Title: Brew City Redevelopment Group, LLC v. The Ferchill Group
Citation: 2006 WI 128
Docket Number: 2004AP003238
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: December 13, 2006

2006 WI 128 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2004AP3238 
 
 
COMPLETE TITLE: 
 
 
Brew City Redevelopment Group, LLC, 
          Plaintiff-Appellant, 
     v. 
The Ferchill Group, John T. Ferchill, Wispark, 
LLC, Jerold P. Franke, Juneau Avenue Partners, 
LLC, JTMK-Pabst, Ltd., Highland Best, LLC, ABC 
Company, Inc., or Partnership, and DEF Company, 
Inc. or Partnership, 
          Defendants-Respondents-Petitioners. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2006 WI App 39 
Reported at: 289 Wis. 2d 795, 714 N.W.2d 582 
(Ct. App. 2006—Published) 
 
 
OPINION FILED: 
December 13, 2006   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
October 13, 2006   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Milwaukee   
 
JUDGE: 
Richard J. Sankovitz 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING: WILCOX, J., did not participate.   
 
 
 
ATTORNEYS: 
 
For 
the 
defendants-respondents-petitioners 
there 
were 
briefs by Matthew W. O’Neill and Friebert, Finerty & St. John, 
S.C., Milwaukee; R. Ryan Stoll and Skadden, Arps, Slate, Meagher 
& Flom, LLP, Chicago, IL, and oral argument by Matthew W. 
O’Neill. 
 
For the plaintiff-appellant there was a brief by William M. 
Cannon, Sarah F. Kaas, Brett A. Eckstein, and Cannon & Dunphy, 
S.C., Brookfield, and oral argument by William M. Cannon. 
 
An amicus curiae brief was filed by Joseph D. Kearney and 
Appellate Consulting Group, Milwaukee, on behalf of Wisconsin 
Manufacturers and Commerce. 
 
 
 
2 
An amicus curiae brief was filed by Debra P. Conrad and 
Thomas D. Larson, Madison, on behalf of the Wisconsin Realtors 
Association. 
 
An amicus curiae brief was filed by William C. Gleisner, 
III and the Law Offices of William Gleisner, Milwaukee; E. 
Campion Kersten and Kersten & McKinnon, S.C., Milwaukee, on 
behalf of the Wisconsin Academy of Trial Lawyers. 
 
An amicus curiae brief was filed by Timothy M. Hansen and 
Michael Best & Friedrich LLP, Milwaukee, on behalf of the 
National 
Association of Industrial and Office Properties, 
Wisconsin Chapter and the Wisconsin Builders Association. 
 
 
2006 WI 128
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2004AP3238  
(L.C. No. 
2004CV4306) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Brew City Redevelopment Group, LLC, 
 
          Plaintiff-Appellant, 
 
     v. 
 
The Ferchill Group, John T. Ferchill, Wispark, 
LLC, Jerold P. Franke, Juneau Avenue Partners, 
LLC, JTMK-Pabst, Ltd., Highland Best, LLC, ABC 
Company, Inc., or Partnership, and DEF Company, 
Inc. or Partnership, 
 
          Defendants-Respondents-Petitioners. 
 
 
 
FILED 
 
DEC 13, 2006 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
¶1 
ANN WALSH BRADLEY, J.   This is a review of a 
published court of appeals decision affirming in part and 
reversing in part an order of the Circuit Court of Milwaukee 
County. That order dismissed, with limited right to replead, the 
complaint filed by Brew City Redevelopment Group, LLC, against 
the Ferchill Group, John T. Ferchill, Wispark, LLC, Jerold P. 
Franke, Juneau Avenue Partners, LLC, JTMK-Pabst, Ltd., Highland 
No. 
2004AP3238   
 
2 
 
Best, LLC, and other unknown entities (collectively, "Ferchill 
Group").1  
¶2 
This case arises out of a dispute over the purchase 
and planned redevelopment of the property and buildings of a 
defunct brewery in downtown Milwaukee. Brew City alleges an 
array of contract and tort causes of action against various 
combinations of defendants. The circuit court dismissed all of 
the causes of action. The court of appeals reversed some of 
these dismissals, modified others, and affirmed the remainder. 
Both tort and contract claims remain, and the interface between 
them occasions this review.  
¶3 
The Ferchill Group seeks review, contending (1) that 
Brew 
City's 
malicious 
injury 
to 
business 
claim 
under 
Wis. Stat. § 134.01 (2003-04)2 is barred by the economic loss 
doctrine; (2) that Franke and Ferchill are immune from tortious 
interference with contract claims by virtue of being members or 
managers of limited liability companies (LLCs); and (3) that the 
intracorporate conspiracy doctrine bars Brew City's claims for 
conspiracy to tortiously interfere with contract and conspiracy 
to maliciously injure business.  
¶4 
We determine first that the economic loss doctrine 
does not apply to Brew City's malicious injury to business 
                                                 
1 See Brew City Redevelopment Group, LLC v. The Ferchill 
Group, 
2006 
WI 
App 
39, 
289 
Wis. 2d 795, 
714 
N.W.2d 582 
(affirming in part and reversing in part an order of the Circuit 
Court for Milwaukee County, Richard J. Sankovitz, Judge). 
2 All references to the Wisconsin Statutes are to the 2003-
04 version unless otherwise noted. 
No. 
2004AP3238   
 
3 
 
claim. Second, under the facts alleged in Brew City's complaint, 
Franke and Ferchill are not immune from liability under 
Wis. Stat. § 183.0304. 
Third, 
the 
intracorporate 
conspiracy 
doctrine does not bar Brew City's claims, as alleged, for 
conspiracy 
to 
maliciously 
injure 
business 
under 
Wis. Stat. § 134.01 and for conspiracy to tortiously interfere 
with contract. Although we apply a different rationale with 
respect to Brew City's § 134.01 claims, we affirm the court of 
appeals.  
I 
¶5 
The facts set forth below come from the plaintiff's 
complaint. We reference additional facts from the complaint as 
needed in the discussion sections of this opinion.  
¶6 
The property that is the subject of this dispute is 
the site of the Pabst Brewing Company's downtown Milwaukee 
brewery, which Pabst closed in 1996. The complex consists of 27 
buildings, most of which were built in the late nineteenth 
century. Brew City, whose president and CEO is James Haertel, 
acquired the right to purchase the property. On June 5, 2002, 
Brew City assigned that right to Wispark. According to Brew 
City's complaint, Jerold Franke is Wispark's president.  
¶7 
Haertel executed the June 5 assignment agreement on 
behalf of Brew City, and Franke executed the agreement on behalf 
of Wispark. Among the provisions of the agreement were the 
following: 
• Brew City assigned to Wispark its contractual 
right to buy the Pabst property; 
No. 
2004AP3238   
 
4 
 
• Upon its acquisition of the property, Wispark was 
to convey to Brew City title to Buildings 27, 28, 
and 35 on the property; 
• Brew City and Wispark agreed that the development 
of buildings 27, 28, and 35 would be subject to 
mutually agreeable restrictive covenants, and in 
accordance with master planning considerations 
for the property; 
• Wispark was to employ Haertel as a consultant to 
Wispark for two years after Wispark acquired the 
property; 
• Wispark was to provide Brew City with up to ten 
percent of the environmental remediation credit 
that 
Wispark 
would 
receive 
from 
Pabst 
as 
reimbursement 
for 
Brew 
City's 
environmental 
remediation of buildings 27, 28, and 35; 
• Brew City acknowledged that Wispark intended to 
create a new entity to own the Pabst property; 
• Brew City was to receive a five percent ownership 
in the new entity. 
¶8 
Juneau Avenue Partners ("Juneau") was created as the 
new entity to own the Pabst property. According to the 
complaint, Juneau is a joint venture between JTMK-Pabst and 
Highland Best. The complaint alleges that JTMK-Pabst is an 
affiliate of the Ferchill Group, and that Wispark is the sole 
member of Highland Best. It also states that John Ferchill is 
president and chief executive officer of the Ferchill Group, and 
No. 
2004AP3238   
 
5 
 
a member of JTMK-Pabst. Brew City asserts that at a September 
10, 2002, closing, Juneau purchased the property from Pabst.  
¶9 
After the closing, Brew City and Juneau were unable to 
agree on the restrictive covenants for buildings 27, 28, and 35, 
the easements for those buildings, and the nature of Brew City's 
five percent equity interest in Juneau. There were also disputes 
between the parties regarding the transfer of title to buildings 
27, 28, and 35 to Brew City, payment of Haertel's consulting 
salary,3 and payment of the environmental remediation credit. 
¶10 Brew City filed this lawsuit, alleging the following 
nine claims for relief: 
1. Against Wispark for breach of an "implied duty of good 
faith"; 
2. Against Wispark for breach of contract; 
3. Against 
Franke, 
Ferchill, 
and 
JTMK-Pabst 
for 
intentional interference with Brew City's contract 
with Wispark; 
4. Against Juneau for "breach of fiduciary duty"; 
5. Against Wispark for conversion; 
6. Against all the defendants for malicious "injury to 
business" under Wis. Stat. § 134.01; 
7. Against 
Franke, 
Ferchill, 
and 
JTMK-Pabst 
for 
conspiracy to intentionally interfere with Brew City's 
contract with Wispark; 
                                                 
3 The record reflects that the parties have resolved the 
dispute regarding Haertel's consulting salary. 
No. 
2004AP3238   
 
6 
 
8. Against 
Wispark 
and 
Juneau 
Avenue 
Partners 
for 
conspiracy to convert Brew City's property; and 
9. Against all the defendants for punitive damages. 
¶11 The complaint also alleges a number of instances of 
"rough treatment" of Haertel and Brew City by Franke, Ferchill, 
and Juneau Avenue Partners. For example, it alleges that during 
a tour of the Pabst property with the Milwaukee mayor, Franke 
stated that "we're going to have Haertel so tied up with 
covenants and restrictions, that we will control those buildings 
as well." It also alleges that Ferchill berated Haertel at a 
meeting, that Wispark or Juneau changed the locks on buildings 
27, 28, and 35 to prevent Brew City's access, and that Juneau 
interfered with Brew City's negotiations with a potential 
lessee. Further, Brew City alleges that at several of Juneau's 
meetings, Franke and Ferchill made comments regarding whether 
Haertel had "suffered enough" and concluded that "No, Haertel 
has not suffered enough."  
¶12 The circuit court dismissed the first and second 
causes of action against Wispark for breach of contract and 
breach of duty of good faith, but granted leave for Brew City to 
file an amended complaint against Juneau for those causes of 
action. It dismissed all of the other claims with prejudice.  
¶13 The court of appeals reversed the dismissals of counts 
one and two. Ferchill Group has not petitioned for review of 
that aspect of the court of appeals decision, and those contract 
claims are not before us.  
No. 
2004AP3238   
 
7 
 
¶14 The essential questions in this review concern whether 
Brew City can pursue three tort claims against the various 
individuals and entities involved in the sale of the property. 
The court of appeals reversed the dismissal of Brew City's sixth 
cause of action, a tort claim against all defendants for 
conspiracy to maliciously injure reputation and business under 
Wis. Stat. § 134.01, 
"except insofar as it asserts claims 
against Highland Best and JTMK-Pabst for acts done as members or 
managers of Juneau." Brew City, 289 Wis. 2d 795, ¶19. It 
affirmed the dismissal of two additional tort claims, Brew 
City's third claim for intentional interference with contract, 
and its seventh claim for conspiracy to intentionally interfere 
with contract. However, the dismissals were modified to be 
dismissals without prejudice. Ferchill Group seeks review of the 
court of appeals' actions as to these tort claims.4  
II 
¶15 This case comes to the court on review of a motion to 
dismiss. We address whether Brew City's complaint asserts claims 
                                                 
4 The court of appeals affirmed the dismissals of claims 
four (breach of implied fiduciary duty against Juneau), five 
(conversion against Wispark), and eight (conspiracy to convert 
against Wispark and Juneau) without modification. Brew City has 
not sought review of the court of appeals' decision to affirm 
those dismissals. The court of appeals vacated the trial court's 
dismissal of the ninth claim, for punitive damages, "the fate of 
which will be determined on remand in connection with the trial 
of [claims three, six, and seven]." Brew City, 289 Wis. 2d 795, 
¶22. That part of the court of appeals decision is not under 
review.  
 
No. 
2004AP3238   
 
8 
 
upon which relief can be granted. Such an inquiry presents 
questions of law subject to independent appellate review. 
Walberg v. St. Francis Home, Inc., 2005 WI 64, ¶6, 281 
Wis. 2d 99, 697 N.W.2d 36. 
¶16 A reviewing court takes as true the facts alleged in 
the complaint. Methodist Manor of Waukesha, Inc. v. Martin, 2002 
WI App 130, ¶2, 255 Wis. 2d 707, 647 N.W.2d 409. In determining 
whether a proper claim has been alleged, the complaint should be 
liberally construed. Kaloti Enters., Inc. v. Kellogg Sales Co., 
2005 WI 111, ¶11, 283 Wis. 2d 555, 699 N.W.2d 205. Dismissal is 
proper only if it is "quite clear" that there are no 
circumstances in which the plaintiff could recover. Doe 67C v. 
Archdiocese of Milwaukee, 2005 WI 123, ¶20, 284 Wis. 2d 307, 700 
N.W.2d 180. 
III 
¶17 We turn first to Brew City's malicious injury to 
reputation 
and 
business 
claim 
under 
Wis. Stat. § 134.01. 
Ferchill Group argues that the economic loss doctrine bars 
recovery for this claim. The economic loss doctrine "is a 
judicial 
doctrine 
intended 
to 
preserve 
the 
fundamental 
distinction between contract and tort. It works to prevent a 
party to a contract from employing tort remedies to compensate 
the party for purely economic losses arising from the contract." 
Grams v. Milk Prods., Inc., 2005 WI 112, ¶2, 283 Wis. 2d 511, 
699 N.W.2d 167 (internal citation omitted). Ferchill Group 
asserts that the alleged actions upon which Brew City bases its 
claim all pertain to contract performance, and that the only 
No. 
2004AP3238   
 
9 
 
damages Brew City seeks are for economic losses pertaining to 
breach of the June 5, 2002, assignment agreement. Thus, it 
argues, Brew City's § 134.01 claim is barred by the economic 
loss doctrine. We disagree.  
¶18 Assessing Ferchill Group's argument requires that we 
examine Brew City's pleading. Brew City captions its sixth claim 
for relief as: "Injury to Business: Wis. Stat. § 134.01." It 
asserts 
that 
the 
"[d]efendants 
acted 
maliciously 
and 
intentionally to injure Brew city's reputation and business." 
¶19 Section 134.01 provides: 
Injury to business; restraint of will. Any 2 or more 
persons who shall combine, associate, agree, mutually 
undertake or concert together for the purpose of 
willfully or maliciously injuring another in his or 
her reputation, trade, business or profession by any 
means whatever, or for the purpose of maliciously 
compelling another to do or perform any act against 
his or her will, or preventing or hindering another 
from doing or performing any lawful act shall be 
punished by imprisonment in the county jail not more 
than one year or by fine not exceeding $500. 
While § 134.01 is a criminal statute, it provides the basis for 
civil tort liability. Radue v. Dill, 74 Wis. 2d 239, 245, 246 
N.W.2d 507 (1976). 
¶20 The requirements to state a cause of action for civil 
conspiracy under § 134.01 were set out by this court in Radue. 
In that case, the plaintiff alleged that the defendants had 
combined to injure his business reputation by committing 
perjury. Though the only acts alleged in the complaint were 
giving false information, this court determined that the 
plaintiff was able to state a claim under § 134.01 based on 
No. 
2004AP3238   
 
10 
 
those actions. Id. at 244. The court stated that if the 
defendants "conspired for one of the purposes proscribed by 
§ 134.01 
[i.e., 'maliciously injuring' the plaintiff] and 
thereby caused damage to the plaintiff, they have committed a 
civil wrong for which the plaintiff may recover." Id. at 245.5 
Thus, the plaintiff's allegation that the defendants had 
"conspired 'for the purpose of willfully and maliciously 
injuring 
the 
plaintiff 
in 
his 
reputation, 
trade 
and 
profession,'" combined with the plaintiff's allegation that the 
conspiracy caused him injury, sufficed to state a claim. Id. 
¶21 Brew City's statement of the cause of action asserts 
that the defendants "acted together for the common and agreed 
upon purpose of injuring Brew City's reputation and business," 
and "acted maliciously and intentionally to injure Brew City's 
reputation and business." It also incorporates by reference all 
of the factual allegations in the complaint as a whole. Finally, 
it asserts damages. 
                                                 
5 In contrast to criminal law, where the "gist" of 
conspiracy is the agreement, the "gist" of a civil conspiracy 
action is the damages. "It is the established law of this state 
that there is no such thing as a civil action for conspiracy. 
There is an action for damages caused by acts pursuant to a 
conspiracy but none for the conspiracy alone. In a civil action 
for damages for an executed conspiracy, the gist of the action 
is the damages." Singer v. Singer, 245 Wis. 191, 195, 14 N.W.2d 
43 
(1944); 
Onderdonk 
v. 
Lamb, 
79 
Wis. 2d 241, 
246, 
255 
N.W.2d 507 (1977); Radue v. Dill, 74 Wis. 2d 239, 244, 246 
N.W.2d 507 (1976). Thus, while parties may incur criminal 
liability by conspiring to maliciously or willfully injure 
another's 
business 
reputation 
in 
violation 
of 
Wis. Stat. § 134.01, those parties will not be subject to civil 
liability absent damages. 
No. 
2004AP3238   
 
11 
 
¶22 The circuit court determined that the economic loss 
doctrine bars recovery for Brew City's § 134.01 claim on the 
ground that the actions described in the complaint were 
indicative only of "a mean-spirited breach of contract." 
Further, it determined that the dispute was principally about 
Brew City's expectancy interests arising out of its bargained-
for agreement, and that the economic loss doctrine therefore 
barred the claim.  
¶23 The court of appeals reversed the circuit court's 
dismissal of Brew City's § 134.01 claim.6 The crux of the court 
of appeals' decision regarding the § 134.01 claim is its 
recognition of a malevolent action exception to the economic 
loss doctrine. It based its decision on this court's opinion in 
Kaloti, which recognized a "fraud in the inducement" exception 
to the economic loss doctrine. Kaloti, 283 Wis. 2d 555, ¶51. The 
court 
of 
appeals 
reasoned 
that 
because 
the 
essence 
of 
intentional fraud is malevolent intent, the malicious intent 
                                                 
6 As previously noted, the court of appeals did not reverse 
the dismissal of Brew City's § 134.01 claims against Highland 
Best and JTMK-Pabst for acts done as members or managers of 
Juneau. Brew City, 289 Wis. 2d 795, ¶19. 
No. 
2004AP3238   
 
12 
 
required for § 134.01 claims7 would suffice to keep such claims 
from being barred by the economic loss doctrine. Brew City, 289 
Wis. 2d 795, ¶19. Thus, the court reasoned that because Brew 
City's complaint alleges that the defendants acted with malice, 
their actions fall within the scope of the malevolent action 
exception to the economic loss doctrine. 
¶24 Ferchill 
Group 
argues 
that 
the 
circuit 
court's 
approach is correct, and that Brew City's § 134.01 claims are 
barred by the economic loss doctrine. As Ferchill Group 
explains, this court applied the economic loss doctrine to bar 
recovery in tort in the context of a commercial real estate 
transaction in Van Lare v. Vogt, Inc., 2004 WI 110, 274 Wis. 2d 
631, 683 N.W.2d 46. 
¶25 However, the fact that the economic loss doctrine 
applies to commercial real estate agreements has no bearing on 
the pleadings in this case. Rather, the economic loss doctrine 
does not apply here. This is true for three reasons. First, 
§ 134.01 claims do not depend on a contract in order to lie. 
Second, the allegations underlying Brew City's § 134.01 claim 
                                                 
7 In Maleki v. Fine-Lando Clinic Chartered, S.C., 162 
Wis. 2d 73, 469 N.W.2d 629 (1991), this court determined that 
under § 134.01 "malice" demands more than an intent to do harm. 
Rather, it requires an intent to do "wrongful" harm. Such harm 
does not include incidental harms that derive from a person's 
seeking competitive advantage. It requires inflicting a harm 
"for the sake of harm as an end in itself, and not merely as a 
means to some further end legitimately desired [such as hurting 
someone else's business by competition]." Id. at 87-88 (brackets 
in Maleki, quoting Aikens v. Wisconsin, 195 U.S. 194, 203 
(1904)). 
No. 
2004AP3238   
 
13 
 
are different allegations than those underlying Brew City's 
breach of contract claims. Finally, the damages Brew City 
alleges under its breach of contract claims are different from 
the damages it alleges under the malicious injury claim. 
¶26 In Van Lare, this court determined that the economic 
loss doctrine may bar recovery in tort for strict liability 
misrepresentation claims in commercial real estate contracts. 
274 Wis. 2d 631, ¶28. However, in contrast to Brew City's 
malicious injury to business claim, the strict liability 
misrepresentation claim in Van Lare was premised on the 
existence of a contract in the first place. The malicious injury 
to reputation and business claim in this case could have 
occurred regardless of whether the June 5 assignment agreement 
ever existed. We see no reason why the economic loss doctrine 
should apply to, or bar recovery for, a claim that does not 
depend on a contract in order to lie.  
¶27 The second reason that the economic loss doctrine does 
not apply here is that the actions that constitute Brew City's 
§ 134.01 claim are different actions than those that constitute 
Brew City's breach of contract claims. There are several 
principal allegations that support the malicious injury to 
reputation and business claim.  
¶28 Brew City alleges that Franke boasted in front of 
Milwaukee's mayor that "[w]e're going to have Haertel so tied up 
with 
covenants 
and 
restrictions, 
that 
we 
will 
control 
[Haertel's] buildings as well." It also alleges that Juneau 
contacted one of Brew City's potential lessees against Brew 
No. 
2004AP3238   
 
14 
 
City's wishes. Though that potential lessee had given Brew City 
a letter stating its intent to become a tenant in one of Brew 
City's buildings, Brew City alleges that the potential lessee 
slowed its approach to leasing after being contacted by Juneau. 
¶29 Next, Brew City alleges that at a meeting regarding 
the 
redevelopment 
project 
with 
others 
present, 
"Ferchill 
verbally berated Mr. Haertel, directed profanities towards him 
and told Mr. Haertel he was in 'over his head' and that 'he 
would [expletive deleted] fail,'" (brackets in complaint). 
Finally, Brew City's complaint alleges that at several meetings 
defendants asked whether Haertel had "suffered enough," and 
concluded by stating that Haertel had not suffered enough. These 
alleged actions belittle and disparage Haertel's abilities. They 
all concern harms to Brew City's reputation and business, and do 
not concern the transfer of property or money under the 
assignment agreement. 
¶30 In contrast, the breach of contract claims allege that 
Wispark failed to convey the title to buildings 27, 28, and 35 
in a timely manner, failed to draft reasonable covenants, failed 
to provide Brew City with remediation money, and delayed payment 
of Haertel's salary. These allegations all concern the transfer 
of property or money under the assignment agreement, and do not 
concern harm to Brew City's reputation and business. 
¶31 The third reason that the economic loss doctrine does 
not apply here is that the damages Brew City seeks under its 
§ 134.01 claim are distinct from the damages it seeks under its 
breach of contract claims. Ferchill Group argues that the 
No. 
2004AP3238   
 
15 
 
allegations supporting Brew City's § 134.01 claim are part of 
the assignment agreement on the grounds that the damages Brew 
City seeks are (a) economic damages and (b) identical to the 
damages it seeks for its breach of contract claims. This 
argument is mistaken. 
¶32 That Brew City seeks financial recovery is not 
tantamount to its losses being economic losses for the purposes 
of the economic loss doctrine. "An injury is not 'economic' 
simply because it is monetary. All losses—even those stemming 
from injuries to the person or damage to property—are monetary 
in nature, i.e., 'they destroy values which can be and are 
monetized.'" Rich Prods. Corp. v. Kemutec, Inc., 66 F. Supp. 2d 
937, 968 (E.D. Wis. 1999); quoting Miller v. U.S. Steel Corp., 
902 F.2d 573, 574 (7th Cir. 1990). Malicious injury to one's 
business is more akin to injury to person or injury to property, 
which need not be economic losses for the purposes of the 
economic 
loss 
doctrine, 
despite 
often 
being 
compensated 
financially. Daanen & Janssen, Inc. v. Cedarapids, Inc., 216 
Wis. 2d 395, 402, 573 N.W.2d 842 (1998). 
¶33 Ferchill Group argues that the damages Brew City 
alleges show that its § 134.01 claims are really contract 
claims, artfully pled. It observes that in its statement of 
damages for the § 134.01 claims, Brew City refers to the same 
paragraph that sets out the injuries and damages for the alleged 
No. 
2004AP3238   
 
16 
 
breach of contract.8 Thus, Ferchill argues, Brew City has only a 
contract claim, pled different ways. 
¶34 This argument is unpersuasive. Brew City's claim for 
relief under § 134.01 states that Brew City "sustained financial 
and other injuries, including those injuries set forth above 
[under breach of contract]." This cannot be read to indicate 
that the only damages Brew City suffered arose out of the 
alleged breach of contract. Further, the paragraph alleging 
damages from breach of contract includes damage "to Brew City's 
business and reputation." Because such damages are properly pled 
in tort, not contract, they may serve as the basis for tort 
liability. 
¶35 In sum, malicious injury to reputation and business 
claims do not require the existence of a contract in order to 
lie. The allegations upon which Brew City bases its § 134.01 
claim 
and 
the damages it seeks are different from the 
allegations and damages found in its breach of contract claims. 
We therefore determine that the economic loss doctrine does not 
apply in this case and thus does not bar recovery for Brew 
City's § 134.01 claim. 
                                                 
8 With regard to damages, Brew City's complaint alleges that 
"[a]s a result of defendants' malicious and intentional injury 
to Brew City's reputation and business, Brew City has sustained 
financial and other injuries, including those injuries set forth 
above in paragraph 90." Paragraph 90 states that Wispark's 
breach of contract caused damages to Brew City, including loss 
of time, money, business, profits, and "damage to Brew City's 
business and reputation." 
No. 
2004AP3238   
 
17 
 
¶36 Note that our conclusion is not based on a malevolent 
action exception to the economic loss doctrine. While we agree 
with the court of appeals that the economic loss doctrine does 
not bar Brew City's claims under § 134.01, we do not agree with 
its conclusion that a malevolent action exception to the 
economic loss doctrine is implicated. If such an exception were 
to exist, it would require a case in which the economic loss 
doctrine applies in the first instance. Rather, we determine 
that the economic loss doctrine does not apply in the case of an 
independent tort based on allegations distinct from any contract 
allegations, and which seeks separate, non-economic damages. 
IV 
¶37 We consider next Brew City's claims that Franke, 
Ferchill, and JTMK-Pabst intentionally interfered (claim three), 
and conspired to intentionally interfere (claim seven), with 
Brew City's June 5, 2002, assignment agreement with Wispark.9 
Ferchill Group argues that Franke and Ferchill are immune from 
claims of tortious interference with contract by virtue of being 
                                                 
9 As noted by the court of appeals, the claim for conspiracy 
to intentionally interfere with contract (claim seven) is 
essentially a "recasting" of claim three. Brew City, 289 
Wis. 2d 795, ¶20. 
The elements of a claim for intentional interference with a 
contract are "(1) the plaintiff had a contract or prospective 
contractual relationship with a third party; (2) the defendant 
interfered with the relationship; (3) the interference was 
intentional; 
(4) 
a 
causal 
connection 
exists 
between 
the 
interference and the damages; and (5) the defendant was not 
justified or privileged to interfere." Aon Risk Servs., Inc. v. 
Liebenstein, 
2006 
WI 
App 
4, 
¶20, 
289 
Wis. 2d 127, 
710 
N.W.2d 175. 
No. 
2004AP3238   
 
18 
 
members or managers of LLCs. It asserts that because Franke and 
Ferchill are not "independent from the legal entity with 
authority to perform under the contract," they cannot be held 
liable to third parties in tort for their conduct as members or 
managers of LLCs under Wis. Stat. § 183.0304. 
¶38 The court of appeals modified the dismissals of the 
tortious interference claims from dismissals with prejudice to 
dismissals without prejudice and allowed for the repleading of 
the claims. Ferchill Group requests that this court "reverse the 
Court of Appeals' 'modification' of the dismissal of the 
tortious interference claims." We decline to do so. Ferchill 
Group's argument misses the mark because it fails to appreciate 
that at the motion to dismiss stage of the proceeding all of the 
allegations of the pleadings are taken as true.  
¶39 Ferchill Group relies on Wis. Stat. § 183.0304 in 
support of its argument. That statute provides: 
Liability of members to 3rd parties. (1) The debts, 
obligations and liabilities of a limited liability 
company, 
whether 
arising 
in 
contract, 
tort 
or 
otherwise, shall be solely the debts, obligations and 
liabilities of the limited liability company. Except 
as provided in ss. 183.0502 and 183.0608, a member or 
manager 
of 
a 
limited 
liability 
company 
is 
not 
personally 
liable 
for 
any 
debt, 
obligation 
or 
liability of the limited liability company, except 
that a member or manager may become personally liable 
by his or her acts or conduct other than as a member 
or manager. 
Section 183.0304 does not provide the Ferchill Group with the 
protection it seeks. It overlooks the last clause of the 
statute:  "except that a member or manager may become personally 
No. 
2004AP3238   
 
19 
 
liable by his or her acts or conduct other than as a member or 
manager." 
¶40 The court of appeals correctly notes that Brew City's 
complaint does not allege that Franke or Ferchill were members 
or managers of Juneau, and it does not allege that they acted on 
behalf of Juneau.10 Brew City, 289 Wis. 2d 795, ¶13. Moreover, to 
the extent that Juneau has legal responsibility for conduct 
alleged in Brew City's complaint, as an LLC only its members and 
managers have any immunity. 
¶41 The express language of Wis. Stat. § 183.0304 is clear 
that it preserves the liability of a member of an LLC for 
conduct "other than as a member or manager."11 Thus, were it to 
                                                 
10 Franke is the president of Wispark, and Wispark is party 
to the June 5, 2002, assignment contract. To the extent that 
Franke's actions are performed as a member or manager of 
Wispark, he will be not be liable individually for interference 
with that contract under § 183.0304. 
11 In addition, under Wis. Stat. § 183.0402, certain types 
of conduct are beyond the scope of the duties of managers and 
members of an LLC. Section 183.0402 provides in relevant part: 
Duties of managers and members. Unless otherwise 
provided in an operating agreement: 
(1) No member or manager shall act or fail to act in a 
manner that constitutes any of the following: 
. . . . 
(b) A violation of criminal law, unless the member or 
manager had reasonable cause to believe that the 
person's conduct was lawful or no reasonable cause to 
believe that the conduct was unlawful. 
(c) A transaction from which the member or manager 
derived an improper personal profit. 
No. 
2004AP3238   
 
20 
 
turn out that Franke and Ferchill are members or managers of 
Juneau, they may still be liable for tortious interference with 
contract if they conducted such interference other than as 
members or managers of Juneau. Indeed, Brew City's third cause 
of action alleges that they were acting "individually"; we 
understand "individually" to mean "not as a member or manager of 
another entity."  
¶42 Ferchill Group also asserts that Brew City's tortious 
interference claims should be barred because Brew City does not 
allege that Franke and Ferchill "acted with an improper personal 
motive or otherwise inconsistent with the interests of Wispark 
and Juneau." This presupposes that there was a unity of 
interests in the first place. However, Brew City does not allege 
unity of interest. Rather, as already noted, Brew City's 
tortious interference claims are alleged against Franke and 
Ferchill "individually." 
¶43 The 
court 
of 
appeals 
did, 
however, 
affirm 
the 
dismissals of the tortious interference claims, but modified the 
dismissals to be dismissals without prejudice, and allowed that 
Brew City could replead its claims. It affirmed the dismissals 
not on the basis of immunity, but because Brew City had not pled 
a sufficient nexus between Franke and Ferchill's malicious 
conduct and the tortious interference with the contract: 
[A]lthough Brew City's complaint alleges what on the 
surface appears to be rough treatment of Haertel, none 
of the allegations are tied directly, or even by 
                                                                                                                                                             
(d) Willful misconduct. 
No. 
2004AP3238   
 
21 
 
reasonable inference, to the mechanisms (that is, what 
Franke and Ferchill did to interfere with Brew City's 
June 
5th 
assignment contract with Wispark) that 
resulted in the grievances asserted in the Third 
Claim. 
Brew City, 289 Wis. 2d 75, ¶13.12  
¶44 We agree with the court of appeals that the dismissals 
of the tortious interference and conspiracy to tortiously 
interfere claims should be without prejudice and that the claims 
may be repled.  Under Wis. Stat. § 802.09, leave to amend a 
complaint "shall be freely given at any stage of the action when 
justice so requires." Ferchill Group has offered no persuasive 
argument why leave should not be freely given here. 
¶45 In sum, we agree with the court of appeals that based 
on the allegations in the complaint, Ferchill Group's argument 
that Franke and Ferchill are immune must fail. The complaint 
provides no allegation that they are members or managers of 
Juneau, and the allegation that Franke and Ferchill acted 
individually indicates that they acted other than as member or 
managers of another entity. Accordingly, we determine that 
Franke and Ferchill are not immune from liability for claims of 
intentional 
interference 
with 
contract 
and 
conspiracy 
to 
                                                 
12 The court of appeals also determined that because Brew 
City's complaint alleges that JTMK-Pabst is a member of Juneau, 
yet alleges no conduct by JTMK-Pabst other than as a member of 
Juneau, it was not a proper party to Brew City's tortious 
interference claims (claims three and seven). It affirmed the 
circuit court's dismissals, though modified them to be without 
prejudice if facts were to develop showing that it acted other 
than as a member of Juneau. Neither Ferchill Group nor Brew City 
seeks review of this aspect of the court of appeals' decision. 
No. 
2004AP3238   
 
22 
 
intentionally 
interfere 
with 
contract 
under 
Wis. Stat. § 183.0304. 
V 
¶46 Ferchill Group argues next that the intracorporate 
conspiracy doctrine set out in Copperweld Corp. v. Independence 
Tube Corp., 467 U.S. 752 (1984), prevents recovery from the 
defendants for Brew City's conspiracy claims (six and seven) 
because they are members, officers, or affiliates of Juneau.13 We 
disagree on the ground that there is nothing in Brew City's 
complaint that demands the conclusion that the defendants had 
the 
unity 
of 
interests 
required 
for 
the 
intracorporate 
conspiracy doctrine to apply.  
¶47 The intracorporate conspiracy doctrine as outlined in 
Copperweld is based on a unity of interests between a parent 
company and a wholly-owned subsidiary. Copperweld involved a 
lawsuit for conspiracy to violate the Sherman Antitrust Act, 15 
U.S.C. § 1 (2000), against a company and its wholly owned 
                                                 
13 The conspiracy causes of action are claim six (conspiracy 
to maliciously injure reputation and business under Wis. Stat. 
§ 134.01) and claim seven (conspiracy to intentionally interfere 
with contract). As noted above, the court of appeals reversed 
the dismissal of Brew City's § 134.01 claim with respect to all 
defendants "except insofar as it asserts claims against Highland 
Best and JTMK-Pabst for acts done as members or managers of 
Juneau." Brew City, 289 Wis. 2d 795, ¶19. The court of appeals 
allowed repleading of claim seven with respect to Franke and 
Ferchill. Because the complaint alleges that JTMK-Pabst is a 
member of Juneau, the court of appeals allowed repleading of 
claim seven with respect to JTMK-Pabst only "if facts develop 
that show any conduct by it other than as a member of Juneau." 
Id., ¶13.  
No. 
2004AP3238   
 
23 
 
subsidiary. The Supreme Court held that because of the complete 
unity of interests between a parent corporation and its wholly-
owned subsidiary, they cannot conspire together for the purposes 
of antitrust law. The Court articulated that unity of interests 
as follows: 
A parent and its wholly owned subsidiary have a 
complete unity of interest. The objectives are common, 
not disparate; their general corporate actions are 
guided or determined not by two separate corporate 
consciousnesses, but one. . . .  With or without a 
formal "agreement," the subsidiary acts for the 
benefit of the parent, its sole shareholder. . . .  
[T]he very notion of an "agreement" in Sherman Act 
terms between a parent and a wholly owned subsidiary 
lacks meaning. A § 1 agreement may be found when "the 
conspirator had a unity of purpose or a common design 
and understanding or a meeting of minds in an unlawful 
arrangement." But in reality a parent and a wholly 
owned subsidiary always have a "unity of purpose or a 
common design." They share a common purpose whether or 
not the parent keeps a tight rein over the subsidiary; 
the parent may assert full control at any moment if 
the subsidiary fails to act in the parent's best 
interests.  
Id. 
at 
771-72 
(emphasis 
in 
original, 
internal 
citations 
omitted). 
¶48 Ferchill Group cites two Wisconsin cases in support of 
its view that the intracorporate conspiracy doctrine bars Brew 
City's claims for conspiracy to intentionally interfere with 
contract and conspiracy to maliciously injure reputation and 
business. The cases demonstrate the unity of interests present 
in Copperweld, but they are distinct from the facts alleged 
here. In Ford Motor Co. v. Lyons, 137 Wis. 2d 397, 405 
N.W.2d 354 (1987), the defendants were a parent corporation and 
No. 
2004AP3238   
 
24 
 
its wholly owned subsidiary. In its determination that the 
defendants were unable to conspire under Wis. Stat. § 134.01, 
the court of appeals emphasized that, as in Copperweld, the 
defendants had a complete unity of interests, and that the 
parent company had the ability to exercise complete control over 
the subsidiary. Id. at 427-28.  
¶49 The second Wisconsin case Ferchill Group relies on is 
Wausau Medical Center, S.C. v. Asplund, 182 Wis. 2d 274, 514 
N.W.2d 34 (1994). In that case, the court of appeals determined 
that a physician and the personal service corporation that was 
the physician's "alter ego" could not conspire together under 
§ 134.01. Id. at 196.  
¶50 These cases do not support Ferchill Group's argument 
that the intracorporate conspiracy doctrine bars Brew City's 
conspiracy claims (claims six and seven). There is nothing from 
facts alleged in Brew City's complaint that suggests that there 
is the complete unity of interests among the defendants of the 
sort in Copperweld and Ford Motor Co. Further, the array of 
entities against whom Brew City has alleged conspiracy goes far 
beyond the single physician and his alter ego in Wausau 
No. 
2004AP3238   
 
25 
 
Medical.14 We therefore cannot conclude based on the allegations 
in the complaint that the intracorporate conspiracy doctrine 
outlined in Copperweld bars Brew City's conspiracy claims. 
VI 
¶51 In conclusion, we determine first that the economic 
loss doctrine does not apply to Brew City's malicious injury to 
business claim. Second, under the facts alleged in Brew City's 
complaint, Franke and Ferchill are not immune from liability 
under 
Wis. Stat. § 183.0304. 
Third, 
the 
intracorporate 
conspiracy doctrine does not bar Brew City's claims, as alleged, 
for 
conspiracy 
to 
maliciously 
injure 
business 
under 
Wis. Stat. § 134.01 and for conspiracy to tortiously interfere 
with contract. Although we apply a different rationale with 
respect to Brew City's § 134.01 claims, we affirm the court of 
appeals.   
By the Court.—The decision of the court of appeals is 
affirmed. 
¶52 Justice JON P. WILCOX did not participate. 
 
                                                 
14 Ferchill Group also cites to Fraser v. Major League 
Soccer, LLC, 97 F. Supp. 2d 130 (D. Mass. 2000) for the 
proposition 
that 
"there 
is 
little 
reason 
to 
treat 
an 
LLC . . . differently from a corporation." Id. at 135. However, 
Fraser is inapt. In the appeal to that case the First Circuit 
declined to extend Copperweld to preclude liability for the LLC. 
Fraser v. Major League Soccer, LLC, 284 F.3d 47, 59 (1st Cir. 
2002), cert. denied, 537 U.S. 885. Rather, it determined that 
Major League Soccer, LLC, should not be treated as a single 
entity based on the "diversity of entrepreneurial interests" of 
its members and the fact that its members "are not mere servants 
of MLS; effectively, they control it . . . ." Id. at 57. 
No. 
2004AP3238   
 
 
 
1