United States District Court, E.D. Wisconsin
JEREMY S. BURT, Plaintiff,
CHASE AUTO FINANCE CORPORATION, Defendant.
DECISION AND ORDER
William C. Griesbach, District Judge
Jeremy Burt commenced this action in state court claiming
Defendant Chase Auto Finance Corporation improperly
repossessed his vehicle. Reflecting the lack of clarity
endemic to American law, the First Amended Complaint (FAC)
alleges six overlapping contract, tort, and statutory claims.
More specifically, the FAC alleges a violation of
Wisconsin's Uniform Commercial Code, civil theft,
invasion of privacy, trespass to land and chattel,
conversion, and breach of contract. Chase removed the case to
federal court on the basis of diversity jurisdiction and
filed a motion to dismiss Burt's civil theft, invasion of
privacy, trespass, and conversion claims on the ground that
they are barred by Wisconsin's economic loss doctrine.
For the following reasons, Chase's motion will be denied.
12(b)(6) motion tests the sufficiency of the complaint to
state a claim upon which relief can be granted. Gibson v.
City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990);
see Fed. R. Civ. P. 12(b)(6). When reviewing a
motion to dismiss under Rule 12(b)(6), the court must accept
all well-pleaded factual allegations as true and draw all
reasonable inferences in the light most favorable to the
nonmoving party. Gutierrez v. Peters, 111 F.3d 1364,
1368-69 (7th Cir. 1997); Mosley v. Klincar, 947 F.2d
1338, 1339 (7th Cir. 1991). Rule 8 mandates that a complaint
need only include “a short and plain statement of the
claim showing that the pleader is entitled to relief.”
Fed.R.Civ.P. 8(a)(2). The plaintiff's short and plain
statement must “give the defendant fair notice of what
the claim is and the grounds upon which it rests.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007). While a plaintiff is not required to plead detailed
factual allegations, he must plead “more than labels
and conclusions.” Id. A simple, formulaic
recitation of the elements of a cause of action will not
do.” Id. A claim is plausible on its face when
“the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 663 (2009).
CONTAINED IN THE AMENDED COMPLAINT
resides in Winnebago County, Wisconsin. In 2018, Burt entered
into a retail installment contract for the purchase of a 2018
Subaru WRX, in which Chase held a security interest. Under
the contract, Chase agreed to finance the purchase of the
vehicle, and Burt agreed to make a $2, 700.00 down payment
and 75 monthly installment payments of $661.97, for a total
payment amount of $52, 347.75. The contract warned Burt that,
if he defaulted, Chase could repossess the vehicle and Burt
could be liable for collection costs.
claims that, despite making timely payments under the
contract, Chase sent agents to repossess the vehicle on
September 17, 2018. Burt demanded the return of his vehicle,
but Chase refused. As a result of Chase's actions, Burt
asserts he has been deprived the use of his vehicle and has
suffered extreme emotional distress, embarrassment, anxiety,
fear, shame, distress, and post-traumatic stress disorder.
Burt asserts six causes of action against Chase arising out
of these allegations: a violation of Wisconsin's Uniform
Commercial Code, civil theft, invasion of privacy, trespass
to land and chattel, conversion, and breach of contract.
Invasion of Privacy, Trespass to Land and Chattel, and
asserts that the court should dismiss Burt's invasion of
privacy, trespass to land and chattel, and conversion claims
because they are barred by Wisconsin's economic loss
doctrine. The economic loss doctrine is a
“judicially-created doctrine that seeks to preserve the
distinction between contract and tort.” Ins. Co. of
N. Am. v. Cease Elec., Inc., 2004 WI 39, ¶ 15, 276
Wis.2d 361, 688 N.W.2d 462 (citation omitted). While the
doctrine is classically applied to cases where a plaintiff
seeks to recover damages suffered when a product does not
perform as promised, “Wisconsin courts have further
defined the parameters of the economic loss doctrine and
referred to it more broadly as ‘precluding contracting
parties from pursuing tort recovery for purely economic or
commercial losses associated with the contract
relationship.'” Kaloti Enters., Inc. v. Kellogg
Sales Co., 2005 WI 111, ¶ 27, 283 Wis.2d 555, 699
N.W.2d 205 (alterations and citation omitted); see also
Below v. Norton, 2007 WI.App. 9, ¶ 15, 297 Wis.2d
781, 728 N.W.2d 156 (Wis. Ct. App. 2006) (noting that the
economic loss doctrine “is intended to bar purely
economic losses in situations when the relationship between
the two parties involves a contract for a product”).
The doctrine is “based on an understanding that
contract law and the law of warranty, in particular, is
better suited than tort law for dealing with purely economic
loss in the commercial arena.” Tietsworth v.
Harley-Davidson, Inc., 2004 WI 32, ¶ 26, 270 Wis.2d
146, 677 N.W.2d 233 (citation omitted). The Wisconsin Supreme
Court has recognized three policies underlying the doctrine:
“(1) to maintain the fundamental distinction between
tort law and contract law; (2) to protect commercial
parties' freedom to allocate economic risk by contract;
and (3) to encourage the party best situated to assess the
risk [of] economic loss, the commercial purchaser, to assume,
allocate, or insure against that risk.” Daanen
& Janssen, Inc. v. Cedarapids, Inc., 216 Wis.2d 395,
403, 573 N.W.2d 842 (1998).
Wisconsin's economic loss doctrine has an extensive
reach, see H.A. Friend & Co. v. Professional
Stationary, Inc., 2006 WI.App. 141, ¶ 15, 294
Wis.2d 754, 720 N.W.2d 96, the doctrine has not been extended
to the circumstances presented here. Again, the economic loss
doctrine seeks to protect parties' freedom to allocate
economic risk by contract and to encourage the party best
situated to assess the risk to insure against that risk.
Kaloti Enters., Inc., 283 Wis.2d 555, ¶ 28. In
this case, Burt claims Chase repossessed his vehicle even
though he made timely monthly payments under the installment
contract. The improper repossession and unauthorized taking
of his vehicle is not the type of risk that Burt could have
reasonably anticipated and addressed in the contract.
to Chase, Burt's tort claims are simply restatements of
his breach of contract claim. But they are not. Indeed,
instead of using tort law to recover for breach of contract,
it appears that Burt is dressing up his tort claims as a UCC
violation and breach of contract. If the allegations of the
complaint are true, it appears that Chase had no contractual
right to repossess Burt's car. But that does not mean
Chase breached the contract or violated the UCC. It simply
means it likely has no defense to his tort claims. In other
words, if any claims should be dismissed, it is likely the
UCC and breach of contract claims. Eventually, the
inconsistent and confusing claims asserted in the FAC will
have to be sorted out. But the argument that the tort claims
are barred by the economic loss doctrine simply because Burt
has asserted questionable contract claims finds no support in
the law. See, e.g., Tyson v. Sterling Rental,
Inc., 836 F.3d 571, 583 (6th Cir. 2016) (holding that
“post-delivery repossession by a non-lien-holding
seller is not the sort of risk typically anticipated by
buyers in the ordinary course of bargaining for a commercial
transaction. Thus, Plaintiff could not reasonably have been
expected to bargain against the possibility that Defendants
would repossess the vehicle without any legal authority,
which is what occurred under Plaintiff's version of
disputed facts.”). In short, the nature of Burt's
claims and the facts alleged in the amended complaint fall
outside the reach of the economic loss doctrine. Accordingly,
the court will not dismiss Plaintiff's invasion of
privacy, trespass to land and chattel, and conversion claims
under the economic loss doctrine.
Civil Theft Claim
also seeks dismissal of Burt's civil theft claim.
Burt's claim for civil theft arises under Wis.Stat.
§§ 943.20 and 895.446. Wisconsin's civil theft
statute, Wis.Stat. § 895.446, affords a civil right of
action to recover damages from anyone who has committed
criminal theft. To state a civil theft claim based on conduct
prohibited by Wisconsin's criminal theft statute, Burt
must allege that Chase “[i]ntentionally takes and
carries away, uses, transfers, conceals, or retains
possession of movable property of another without the
other's consent and with intent to deprive the owner
permanently of possession of such property.” Wis.Stat.
§ 943.20. Chase argues that Burt's civil theft claim
should be dismissed because he failed to allege criminal
intent. In the amended complaint, Burt alleges that Chase
exercised dominion and control over his vehicle without his
consent and without the lawful right to do so and with intent
to deprive him permanently of possession of the car in
violation of Wisconsin's civil theft statute. Am. Compl.
¶ 27. In ...