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The recent decision by the Wisconsin Court of Appeals in Kalahari Development, LLC v. Iconica Inc., 340 Wis. 2d (Ct. App. 2012), underscores the two biggest legal obstacles to claims for latent construction defects: the Economic Loss Doctrine and statutes of limitation.
In the case, the Kalahari Resort & Conference Center's claims against the design/builder for leaks and other construction defects in the resort were barred because they were brought after applicable project warranties and the statutes of limitation had expired.
In May 1999, Kalahari Development Inc. contracted with Iconica Inc., Madison, to design and build the Kalahari Resort & Conference Center. The project included an indoor water park, hotel rooms, a lobby, retail space and restaurants in the Wisconsin Dells.
The project reached substantial completion in May 2000. In May 2008, there were moisture and water problems in the building.
In April 2010, almost 10 years after substantial completion, Kalahari sued Iconica for "defectively designed and/or defectively installed vapor barriers in the walls ... causing moisture damage." The lawsuit against Iconica alleged breach of contract and negligence in the performance of architectural and construction services.
The court awarded summary judgment in favor of Iconica. In upholding the award of summary judgment, the Wisconsin Court of Appeals provided a thorough analysis of the relevant statutes of limitation...