Chula Vista, Inc. v. Architectural Design Consultants, Inc.

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
July 21, 2022
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10 and
RULE 809.62.

Appeal No. 2021AP971 Cir. Ct. No. 2017CV456

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT IV

CHULA VISTA, INC.,

PLAINTIFF-APPELLANT,

V.

ARCHITECTURAL DESIGN CONSULTANTS, INC.,

DEFENDANT-THIRD-PARTY PLAINTIFF-RESPONDENT.

APPEAL from an order of the circuit court for Sauk County:
PATRICIA A. BARRETT, Judge. Affirmed.

Before Blanchard, P.J., Kloppenburg, and Graham, JJ.

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).
No. 2021AP971

¶1 PER CURIAM. Chula Vista, Inc., appeals the circuit court’s order
dismissing its claims against Architectural Design Consultants, Inc., on summary
judgment. The issue is whether the circuit court erred by concluding that Chula
Vista’s claims are barred by the ten-year statute of repose in WIS. STAT. § 893.89
(2015-16).1 We conclude that the circuit court properly dismissed Chula Vista’s
claims based on the statute of repose. Accordingly, we affirm.

¶2 The relevant background facts are straightforward and undisputed.
Chula Vista contracted with Architectural Design to design an indoor water park
facility. The construction of the facility was completed no later than July 1, 2006.
Approximately one year later, Chula Vista discovered that a vapor barrier was
missing or had not been properly installed according to Architectural Design’s
specifications. Because the construction of the facility was by then complete, it was
no longer feasible to install the vapor barrier as specified. Architectural Design
worked with Chula Vista’s general contractor to install spray foam insulation
instead. The spray foam project was completed by December 4, 2007.

¶3 On October 11, 2017, Chula Vista filed suit against Architectural
Design, alleging that Architectural Design breached its duty of care in overseeing
the spray foam project. Architectural Design moved for summary judgment,
arguing that Chula Vista’s claims were barred by the statute of repose in WIS. STAT.
§ 893.89. Most pertinent here, the statute provides that “no cause of action may
accrue and no action may be commenced … against … any person involved in the

1
All references to the Wisconsin Statutes are to the 2015-16 version unless otherwise
noted. In a footnote in its brief, Architectural Design asserts that a newer version of the statute
with a seven-year time limit applies retroactively to Chula Vista’s claims. We assume, without
deciding, that the 2015-16 version containing the ten-year time limit applies.

2
No. 2021AP971

improvement to real property after the end of the exposure period,” and the
“exposure period” is defined as “10 years immediately following the date of
substantial completion of the improvement to real property.” Section 893.89(1)-
(2).2

¶4 The circuit court concluded that Chula Vista’s suit is barred by the
statute of repose because the construction of the water park facility was substantially
complete in 2006, more than ten years before Chula Vista filed suit. On this ground,
the court granted Architectural Design’s motion for summary judgment and
dismissed Chula Vista’s claims. Chula Vista now appeals.

¶5 We review summary judgment de novo, applying the same standards
as the circuit court. Schauer v. Baker, 2004 WI App 41, ¶4, 270 Wis. 2d 714, 678
N.W.2d 258. “Summary judgment is appropriate when there is no material factual
dispute and the moving party is entitled to judgment as a matter of law.” Id. The
interpretation and application of a statute to a given set of facts is likewise a question

2
WISCONSIN STAT. § 893.89(1) and (2) provide in full as follows:

(1) In this section, “exposure period” means the 10 years
immediately following the date of substantial completion of the
improvement to real property.

(2) Except as provided in sub. (3), no cause of action may
accrue and no action may be commenced, including an action for
contribution or indemnity, against the owner or occupier of the
property or against any person involved in the improvement to real
property after the end of the exposure period, to recover damages
for any injury to property, for any injury to the person, or for
wrongful death, arising out of any deficiency or defect in the
design, land surveying, planning, supervision or observation of
construction of, the construction of, or the furnishing of materials
for, the improvement to real property. This subsection does not
affect the rights of any person injured as the result of any defect
in any material used in an improvement to real property to
commence an action for damages against the manufacturer or
producer of the material.

3
No. 2021AP971

of law for our de novo review. Pritchard v. Madison Metro. Sch. Dist., 2001 WI
App 62, ¶7, 242 Wis. 2d 301, 625 N.W.2d 613.

¶6 Chula Vista argues that the circuit court erred in its application of the
statute of repose. It contends that the ten-year exposure period for its claims ran
from completion of the spray foam project in December 2007. According to Chula
Vista, that project is a separate project with a separate exposure period for claims
arising out of that project. Chula Vista focuses on the statutory language providing
that the exposure period commences upon substantial completion of “the
improvement to real property,” see WIS. STAT. § 893.89(1), and it argues that the
spray foam project was itself an “improvement to real property” as defined in Peter
v. Sprinkmann Sons Corp., 2015 WI App 17, 360 Wis. 2d 411, 860 N.W.2d 308.
In Peter, we stated that an “improvement to real property” for purposes of the statute
means “‘[a] permanent addition to or betterment of real property that enhances its
capital value and that involves the expenditure of labor or money and is designed to
make the property more useful or valuable as distinguished from ordinary repairs.’”
Id., ¶22 (quoting Kohn v. Darlington Cmty. Schs., 2005 WI 99, ¶17, 283 Wis. 2d
1, 698 N.W.2d 794). We further stated in Peter that “the initial installation of
insulation into a building or house may be considered an improvement to real
property.” Id., ¶24.

¶7 Architectural Design counters that the circuit court properly
concluded that the exposure period for Chula Vista’s claims commenced upon
substantial completion of the water park facility in 2006. It relies on this court’s
decision in Holy Family Catholic Congregation v. Stubenrauch Assocs., Inc., 136
Wis. 2d 515, 402 N.W.2d 382 (Ct. App. 1987). Architectural Design argues that
under the reasoning in Holy Family, the spray foam project cannot give rise to a
new or delayed exposure period because the purpose of the spray foam project was

4
No. 2021AP971

to correct the missing or improperly installed vapor barrier in the underlying
building project.

¶8 We agree with Architectural Design. Holy Family involved a newly
constructed building with a faulty roof. Id. at 519. We rejected the property owner’s
argument that the building was not substantially complete until the roof was
repaired. Id. at 525. More importantly for purposes here, we concluded in Holy
Family that WIS. STAT. § 893.89 should not be construed to delay the
commencement of the exposure period until remedial services are complete. Holy
Family, 136 Wis. 2d at 522. We reasoned that such an interpretation would be
inconsistent with the statutory language that ties the running of the exposure period,
then a six-year period, to the “substantial” completion of the improvement to real
property. Id. We stated:

[W]e reject Holy Family’s contention that the six-year
period should not begin to run until the designers, planners,
and contractors have ceased furnishing their services. These
persons may provide remedial services after their contractual
obligation has been substantially performed. The notion that
the statutory period does not begin to run until all the
project’s participants have remedied every minor flaw would
neutralize the word “substantial” as it modifies
“completion.” We must avoid a construction rendering part
of a statute superfluous.

Id. We further reasoned in Holy Family that “such a construction would allow the
owner’s demands for remedial work to affect arbitrarily the six-year period’s
commencement.” Id. In addition, we stated in Holy Family that “the date of
occupation and use [of the building] for its intended purpose is a significant factor
in signaling a building’s substantial completion.” Id. at 523-24.

¶9 In the instant case, Chula Vista does not dispute that the spray foam
project was a remedial measure prompted by the missing or improperly installed

5
No. 2021AP971

vapor barrier in the water park facility.3 Chula Vista also does not assert that the
facility could not be occupied and used for its intended purpose prior to the spray
foam project. Applying our reasoning from Holy Family to these undisputed facts,
we agree with the circuit court that Chula Vista’s claims against Architectural
Design are barred by the statute of repose because Chula Vista did not bring those
claims within ten years after substantial completion of the water park facility in
2006.

¶10 Chula Vista next argues that summary judgment was improper
because there are material factual disputes relating to the parties’ understandings of
whether the spray foam project was a continuation of the original building project
or a new and separate project. Even assuming that there are factual disputes relating
to the parties’ understandings, Chula Vista does not persuade us that these factual
disputes are material under our reasoning in Holy Family. Accordingly, we
conclude that these factual disputes are not relevant to our summary judgment
analysis.4

¶11 Chula Vista argues in the alternative that there are additional material
factual disputes relating to whether the fraud exception to the statute of repose
applies. The exception applies to “[a] person who commits fraud, concealment or
misrepresentation related to a deficiency or defect in the improvement to real

3
To the contrary, Chula Vista makes assertions in its briefing that effectively concede that
the spray foam project was remedial. Chula Vista asserts that, upon discovering that the vapor
barrier was missing or not properly installed, Chula Vista “called on [Architectural Design] to assist
with the investigation and remediation.” Chula Vista further asserts that “[t]he facts are clear: the
spray foam installation was in areas of the water park where the vapor barrier was ‘completely
missed’ or not properly overlapped.”
4
As noted at the outset, “[s]ummary judgment is appropriate when there is no material
factual dispute and the moving party is entitled to judgment as a matter of law.” See Schauer v.
Baker, 2004 WI App 41, ¶4, 270 Wis. 2d 714, 678 N.W.2d 258 (emphasis added).

6
No. 2021AP971

property.” WIS. STAT. § 893.89(4). Chula Vista contends that there are material
factual disputes relating to whether its general contractor made misrepresentations
to Architectural Design. According to Chula Vista, if its general contractor “did, in
fact, make misrepresentations to [Architectural Design], who then in turn relied
upon and repeated those misrepresentation to Chula Vista, then Chula Vista’s
complaint cannot be barred by the statute of repose.”

¶12 We reject Chula Vista’s alternative argument based on the fraud
exception because Chula Vista cites no authority to support the proposition that
Architectural Design could be held responsible for unwittingly relying on the
general contractor’s alleged misrepresentations. Chula Vista does not contend that
there is any evidence that Architectural Design knowingly passed on any
misrepresentation. Absent such authority or evidence, we fail to see how
Architectural Design could be considered a “[a] person who commits fraud,
concealment or misrepresentation” within the meaning of the statute. See WIS.
STAT. § 893.89(4).

¶13 In sum, for the reasons stated above, we affirm the circuit court’s order
dismissing Chula Vista’s claims against Architectural Design as barred by the ten-
year statute of repose in WIS. STAT. § 893.89.

By the Court.—Order affirmed.

This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.

7