Opinion ID: 1608413
Heading Depth: 1
Heading Rank: 4

Heading: contractual privity

Text: [6] ¶ 63. Our analysis does not end with the analysis of the economic loss doctrine and the Huron Tool exception in regard to the facts presented. We must also consider whether a subcontractor of the party to whom the alleged misrepresentations were made avoids the operation of the economic loss doctrine, because it was not in contractual privity with the party allegedly engaging in fraud. ¶ 64. Ameritech argues that Bacher should not be able to escape application of the economic loss doctrine just because there was no privity between them. [7] ¶ 65. We answered the question in Daanen & Janssen, 216 Wis. 2d 395, and unequivocally held there that even in the absence of privity, the economic loss doctrine bars one party in the distributive chain from recovering economic losses in tort from another party in that chain. See also Cooper, 123 F.3d 675 at 681 (citing Miller v. United States Steel Corp., 902 F.2d 573, 575 (7th Cir. 1990)). For the reasons discussed herein, the economic loss doctrine applies to Bacher as well, and the fraud in the inducement exception is not applicable to its claims. ¶ 66. With regard to Bacher, it is important to note that it hired Krinsky before any representation was made by Ameritech. Under the facts of this case, Digicorp, an authorized Ameritech distributor, contacted Ameritech for approval to sell Ameritech's calling services and calling plans known as Value-Link through the third party, Bacher Communications. Bacher was not an Ameritech-authorized distributor. Even though Taylor failed to inform Digicorp during these discussions that Krinsky had engaged in fraudulent acts of forging customers' signatures when Krinsky had worked for another authorized Ameritech distributor, by that time Krinsky was already employed by Bacher. He was so employed before Digicorp and Ameritech had entered into the agreement for Digicorp to sell the Value-Link system through Bacher.