Court Opinion

ID: 9690369
Source: CourtListenerOpinion
Date Created: 2023-08-24 19:09:28.032387+00
Date Added: 2024-06-11T18:18:55.923468
License: Public Domain

PATIENCE DRAKE ROGGENSACK, J.
¶ 37. (concurring). The majority opinion, which I authored and join, affirms the court of appeals decision that in turn affirmed the circuit court's grant of summary judgment dismissing plaintiffs' claims. The court of appeals based its decision on the application of Restatement (Second) of Torts § 324A (1965), after concluding that § 324A is the appropriate framework for analyzing the plaintiffs' negligence claims. Butler v. Advanced Drainage Sys., Inc., 2005 WI App 108, ¶ 22, 282 Wis. 2d 776, 698 N.W.2d 117.
¶ 38. The majority has chosen to deny liability based on a public policy factor. When we employ public policy factors to preclude liability, we engage in judicial line-drawing wherein we conclude there is the lack of sufficient cause to hold a defendant liable. Fandrey v. *421Am. Family Mut. Ins. Co., 2004 WI 62, ¶ 16, 272 Wis. 2d 46, 680 N.W.2d 345. In so doing, we employ a case-by-case analysis that provides little guidance for the courts, future litigants, or the public who may face similar legal issues in the future. I write separately because analyzing the plaintiffs' claims under Restatement (Second) of Torts § 324A would have provided more guidance to those who assert or defend a tort claim based on the breach of a contract to which the plaintiff was not a party. Accordingly, I respectfully concur in the majority opinion affirming the court of appeals.
I. BACKGROUND
¶ 39. The court of appeals concluded that the Restatement (Second) of Torts § 324A was the appropriate framework for analyzing the plaintiffs' negligence claims. Butler, 282 Wis. 2d 776, ¶ 22. It concluded that summary judgment was appropriate because, based on the undisputed facts, "none of the three alternative conditions for liability under § 324A [had] been met." Id., ¶ 2. The court of appeals also concluded that an action based on nuisance should be dismissed because it was based on allegedly negligent conduct and the defendants' conduct is not "otherwise actionable under the rules governing liability for negligent conduct." Id., ¶ 40 (quoting Milwaukee Metro. Sewerage Dist. v. City of Milwaukee, 2005 WI 8, ¶ 63, 277 Wis. 2d 635, 691 N.W.2d 658).
II. DISCUSSION
A. Standard of Review
¶ 40. This case requires us to review summary judgment dismissing the plaintiffs' claims against the *422defendants. The standard of review in regard to summary-judgment decisions is fully set forth in the majority op., majority op., ¶ 17, as are the principles that we apply in deciding whether summary judgment should have been granted, majority op., ¶ 18.
B. The Negligence Claim
¶ 41. The plaintiffs' negligence claim can be analyzed within the framework set out in the Restatement (Second) of Torts § 324A or under the usual four-element negligence test. The court of appeals relied on § 324A, and the circuit court applied the four-element test. I conclude that the test set out in § 324A provides the better framework.
1. Restatement (Second) of Torts § 324A
¶ 42. The court of appeals concluded that § 324A of Restatement (Second) of Torts provided the proper framework in which to analyze this tort claim that arose out of a breach of contract between the defendants and the city. Butler, 282 Wis. 2d 776, ¶ 22. Section 324A provides:
One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if
(a) his failure to exercise reasonable care increases the risk of such harm, or
(b) he has undertaken to perform a duty owed by the other to the third person, or
*423(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.
¶ 43. In Miller v. Bristol-Myers Co., 168 Wis. 2d 863, 485 N.W.2d 31 (1992), we observed that the "word 'protect' in the introductory portion [of § 324A] apparently was a typographical error published in the Restatement and should be read 'perform.'" Id. at 882 n.7 (citation omitted). The proposed final draft for Restatement (Third) of Torts has re-worded the introductory paragraph thereby eliminating this concern.1
¶ 44. Wisconsin has a long history of attempting to maintain the distinction between contract and tort claims. Landwehr v. Citizens Trust Co., 110 Wis. 2d 716, 720, 329 N.W.2d 411 (1983). In Landwehr, the issue presented was whether a breach of contract is actionable as a tort. Id. There, Oswald Landwehr sued his father's estate, claiming his father had been negligent in failing to make the will he had promised to make. Id. at 717-19. We reasoned that Landwehr had no tort *424claim against his father's estate because even if we were to assume that there were such a promise by his father, in order for a tort claim to arise, "there must be a duty [to make a will in favor of Landwehr] existing independently of the performance of the contract for a cause of action in tort to exist." Id. at 723. By way of further explanation, we quoted William L. Prosser, Handbook of the Law of Torts § 92, at 617-18 (4th ed. 1971), "[T]here will be liability in tort for misperformance of a contract whenever there would be liability for gratuitous performance [of the act] without the contract." Landwehr, 110 Wis. 2d at 723.
¶ 45. The use of § 324A by Wisconsin courts appears in our attempts to sort out when circumstances that began with an undertaking of some sort, either gratuitous or for pay, could give rise to a tort. For example, in American Mutual Liability Insurance Co. v. St. Paul Fire & Marine Insurance Co., 48 Wis. 2d 305, 179 N.W.2d 864 (1970), we said that § 324A provided "the proper rule of law" for analyzing whether an insurance company's gratuitous inspection of a boiler, which inspection was known to the company and on which the company relied in not conducting its own inspection, could result in tort liability for the insurance company. Id. at 313.
¶ 46. A similar § 324A approach is found in the analysis of the claims in Miller. There, we used § 324A to determine whether a parent company that gave day-to-day advice to a subsidiary corporation on safety issues was liable in tort to the employees of the subsidiary who were harmed because the subsidiary company took the advice of the parent company. Miller, 168 Wis. 2d at 883-84. We explained:
Section 324A establishes when an assumption of duty arises and the grounds for liability thereunder. The *425introductory portion establishes when an assumption of duty arises. The elements for an assumption of duty to arise are that the actor must: (1) undertake to render services, (2) to another, (3) which such actor should recognize as necessary for the protection of a third person.
Id. We noted that once it has been shown that a defendant assumed a duty with regard to another, "the remaining portion of the introduction and subsections (a), (b), and (c) [of § 324A], establish when liability for assuming such a duty arises." Id. at 884.
¶ 47. In Gritzner v. Michael R., 2000 WI 68, 235 Wis. 2d 781, 611 N.W.2d 906, an adult offered to take care of a young girl. The defendant left the young girl unsupervised in the company of a boy known to have behaved in inappropriate ways, sexually, and she was assaulted. Id., ¶ 2. We evaluated the adult's failure to control the children at his home under the provisions of § 324A. In so doing, we explained that "[t]his court has adopted the theory of negligence set forth in the Restatement (Second) of Torts § 324A." Id., ¶ 56. We directed that the standard of conduct set out in § 324A "applies to anyone 'who, having no duty to act, gratuitously undertakes to act and does so negligently.'" Id. We concluded that the adult's inadequate control of a boy known to have inappropriate sexual propensities by leaving him unsupervised with the young girl in his care increased her risk of harm and therefore, he was liable for her injuries. Id., ¶ 57.
¶ 48. In Stephenson v. Universal Metrics, Inc., 2002 WI 30, 251 Wis. 2d 171, 641 N.W.2d 158, we once again employed the provisions of § 324A. In Stevenson, a fellow employee offered to give a co-employee who was intoxicated a ride home. Based on that offer, the bartender continued to provide alcohol. However, when it *426was time to go home, no ride was given and a terrible accident occurred where two people died. Id., ¶ 2. When suit was brought, the defendants argued that there was no duty to give the drunken employee a ride home; therefore, the complaint should be dismissed. Id., ¶ 14. We disagreed, pointing out that we have applied § 324A in numerous cases and as we have applied it, "the framework of § 324A comports with Wisconsin's principles of negligence law." Id., ¶ 23. This is so because although a person may have no duty to perform an act, if he undertakes to do so, he must exercise reasonable care in performing it. Id.
¶ 49. Our use of § 324A comports with general negligence principles because it does not preclude a tort claim where one would otherwise exist. Rather, it assists in maintaining an analysis that preserves the differences between contract and tort claims, while recognizing that some factual circumstances can give rise to both types of claims.
2. The application of § 324A
¶ 50. In the case now before us, none of the defendants had an obligation to enter into a contract with the City. None had any obligation to attempt to correct the Lake's flooding problem. They are sued by the plaintiffs solely because they contracted with the City to construct a system to reduce naturally occurring flooding and the system they constructed failed to do so. Therefore, the defendants have undertaken to render services that they should recognize as necessary to protect the property owners at the Lake's edge. Accordingly, they come within the ambit of the introductory paragraph of § 324A. They are liable to the property owners if the conditions contained in one of the three *427subsections of § 324A are met and the plaintiffs suffered physical harm. See Miller, 168 Wis. 2d at 884-86.
¶ 51. Subsection (a) involves increased risk of harm.2 The property owners claim their risk of harm was increased because the water level continued to rise when the defendants breached their contracts with the City to lower the Lake's water level. The plaintiffs do not claim that some act of the defendants caused more water to enter the Lake; they claim only that the defendants were ineffective in lowering the water level. There is nothing in the record to imply that the defendants' failure to exercise reasonable care in their undertakings for the City increased the risk of harm to the property owners beyond that which was present before the defendants began their contracts with the City. Therefore, because § 324A(a) is not satisfied, no liability arises under that subsection.
¶ 52. Subsection (b) requires that the defendants perform a duty owed by another.3 The property owners claim that the City had a legal duty to lower the water level because of agreements the City made with the DNR. I see no merit in this argument, and I agree with the conclusion of the court of appeals that any obligation of the City to the DNR does not translate into a duty of the City to the property owners. The plaintiffs point to nothing in the record that would infer that the City had an obligation to the plaintiffs to reduce the Lake's flooding, although it repeatedly tried to do so. Further, as we have repeatedly held, " [decisions concerning the adoption, design, and implementation of a *428public works system are discretionary, legislative decisions." Milwaukee Metro, 277 Wis. 2d 635, ¶ 9. Accordingly, because the City had no duty to the plaintiffs to lower the water level in the Lake, the defendants were not performing a duty owed by the City to the property owners when they attempted to lower the water level. Therefore, liability will not arise under § 324A(b).
¶ 53. Subsection (c) requires a finding of harm due to reliance.4 Reliance has a factual foundation. Kaloti Enters., Inc. v. Kellogg Sales Co., 2005 WI 111, ¶ 26, 283 Wis. 2d 555, 699 N.W.2d 205. However, there is not one affidavit from one property owner or from the City averring that any one of them was harmed because of reliance on the undertakings of the defendants. For example, there is no affidavit asserting that the plaintiffs refrained from efforts they would otherwise have undertaken to hold back the rising Lake water level because of the contract between the City and the defendants.
¶ 54. In addition, the City claims to have suffered no "harm" because of the defendants' unsuccessful efforts.5 The plaintiffs contend that because they were assessed to pay a portion of the costs of the City's contracts with the defendants, the assessments they paid were a "harm" as they did not get the benefit expected. However, even if we assume that were so, the plaintiffs would have suffered only an economic harm and the introductory paragraph to § 324A requires that a "physical harm" result from the failed undertaking. *429Therefore, the criteria of § 324A(c) are not fulfilled by the facts before the court. Accordingly, applying § 324A leads me to the conclusion that the plaintiffs have presented no evidence that would create a disputed issue of material fact entitling them to a trial on their negligence claims when analyzed under § 324A.
III. CONCLUSION
¶ 55. The majority has chosen to deny liability based on a public policy factor. When we employ public policy factors to preclude liability, we engage in judicial line-drawing wherein we conclude there is the lack of a sufficient legal cause to hold a defendant liable. Fandrey, 272 Wis. 2d 46, ¶ 16. In so doing, we employ a case-hy-case analysis that provides little guidance for the courts, future litigants, or the public that may face similar legal issues in the future. I write separately because I conclude that the court should have analyzed the plaintiffs' claims under Restatement (Second) of Torts § 324A. In my view, doing so would have provided more guidance to those who assert or defend a tort claim based on the breach of a contract to which the plaintiff was not a party. Accordingly, I respectfully concur in the majority opinion affirming the court of appeals.

 Restatement of the Law Third, Torts: Liability for Physical Harm, Proposed Final Draft No. 1 (Apr. 6, 2005), renumbered § 324A to § 43 and revised the introductory paragraph as:
An actor who undertakes to render services to another that the actor knows or should know reduce the risk of physical harm to which a third person is exposed has a duty of reasonable care to the third person in conducting the undertaking if:
(a) the failure to exercise reasonable care increases the risk of harm beyond that which existed without the undertaking,
(b) the actor has undertaken to perform a duty owed by the other to the third person, or
(c) the person to whom the services are rendered, the third party, or another relies on the actor's exercising reasonable care in the undertaking.

 Section 324A(a) provides: "his failure to exercise reasonable care increases the risk of such harm."

 Section 324A(b) provides: "he has undertaken to perform a duty owed by the other to the third person."

 Section 324A(c) provides: "the harm is suffered because of rebanee of the other or the third person upon the undertaking."

 This is likely true because the City sued the defendants for breach of contract and a settlement was achieved that was satisfactory to the City.