law of this state.  Although we 
have recognized some narrow exceptions as it applies to real 
estate transfers, the doctrine still describes a vital and 
important restriction on liability when real property passes 
from one possessor to the next.  Accordingly, we decline to 
adopt comment t to § 51.  
¶67 We find that the caveat emptor doctrine applies to 
Charter just as it would have if Charter had been the fee simple 
owner when it transferred possession of the Property back to 
No. 
2014AP2376   
 
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Garland Brothers.  Because MWF did not establish any exception 
to the doctrine in this case, Charter's duty to subsequent 
possessors expired when it surrendered possession of the 
Property.  Consequently, Charter cannot be liable in negligence 
for Mr. Brenner's mishap.   
By the Court.—The decision of the court of appeals is 
affirmed. 
¶68 REBECCA GRASSL BRADLEY, J., did not participate. 
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