                                                                2017 WI 38

                  SUPREME COURT               OF   WISCONSIN
CASE NO.:               2014AP2376
COMPLETE TITLE:         Donna Brenner, as Personal Representative for
                        the Estate of Russell T. Brenner and Donna
                        Brenner, Individually,
                                   Plaintiffs-Respondents,
                        v.

                        Amerisure Mutual Insurance Company, Garland
                        Brothers Joint Venture and Garland Brothers,
                        Inc.,
                                  Defendants,

                        Charter Manufacturing Co. and Ace American
                        Insurance Company,
                                  Defendants-Respondents,

                        National Casualty Company and Milwaukee World
                        Festival, Inc.,
                                  Defendants-Appellants-Petitioners.
                            REVIEW OF A DECISION OF THE COURT OF APPEALS
                            Reported at: 365 Wis. 2d 476, 872 N.W.2d 124
                                    (2015 WI App 85 – Published)

OPINION FILED:          April 18, 2017
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:          October    26, 2016

SOURCE OF APPEAL:
   COURT:               Circuit
   COUNTY:              Milwaukee
   JUDGE:               Richard J. Sankovitz

JUSTICES:
   CONCURRED:
   DISSENTED:
   NOT PARTICIPATING:   BRADLEY, R.G., J. did not participate.

ATTORNEYS:

       For        the   defendants-appellants-petitioners,         there     were
briefs       by   Pamela   M.     Schmidt   and   Scopelitis,   Garvin,    Light,
Hanson & Feary, P.C., Milwaukee, and oral argument by Pamela M.
Schmidt.
    For the plaintiffs-respondents, there was a brief by Susan
R. Tyndall, Timothy S. Trecek and Habush Habush & Rottier, S.C.,
Milwaukee, and oral argument by Susan R. Tyndall.




                                2
                                                                  2017 WI 38
                                                          NOTICE
                                            This opinion is subject to further
                                            editing and modification.   The final
                                            version will appear in the bound
                                            volume of the official reports.
No.     2014AP2376
(L.C. No.   2012CV12446)

STATE OF WISCONSIN                      :            IN SUPREME COURT

Donna Brenner, as Personal Representative for
the Estate of Russell T. Brenner and Donna
Brenner, Individually,

            Plaintiffs-Respondents,

      v.

Amerisure Mutual Insurance Company, Garland
Brothers Joint Venture and Garland Brothers,
Inc.,

            Defendants,                                        FILED
Charter Manufacturing Co. and Ace American                APR 18, 2017
Insurance
                                                             Diane M. Fremgen
Company,                                                  Clerk of Supreme Court


            Defendants-Respondents,

National Casualty Company and Milwaukee World
Festival,

Inc.,

            Defendants-Appellants-Petitioners.




      REVIEW of a decision of the Court of Appeals.          Affirmed.
                                                                    No.    2014AP2376



      ¶1     DANIEL KELLY, J.            The question before the court is

whether Charter Manufacturing Company ("Charter"), the former

long-term tenant of property owned by Garland Brothers Joint

Venture ("Garland Brothers"), could be liable for injuries to

Russell T. Brenner, a construction worker who labored at the

former     Garland     Brothers   building      after   it   had    been   sold   to

Milwaukee World Festival, Inc. ("MWF").

                           I.     FACTUAL BACKGROUND

      ¶2     For 21 1/2 years, Garland Brothers owned the property

located     at   607    Polk    Street    in   the   city    of    Milwaukee    (the

"Property").         For 20 of those years, Charter housed its wire

manufacturing business at the Property under a triple net lease.1

One of Charter's tasks in making the facilities operational was

the installation of heat treatment furnaces in a below-grade

"pit" in one of the buildings.                 The furnaces extended up from

the pit and through a hole cut into the metal grate floor above

it.


      1
       A "triple net lease" is one in which the tenant is
typically   responsible  for   expenses   such  as  maintenance,
insurance, real estate taxes, and utilities, in addition to its
lease payments. See, e.g., Lease, Black's Law Dictionary (10th
ed. 2014) (defining a "net-net-net lease," also referred to as a
"triple net lease," as "[a] lease in which the lessee pays all
the expenses, including mortgage interest and amortization,
leaving the lessor with an amount free of all claims."); see
also N.J. Indus. Props., Inc. v. Y.C. & V.L., Inc., 495
A.2d 1320, 1321 (N.J. 1985) (explaining that a "triple net
lease" is a lease in which "the tenant [is] responsible for
maintaining the premises and for paying all utilities, taxes,
and other charges associated with the property.").


                                     2
                                                                     No.    2014AP2376



       ¶3     Fast    forwarding    20     years,   Charter      notified       Garland

Brothers that it would terminate its lease at the end of 2009.

The lease obligated Charter to remove its machinery (including

the    heat     treatment       furnaces)      from       the    Property        before

surrendering possession.            Additionally, Garland Brothers asked

Charter to perform several maintenance and repair tasks.                            One

such request was to fill in the pit where the heat treatment

furnaces had been located.             Garland Brothers later revoked this

request in exchange for Charter's commitment to leave the pit in

a "clean and safe condition."

       ¶4     Charter hired Pieper Electric to help it remediate the

Property before the end of the lease.                Pieper Electric, in turn,

subcontracted with Harrison Metals to remove the heat treatment

furnaces.      Completion of that task left holes in the metal grate

floor through which the furnaces had once protruded.                            Because

the holes could pose a danger, Harrison Metals created short

plywood boxes to cover them.               Harrison Metals did not mark the

boxes to indicate their function or tether them in place.                            In
late    December       2009,     Garland     Brothers       performed       a     final

walkthrough      of    the     Property    with     its    experts    and       Charter

representatives.             Because      Garland     Brothers     had      performed

numerous inspections throughout the life of the lease, the heat

treatment furnaces would have been conspicuous by their absence

during this final walkthrough.               Garland Brothers did not raise

any concerns about the pit, the holes in the floor above it, or

the method of covering them.


                                       3
                                                                           No.     2014AP2376



    ¶5     Charter released possession of the Property to Garland

Brothers   on    December         31,   2009.          Garland      Brothers     thereafter

maintained sole possession of the Property until MWF purchased

it in "as-is, where-is" condition "with all faults" and took

possession      on    May    3,   2011.          MWF    had    originally        slated   for

demolition the building Charter had occupied but subsequently

changed its plans.

    ¶6     MWF        was    on     the        Property       multiple     times     before

purchasing      it.    Its    general      counsel,       for       example,     personally

conducted walkthroughs of the Property while Charter was still

occupying it and observed the heat treatment furnaces extending

through the metal grate floor.                   MWF also had a designer inspect

the building several times and had the designer specifically

consider the feasibility of creating an entryway where the heat

treatment furnaces stood.               MWF's construction director was also

on the Property prior to the purchase to plan for future work.

Environmental tests performed as part of due diligence in the

sale of the Property also identified the existence of the pit.
    ¶7     After       completing         the    purchase      of    the   Property,      MWF

hired Hunzinger Construction ("Hunzinger") to perform demolition

and renovation work on the Property.                          As part of their work,

Hunzinger employees, including Mr. Brenner, removed the plywood

boxes present in the building.                    Mr. Brenner did not know that

some of these boxes covered holes once occupied by the heat

treatment furnaces.           Consequently, while removing one of these

boxes, he fell through a hole and sustained severe injuries.


                                           4
                                                                   No.   2014AP2376



                           II.   PROCEDURAL BACKGROUND

       ¶8     Mr. Brenner and his wife sued MWF, Garland Brothers,

and Charter (as well as their insurers) alleging negligence and

violation of Wisconsin's safe-place statutes.                 As particularly

relevant here, the Brenners said Charter was negligent because

it concealed or failed to disclose to MWF the holes in the metal

grate flooring under the plywood boxes.

       ¶9     Charter     and    Garland    Brothers     moved     for    summary

judgment, relying primarily on the doctrine of caveat emptor as

described in the Restatement (Second) of Torts § 352 (Am. Law

Inst. 1965) (hereinafter "§ 352").            The circuit court dismissed

both       parties,   concluding     that   the    caveat   emptor       principle

precluded      judgment    against   them.2       The   Brenners    subsequently

settled with Charter and Garland Brothers, which they documented

with a settlement agreement that included a Pierringer release.3




       2
           The Honorable Richard J. Sankovitz, presiding.
       3
       Pierringer v. Hoger, 21 Wis. 2d 182, 124 N.W.2d 106
(1963).   "[A] Pierringer release, in effect, limits a second
joint tort-feasor's liability to the amount reflecting its
proportion of wrongdoing.    Stated differently, a Pierringer
release operates to impute to the settling plaintiff whatever
liability in contribution the settling defendant may have to
non-settling defendants and to bar subsequent contribution
actions the non-settling defendants might assert against the
settling defendants." VanCleve v. City of Marinette, 2003 WI 2,
¶39, 258 Wis. 2d 80, 655 N.W.2d 113 (footnote and internal
citation omitted).


                                      5
                                                                             No.     2014AP2376



      ¶10    MWF appealed Charter's dismissal.4                        MWF's interest in

this question is in ensuring it is exposed to no more than the

correct     quantum        of     liability.           Notwithstanding              Charter's

dismissal from the case, if the matter proceeds to trial, a jury

would     need      to     apportion         liability        amongst        all     eligible

defendants——even           those       who      have      been        dismissed          through

settlements.        If the law of negligence makes Charter eligible

for liability, MWF's exposure potentially decreases, resulting

in a smaller judgment against it.                      If Charter is not eligible

for     liability,        the     potential       judgment         against         MWF    could

increase.

      ¶11    On appeal, MWF argued that Charter was not a "vendor"

under     § 352,    and    even    if    it     was,   it   would       still      be     liable

pursuant     to      the        exception       from      exemption          described        in

Restatement        (Second)      of     Torts     § 353     (Am.      Law.    Inst.        1965)

(hereinafter "§ 353").                In a published decision, the court of

appeals affirmed the circuit court's summary judgment in favor

of Charter.5         The court of appeals based its opinion on the
caveat emptor doctrine as described in § 352, concluding that

Charter was a "vendor" within the meaning of the Restatement

test.     It further found that, because MWF had reason to know of

the danger posed by the wooden boxes that covered the holes,

      4
       MWF did not appeal the dismissal of Garland Brothers, and
as to Charter, MWF appealed only the dismissal of the Brenners'
negligence claim.
      5
       Brenner v. Nat'l Cas.                    Co.,   2015      WI    App    85,    ¶5,     365
Wis. 2d 476, 872 N.W.2d 124.


                                          6
                                                                                     No.       2014AP2376



§ 353 did not negate the immunity supplied by the caveat emptor

doctrine.         We granted MWF's timely petition for review and now

affirm the court of appeals.

                                III. STANDARD OF REVIEW

       ¶12       This    matter    is    before          us    on     review       of    a    grant    of

summary       judgment      dismissing             the    Brenners'              negligence          claim

against Charter.            Summary judgment is appropriate where there

are    no    material       facts       in    dispute          and        the    moving       party    is

entitled         to    judgment    as    a     matter          of    law.          See     Wis.      Stat.

§ 802.08(2) (2015-16).6             We review a grant of summary judgment de

novo,       applying      the     same       methodology             as    the     circuit        court.

Belding      v.       Demoulin,    2014       WI    8,        ¶13,    352        Wis. 2d      359,     843

N.W.2d 373. While our review is independent from the circuit

court and court of appeals, we benefit from their analyses.

Preisler v. Gen. Cas. Ins. Co., 2014 WI 135, ¶16, 360 Wis. 2d

129,       857    N.W.2d 136.            Whether          a         duty        exists       under     the

circumstances, and the scope of any such duty, are questions of

law we decide de novo.                   Hocking v. City of Dodgeville, 2009
WI 70, ¶7, 318 Wis. 2d 681, 768 N.W.2d 552.

                                     IV.       DISCUSSION

       ¶13       We must determine whether the law of negligence could

make Charter liable to the Brenners.                                Success in that endeavor

requires establishing the following:                           (1) a duty of care owed by

Charter; (2) a breach of that duty; (3) a causal connection

       6
       All subsequent references to the Wisconsin Statutes are to
the (2015-16) version unless otherwise indicated.


                                              7
                                                                         No.    2014AP2376



between the breach and the Brenners' injury; and (4) actual loss

or damage resulting from the injury.                  Gritzner v. Michael R.,

2000 WI 68, ¶19, 235 Wis. 2d 781, 611 N.W.2d 906.                              On summary

judgment,      only    the     first    issue——whether           Charter        owed    the

Brenners a duty of care——was at issue.                      It is also the only

element we address in our analysis here.

      ¶14     MWF asks us to find that the tort-based duty of a real

estate    tenant      continues     even      after   the       tenant    vacates       the

property.      The Brenners say, and the circuit court and court of

appeals     agreed,     that    the    caveat      emptor       doctrine       terminated

Charter's duty after it surrendered possession of the Property

to Garland Brothers.            MWF tells us that caveat emptor is an

archaic     proposition       and   that     we   would    do    well    to     join     the

twenty-first        century    by   abandoning      this    concept      in     favor    of

principles      described      in     the    Restatement        (Third)        of   Torts:

Physical      and     Emotional       Harm     § 51   (Am.        Law    Inst.         2012)

(hereinafter "§ 51").           MWF says the old ways, memorialized in

§§ 352 and 353, create dangerous dynamics, the effects of which
caused Mr. Brenner's injury.                Alternatively, if we should decide

not to adopt the Restatement (Third) of Torts on this question,

MWF says caveat emptor (as described in the Restatement (Second)

of   Torts)    does    not     apply   to     long-term     former       tenants        like

Charter.      And if it does, MWF says, there are exceptions to this

immunity from liability that operate against Charter under the

facts of this case.




                                        8
                                                                              No.    2014AP2376



                                       A. Charter's Duty

                       1. General principles governing "duty"

       ¶15       Before analyzing the caveat emptor doctrine, we must

first describe the duty it is supposed to affect.                               MWF says it

is   "unquestionable"             that       Charter     would     owe    a   duty    to     the

Brenners absent the doctrine of caveat emptor "because everyone

owes       a    duty    to     everyone      else."        (Citing       Behrendt    v.    Gulf

Underwriters            Ins.    Co.,      2009     WI    71,      318    Wis. 2d 622,        768

N.W.2d 568.)

       ¶16       This    characterization          of     Behrendt       suggests     we   have

concluded that every negligence claim arrives at court with the

first element already proven as a matter of law, or that we have

eliminated the first line from the negligence quatrain.                               We have

not.           See, e.g., A.E. Inv. Corp. v. Link Builders, Inc., 62

Wis. 2d 479,           484,     214    N.W.2d 764        (1974)    ("Duty      is    still   an

important factor in determining whether an act is negligent.").

       ¶17       What we said in Behrendt is that "everyone owes to the

world at large the duty of refraining from those acts that may
unreasonably            threaten       the    safety     of     others."      Behrendt,      318

Wis. 2d 622, ¶17 (bracket and internal marks omitted) (quoting

Alvarado         v.     Sersch,       2003    WI   55,     ¶13,    262    Wis. 2d 74,        662

N.W.2d 350).7            Immediately following this statement, however, we

explained         that       "[w]hat    is    within     the    duty     of   ordinary     care

depends         on     the    circumstances        under       which    the   claimed      duty

       7
       This is the minority view of Palsgraf v. Long Island R.R.
Co., 162 N.E. 99 (N.Y. 1928).


                                              9
                                                                  No.     2014AP2376



arises.    For example, what is comprised within ordinary care may

depend on the relationship between the parties or on whether the

alleged    tortfeasor    assumed     a    special   role   in    regard    to    the

injured party."        Behrendt, 318 Wis. 2d 622, ¶18 (quoting Hoida,

Inc. v. M & I Midstate Bank, 2006 WI 69, ¶32, 291 Wis. 2d 283,

717 N.W.2d 17).

    ¶18     One of the most significant circumstances relating to

the nature of Charter's duty in this case is the relationship

between the parties, as evidenced by the sequence in which the

defendant parties possessed the Property.                  As relevant here,

Charter was the first to possess.              Garland Brothers then took

possession upon expiration of Charter's lease.                    Finally, MWF

gained    possession    of   the    Property   through     its   purchase       from

Garland Brothers.

    ¶19     Therefore, whether Charter is            potentially liable in

negligence to the Brenners depends on whether its duty "to the

world at large . . . [to] refrain[] from those acts that may

unreasonably    threaten      the    safety    of   others,"     Behrendt,       318
Wis. 2d 622, ¶17 (internal marks and citation omitted), extended

to telling not just Garland Brothers, but all future strangers

who may come into possession of the Property, that there were

holes in the floor under the plywood boxes.

    ¶20     The only support MWF identified for this proposition

was § 51, in conjunction with its over-simplification of our

holding in Behrendt.         So we review § 51 to determine whether it

provides any insight on the nature of Charter's duty under these
circumstances.
                                     10
                                                      No.   2014AP2376



  2.     Restatement (Third) of Torts: Physical & Emotional Harm

                                 § 51

       ¶21   MWF urges us to adopt § 51 because it believes this

provision describes a superior view of what the law of premises

liability ought to be.     This section states:

            Subject   to  [Restatement   (Third)  of   Torts:
       Physical & Emotional Harm] § 52, a land possessor owes
       a duty of reasonable care to entrants on the land with
       regard to:

             (a) conduct by the land possessor that creates
             risks to entrants on the land;

             (b) artificial conditions on the land that pose
             risks to entrants on the land;

             (c) natural conditions on the land     that    pose
             risks to entrants on the land; and

             (d) other risks to entrants on the land when any
             of the affirmative duties provided in Chapter 7
             is applicable.
§ 51.    This provision does not define "land possessor," but we

need only flip back to Restatement (Third) of Torts: Physical &

Emotional Harm § 49 (Am. Law Inst. 2012) (hereinafter "§ 49")
for assistance:

       A possessor of land is

             (a)   a person who occupies the land and controls
             it;

             (b) a person entitled to immediate occupation
             and control of the land, if no other person is a
             possessor of the land under Subsection (a); or

             (c) a person who had occupied the land and
             controlled it, if no other person subsequently
             became a possessor under Subsection (a) or (b).
§ 49.

                                11
                                                                              No.       2014AP2376



       ¶22    If we were to adopt § 51 verbatim (incorporating the

§ 49       definition),      it     would       not    bear   the       weight          of   MWF's

proposition.       It does not, ex proprio vigore, apply to companies

in Charter's position.              The unadorned language applies, instead,

to a "land possessor."               The only party in this case that is a

"land possessor" in relation to the Property is MWF.                                     But the

language is not unadorned——it is festooned by eighteen pages of

comments and illustrations (not including the Reporter's Note).

       ¶23    MWF says we may engage comment t to § 51 to transfer

its    operation      to    former       land    possessors.           This    comment,         in

relevant part,8 explains that "[a] former possessor who creates a

risk of harm when in possession of the land continues to be

subject to the ordinary duty of reasonable care provided in § 7

for    that     risk,       even    after       possession        is     relinquished           to

another."       § 51 cmt. t (emphasis added).                     Similarly, comment h

to § 49, entitled "Former possessors," states, in part:                                         "A

person who has relinquished possession and control of land to

another is not subject to the duties provided in §§ 51 to 53 of
this Chapter, with one exception.                     See § 51, Comment t."

       ¶24    Thus,     both       §§ 49    and       51   turn        our    attention         to

Restatement (Third) of Torts: Physical & Emotional Harm § 7 (Am.

Law Inst. 2010) (hereinafter "§ 7"), which imposes a general

duty of care:           "An actor ordinarily has a duty to exercise

reasonable      care       when    the    actor's      conduct     creates          a    risk   of

       8
       Comment t is extensive——together with its illustrations,
it encompasses nearly four pages of text.


                                           12
                                                                                 No.    2014AP2376



physical harm."            § 7(a).          But this provision does not, on its

own     terms,       say     anything         about        land        possessors,       or     the

persistency of liability once possession of the land transfers

to another.          Nor does it describe a principle or methodology by

which we may derive the rule advocated by MWF.9

       ¶25     Instead,          the       actual        text     of     these     Restatement

provisions         comprise       a    basically         faithful,        and    unremarkable,

rendition of the law as it currently exists in Wisconsin.                                        As

the first comment to § 51 recognized, its primary purpose has

nothing to do with this case——it is to clarify that a possessor

of land owes a unitary duty of care to anyone who enters the

land and that the land possessor's duty is not dependent upon

the entrant's status:                  "This Section rejects the status-based

duty       rules    and    adopts      a    unitary       duty    of    reasonable       care   to

entrants on the land."                     § 51 cmt. a.           Like § 51, this court

rejected status-based duties long ago.                            See, e.g., Antoniewicz

v.     Reszcynski,         70     Wis. 2d 836,            839,     236     N.W.2d 1        (1975)

(concluding that "the distinction between the duty heretofore
owed by a land occupie[r] to licensees and to invitees should be

abolished,         and    that    the      duty     of    the     land    occupier       be    that

required       in    any    negligence         action——ordinary             care       under    the




       9
       MWF did not address § 7 or its applicability in this case.
Rather, it simply contends that § 51 itself imposes a duty of
care on a former possessor of land.


                                             13
                                                                      No.     2014AP2376



circumstances."10         And our adoption of Palsgraf's minority view

was already distant history before the advent of § 7.                               See,

e.g., A.E. Inv. Corp., 62 Wis. 2d at 483 (explaining that this

court has adopted the Palsgraf minority view).                        Thus, adopting

the text of those sections would do little, if anything, to

alter     or   advance    the   development    of     law   in   this       state   with

respect to those general principles.

     ¶26       It   is    apparent   from    our      review     of     the   relevant

sections       of   the    Restatement      (Third)    of      Torts:    Physical     &

Emotional Harm that the life of MWF's argument is not in the

text of the various provisions, but only in the commentary.11                         By

itself, the text tells us nothing about the duties of former

land possessors.          Thus, to reach MWF's conclusion we would need




     10
       However,   the   Antoniewicz  court  "decline[d] . . . to
change the immunities which a land occupier enjoys in respect to
trespassers."   Antoniewicz v. Reszcynski, 70 Wis. 2d 836, 839,
236 N.W.2d 1 (1975).
     11
       This is not the only instance in which the commentary
reads substantive content into § 51 without the support of
corresponding text.   For example, comment t says § 51 includes
certain disclosure duties and liability time limits despite the
absence of any such declaration, or even suggestion, in § 51's
text.    See id. ("[t]his Section adopts the actual discovery
aspect but not the 'should discover' portion of [Restatement
(Second) of Torts] § 352" with respect to liability time
limits).


                                     14
                                                       No.   2014AP2376



to adopt not § 51, but comment t.12      We next turn to the law MWF

would have us replace with this comment.

                       B.    Caveat Emptor

    ¶27   "Caveat emptor" operates as a limited exception to the

rule that "everyone owes to the world at large the duty of

refraining from those acts that may unreasonably threaten the

safety of others."     Behrendt, 318 Wis. 2d 622, ¶17 (bracket,

internal marks, and citation omitted).      In Ollerman v. O'Rourke

Co., Inc., 94 Wis. 2d 17, 288 N.W.2d 95 (1980), we explained

that "[t]he traditional legal rule that there is no duty to

disclose in an arm's-length transaction is part of the common

law doctrine of caveat emptor which is traced to the attitude of

rugged individualism reflected in the business economy and the

law of the 19th century."   Id. at 29.

    ¶28   Caveat emptor——or "buyer beware"——finds expression in

§ 352, which states:

    Except as stated in [Restatement (Second) of Torts]
    § 353, a vendor of land is not subject to liability
    for physical harm caused to his vendee or others while
    upon the land after the vendee has taken possession by
    any   dangerous   condition,    whether   natural   or


    12
       We recognize that the ALI adopts the comments as well as
the actual text of § 51, and that the comments express how the
ALI would like courts to understand the text. Thus, were we to
adopt § 51 (as MWF requests), we would be inserting not just the
few spare lines of the text into our law, but the 18 pages of
copious comments and illustrations as well.        It would be
imprudent to import so much material without closely examining
it first, especially when the comments say so much that the text
simply does not.


                              15
                                                                      No.   2014AP2376


    artificial, which existed at the time that the vendee
    took possession.
§ 352.      We have recognized that the             caveat      emptor      principle

broadly applies to the transfer of real estate interests:

    [S]ecs. 352, 353 [of the Restatement (Second) of
    Torts], sets forth the broad principle that a vendor
    is not liable for bodily harm caused to his vendee, or
    others, after the vendee has taken possession except
    where the vendor has concealed or failed to disclose a
    dangerous condition known to him, but not to the
    vendee, and the vendor has reason to believe that the
    vendee will not discover it.
Fisher v. Simon, 15 Wis. 2d 207, 214, 112 N.W.2d 705 (1961). See

also Pines v. Perssion, 14 Wis. 2d 590, 594-95, 111 N.W.2d 409

(1961) ("A tenant is a purchaser of an estate in land, and is

subject to the doctrine of caveat emptor.")

    ¶29     But    we   do   not   apply     the   rule    to   all    real   estate

transactions.      In Fisher itself we found the rule inapplicable

with respect to the owner of real estate who built a house

thereon for the express purpose of selling it.                        15 Wis. 2d at

216, 219.    We analogized the transaction to the sale of chattels

and borrowed from product liability principles in finding that

the vendor owed a duty to his vendee.                Id.    In Pines, we found

an implied warranty of habitability in a residential lease after

surveying    the    legislative     imposition       of    various      health    and

safety   requirements        related    to    residential       properties.        14

Wis. 2d at 594-96.       And in Ollerman, we held that a real estate

subdivider-vendor had "a duty to a 'non-commercial' purchaser"




                                       16
                                                                No.    2014AP2376



to disclose material facts known to the vendor but that the

purchaser would not readily discern.           94 Wis. 2d at 42.13

     ¶30   These    exceptions,   however,       are   narrow    and    do    not

detract from the continuing health of the doctrine.               Indeed, the

caveat emptor doctrine, as described in § 352, has retained its

vitality in the years since Ollerman.              We remarked in Kaloti

Enterprises,   Inc.   v.   Kellogg     Sales    Co.,   hearkening      back    to

Ollerman, that

     parties to a business transaction must "use their
     faculties and exercise ordinary business sense, and
     not [] call on the law to stand in loco parentis to
     protect them in their ordinary dealings with other
     business people."    Further, "in a free market the
     diligent should not be deprived of the fruits of
     superior skill and knowledge lawfully acquired."
2005 WI 111, ¶18, 283 Wis. 2d 555, 699 N.W.2d 205 (bracket in

Kaloti;    internal   citation     omitted)       (quoting      Ollerman,      94

Wis. 2d at 30).14

     13
       We said in Ollerman v. O'Rourke Co., Inc., 94 Wis. 2d 17,
288 N.W.2d 95 (1980), that "[t]his court has moved away from the
rule of caveat emptor in real estate transactions, as have
courts in other states." Id. at 38 (emphasis added). But this
was in the context of discussing Restatement (Second) of Torts
§ 551, which generally addresses "benefit of the bargain"
considerations,   not  liability   for   physical   injury after
relinquishing possession of real estate.     The logic of caveat
emptor does not apply with quite as much force to § 551 cases,
and such cases certainly do not present the harmful dynamics we
address in Section IV.C, infra.    Thus, we do not believe this
statement gives us guidance in resolving this case.
     14
       At one point, we did suggest we had abandoned this
doctrine. In a case involving the sale of real property we said
"[t]he common law doctrine of caveat emptor has been abrogated
in this state and elsewhere . . . ."      State v. Alles, 106
Wis. 2d 368, 378, 316 N.W.2d 378 (1982).   We made that comment
                                                    (continued)
                                  17
                                                                 No.    2014AP2376



       ¶31     Our   court   of    appeals    has   not   had   any    difficulty

identifying the circumstances in which this doctrine applies, or

in applying it.          For example, in Bagnowski v. Preway, Inc., a

homeowner filed suit against the former owner, arguing that the

former owner had negligently installed a chimney that caused a

fire.     138 Wis. 2d 241, 244, 405 N.W.2d 746 (Ct. App. 1987).                On

appeal,      the     court   of   appeals     considered,     inter    alia,   the

instructions and special verdict form given to the jury, noting

that    they    were    based     on    §§ 352   and   353.     Bagnowski,     138

Wis. 2d at 246-47.           Having concluded that the former homeowner

was not a "builder-vendor" (as in Fisher) but rather a "private

homeowner-vendor," the court of appeals found no error in the

caveat emptor-based instructions and verdict form the circuit

court had given the jury.              Bagnowski, 138 Wis. 2d at 248-49.

       ¶32     In McCarty v. Covelli, 182 Wis. 2d 342, 514 N.W.2d 45

(Ct. App. 1994), the court of appeals had to assign liability

for an injury in a relational context similar to that in this

case.        Mr. McCarty sustained an injury on a rental property
while assisting an evicted tenant vacate the premises.                     Id. at

345.    He sued both the current and prior owners of the property.

in the context of a statute criminalizing the failure to
disclose encumbrances in a real estate transaction, which
removed from the ambit of the caveat emptor doctrine only the
conduct proscribed by the statute.        However, we cited no
authority to support such a broadly stark proposition beyond
that specific circumstance.     We find that this orphan comment
is not an accurate reflection of the law, either then or now,
beyond the statute under consideration in that case.




                                        18
                                                                             No.     2014AP2376



Id.     The     court     had    no    difficulty        identifying        caveat     emptor

principles (as expressed in §§ 352 and 353) as the controlling

decisional standards. McCarty, 182 Wis. 2d at 345-46.                                Thus, as

the    court    of   appeals          aptly    noted     in    the       decision     we   are

reviewing,      this      doctrine       still    applies          in    Wisconsin.        See

Brenner v. Nat'l Cas. Co., 2015 WI App 85, ¶28, 365 Wis. 2d 476,

872 N.W.2d 124 (hereinafter "Brenner I").

       ¶33     MWF's argument, of course, is not so much that caveat

emptor has fallen into desuetude in Wisconsin, but that the time

has come for its demise:                "The Court should reject the outdated

rule of caveat emptor implicit in [Bagnowski and McCarty] and

embedded in the Restatement (Second) of Torts §§ 352 and 353 to

bring Wisconsin premises liability law and the duties of land

possessors into the 21st century by adopting the Restatement

(Third) of Torts § 51."                Thus, we now consider whether it would

be appropriate for us to adopt comment t to § 51.

                     C.     Comment t versus Caveat Emptor

       ¶34     This is no small change that MWF asks of us.                          The real
estate transactions that created the question we are addressing

here are entirely unremarkable——a commercial tenant vacated a

commercial       property        and     the     owner        (a    commercial        entity)

subsequently      sold     the    property       to    another          commercial    entity.

These types of transactions are the daily fare of the commercial

real estate world.              With respect to the structural elements of

such   transactions,        there       is     nothing    immediately         apparent      to

distinguish them from those we are examining.                                Consequently,
whatever decision we make here will affect not just Charter, but
                                          19
                                                                 No.   2014AP2376



an untold (and certainly large) number of vendors who once owned

Wisconsin real estate.

       ¶35   Adopting    comment     t      would    dramatically       unsettle

property     interests    that     thrive     on    stability.         Divorcing

liability for injuries caused by a dangerous condition from the

ability to control for it would be just the first (but most

obvious) upset attendant on adopting comment t.              For example, a

land possessor could choose to mitigate, or even eliminate, the

risk    of   injury   through    management    practices    rather      than   by

repairing the dangerous condition.                 It could accomplish this

through the simple expedient of restricting access to dangerous

areas entirely, or allowing access only to those who had been

trained to safely engage the condition, or who had been warned

of its existence.        A subsequent possessor, however, may simply

leave the dangerous condition open to anyone who comes upon it.

Thus, the former possessor's risk of exposure could be greatly

expanded, or even created ab initio, by the acts of successors.

The present rule accounts for this reality by logically and
justifiably pairing potential liability with the opportunity to

reduce, eliminate, or manage around it.                 Allowing persistent

exposure to liability without the concomitant ability to control

for it is a rule with little to recommend to us.15


       15
       We are not the first to see the connection between caveat
emptor and these circumstances:

       [T]he rationale underlying the general rule of nonliability
        . . . [of] one who has transferred ownership and control
       is no longer held liable because (1) he no longer has
                                                       (continued)
                                   20
                                                              No.    2014AP2376



    ¶36     Second, comment   t    creates an entirely unforeseeable

quantum of risk exposure.          A former possessor, for example,

cannot anticipate how subsequent owners might use the property.

The original possessor may allow only a very few people to enter

the premises, but an owner at the second remove (or even more

distant) may unforeseeably open the property to the public at

large.    Because we establish negligence in relation to the act

in question, rather than in relation to the person harmed, the

former    possessor   might   find     itself   liable   to     an    immense

population it had never expected.

    ¶37     Third, comment t would make a former possessor the

insurer of all its successors.           A former land possessor who

created a risk of harm would remain subject to liability even

after he disclosed the risk to the subsequent purchaser.                   See

§ 51 cmt.    t,   Illustration 11 (explaining that a former land

possessor who created a risk of harm retains a duty of care

under § 7 even after notifying the current land possessor of the

risk and where the current land possessor chooses not to reduce,
manage, or eliminate the risk of harm).         Because comment t would

make the former possessor stand as the insurer of all subsequent

possessors, this rule would perversely dampen the successors'

incentive to manage the risk or repair the dangerous condition.



     control and thus may not enter the property to cure any
     deficiency, and (2) he cannot control the entry of persons
     onto the property or provide safeguards for them.
Preston v. Goldman, 720 P.2d 476, 479 (Cal. 1986).


                                  21
                                                                        No.    2014AP2376



      ¶38     Fourth, MWF would have us make former possessors stand

as   insurers    to     all    successive       possessors       without      indicating

whether there is an insurance market in which former possessors

could      purchase    coverage.          The     Supreme    Court      of    California

recognized this potentially profound economic dislocation over

three decades ago in            Preston v. Goldman, 720 P.2d 476 (Cal.

1986).      The court recognized that "[t]he ascription of liability

in this context to a party with control is . . . reflected in

the usually applicable insurance coverage."                      Id. at 483.     So the

court rejected the invitation to visit those uninsurable risks

on former possessors, concluding that it would "continue[] to

treat ownership and control as a fundamental requirement for

ascribing liability."             Id.16     Imposing liability on unwitting

former possessors who would have no apparent means of insuring

their exposure is injudicious.

      ¶39     Finally, adopting comment t carries the very real risk

that we would be effectively renegotiating, retroactively and as

a matter of law, an unknowable number of Wisconsin real estate
transactions,         including     the     ones        before    us.         Contracts,

including      those     for    the       lease    or     sale    of    real     estate,

incorporate the law extant at the time of execution.                          See, e.g.,

Dairyland Greyhound Park, Inc. v. Doyle, 2006 WI 107, ¶60, 295


      16
       That Preston predates the Restatement (Third) of Torts is
of no consequence on this point, as the parties provide no
indication that the insurance industry currently offers coverage
to former real estate possessors for the risk of liability
comment t would create.


                                      22
                                                                    No.    2014AP2376



Wis. 2d 1,    719     N.W.2d 408.          Thus,   when    a     vendee    purchases

Wisconsin    real    estate   as-is,       without   warranty,       its    contract

incorporates the caveat emptor doctrine.17                So too with leases.18

Presumably, commercial entities like Charter, Garland Brothers,

and MWF account for undisclosed and unknown risks when they

negotiate the terms of their transactions.                  As relevant here, a

purchasing party that assumes those risks can, because of that

assumption,    negotiate      a    lower    purchase      price.      MWF,   having

reaped the financial benefit of a lower price in exchange for

assuming those risks, would now enlist us in shifting some or

all of those risks to Charter.              If we accepted that invitation,

we would necessarily reallocate not just the benefit of the

bargains in this case, but the benefits of all similar Wisconsin

real estate transactions younger than the applicable statute of

limitations.        Further, the disruption would not be limited to

those transactions that have already occurred.                     Prospectively,

adopting    comment    t   would    likely    distort      the    commercial    real

estate market, at least in the short term, as vendors inflate
sales prices to reserve an actuarially-rational amount of funds



     17
       Barnard v. Kellogg, 77 U.S. 383, 394 (1870) ("The parties
negotiated on the basis of caveat emptor, and contracted
accordingly.").
     18
       "[N]o action lies by a tenant against a landlord on
account of the condition of the premises hired, in the absence
of an express warranty or of active deceit. This is a general
rule of caveat emptor." Doyle v. Union Pac. R. Co., 147
U.S. 413, 425 (1893) (internal marks and citation omitted).


                                     23
                                                                     No.   2014AP2376



against potential liability until the insurance market creates

and prices appropriate policies or riders.19

     ¶40    We decline MWF's invitation to adopt comment t because

it would introduce dramatic changes to the duty a former land

possessor owes under Wisconsin law, and would negatively impact

settled expectations, and settled rights, between real estate

vendors and vendees.       Further, MWF has identified no compelling

reason to abandon the current state of our law, and certainly

nothing    important    enough       to    justify   the    market     dislocations

comment t would likely cause.              We next consider whether Charter

could be liable to the Brenners under existing Wisconsin law as

reflected in §§ 352 and 353.

                 D. Charter's liability to the Brenners

     ¶41    To determine whether Charter could be liable to the

Brenners     under    current    Wisconsin       law,      we   must   answer    two

questions.      The    first    is    whether    caveat     emptor     governs   the

relationship between Charter and successive possessors of the


     19
       We   could   control   for   at  least   the   retroactive
consequences of adopting comment t by "sunbursting" the change
so that it would apply only prospectively.        See Jacque v.
Steenberg Homes, Inc., 209 Wis. 2d 605, 623-24, 563 N.W.2d 154
(1997) (explaining that where the announcement of a new rule
will result in an inequity if given retroactive effect, the
court may instead apply the newly announced rule prospectively
if there is a compelling judicial reason to do so). We decline
to consider this option because the nature and extent of the
relationships and expectations we would be changing suggest
that, on the record before us, we simply have insufficient
information to determine whether the downstream consequences
would actually represent a net improvement over the status quo.


                                      24
                                                              No.    2014AP2376



Property.     The second is whether, if caveat emptor applies, any

of the exceptions to the doctrine apply.

             1.     Charter and the caveat emptor doctrine
    ¶42     MWF argues that our caveat emptor cases apply only to

vendors of land and that Charter cannot be a vendor of land

because it was merely a former tenant that did not sell the

Property to anyone.       Thus, according to MWF, when the circuit

court and court of appeals denominated Charter a "vendor" within

the meaning of § 352, they expanded the meaning of that term

without warrant or justification.

    ¶43     MWF's argument has some initial appeal.             By its own

terms, § 352 applies only to vendors:

    Except as stated in [Restatement (Second) of Torts]
    § 353, a vendor of land is not subject to liability
    for physical harm caused to his vendee or others while
    upon the land after the vendee has taken possession by
    any   dangerous   condition,    whether   natural   or
    artificial, which existed at the time that the vendee
    took possession.
§ 352.      However, because of the nature of Restatements, this

provision describes the beginning of our inquiry, not the end.

As significant and important as a Restatement is, it is not a

code of laws.       Instead, Restatements "aim at clear formulations

of common law and its statutory elements or variations . . . ."

American      Law     Institute,         Frequently   Asked         Questions,

https://www.ali.org/publications/frequently-asked-questions/

(last visited Mar. 6, 2017).            They also attempt to "reflect the

law as it presently stands or might appropriately be stated by a
court."     Id.   Because the common law can vary across the States,

                                   25
                                                                          No.    2014AP2376



sometimes       significantly,          these      goals        can     often    be    more

aspirational than descriptive.20                  Thus, because the Restatements

are not, in themselves, authoritative, MWF's task goes beyond

demonstrating that the text of § 352 excludes Charter from its

operation.          It must also demonstrate that this exclusion either

reflects the current state of the law in Wisconsin, or that this

is a question of first impression, the answer to which should be

guided by the logic of § 352's focus on vendors.

       ¶44     We have not previously determined whether a former

commercial tenant such as Charter is a vendor within the meaning

of § 352.       See Brenner I, 365 Wis. 2d 476, ¶24 (recognizing that

prior to its decision in this matter, no published Wisconsin

case    had    considered       whether      a   former      tenant     qualifies      as   a

vendor      under     § 352).      So     in     determining      whether       commercial

tenants occupy the same legal position as vendors for caveat

emptor purposes, we will consider the logic behind the doctrine

before deciding whether § 352 appropriately excludes commercial

tenants from its terms.
       ¶45    Freedom     of    contract         and   the      right     of    inspection

provide       the     primary    justifications           for     the    caveat       emptor


       20
       The Restatements themselves recognize this. For example,
the Reporter's Note regarding comment t to § 51 frankly admitted
the proposed rule was not a statement of the law all across the
country:   "Courts are split on whether a former possessor who
created a risk on the land remains subject to liability or
whether transfer of the land absolves the possessor of
liability, as provided in the Second Restatement."          § 51
Reporter's Note cmt. t.


                                        26
                                                     No.   2014AP2376



doctrine.   As the United States Supreme Court observed when our

country was considerably younger,

    [n]o principle of the common law has been better
    established, or more often affirmed, both in this
    country and in England, than that in sales of personal
    property, in the absence of express warranty, where
    the buyer has an opportunity to inspect the commodity,
    and the seller is guilty of no fraud, and is neither
    the manufacturer nor grower of the article he sells,
    the maxim of caveat emptor applies.
Barnard v. Kellogg, 77 U.S 383, 388 (1870).    A vendee wishing to

ensure he does not take on more liability exposure than desired

must inform himself of what he can about what he buys.     Bostwick

v. Mut. Life Ins. Co. of N.Y., 116 Wis. 392, 400, 89 N.W. 538

(1902), on reh'g, 116 Wis. 392, 92 N.W. 246 ("[T]he doctrine

that one must observe what he has reasonable opportunity for

knowing in matters of contract is within the rule of caveat

emptor . . . .").   He may, of course, choose to negotiate an

express warranty as a substitute for his inspection to cover the

risk he takes for himself:      "And there is no hardship in it

[caveat emptor], because if the purchaser distrusts his judgment

he can require of the seller a warranty . . . ."       Barnard, 77

U.S. at 388.    But if he chooses to purchase with neither an

inspection nor a warranty, the caveat emptor doctrine holds him

responsible for his decision.     Id. ("If he is satisfied without

a warranty, and can inspect and declines to do it, he takes upon

himself the risk that the article is merchantable."); Doyle v.

Union Pac. R. Co., 147 U.S. 413, 425 (1893) ("This is a general
rule of caveat emptor.   In the absence of any warranty, express


                             27
                                                                       No.    2014AP2376



or implied, the buyer takes the risk of quality upon himself.");

McBurney v. Young, 133 S. Ct. 1709, 1776 (2013) ("'Caveat emptor

being the rule with us in the absence of a special agreement, it

is just and essential to the protection of persons intending to

purchase or take incumbrances that they be allowed the right of

inspection.'" (quoting State v. Grimes, 84 P. 1061, 1073 (Nev.

1906))).

      ¶46   This rule grew out of the natural business dynamic

that the person in the best position to adjudge potential risk

is the one affected by it:               "[T]he law requires men, in their

dealings    with    each   other,       to   exercise    proper       vigilance,      and

apply their attention to those particulars which may be supposed

to be within reach of their observation and judgment, and not

close     their    eyes    to     the    means    of    information          which    are

accessible to them."        Bostwick, 116 Wis. at 400 (quoting Mamlock

v. Fairbanks, 46 Wis. 415, 418, 1 N.W. 167 (1879)); see also

Barnard, 77 U.S. at 388 ("Such a rule, requiring the purchaser

to take care of his own interests, has been found best adapted
to the wants of trade in the business transactions of life.").

      ¶47   These principles instruct that                   caveat    emptor       should

apply in the commercial tenancy context just as it does in the

vendor-vendee      relationship         described       in     § 352.         The      one

difference is that a tenant will, when commencing the tenancy,

occupy the position of a vendee with respect to the landlord,

while at the end of the tenancy he will occupy the position of

the     vendor.     We     will    address       the    relationship         from    both
perspectives.
                                        28
                                                                   No.    2014AP2376



      ¶48    When a lessor enters a lease, he is purchasing an

interest in the estate.         See, e.g., Pines, 14 Wis. 2d at 594-95.

Functionally,       the      tenant's     purpose     for     entering          that

relationship is largely the same as that of a vendee——to obtain

possession of the property and to put it to whatever use may be

desirable, so long as it conforms to the terms of the tenancy.

With respect to the condition of the property, therefore, they

operate under similar risks.             The property either will or will

not be suitable for their purposes, and it either will or will

not contain dangerous conditions that could cause injury to them

or others.

      ¶49    The methods of controlling for that risk are the same

for   both   the    tenant   and   the   vendee.      Both   may     inspect     the

premises prior to the transaction to discover defects or other

dangerous conditions.         If not satisfied with their inspections,

or if the inspection raises concerns about undiscoverable latent

defects,     both   can   negotiate      warranties    to    cover       the   risk.

Consequently, we have previously recognized that caveat emptor
applies when a tenant executes a lease.                Id. ("A tenant is a

purchaser of an estate in land, and is subject to the doctrine

of caveat emptor.")

      ¶50    At the termination of the tenancy, the lessee occupies

the position of the vendor as he transfers possession of the

property back to the landlord.               Just as the interests of a

vendee and a tenant (to the extent they are relevant to this

analysis) coincided at the beginning of the tenancy, so too do
the relevant interests of a vendee and a landlord coincide at
                                    29
                                                                            No.     2014AP2376



the   end.        The   landlord,        cognizant     that     the       tenant    has    had

exclusive        possession       of   the     property,        must       ensure     he    is

receiving the property from the tenant in the condition required

by the contract.            The landlord has the same opportunity as the

vendee    to      control   for    the    risk   that     it    might       be    otherwise,

either by requiring a warranty from the tenant (in the initial

lease negotiation), or in a thorough inspection to ensure the

property meets the condition required by the lease when the

tenant vacates.

      ¶51       The similarities between the commercial tenancy and

vendor-vendee           relationships          extend      to         the        intolerable

consequences of not applying caveat emptor.                          The former tenant,

like the vendor, would suffer continuing exposure to liability

even after he can no longer reduce, eliminate, or manage around

the dangerous condition. The quantum of his exposure also slips

beyond      his     control       as   the     landlord        or     other       successive

possessors expose the property's dangerous condition in a way

that may exacerbate, or even create, the potential for injury.
He would also, like the vendor, stand as liability insurer to

all subsequent possessors, and would similarly have no access to

the insurance market (at least until the industry adapted).

      ¶52       As did the circuit court and court of appeals, we find

Brock v. Rogers & Babler, Inc., 536 P.2d 778 (Alaska 1975) and

Great Atlantic & Pacific Tea Company, Inc., 408 N.E.2d 144 (Ind.

Ct. App. 1980), instructive on this question.                             Brock addressed

whether     a     gravel    excavation       company    that        had   remediated       the
property it leased into an artificial lake could be liable to a
                                          30
                                                                             No.     2014AP2376



child who almost drowned approximately three years after the

company relinquished possession of the property.                                  536 P.2d at

779.     The Supreme Court of Alaska applied § 352 and explained

that   although          that   section       refers      to     vendors     of    land,       its

principle         was    nevertheless     "broad          enough    to     cover    a     former

lessee    who      had    relinquished         his    possessory         interest        in   the

premises."         Brock, 356 P.2d at 782.                It explained that liability

is generally limited to those who are in possession and control

of the property, and that those not in possession should not

suffer liability because they have no authority or ability to

prevent the injury from occurring.                    Id.

       ¶53    The       Indiana    Court       of      Appeals       reached        the       same

conclusion in Great Atlantic.                    There, Great Atlantic leased a

building in which an opening in the floor had been created for a

conveyor belt to move stock from storage in the basement to the

sales floor.            408 N.E.2d at 146.                When the lease terminated,

Great Atlantic released possession to the landlord, which then

offered the property for sale.                   Id.        A prospective buyer fell
into   the        conveyer-belt        opening       in    the     floor     and    sustained

injuries.         Id.     The Indiana Court of Appeals took its cue from

Brock, concluding that "[t]he new owner, upon assuming control

and possession, becomes responsible for the safety of structures

erected      by    his    predecessors"        and     that      "liability        for    injury

ordinarily         depends      upon    the     power       to     prevent    injury          and,

therefore, rests upon the person who has control and possession

through ownership, lease, or otherwise."                           See Great Atl., 408
N.E.2d at 147-48.
                                          31
                                                                       No.   2014AP2376



      ¶54   Here, Charter leased the Garland Brothers' building

for approximately 20 years under a triple net lease, meaning

that——for purposes of the condition of the property——Charter had

the type of exclusive possession and control that a fee owner

would   have.      At     the    end   of    the    tenancy,      Garland    Brothers

exercised    its       contractual     right       to    thoroughly     inspect    the

Property before Charter relinquished possession on December 31,

2009.   Thereafter, Charter no longer had the right to access or

control the Property, just like property vendors.                      Consequently,

when Mr. Brenner suffered his injuries in November 2011, Charter

had exactly the same relationship to the Property as if it had

been its fee owner, to wit, none.

      ¶55   Because Charter, as a former tenant, stands in the

same position as a vendor (for purposes of the caveat emptor

doctrine described in § 352) and because MWF——not Charter——was

in   possession    of    the    Property     at    the    time    of   Mr.   Brenner's

injuries, Charter is immune from liability unless a recognized

exception    lifts      the    immunity     and    restores      the   potential   for
liability.

                  2.     Caveat emptor and its exceptions
      ¶56   MWF argues that, under the facts of this case, § 353

pushes Charter out from under the protective umbrella of the

caveat emptor doctrine.          This section provides that:

            (1) A vendor of land who conceals or fails to
            disclose to his vendee any condition, whether
            natural    or    artificial, which    involves
            unreasonable risk to persons on the land, is
            subject to liability to the vendee and others

                                       32
                                                              No.     2014AP2376


            upon the land with the consent of the vendee or
            his subvendee for physical harm caused by the
            condition after the vendee has taken possession,
            if

            (a) the vendee does not know or have reason to
            know of the condition or the risk involved, and

            (b) the vendor knows or has reason to know of
            the condition, and realizes or should realize the
            risk involved, and has reason to believe that the
            vendee will not discover the condition or realize
            the risk.

            (2) If    the    vendor   actively   conceals   the
            condition, the liability stated in Subsection (1)
            continues until the vendee discovers it and has
            reasonable    opportunity     to   take   effective
            precautions against it. Otherwise, the liability
            continues   only    until   the  vendee   has   had
            reasonable opportunity to discover the condition
            and to take such precautions.
§ 353.      We   have   previously     recognized   the     essence    of   the

exception   contained     in   § 353(1).     Fisher,   15    Wis. 2d at     214

(caveat emptor does not apply "where the vendor has concealed or

failed to disclose a dangerous condition known to him, but not

to the vendee, and the vendor has reason to believe that the

vendee will not discover it.").            We will apply the language of
§ 353 (as MWF requested) to evaluate this part of its argument,

but without opining on whether its text is an exacting statement

of Wisconsin law.       Only if we conclude that MWF's argument would

succeed under the language of § 353 will we determine whether it

comports with Wisconsin law, or describes a standard we should

adopt.




                                  33
                                                             No.   2014AP2376



     ¶57    For purposes of our discussion here, § 353(1) requires

the proponent of the rule to establish, inter alia, each of the

following four elements:

     (1)    The vendor concealed or failed to disclose to his
            vendee   any   condition,   whether  natural   or
            artificial, that involves unreasonable risk to
            persons on the land;

     (2)    The vendor knew or had reason to know of the
            condition, and realized or should have realized
            the risk involved;

     (3)    The vendee did not know, or have reason to know,
            of the condition or the risk involved; and

     (4)    The vendor had reason to believe that the vendee
            would not discover the condition or realize the
            risk.
§ 353(1).

     ¶58    MWF spent nearly its entire argument discussing these

elements as between it and Charter.            But that is the wrong

relationship   to   consider.    With     respect    to   Charter,   it   is

Garland Brothers, not MWF, that is the vendee.            So MWF's task is

to demonstrate that the facts satisfy the elements of § 353(1)
as between Charter and Garland Brothers.           If they do, only then

would   Charter's   liability   persist    until    (a)   the   vendee    (or

successors) has had a reasonable opportunity to discover the

condition and to take effective precautions, or (b) the vendee

discovers the dangerous condition and has reasonable opportunity

to   take   effective   precautions   if    the     vendor   has   actively

concealed the condition.    § 353(2).




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      ¶59    For the sake of our analysis, we will assume MWF can

establish        the    first    two        elements      of     the    § 353(1)       test,    and

proceed directly to the third element, which requires MWF to

establish that Garland Brothers did not know, or have reason to

know, of the danger presented by the holes in the floor under

the   plywood         boxes.      The       circuit       court    found       that    there    was

insufficient evidence to hold that Garland Brothers had actual

knowledge        of    the     dangerous          condition       but    was    silent     as    to

whether     it    had    reason        to    know    of    that        condition.        For    the

following         reasons,        we        believe        the     record        unequivocally

demonstrates that Garland Brothers had reason to know of the

holes under the plywood boxes.

      ¶60    First, the record establishes that Garland Brothers,

through     its        agent,    conducted           an    annual       inspection       of     the

Property over the course of Charter's 20-year tenancy.                                     During

those   annual         inspections,          there    is    no     question      that     Garland

Brothers would have seen the heat treatment furnaces extending

upward through the holes in the metal grate floor.                                    Next, after
Charter     gave       notice     it        was    terminating          the    lease,     Garland

Brothers identified several requirements Charter was required to

satisfy prior to vacating the Property.                                Among them was that,

after removing the heat treatment furnaces (as required pursuant

to the lease's terms), Charter was to fill in the pit where the

furnaces had been.              When Charter objected to that requirement,

Garland Brothers agreed to substitute a requirement that Charter

leave the pit in a "clean and safe condition."


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    ¶61     Garland Brothers necessarily knew that removing the

heat treatment furnaces would leave holes in the floor.                    And it

undoubtedly had an interest in knowing whether doing so would

leave the Property in a dangerous condition.                 Further, it had a

reasonable        motivation    for    determining       whether   Charter     left

behind dangerous conditions, and ample opportunity to discover

whether it did.

    ¶62     Garland Brothers' actions demonstrate it was satisfied

Charter had left the Property in a safe condition.                  When Garland

Brothers completed its final walkthrough and inspection of the

Property with Charter in late 2009, Garland Brothers did not

raise any concerns about the condition in which Charter had left

the pit or the corresponding holes in the metal grate floor.21

It then executed a "Release Agreement" with Charter, in which it

agreed     that     Charter    had    surrendered    the     Property    "in   the

physical     condition        required     under   the    Lease    and   [Garland

Brothers] hereby releases Charter from any further liability or

claims in connection with such obligation or in any way relating



    21
       The precise date on which Charter's contractor placed the
plywood boxes over the holes in the metal grate floor is not
clear.   The parties' briefs generally refer to them as having
been in place no later than December 31, 2009, when Charter
surrendered the Property to Garland Brothers.   However, one of
the briefs filed on behalf of Charter suggests the contractor
may not have put the boxes in place until after Charter vacated
the Property.    MWF's argument presupposes that Charter knew,
while it was yet in possession of the Property, that the boxes
concealed holes in the floor.       Consequently, our analysis
operates on that presupposition.


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to   the    physical   condition       of   the    Property    or     Charter's

performance of its obligations under the Lease."

     ¶63    We are convinced by this that Garland Brothers had

reason to know of the holes in the floor underneath the plywood

boxes.     We are not the only ones to arrive at that conclusion——

MWF argued the same thing itself while opposing Charter's motion

for summary judgment, and for much the same reasons:

          Together, GBI[22] and GBJV,[23] failed to disclose
     not only the existence of the pit but, more
     importantly, that Charter had created holes in the
     floor above the pit. . . .

          GBI and GBJV should have known that the holes
     existed as the pit was the subject of negotiations
     when Charter terminated its lease and GBI conducted an
     inspection of the premises before accepting the
     premises from Charter on behalf of GBJV. Further, GBI
     and GBJV are (or were) in the business of owning,
     managing and leasing industrial properties.   GBJV had
     leased the property to Charter for more than twenty
     years and GBI had, apparently, managed the lease for a
     lengthy time——conducting annual inspections.

Yes, just so.
     ¶64    Finally,   as   the   circuit     court   ably    described,    MWF

argued itself into a box canyon on this point.                   By asserting

that Garland Brothers is chargeable with constructive knowledge

of the covered holes by virtue of its possession and control of

the Property, it implicitly (but necessarily) argued that it

should     also   be   charged    with      that   knowledge.         MWF   had


     22
          GBI was Garland Brothers' agent.
     23
          GBJV is Garland Brothers.


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approximately      as    much    time,       opportunity,    and    motivation         to

discover defects in the Property before Mr. Brenner's injury as

did   Garland     Brothers.          Thus,   if   possession      and    control       are

enough to charge Garland Brothers with constructive knowledge of

the covered holes, it must necessarily do the same for MWF.                            So

even if this analysis required us to examine the relationship

between MWF and Charter, it would be impossible for MWF, because

of its own argument, to establish the third element of § 353(1).

      ¶65   As it is, however, the proper relationship to examine

is the one that obtained between Charter and Garland Brothers.

And because we find that Garland Brothers had reason to know of

the holes covered by the plywood boxes, MWF cannot establish the

third    element    of   the     § 353(1)      analysis.       Inasmuch         as    this

provision   requires      MWF    to    demonstrate     all   four       elements,      we

conclude that § 353 does not remove the exemption from liability

provided by the caveat emptor doctrine.

                                 V.      CONCLUSION

      ¶66   The    doctrine      of    caveat     emptor——"buyer         beware"——has
long been a part of the common law of this state.                           Although we

have recognized some narrow exceptions as it applies to real

estate   transfers,      the     doctrine      still   describes        a     vital   and

important   restriction         on    liability    when    real    property      passes

from one possessor to the next.                   Accordingly, we decline to

adopt comment t to § 51.

      ¶67   We find that the caveat emptor doctrine applies to

Charter just as it would have if Charter had been the fee simple
owner when it transferred possession of the Property back to
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Garland Brothers.           Because MWF did not establish any exception

to   the    doctrine    in    this   case,   Charter's     duty      to    subsequent

possessors        expired    when    it    surrendered     possession         of     the

Property.     Consequently, Charter cannot be liable in negligence

for Mr. Brenner's mishap.

      By    the    Court.—The    decision    of    the    court   of       appeals    is

affirmed.

      ¶68    REBECCA    GRASSL       BRADLEY,     J.,    did   not     participate.




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