No Diagnosis, No "Damages": Wisconsin's Construction Statute of Repose in Asbestos Cases

How to apply Wisconsin’s construction statute of repose, Wis. Stat. § 893.89, in asbestos cases has recently been a hot topic dividing trial courts. The statute bars a broad category of claims if they are brought more than 10 years after the date of substantial completion of an improvement to real property. Many corporate defendants argue that their involvement in past real property improvements entitles them to the protection of the statute and bars asbestos plaintiffs’ claims. One of the key debates involves the meaning of the exception from the statute’s protection for claims for “[d]amages that were sustained before April 29, 1994.” § 893.89(4)(d). Plaintiffs, some of whom first worked with asbestos-containing products more than 50 years ago, often contend that this exception applies to their claims, making the statutory bar inapplicable.

Last week, in Peter v. Sprinkmann Sons Corp., 2014AP923, the Wisconsin Court of Appeals, District I, held the exception inapplicable to claims made by the estate of the deceased, Mr. Peter. The crux of the issue was the meaning of the phrase “damages that were sustained.” Did “damages” refer to legal damages, as in a legal cause of action that accrues when a cancer diagnosis is made (here, in 2012), as the defendant urged? Or did “damages” mean physical damage, as the plaintiff estate contended, submitting expert testimony that physical damage occurs upon asbestos exposure, which here may have been as far back as 1959. The court agreed with the defendant, for four reasons.

First, the court held that “damages” has a specific meaning: a legally cognizable claim or right to recover for injuries. The decedent had no such claim until his mesothelioma diagnosis in 2012, nearly two decades after April 29, 1994. Second, the court determined that the legislature had used both the word “damages” and the word “injury” in the same sentence in § 893.89(2) (“damages for any injury”), so to give those terms an identical meaning would render a piece of the statute “absurd.” Accordingly, “damages” in this statute had to mean something other than “injury.”

Third, the court approvingly cited an opinion by Judge Griesbach of the Eastern District of Wisconsin, holding that the use of the plural word “damages” in the statute showed that “damages” means legal damages, not physical “damage.” Lastly, the court thought that its interpretation was supported by the purpose of § 893.89: to provide long-term liability protection for those involved in real property improvements by extinguishing all rights of recovery after the 10-year repose period expired. While the court acknowledged the harshness of this result for asbestos plaintiffs who may face a 40-year latency period before their diagnosis, it put the responsibility for constructing any asbestos-related exception in the statute squarely on the legislature.

There is little doubt that Peter will encourage defendants involved in past real property improvements to cite the statute of repose as a defense in asbestos litigation. If the opinion is published, as the panel recommended, it will have statewide precedential effect, Wis. Stat. § 752.41(2), and may well govern the outcome of three other cases of which we are aware, now pending in the Court of Appeals on this same issue, as well as in trial courts throughout the state. We will not be surprised, therefore, to see the plaintiff estate petition for review by the Wisconsin Supreme Court.