Title: Chad Novell v. Anthony Migliaccio
Citation: 2008 WI 44
Docket Number: 2005AP002852
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: May 28, 2008

2008 WI 44 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2005AP2852 
COMPLETE TITLE: 
 
 
Chad Novell, 
          Plaintiff-Appellant, 
     v. 
Anthony Migliaccio and Andrea Migliaccio, 
          Defendants-Respondents-Petitioners. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at: 297 Wis. 2d 584, 724 N.W.2d 703 
(Ct. App. 2006-Unpublished) 
 
OPINION FILED: 
May 28, 2008   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
February 29, 2008   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Milwaukee   
 
JUDGE: 
Michael D. Guolee   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
ZIEGLER, J., concurs (opinion filed).   
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For 
the 
defendants-respondents-petitioners 
there 
were 
briefs by Joseph J. Welcenbach, Jeffrey K. Welcenbach, and 
Welcenbach Law Offices, S.C., Milwaukee, and oral argument by 
Joseph J. Welcenbach. 
 
For the plaintiff-appellant there was a brief by Daniel W. 
Stevens, Rudolph J. Kuss, and the Law Office of Daniel W. 
Stevens, Brookfield, and oral argument by Rudolph J. Kuss. 
 
An amicus curiae brief was filed by O. Thomas Armstrong and 
von Briesen & Roper, S.C., Milwaukee, on behalf of Wisconsin 
Manufacturers & Commerce. 
 
An amicus curiae brief was filed by Jennifer M. Krueger and 
Murphy Desmond, S.C., Madison, on behalf of the Wisconsin 
Merchants Federation, Inc. 
 
An amicus curiae brief was filed by Debra P. Conrad, 
Madison, on behalf of the Wisconsin REALTORS® Association. 
 
 
 
2008 WI 44
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2005AP2852  
(L.C. No. 
2004CV7209) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Chad Novell, 
 
          Plaintiff-Appellant, 
 
     v. 
 
Anthony Migliaccio and Andrea Migliaccio, 
 
          Defendants-Respondents-Petitioners. 
 
 
 
FILED 
 
MAY 28, 2008 
 
David R. Schanker 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
 
¶1 
ANN WALSH BRADLEY, J.   The petitioners, Anthony and 
Andrea Migliaccio, seek review of an unpublished court of  
appeals decision reversing a circuit court order that had 
granted summary judgment in favor of the Migliaccios and 
dismissed the Wis. Stat. § 100.181 statutory misrepresentation 
                                                 
1 All citations to the Wisconsin Statutes are to the 2005-06 
version unless otherwise noted. 
No. 
2005AP2852   
 
2 
 
claim of Chad Novell, the respondent.2  They contend that the 
court of appeals erred when it concluded that reasonable 
reliance is not an element of the statutory misrepresentation 
claim.    
¶2 
Rather, the Migliaccios assert that in pursuing a 
§ 100.18 cause of action, a plaintiff is required to prove 
reasonable 
reliance 
as 
an 
element 
of 
the 
statutory 
misrepresentation claim. Additionally they advance that even if 
the plaintiff does not have the burden to prove reasonable 
reliance as an element of the statutory claim, the circuit court 
nevertheless correctly granted summary judgment because there 
existed no genuine issue of material fact that the reliance here 
was unreasonable. 
¶3 
Based on an examination of the words of the statute, 
its purpose, and our case law interpreting the statute, we 
conclude that a plaintiff is not required to prove reasonable 
reliance as an element of a § 100.18 misrepresentation claim. 
However, the reasonableness of a plaintiff's reliance may be 
relevant in considering whether the representation materially 
induced (caused) the plaintiff to sustain a loss. We further 
conclude that the circuit court erred in granting summary 
judgment because there remained genuine issues of material fact 
as 
to 
whether 
the 
reliance 
on 
the 
representation 
was 
                                                 
2 See Novell v. Migliaccio, No. 2005AP2852, unpublished slip 
opinion (Wis. Ct. App. Oct. 17, 2006)(affirming in part and 
reversing in part a judgment of the circuit court for Milwaukee 
County, Michael D. Guolee, Judge). 
No. 
2005AP2852   
 
3 
 
unreasonable, that is whether the representation here was a 
material inducement causing the plaintiff's loss. Accordingly, 
we affirm the decision of the court of appeals.  
I 
¶4 
This dispute arises from the sale of a house with a 
leaky basement.  In the fall of 2002, Chad Novell ("Novell") was 
living with his parents and was in the market to purchase a 
home.  A woman who was a long-time friend of Novell's mother and 
the family's former cleaning lady was aware of Novell's search. 
She informed the Novells that her sister and brother-in-law, 
Andrea and Anthony Migliaccio, were thinking of selling their 
home.  
¶5 
After hearing this information, the Novells contacted 
the Migliaccios regarding the sale of their home. In October 
2002, after the Novells viewed the home, Novell's father e-
mailed the Migliaccios stating that they had prepared an offer 
to purchase.  The Migliaccios replied that they were not yet 
ready to sell.   
¶6 
In January 2003, the Novells again contacted the 
Migliaccios asking if they were ready to entertain an offer to 
purchase.  In response, the Migliaccios informed the Novells 
that they would be willing to discuss the sale after they had 
secured financing for their new home.  The Novells replied, 
asking for a timeline. In April, Andrea Migliaccio contacted 
Novell and advised that they were willing to sell their home.  
Novell viewed the home for a second time in June 2003 and made 
No. 
2005AP2852   
 
4 
 
an offer to purchase the home for $172,500.  The Migliaccios 
accepted the offer. 
¶7 
As a part of the sale, the Migliaccios prepared a Real 
Estate Condition Report.  The Real Estate Condition Report is a 
standard report required under Wisconsin law that obliges the 
sellers of a home to attest to any known defects in the 
property. Wis. Stat. § 709.02. A "defect" is defined in the 
report as "a condition that would have a significant adverse 
effect on the value of the property . . . ." Wis. Stat. 
§ 709.03. Consistent with § 709.03, the form advises sellers 
that while it is not a warranty, prospective buyers may rely on 
their statements in deciding whether to purchase the property 
and under what terms. 
¶8 
The form specifically inquires regarding conditions of 
the home.  Relevant here, it asks if the seller is "aware of 
defects in the basement or foundation (including cracks, 
seepage, and bulges)." It further defines basement defects as 
including "flooding, extreme dampness or wet walls, unsafe 
concentrations of mold, or defects in drain tiling or sump 
pumps."  The Migliaccios' response on the form denied any 
knowledge of such defects. 
¶9 
At the end of the Real Estate Condition Report is a 
separate inquiry regarding the Migliaccios' knowledge of water 
or moisture problems.  Again, they denied any "aware[ness] of 
the presence of . . . water or moisture intrusions or conditions 
that might indicate the growth of unsafe levels of mold."  Both 
Andrea and Anthony Migliaccio signed and dated the form under 
No. 
2005AP2852   
 
5 
 
the "Owner's Certification," thereby attesting to the accuracy 
of their statements.  
¶10 Before closing, Novell hired a home inspector to 
inspect the home.  The home inspection report categorized and 
evaluated areas of the Migliaccios' home.  Under each area, the 
inspector evaluated items in the area as either "Acceptable," 
"Not Present," "Not Inspected," "Marginal," or "Defective."  The 
inspector 
listed 
the 
foundation 
as 
"Marginal" 
and 
noted 
displacement and stair step cracks in the basement walls.  He 
recommended that Novell hire a foundation specialist to provide 
further evaluation and suggested that the wall cracks should be 
monitored.     
¶11 On a separate page, in the "Basement" section of the 
report, the inspector described the sump pump and moisture 
readings in the southwest corner of the basement as "Marginal."  
He stated that the sump pump was operative but submerged and 
that the drain line was not properly connected or not draining 
away from the foundation.  
¶12 The inspector also noted water stains in the southwest 
corner of the basement and high moisture readings.  To remedy 
the problem, he recommended "extending exterior downspouts[,] 
proper grading [and] extend[ing] the sump pump piping to divert 
water away from foundation."   The Migliaccios agreed to make 
these improvements as a condition of the sale.       
¶13 After examining the house and preparing the inspection 
report, the inspector went through the house with Novell, 
Novell's father, and Anthony Migliaccio. During this visit, the 
No. 
2005AP2852   
 
6 
 
inspector had concerns regarding bowing and cracking in the 
basement walls and the presence of water in the basement. In 
order to ascertain whether he should remove wood paneling that 
covered much of the basement walls, the inspector pointed out 
the bowing and cracking to Anthony Migliaccio and expressed his 
concern about whether the wall or the cracks had been moving and 
if there had been water in the basement before. Migliaccio 
responded 
that 
"[t]here 
had 
never 
been 
water 
in 
the 
basement . . . [that] the bow had not moved, and [that] the 
cracks had not moved since the time that they had occupied the 
house."  At the time the Migliaccios sold their home, they had 
been living there for approximately nine years. 
¶14 The inspector also asked if the walls had been painted 
by the Migliaccios or whether they had been painted by the 
previous owner. Migliaccio responded that he had not painted the 
walls, but that they had been painted by the previous owner. 
Novell considered Migliaccio's representation that the walls had 
not been painted in the nine years the Migliaccios had lived in 
the house as an indication that the walls and cracks were not 
moving. Further, Novell later testified that he did not consider 
it necessary to hire an additional specialist "[b]ased on Mr. 
Migliaccio's word that he had never had water in his basement, 
and that he not painted his walls, and had not had any previous 
problems or noticed any movement . . . as a friend of the 
family."  
¶15 Novell purchased the home in September 2003.  He moved 
in on November 15, 2003. 
No. 
2005AP2852   
 
7 
 
¶16 In early 2004 Novell smelled a foul odor in the 
basement.  He noticed standing water in the northwest area of 
the basement. The water covered about one-third of the area of 
the finished basement. The basement flooded in that area at 
least five to seven times that season, generally when the snow 
melted or when it rained.  
¶17 Novell contacted the home inspector who had performed 
the initial assessment of the house.  In a June 2, 2004, letter 
to Novell, the inspector recounted his original assessment of 
the home.  He recalled that the walls at the southwest corner of 
the basement near the sump pump had cracks and displacement, 
that the walls were wet to the touch, and that there were 
elevated moisture readings.  In addition, he remembered telling 
Novell and his father to hire a basement foundation specialist 
to fully determine the "cause and effect" of the present wall 
cracks and displacement in the southwest corner of the basement.  
As to the wetness, the inspector recalled attributing wetness to 
"a combination of poor grading and improper sump pump use." He 
indicated that he also remembered saying that a foundation 
specialist "could also perform a test on the drain tile to see 
if the system is working properly." 
¶18 After communicating with the home inspector, Novell 
hired a professional engineer.  In contrast to the findings of 
the home inspector who noted cracks, displacement, and wet walls 
in the southwest corner of the basement, the engineer focused on 
the northwest corner of the basement, where there had been 
standing water. He concluded that the northwest corner of the 
No. 
2005AP2852   
 
8 
 
basement was the source of the water problems. He opined that 
water had been entering in northwest area for the past decade, 
and that the water was coming from behind the wooden paneling on 
the walls. His inspection revealed "areas of paneling that were 
badly water stained and furring strips behind the paneling that 
were rotting."   
¶19 The engineer stated that based on the cracks in the 
basement that were patched and concealed, it was his opinion 
that "the sellers of the house would have experienced problems 
to the same degree that Mr. Novell did." He further opined that 
"if the sellers lived in the house five to ten years, they would 
have experienced numerous periods of water intrusion comparable 
to that of Mr. Novell."  
¶20 Novell 
also 
hired 
a 
foundation 
specialist, 
who 
concluded that the basement walls had been painted recently to 
conceal the presence of cracks.  The foundation specialist 
determined that water had been leaking into the basement for at 
least the previous three years.   
¶21 Novell filed a complaint against the Migliaccios 
alleging six causes of action: (1) breach of contract; (2) 
intentional 
misrepresentation; 
(3) 
misrepresentation 
in 
violation 
of 
Wis. 
Stat. 
§§ 895.80 
and 
943.20(1)(d); 
(4) 
misrepresentation in violation of Wis. Stat. § 100.18; (5) 
strict 
responsibility 
representation; 
and 
(6) 
negligent 
misrepresentation.  In July 2005, the Migliaccios moved for 
summary judgment.  The circuit court granted the motion and 
entered summary judgment on all claims.  With respect to the 
No. 
2005AP2852   
 
9 
 
§ 100.18 claim, the circuit court determined as a matter of law 
that justifiable reliance was an element and that Novell was not 
justified 
in 
relying 
on 
the 
misrepresentations 
of 
the 
Migliaccios.   
¶22 Novell appealed the circuit court's grant of summary 
judgment on all claims.  The court of appeals affirmed the 
circuit court's summary judgment on five of the six claims.  
With respect to the § 100.18 cause of action, however, the court 
of appeals reversed the circuit court's order. It concluded that 
reasonable reliance is not an element of a § 100.18 claim.  The 
Migliaccios petitioned for review. Novell did not cross-
petition. 
II 
¶23 This case requires us to determine whether the court 
of appeals erred in reversing the circuit court's grant of 
summary judgment.  We review the grant or denial of summary 
judgment independently, but apply the same methodology as used 
by the circuit court. Wis. Mall Props., LLC v. Younkers, Inc., 
2006 WI 95, ¶19, 293 Wis. 2d 573, 717 N.W.2d 703.  Summary 
judgment is appropriate where there is no genuine issue of 
material fact and the moving party is entitled to judgment as a 
matter of law.  Wis. Stat. § 802.08(2). The inferences to be 
drawn from the underlying facts are to be viewed in the light 
most favorable to the party opposing the motion. Lambrecht v. 
Estate of Kaczmarczyk, 2001 WI 25, ¶23, 241 Wis. 2d 804, 623 
N.W.2d 751.  If there is any reasonable doubt regarding whether 
there exists a genuine issue of material fact, that doubt must 
No. 
2005AP2852   
 
10 
 
be resolved in favor of the nonmoving party. Schmidt v. Northern 
States Power Co., 2007 WI 136, ¶24, __ Wis. 2d __, 742 
N.W.2d 294. 
¶24 In addition, we are called upon to interpret the 
elements of a claim under Wis. Stat. § 100.18.  Questions of 
statutory interpretation and application present questions of 
law which we review independently of the determinations rendered 
by the circuit court and the court of appeals.  Kierstyn v. 
Racine Unified School Dist., 228 Wis. 2d 81, 88, 596 N.W.2d 417 
(1999).   
III 
¶25 The Migliaccios contend that the court of appeals 
erred in determining that reasonable reliance is not an element 
of a § 100.18 cause of action. They argue that based on § 100.18 
and cases interpreting the statute, Novell must prove reasonable 
reliance in order to meet the elements of a § 100.18 cause of 
action.  
¶26 In determining whether reasonable reliance is an 
element of a Wis. Stat. § 100.18 claim, we begin our analysis by 
examining the words of the statute. Section 100.18(1) prohibits 
making false representations with the intent to sell real 
estate.   
No 
person . . . with 
intent 
to 
sell . . . real 
estate . . . shall 
make, 
publish, 
disseminate, 
circulate, 
or 
place 
before 
the 
public . . . [a] 
statement or representation of any kind to the public 
relating 
to 
such . . . sale . . . of 
such 
real 
estate . . . or to the terms or conditions thereof, 
which . . . statement or representation contains any 
No. 
2005AP2852   
 
11 
 
assertion, representation or statement of fact which 
is untrue, deceptive or misleading. 
A person suffering pecuniary loss because of a violation of 
§ 100.18(1) may recover damages under § 100.18(11)(b)2, which 
provides: 
Any person suffering pecuniary loss because of a 
violation of this section by any other person may 
sue in any court of competent jurisdiction and shall 
recover such pecuniary loss, together with costs, 
including reasonable attorney fees . . . . 
¶27 A plain reading of the statute reveals that reasonable 
reliance is not an element of a statutory false representation 
claim.  Section 100.18(1) prohibits making misrepresentations to 
the public with the intent to sell, and § 100.18(11)(b)2 
provides 
for 
recovery 
when 
such 
misrepresentations 
cause 
pecuniary loss.  
¶28 The words "rely," "relied," and "reliance" appear 
nowhere in the text of either § 100.18(1) or § 100.18(11)(b)2. 
Rather, § 100.18(11)(b)2 provides that "any person suffering 
pecuniary loss because of a violation of this section by any 
other 
person 
may 
sue 
in 
any 
court 
of 
competent 
jurisdiction . . . ."    
¶29 Accordingly, there is no indication based on the  
language of the statute that the legislature sought to limit a 
purchaser's ability to bring a claim under § 100.18 only to 
those circumstances in which the plaintiff can show reasonable 
reliance as a statutory element. Absent any ambiguity in the 
statute to the contrary, it should be assumed that the 
legislature intended courts to interpret the statute as written. 
No. 
2005AP2852   
 
12 
 
¶30 In addition, the purpose of § 100.18 does not support 
the proposition that reasonable reliance is an element of a 
§ 100.18 claim. This court and the court of appeals have made 
clear that the purpose of § 100.18 is to deter sellers from 
making false and misleading representations in order to protect 
the public. In State v. Automatic Merchandisers of America, 
Inc., this court determined that the statute applied to face-to-
face communications in addition to media advertisements because 
the statute was "intended to protect the residents of Wisconsin 
from any untrue, deceptive or misleading representations made to 
promote the sale of a product." 64 Wis. 2d 659, 663, 221 
N.W.2d 683 (1974).   
¶31 Similarly, in Ricco v. Riva, the court of appeals 
determined that a plaintiff could state a cause of action under 
§ 100.18 for misrepresentations a seller made to a realtor, who 
unknowingly 
passed 
the 
misrepresentations 
along 
to 
the 
plaintiff. 
2003 
WI 
App 
182, 
¶36, 
266 
Wis. 2d 696, 
669 
N.W.2d 193. Realtors who are unaware that a representation is 
untrue are immune from liability. Wis. Stat. § 110.18(12)(b). 
However, the court of appeals determined that extending such 
immunity to sellers would undermine "[t]he purpose of § 100.18 
[which] is to deter sellers of property from making false 
representations in order to induce a sale." Id. See also Grube 
v. Daun, 173 Wis. 2d 30, 57, 496 N.W.2d 106 (Ct. App. 1992)("the 
statute intends to protect the public from all untrue, deceptive 
or 
misleading 
representations 
made 
in 
sales 
promotions, 
No. 
2005AP2852   
 
13 
 
including representations made in face-to-face sales where no 
media advertising is involved."). 
¶32 Deterrence does not depend on reasonable reliance. 
Requiring that plaintiffs demonstrate reasonable reliance as a 
statutory element of a § 100.18 claim therefore would not 
fulfill the statutory purpose.  
¶33 The 
Migliaccios 
recognize 
that 
§ 100.18 
contains 
neither the word "rely" nor a variation of the word.  They 
maintain instead that Wisconsin case law interpreting the 
statute demonstrates that reasonable reliance is an element of 
§ 100.18 claims. 
¶34 Among the cases the Migliaccios cite is Tim Torres 
Enters., Inc. v. Linscott, 142 Wis. 2d 56, 416 N.W.2d 670 (Ct. 
App. 
1987). 
Torres 
filed 
a 
§ 100.18 
suit 
alleging 
that 
Linscott's advertisements falsely claimed that it was the only 
establishment selling Gilles frozen custard. Id. at 62-63. 
Linscott contended that Torres had failed to adduce sufficient 
evidence to demonstrate that the advertising caused damages. Id. 
at 69. The court of appeals determined that § 100.18 required 
some evidence that false advertising caused damages. Id. at 70. 
The circuit court's jury instruction on cause included the 
statement that "there must be some actual consumer reliance on 
the signs before awarding pecuniary damages." Id. The court of 
appeals determined that there was evidence to show such 
reliance, and that such evidence was sufficient for a jury 
finding that the advertising caused damages.  Id.  
No. 
2005AP2852   
 
14 
 
¶35 The Migliaccios also cite to a federal case discussing 
reliance in the context of a § 100.18 claim. In Valente v. 
Sofamor, S.N.C., the plaintiffs received bone screws during 
spinal fusion surgery. 48 F. Supp. 2d 862, 863 (E.D. Wis. 1999). 
They alleged that the screws were defective and caused injury, 
and among the causes of action pled was a § 100.18 false 
advertising claim. Id. at 864. The court determined that the 
plaintiffs were unable to establish a causal connection between 
the defendants' conduct and their pecuniary loss on the ground 
that they had failed to show "that they or their doctors relied 
on the defendants' allegedly fraudulent representations when 
they elected to undergo spinal fusion surgery."  Id. at 874. 
¶36 Tim Torres and Valente demonstrate that a person's 
reliance on a representation can suffice to show that a 
representation materially induced (caused) loss. The question 
here, however, is whether reasonable reliance is a necessary 
element in a § 100.18 claim. Those cases do not address the 
reasonableness of the reliance. The Tim Torres court did not ask 
whether consumers relying on representations that a seller was 
the sole purveyor of Gilles frozen custard were reasonable to do 
so. Similarly, the Valente court required that patients or their 
doctors relied on the representations. It did not examine 
whether they would have been reasonable to do so. Thus, the two 
cases fail to support the Migliaccios' argument.  
¶37 The Migliaccios also rely on the recent court of 
appeals decision in Malzewski v. Rapkin, 2006 WI App 183, 296 
Wis. 2d 98, 723 N.W.2d 156. The Malzewskis offered to buy a 
No. 
2005AP2852   
 
15 
 
house from the Rapkins. The offer stated that the seller had no 
knowledge of conditions affecting the property other than those 
listed in the seller's Real Estate Condition Report. In the Real 
Estate Condition Report, the Rapkins represented that they were 
aware of basement or foundation defects, including "cracks, 
seepage and bulges." Id., ¶2. They further stated that during 
"very heavy rainstorms, there might be a little seepage in the 
walls/floors," but that they had "regraded to correct this." Id. 
¶38 The offer also contained an inspection contingency, 
such that sale was contingent on the house passing inspection. 
Id., ¶3. The Malzewskis waived their inspection right and 
purchased the home. Id., ¶4. Less than a year after they 
purchased the home, paint peeled from the basement walls to 
reveal pre-existing cracks. Id., ¶5. An expert hired by the 
Malzewskis to evaluate their walls informed them that the cracks 
had been there for many years and estimated repair costs at over 
$25,000. Id. 
¶39 The Malzewskis sued, alleging a variety of causes of 
action, including a § 100.18 statutory misrepresentation claim. 
The circuit court granted the Rapkins' motion for summary 
judgment on all claims, and the Malzewskis appealed. Id., ¶10. 
The court of appeals affirmed summary judgment with respect to 
the causes of action for intentional misrepresentation, strict 
liability misrepresentation, negligent misrepresentation, and 
theft-by-fraud on the ground that those causes of action each 
include an element of justifiable reliance. Id., ¶¶17-26.  
No. 
2005AP2852   
 
16 
 
¶40 With respect to the § 100.18 claim, however, the court 
of appeals reversed on the ground that reasonable reliance is 
not an element. Id., ¶24. Rather, it determined that reasonable 
reliance may "be considered by a jury in determining whether the 
purchaser in fact relied on the seller's representation." Id. 
Nonetheless, the court stated in a footnote that there are 
circumstances in which reasonable reliance should be an element 
of a § 100.18 claim: 
There 
are, 
nevertheless, 
undoubtedly 
some 
circumstances where reasonable reliance should be an 
element of a claim for false advertising that is 
decided as a matter of law.  For example, a company, 
in 
connection 
with 
the 
recently 
released 
film 
"Superman 
Returns" 
(Warner 
Bros. 
Studios 
2006) 
advertises a blue cloak that it represents will 
actually permit someone to fly. We would be hard 
pressed to say . . . that a trial is required if an 
adult of normal intelligence who buys the cloak would 
have a claim under Wis. Stat. § 100.18 if the cloak 
did not let the buyer fly, whether faster or slower 
than a "speeding bullet." 
Id., ¶24 n.3 (emphasis in original). 
¶41 We agree with the Migliaccios that Malzewski is 
directly applicable to the present case. The cases are factually 
and procedurally very similar.  Both cases involve the seller of 
a home concealing basement water problems, and in both cases the 
plaintiffs alleged both common law and § 100.18 statutory 
misrepresentation claims. The circuit courts in both cases 
granted the defendants' motions for summary judgment with 
respect to all claims. Both courts based their decision on 
unreasonable reliance.  Moreover, like the court of appeals in 
this case, the Malzewski court affirmed summary judgment on the 
No. 
2005AP2852   
 
17 
 
common law claims but reversed with respect to the § 100.18 
claim because reasonable reliance is not an element.  
¶42 However, given these similarities, and the value of 
Malzewski as precedent, it is surprising that the Migliaccios 
cite it in support of their position. Regardless of the footnote 
mentioning reasonable reliance, the Malzewksi court was explicit 
that reasonable reliance is not an element of a § 100.18 
misrepresentation claim. Malzewski distinguishes § 100.18 claims 
from common law misrepresentation claims on that basis. Thus, 
rather than supporting the Migliaccios' position, Malzewksi 
confounds it. 
¶43 Finally, the Migliaccios cite this court's recent 
analysis of § 100.18 in K&S Tool & Die Corp. v. Perfection Mach. 
Sales Inc., 2007 WI 70, 301 Wis. 2d 109, 732 N.W.2d 792.  The 
plaintiff, a manufacturer of heavy industrial parts, purchased 
an 
industrial 
press 
based 
on 
Perfection's 
written 
representations that the press would conform to the needs of 
K&S. Id., ¶1.  After purchase, K&S discovered that the machinery 
was not designed for its needs, and it sued Perfection under 
§ 100.18. Id.  
¶44 Relevant here is our analysis of the elements of the 
cause of action.  We stated that to prevail on a § 100.18 claim, 
the plaintiff must prove three elements: (1) the defendant made 
a representation to the public with the intent to induce an 
obligation, (2) "that the representation was untrue, deceptive 
or misleading," and (3) "that the representation caused the 
plaintiff a pecuniary loss." Id., ¶19 (citing Tietsworth v. 
No. 
2005AP2852   
 
18 
 
Harley Davidson, Inc., 2004 WI 32, ¶39, 270 Wis. 2d 146, 677 
N.W.2d 233; Wis JI——Civil 2418).   
¶45 In discussing the plaintiff's burden, we stated that 
K&S had to prove "that Perfection's misrepresentation . . . 
caused it to sustain a pecuniary loss." Id., ¶34.  Going 
further, we stated that a "plaintiff does not have the burden of 
proving reasonable reliance." Id., ¶36 (emphasis added).  We 
contrasted § 100.18 claims with common law misrepresentation 
claims on the ground that "[u]nlike common law causes of action 
for misrepresentations, reasonable reliance is not the standard 
for a [§ 100.18] claim because the legislature created a 
distinct cause of action." Id.   
¶46 The fact that common law misrepresentation claims 
require reasonable reliance was insufficient for us to conclude 
that 
a 
§ 100.18 
claim 
requires 
reasonable 
reliance. 
We 
determined that by enacting § 100.18 the legislature did not 
intend to merely add yet another remedy for common law 
misrepresentation:  
There 
is 
no 
indication 
in 
§§ 100.18(1), 
100.18(11)(b)2, and 100.18(11)(b)3 or any of the other 
many and detailed subsections that make up § 100.18, 
that the legislature intended to add a remedy for 
common law misrepresentation claims rather than to 
create a distinct statutory cause of action. 
Id. (quoting Kailin v. Armstrong, 2002 WI App 70, ¶44, 252 
Wis. 2d 676, 643 N.W.2d 132). 
¶47 Nonetheless, we stated that even though a plaintiff 
need not prove reasonable reliance in a § 100.18 claim, "the 
reasonableness of a plaintiff's reliance may be relevant in 
No. 
2005AP2852   
 
19 
 
considering whether the representations materially induced the 
plaintiff's pecuniary loss . . . ." Id. In support of this 
proposition, we cited Malzewski. 
¶48 As with Malzewski, we were explicit that plaintiffs in 
§ 100.18 actions do not have to demonstrate reasonable reliance 
as an element of the statutory claim. K&S Tool & Die, 301 
Wis. 2d 109, ¶36.  Thus, neither the language of the statute, 
the purpose of the statute, nor the case law supports the 
Migliaccios' argument that reasonable reliance is an element of 
a § 100.18 cause of action.  
¶49 The Migliaccios maintain that even if reasonable 
reliance 
is 
not 
an 
element 
of 
a 
§ 100.18 
claim, 
the 
reasonableness 
of 
a 
person's 
actions 
in 
relying 
on 
representations is a defense and may be considered by a jury in 
determining cause. We agree. As set forth above, there are three 
elements in a § 100.18 cause of action: (1) the defendant made a 
representation to the public with the intent to induce an 
obligation, (2) the representation was "untrue, deceptive or 
misleading," and (3) the representation materially induced 
(caused) a pecuniary loss to the plaintiff.  K&S Tool and Die, 
¶19; see also Wis JI——Civil 2418.3 Reliance is an aspect of the 
                                                 
3 Wis JI——Civil 2418 sets forth the third element of a Wis. 
Stat. § 100.18 statutory misrepresentation claim as follows: 
Third, (plaintiff) sustained a monetary loss as a 
result 
of 
the 
(assertion) 
(representation) 
(statement). In determining whether (plaintiff)'s loss 
was 
caused 
by 
the 
(assertion) 
(representation) 
(statement), the test is whether (plaintiff) would 
have acted in its absence. Although the (assertion) 
No. 
2005AP2852   
 
20 
 
third element, whether a representation caused the plaintiff's 
pecuniary loss. Tim Torres, 142 Wis. 2d at 70; Valente, 48 
F. Supp. 2d at 874. 
¶50 Rather than suggesting that reasonable reliance is an 
element of a § 100.18 claim, K&S and Malzewski show that a jury 
may consider the reasonableness of a person's reliance on a 
misrepresentation in determining whether there had been a 
material 
inducement. 
That 
is 
the 
sense 
in 
which 
"the 
reasonableness of a plaintiff's reliance may be relevant in 
considering whether the representation materially induced the 
plaintiff's 
pecuniary 
loss . . . ." 
K&S 
Tool 
& 
Die, 
301 
Wis. 2d 109, ¶36.  
¶51 Seen in this light, the statement in Malzewski that in 
some cases reasonable reliance "should be an element of a claim 
for false advertising that is decided as a matter of law" is 
simply an assertion regarding circumstances in which circuit 
courts may determine as a matter of law that a misrepresentation 
did not cause pecuniary loss. That is, there are cases in which 
a circuit court may determine as a matter of law that a 
plaintiff's 
belief 
of 
a 
defendant's 
representation 
is 
unreasonable, and as a result the plaintiff's reliance (which is 
                                                                                                                                                             
(representation) (statement) need not be the sole or 
only motivation for (plaintiff)'s decision to (buy) 
(rent) (use) the _______ [product or item], it must 
have 
been 
a 
material 
inducement. 
That 
is, 
the 
(assertion) (representation) (statement) must have 
been 
a 
significant 
factor 
contributing 
to 
(plaintiff)'s decision. 
No. 
2005AP2852   
 
21 
 
based on the unreasonable belief) is also unreasonable.  The 
circuit court may determine that the representation did not 
materially induce the plaintiff's decision to act and that 
plaintiff would have acted in the absence of the representation. 
See Wis. JI-Civil 2418. 
¶52 Using the illustrative example from Malzewski, a 
circuit court may determine that a plaintiff's belief that a 
Superman cloak could "actually permit someone to fly" is 
unreasonable, and that relying on a claim that the cloak bestows 
the power of flight would therefore be unreasonable. 296 
Wis. 2d 98, ¶24 n.3. On that basis, the court may further 
determine that such a claim did not materially induce a person 
to 
purchase 
the 
cloak 
as 
a 
matter 
of 
law. 
Thus, 
the 
representation could not cause the buyer's pecuniary loss as a 
matter of law.  
¶53 We 
therefore 
agree 
with 
the 
court 
of 
appeals' 
analysis. Based on the plain language of § 100.18, the statutory 
purpose of protecting the public by deterring sellers from 
making false representations, and the cases interpreting the 
statute, we determine that reasonable reliance is not an element 
of a § 100.18 cause of action. Rather, the reasonableness of a 
plaintiff's reliance may be relevant in considering the third 
element of such a claim, that is whether a representation 
materially induced (caused) the plaintiff to sustain a pecuniary 
loss.  
 
 
No. 
2005AP2852   
 
22 
 
IV 
¶54 Having addressed the role of reasonableness in a 
§ 100.18 cause of action, we turn to the question of whether 
summary judgment on Novell's § 100.18 claim was appropriate. The 
circuit 
court 
determined 
that 
Novell's 
reliance 
on 
the 
Migliaccios' representations was unreasonable as a matter of law 
based upon the infirmities listed in the inspection report and 
the inspector's recommendation that Novell seek the professional 
opinion of a foundation specialist. The Migliaccios maintain 
that the circuit court's view is correct.  
¶55 The evidence is equivocal as to whether Novell's 
reliance on the Migliaccios' representations was unreasonable. 
To begin, the Real Estate Condition Report signed by the 
Migliaccios stated that buyers may rely on the statements 
contained in the report in deciding whether, and on what terms, 
to purchase the property. The Migliaccios' report indicated that 
they were not aware of any defects (i.e., any "condition that 
would have a significant adverse effect on the value of the 
property") in the basement or the foundation.  
¶56 Moreover, the Home Inspection Report, prepared by 
Novell's home inspector, is equivocal as to whether Novell acted 
unreasonably in not hiring additional specialists to examine the 
integrity of the basement and the foundation. Although the 
report describes several problems with the foundation and 
basement, it cannot be concluded as a matter of law that the 
report alerted Novell to the water problems he would experience 
after moving into his new home. 
No. 
2005AP2852   
 
23 
 
¶57 The report describes sump pump problems, high moisture 
readings, and water stains in the southwest corner of the 
basement. However, those problems are in a different area than 
the damage at issue in the present action, which was in the 
northwest part of the basement. Further, Novell required that 
the Migliaccios correct the problems in the southwest corner as 
a condition of purchasing the home. With respect to the 
inspector's recommendation that Novell consult an expert, a 
reasonable interpretation of the report is that the inspector 
recommended that Novell hire an expert to examine the foundation 
rather than an expert to assess flooding.   
¶58 Juxtaposed 
to 
the 
inspector's 
report 
and 
recommendation, Novell had Anthony Migliaccio's statements that 
the basement walls had not been painted, that the cracks and bow 
in the walls had not moved, and that there had been no water in 
the basement during the nine years the Migliaccios lived in the 
house. The statements were made in direct response to the 
inspector's concerns, and Novell testified that he placed faith 
in the statements based on the relationship between the 
families. Novell contends that it was on the basis of Anthony 
Migliaccio's representations, and the family relationship, that 
he determined it was unnecessary to hire further experts.  
¶59 This is not a case where it is beyond any reasonable 
doubt that the homebuyer simply refused to take the definitive 
advice of a home inspector. Rather, when the evidence is viewed 
in the light most favorable to Novell, his reliance was not 
unreasonable. The decision whether to hire another expert to 
No. 
2005AP2852   
 
24 
 
examine the foundation and the decision whether to remove the 
paneling to examine the wall behind were based upon how recently 
the walls had been painted and on Migliaccio's statement that he 
had never experienced water problems in the basement. That is, 
if the walls had been painted recently or if the Migliaccios had 
experienced water in the basement, it would be more likely that 
there remained foundation or basement defects requiring an 
expert's help. Those, however, are precisely the representations 
which form the basis of the § 100.18 claim. Novell contends that 
the false representations are what caused him to act in the way 
that the Migliaccios consider unreasonable. 
¶60 In such 
circumstances, Novell's reliance is not 
unreasonable as a matter of law. Rather, there remain genuine 
issues of material fact as to whether his reliance was 
unreasonable.  
¶61 As explained above, there are cases in which a circuit 
court may determine as a matter of law that a plaintiff's belief 
of a defendant's representation is unreasonable, and as a result 
the plaintiff's reliance is therefore also unreasonable. In such 
cases the circuit court may determine that the representation 
did not materially induce (cause) the plaintiff's decision to 
act as a matter of law. This, however, is not such a case.  
¶62 Rather, the evidence in this case is such that a 
reasonable 
jury 
could 
determine 
that 
the 
Migliaccios' 
representations caused Novell's loss and return a verdict in 
favor of Novell on the § 100.18 claim. Thus, the circuit court 
erred in granting summary judgment on Novell's § 100.18 claim.   
No. 
2005AP2852   
 
25 
 
¶63 The 
Migliaccios 
maintain, 
however, 
that 
Novell's 
reliance on the Migliaccios' representations is unreasonable as 
a matter of law because that aspect of the circuit court's 
decision is not subject to review. The court of appeals affirmed 
the circuit court's summary judgment on five causes of action on 
the ground that Novell's reliance was unreasonable. Novell has 
not sought review of that determination. The Migliaccios 
therefore contend Novell's reliance was unreasonable as a matter 
of law based on the law of the case doctrine.  
¶64 The Migliaccios' argument misses the mark. The law of 
the case doctrine is a "longstanding rule that a decision on a 
legal issue by an appellate court establishes the law of the 
case, which must be followed in all subsequent proceedings in 
the trial court or on later appeal." State v. Stuart, 2003 WI 
73, ¶23, 262 Wis. 2d 620, 664 N.W.2d 82. It binds the circuit 
court and appellate courts to apply decisions of the court of 
appeals and supreme court in subsequent proceedings. Id. The 
current proceeding, however, is a review of a court of appeals 
decision, not a "subsequent proceeding in the trial court or [a] 
later appeal." As such, the law of the case doctrine is 
inapplicable.  
¶65 Nonetheless, the Migliaccios are correct that the 
circuit court's summary judgment order regarding Novell's common 
law causes of action, which was based on its determination that 
Novell acted unreasonably, is not under review. Novell has 
failed to preserve those issues insofar as he has not cross-
petitioned for review. See Wis. Stat. (Rule) § 809.62(7); Hommel 
No. 
2005AP2852   
 
26 
 
v. Hommel, 162 Wis. 2d 782, 795-96, 471 N.W.2d 1 (1991)(a party 
that fails to file a petition for cross-review of a court of 
appeals decision may not raise argument in the supreme court 
calling for reversal of the court of appeals decision).   
¶66 Because of the equivocal information available to 
Novell, the fact that the Migliaccios made misrepresentations in 
direct response to the home inspector's concerns, and the 
Migliaccios' 
relationship 
with 
Novell's 
family, 
Novell's 
reliance on the representations was not unreasonable as a matter 
of law. There thus remains a genuine issue of material fact as 
to whether the representations materially induced (caused) 
pecuniary loss to Novell, and the circuit court erred in 
granting 
summary 
judgment 
on 
the 
§ 100.18 
claim. 
Our 
determination here does not upset the circuit court's order 
granting summary judgment on the other causes of action, which 
the court of appeals affirmed, and for which Novell has not 
sought review.  
V 
¶67 In sum, based on an examination of the words of the 
statute, its purpose, and our case law interpreting the statute, 
we conclude that a plaintiff is not required to prove reasonable 
reliance as an element of a § 100.18 misrepresentation claim. 
However, the reasonableness of a plaintiff's reliance may be 
relevant in considering whether the representation materially 
induced (caused) the plaintiff to sustain a loss. We further 
conclude that the circuit court erred in granting summary 
judgment because there remained genuine issues of material fact 
No. 
2005AP2852   
 
27 
 
as 
to 
whether 
the 
reliance 
on 
the 
representation 
was 
unreasonable, that is whether the representation here was a 
material inducement causing the plaintiff's loss. Accordingly, 
we affirm the decision of the court of appeals.  
By the Court.—The decision of the court of appeals is 
affirmed. 
 
 
 
 
 
 
No.  2005AP2852.akz 
 
1 
 
 
¶68 ANNETTE 
KINGSLAND 
ZIEGLER, 
J.   (concurring). 
 
I 
concur with the majority's determination that the court of 
appeals' decision should be affirmed.  In this case, there are 
genuine issues of material fact that preclude summary judgment. 
¶69 The seminal issue on appeal in this case is whether 
reasonable 
reliance 
is 
an 
element 
of 
the 
statutory 
misrepresentation 
claim. 
 
In 
following 
K&S 
Tool 
& 
Die 
Corporation v. Perfection Machinery Sales, Inc., 2007 WI 70, 301 
Wis. 2d 109, 732 N.W.2d 792, reasonable reliance is not an 
element of a Wis. Stat. § 100.18 misrepresentation claim.  I 
write separately, however, because reasonable reliance is a 
valid consideration not only for the fact finder, but also the 
circuit court judge and even at summary judgment.   
¶70 The second and third elements of a Wis. Stat. § 100.18 
claim 
include 
reasonable 
or 
justifiable 
reliance 
as 
a 
consideration.  "[T]he reasonableness of a plaintiff's reliance 
may be relevant in considering whether the representation 
materially induced (caused) the plaintiff to sustain a loss."  
Majority op., ¶3.  Thus, a court may consider whether the 
representation materially induced the plaintiff's pecuniary 
loss.  K&S Tool & Die Corp., 301 Wis. 2d 109, ¶37.   
¶71 I write separately because I believe that under 
different facts the court may rightfully determine, as a matter 
of law, that a party's reliance is so unreasonable that summary 
judgment or dismissal of a Wis. Stat. § 100.18 claim is 
appropriate.  I do not want the majority decision today to be 
No.  2005AP2852.akz 
 
2 
 
viewed as an absolute bar to summary judgment determination of a 
§ 100.18 claim, under all circumstances.  While an unscrupulous 
seller ought not benefit from deceiving a purchaser, § 100.18 
ought not protect a fully informed consumer who, with knowledge 
that a defect exists, ignores the obvious, proceeds to purchase, 
and then later makes a claim for statutory misrepresentation.  
¶72 While I do not advocate for the protection of a seller 
who purposefully misrepresents the condition of a home and lies 
to a purchaser in order to induce the sale of a home, there may 
be circumstances where a buyer should be held responsible for 
his or her failure to take reasonable action.  This decision 
today does not address such a situation where the buyer has 
actual 
knowledge 
that 
representations 
are 
untrue 
or 
has 
independent knowledge regarding a defective condition, but 
proceeds to purchase despite that knowledge.  This decision does 
not address a situation where there is no question that the 
seller has innocently acted and defects are later discovered.  
What the court has decided today is that here, there are genuine 
issues of material fact that cannot be resolved at summary 
judgment.   
¶73 For the foregoing reasons I concur. 
No.  2005AP2852.akz 
 
 
 
1