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economic loss claim for physical property Consumer Law, Warranties

Discussion in 'Consumer Law, Contracts, Warranties' started by legalnovice_01, May 9, 2022.

  1. legalnovice_01

    legalnovice_01 Law Topic Starter New Member

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    Hi everyone,
    I have a little unique situation. I want to know if it's possible to claim an economic loss that involves physical property. I have a trailer that was towed from a truck stop by a towing company. I called the towing company within their business hours to claim and recover my trailer (same day it was towed), but they refused to return my trailer to me. They did this intentionally and on purpose (not an accident). Consequently, I lost work/freight for that weekend. I already had arrangements booked and prepared to pickup the freight before the tow. But after they towed the trailer and wouldn't return it ( on purpose), I had to cancel arrangements. The freight was worth thousands of dollars. I spoke with some local lawyers about this, but they said the economic loss doctrine could prevent me from making a claim. I feel there has to be a way to make a claim. If people can make claims for intellectual property infringement, there has to be a way to do it for physical property. This happened in Milwaukee Wisconsin. Furthermore, there were other issues in this situation, such as lack of signs in the area where I parked the trailer. Any help is appreciated.

    Thanks
     
  2. Tax Counsel

    Tax Counsel Well-Known Member

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    How do you know it was intentional and what reason was given for holding it? What did your contract say about how long the vehicle would be held? And when you contracted with the towing firm, did you tell the firm it was important to get the vehicle back before some specific time because if you didn't you'd suffer loss of business of $X?

    Yours is a situation that falls under contract law. The attorneys with whom you spoke mentioned that the economic loss doctrine would preclude you from an award here. The economic loss doctrine states that that in a contract case a party cannot recover for damages in tort (e.g. negligence damages). As a Wisconsin Court explains:

    Here, Magestro initially alleged causes of action for both negligence and breach of contract. Pekul filed a motion for partial summary judgment to dismiss the negligence claims based upon the economic loss doctrine, claiming that Magestro's losses were solely economic in nature and therefore he could not recover under tort theories of negligence. The trial court agreed and dismissed all of the negligence claims. The only claims remaining were breach of contract claims and therefore the economic loss doctrine was no longer applicable. We agree with Magestro's attorney who stated before the trial court:
    I guess I would just like to make a comment about this economic loss doctrine because I understand that you are keeping a lot of these damages out based on the economic loss doctrine, which is a theory that is used in tort cases. The economic loss doctrine is used to preclude damages suffered by somebody in tort when there is a contract in place. I don't think that the economic loss doctrine has any applicability in this case because we're speaking now strictly of a breach of contract and whether or not there are consequential damages flowing from that breach of contract.... [Y]our Honor, if you are dismissing any of these damages based on the economic loss doctrine, I have to respectfully, completely disagree with you because I don't think the economic loss doctrine has any applicability in this case because we're talking about a breach of contract. (Emphasis added.)
    ¶ 8 Because the trial court dismissed all the negligence claims pursuant to the economic loss doctrine, the economic loss doctrine has no further applicability to the remaining breach of contract claims.

    Magestro v. N. Star Env't Const., 2002 WI App 182, ¶¶ 7-8, 256 Wis. 2d 744, 750–51, 649 N.W.2d 722, 725.

    So if you were alleging damages due to negligence of the tow company the damages that occurred from that negligence could not be recovered. That's the economic loss doctrine. I'm not seeing a negligence claim here, though I also don't have all the facts. In any event, you'd not get damages for negligence out of this. But that's not the end of the matter.

    In contract law there are two categories of breach of contract damages: direct damages and consequential damages. When a contract is breached, you are entitled to direct damages that result from the breach. An example of that is if the tow company had damaged your vehicle while towing it. That's a damage directly incurred from the act you contracted the company to do — tow the vehicle.

    Consequential damages are indirect damages that result from the breach. Loss of profit from other work you could have had while the truck was idle is a common example of consequential damages. The key thing here is that the the consequential damages must be reasonably foreseeable to the breaching party at the time the contract was for you to be awarded them. "Consequential damages may be awarded for a breach of contract if such damages are reasonably foreseeable at the time the contract was made." Trenhaile v. J.H. Findorff & Son, Inc., 2004 WI App 125, ¶ 16, 275 Wis. 2d 275, 683 N.W.2d 93

    Often it is not obvious to the breaching party that those damages will occur. That party may not have any reason to know you'd loss business and how much profit was at stake. For that reason, you generally want to put the other party on notice of any losses like that which may occur when you are making the contract so the other party knows what is at stake. Failure to do that might mean you don't get that lost profit. And, of course, you have to prove that the lost profit with reasonable certainty.

    So, just based on what you said here, I'm not seeing that your problem is with the economic loss doctrine. I see the problem as a consequential damages issue. Without more information on what the contract said about when you'd get the vehicle back, the reason for the delay, and what reasons the tow company would have to know you'd have lost profit, I can't say whether you might have a good claim to get that. As you can see, there is a lot you have to prove to win it: that the contract was breached, the breach was the cause of the loss profit, what the amount of lost profit was, and that this loss was reasonably foreseeable to the breaching party or that he had been specifically put on notice of that potential loss at the time the contract was made. And it bears repeating: you'd get only lost profit, not the total amount of charges you'd have billed for the lost jobs.
     
    Last edited: May 9, 2022
  3. Zigner

    Zigner Well-Known Member

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    I could be wrong, but the way I read the entire post is that the OP had the trailer parked in a spot it wasn't supposed to be parked, so it was towed. I don't think that falls under contract law.
     
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  4. adjusterjack

    adjusterjack Super Moderator

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    Did they say why?

    Did you ask why?
     
  5. Redemptionman

    Redemptionman Active Member

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    Wisconsin is one of many states that has instituted an economic loss doctrine. This bars purely economic damages from tort by a part within contractual terms. In not too short terms, too bad.
     
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  6. adjusterjack

    adjusterjack Super Moderator

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    What "contract" did the OP have with the towing company?
     
  7. Zigner

    Zigner Well-Known Member

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    The OP hasn't come back to either forum for clarification. I'm waiting with bated breath.
     
  8. Tax Counsel

    Tax Counsel Well-Known Member

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    You may be correct. The OP wasn't clear on that and he should clarify if he was the one who had it towed or the truck stop had it towed. I believed contract law to apply because the OP said the lawyers he talked to said the economic loss doctrine would preclude him from recovery. The economic loss doctrine denies recovery for monetary tort claims when there is a contract between the two parties. So, if there was no contract, those lawyers should not have mentioned that doctrine at all.
     
  9. Redemptionman

    Redemptionman Active Member

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    Whenever they agreed to the tow they also agreed to whatever terms and conditions they applied to that.
     
    Last edited by a moderator: May 9, 2022
  10. Zigner

    Zigner Well-Known Member

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    The OP didn't "agree" to the tow. If he had, then why would he have to "claim and recover" it?
     
  11. Redemptionman

    Redemptionman Active Member

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    Wisconsin abandoned trailers/ vehicles rules apply. The trailer should not have been left where it was but like you said OP will never come back to reply any so, there is that.
     
  12. Zigner

    Zigner Well-Known Member

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    It's more likely Wisconsin Legislature: 349.13(3m)(c) that would apply...
     
  13. Zigner

    Zigner Well-Known Member

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    It is these three sentences that make me believe the tow was due to the trailer being parked on private property without permission.

    EDIT: Especially the last sentence. Why would the OP care about the signs if he called for the tow?
     
  14. adjusterjack

    adjusterjack Super Moderator

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    We don't know if he had it towed or if it was towed because it was in the wrong place.
     
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  15. Tax Counsel

    Tax Counsel Well-Known Member

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    I can see that. Taken as a whole, the OP's post is simply not clear on the circumstances of the tow, and those details are important. If the OP comes back to clarify that, then we can refine where he/she stands. Until then, I think we've covered the possibilities as much as we can for now given the info we have.
     
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