State Farm Mutual Automobile Insurance Company v. Defendant Automobile Manufacturer

  • Supreme Court of Wisconsin, 592 N.W.2d 201 (Wis. 1999)02/01/1999
    Client: Defendant Automobile Manufacturer
    Outcome: Summary Judgment in Favor of Defendant Affirmed


Plaintiff’s insured purchased a vehicle from defendant’s dealership on an “as-is” basis, taking an extended warranty. After the warranty expired, the car caught fire, plaintiff contended, due to an allegedly defective ignition switch.

After paying the claim from its insured, the insurance company filed a subrogation action against defendant on tort and strict liability theories.

The Supreme Court of Wisconsin held that the “economic loss” theory applied to consumer as well as commercial transactions and precluded recovery in tort for solely economic losses and that plaintiff’s remedies, if any, were based on contract or breach of warranty theories.