Economic Loss Doctrine

News & Analysis as of

Massachusetts Supreme Court Holds Economic Loss Rule No Bar to Condo Trustees’ Claim for Damages to Common Areas Caused By...

Wyman v. Ayer Properties, LLC, 469 Mass. 64, 2014 Mass. LEXIS 524 (July 10, 2014) - The Massachusetts Supreme Court ruled that the economic loss rule, which bars recovery of tort damages from the negligent supplier of...more

Real Property, Financial Services & Title Insurance Update: September 2014 #2

REAL PROPERTY UPDATE - - Parol Evidence: trial court erred by considering extrinsic evidence to determine parties’ intent because contract for sale of property that provided certain prior deposits be paid to seller as...more

LITIGATION ALERT: Texas Supreme Court Limits the Application of the Economic Loss Rule

In Texas, the economic loss rule has been applied by courts to prevent a plaintiff from recovering purely economic losses in a negligence or strict liability action. In products liability cases, when a loss results from the...more

Federal District Court in New Jersey Holds that Economic Loss Rule Does Not Bar Contractor’s Tort Claims Against Architect Where...

The University of Medicine and Dentistry of New Jersey contracted HDR Architects and Engineers, P.C. (“HDR”) to design a medical school building. After the project went to bid, the Bedwell Company (“Bedwell”) contracted with...more

Texas Supreme Court Unanimously Blocks Contractors' Economic Loss Tort Claims Against Designers

Texas contractors have long tried to directly sue their owners’ professional design firms -- rarely with success -- when faulty plans cause economic losses such as increased costs from delays and disruptions. A few cases in...more

Does the Economic-Loss Rule Bar Claims Under Section 75-1.1?

The economic-loss rule says that a contract dispute generally does not state a tort claim. The concern is that if a plaintiff could recover tort damages, that outcome would disregard the expectations reflected in the parties’...more

Legal Alert: Supreme Court of Texas Finds Contractors Cannot Recover Delay Damages for Negligent Misrepresentation Against an...

On June 20, Texas joined a number of states that apply the economic loss rule to damages claims arising from negligent misrepresentation between contractors and the owner’s architect. In LAN/STV v. Martin K. Eby Construction...more

Beware of Defendants Who Attempt to Push the Boundaries of the Economic Loss Rule (Texas)

In most jurisdictions today, to recover under a strict products liability theory, the Plaintiff must prove that a defect in the subject product was a producing cause of the Plaintiff’s damages. More importantly, in order to...more

Simser v. Aviva.

The Appeal decision in Simser v. Aviva (Appeal P13-00004) was recently released by the Financial Services Commission of Ontario (FSCO) on January 9, 2014. The appeal concerned clause 3(7)(e) of the Statutory Accident...more

Second Circuit Firmly Aligns (for now) with the Robins Dry Dock Rule on Non-Recoverability of Pure Economic Damages Absent...

The United States Court of Appeals for the Second Circuit in American Petroleum & Transport, Inc. v. New York, 2013 WL 6332548 (2d Cir. Dec. 6, 2013) recently - albeit reluctantly - joined the fleet of other federal circuit...more

The State and Impact of Florida’s Economic Loss Rule

In March of this year, the Florida Supreme Court departed from established precedent and limited the application of the economic loss rule to product liability cases. The court explained that this was necessary given the...more

Class Action Regarding Whirlpool Washing Machines Dismissed but Possibility for Future Claims for Economic Loss for “Shoddy”...

In Arora v. Whirlpool Canada LP, 2013 ONCA 657, the Ontario Court of Appeal upheld Justice Perell’s decision to deny certification for a proposed class action alleging pure economic loss. (Justice Perell’s decision is...more

Economic Loss Doctrine and Negligent Misrepresentation Claims

In almost every state, the economic loss doctrine prevents claimants from pursuing tort claims that arise from solely economic injuries; instead, the doctrine requires that claimants pursue these purely economic claims...more

Economic Loss Rule of the Third Kind - Nothing New or Alien Concepts?

Can a contractor sue the project’s designer for losses allegedly caused by errors in construction documents? This question was presented in the Eby v. LAN/STV case, which is now before the Texas Supreme Court....more

Defeating Economic Loss Claims In Pharma Class Actions

Where product liability actions or government investigators have targeted a prescription drug, class actions follow alleging that patients are entitled to a refund of what they paid for the medicine. The theory of these...more

Product Liability Update -- October 1, 2013

In This Issue: ..Massachusetts Supreme Judicial Court (Finally) Enforces Agreement for Individualized Arbitration of Unfair and Deceptive Practices Claims Following United States Supreme Court Decision Reversing...more

No Harm Allegations Run "Fowl" for New York Poultrygeist Suit

Simply alleging economic losses suffered in the state where its business was located was insufficient for a producer to bring intellectual-property claims resulting from unlicensed foreign distribution of the spoof-horror...more

Under Construction - September 2013: Application of the Economic Loss Rule in Arizona Since Flagstaff Affordable Housing Ltd. v....

In a recent ruling, the Arizona Supreme Court clarified that the economic loss rule does not apply to non-contracting parties. See Sullivan v. Pulte Home Corporation, 667 Ariz. Adv. Rep. 36 (Ariz. 2013). This ruling both...more

Under Construction - September 2013: California’s Economic Loss Doctrine – Limits on Tort Recovery

In California, the economic loss rule addresses the distinction between suits in contract and tort. A contract claim can typically be pursued to recover all damages proximately caused by breach of contract, unless expressly...more

Under Construction - September 2013: Utah’s Economic Loss Rule

In Utah, a plaintiff must generally in be in privity with the “original contractor, architect, engineer or real estate developer” to bring an “action for defective design or construction.” Utah Code Ann. §78 B-4-513(4). This...more

Under Construction - September 2013: New Mexico’s Economic Loss Rule—It Exists, but Its Limits are To Be Determined

In Utah International, Inc. v. Caterpillar Tractor Co., 108 N.M. 539, 775 P.2d 741 (Ct. App. 1989), the New Mexico Court of Appeals adopted, for the first time, the economic loss rule in New Mexico. The defendant designed,...more

Under Construction - September 2013: Economic Loss in Colorado

The economic loss doctrine generally holds parties to the benefits, burdens and obligations set out in their contracts and bars tort claims such as negligence, misrepresentation and theft for purely economic loss when a...more

Under Construction - September 2013

Welcome to the fall 2013 issue of Under Construction. In this issue, we focus on the economic loss doctrine and how the different courts in our firm’s footprint treat it similarly and differently. We hope you enjoy our review...more

Fifth Circuit Revives Negligence Claims for Purely Economic Losses in Connection with Heartland Payment Systems Cyber-Attack...

On September 3, 2013, in Lone Star Nat'l Bank N.A. v. Heartland Payment Sys., Inc., the U.S. Court of Appeals for the Fifth Circuit held that "the economic loss doctrine under New Jersey law does not preclude the Issuer...more

Florida Supreme Court Eliminates The Contractual Economic Loss Rule

Contracts are an integral part of every company’s daily life. ...more

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