Washington Supreme Court Recasts the Economic Loss Rule to Allow Third Party Tort Claims Against Design Professionals

more+
less-

A sharply divided Washington Supreme Court has held that an engineering firm owes a "duty of reasonable care encompassing safety risks of physical damage" to a party not in privity with the engineering firm. The decision in Affiliated FM Ins. Co. v. LTK Consulting Servs., Inc., could lead to a departure from what had been known as the "economic loss rule," which courts traditionally interpreted as barring tort claims for any harm not involving physical injury to other property or to a person. Under LTK Consulting, the lead opinion of the court said that the economic loss rule (renamed the independent duty rule) would not bar a tort claim based on an engineering firm's duty of care to avoid damages to a third party.

The LTK Consulting decision answered a question referred to it by the Ninth Circuit Court of Appeals regarding the economic loss rule under Washington law. LTK Consulting had a contract with the City of Seattle for maintenance on the Seattle monorail; however, the city does not operate the monorail. Instead, the city has a concession agreement with Seattle Monorail Services ("SMS"). In 2004, one of the monorail trains caught fire, resulting in millions of dollars in losses to SMS while the trains were out of service. SMS's insurer sued LTK Consulting, which successfully argued at the trial court level that the claims were barred by the economic loss rule.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Lane Powell PC | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×
×