Stuart v. Weisflog's Showroom Gallery, Inc., 2008 WI 22
This case held that a home improvement contractor can be found liable for double damages, attorneys' fees and costs where company and individual owner engage in misrepresentation in providing construction services in violation of ATCP 110. Effect on the construction industry: this case will have a profound effect on contractors within the home improvement industry -- raising the risks of significant liability. My view is that any contractor or subcontractor within this industry must have: (1) a professionally drafted contract; (2) all representations and change orders in writing; and (3) a working checklist to ensure compliance with ATCP 110. Home owners and plaintiff's lawyers are going to have a hey-day with this case. The case is located in the link below.
Below v. Norton, 2008 WI 77
This case held that home buyers can no longer sue for common law fraud/misrepresentation claims; however, where applicable, home buyer may still can file claims under Wis. Stat. A? 100.18, for fraud and misrepresentation. Effect on the construction industry: nominal -- buyer's lawyers need to be vigilant so as not to plead common law fraud claims and to include where applicable, claims under Wis. Stat. A? 100.18. Sellers who are also contractors may be able to benefit from this, as common law fraud claims (under which punitive damages may be available) are out the window. The case is located in the link below.
State v. Keyes, 2008 WI 54
This case held that a general contractor commits theft by contractor under Wis. Stat. A? 779.02(5), where payments made by the owner are not used by the general contractor to pay subcontractors first -- requiring subcontractors to be paid a proportional amount of what's left of the money if a project runs dry before all final payments have been made. Effect on the construction industry: could be significant as the industry is facing a crisis of owners and developers who are defaulting on construction loans. General contractors need to be very wary about paying themselves first, and must closely monitor the owner's construction loan situation and where there are red-flags -- make sure that subs are getting paid. Where the owner defaults on a construction loan, general contractors should divvy up proportionately the remaining balance of the loan or face a theft by contractor clause. This case is also located in the link below.
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