The economic loss rule in
the state of Florida prevents economic loss-based tort actions. This law
protects defendants from their defective products. In order for economic loss
cases to proceed in court, the plaintiff must add something other than economic
losses to make a solid claim.
A defective product by itself
produces an economic loss; therefore, there is no property damage, no product
damage, and no personal injuries. When the replacement and repair costs of
defective products are sought, only economic damages apply in these cases. For
example, if you are using the lawnmower to mow your lawn or a client’s lawn,
and the mower stops working due to a faulty pull string, then you cannot seek
out damages from the mower manufacture. However, if you are using the same
mower and the pull string snaps and injures you, not only may you be entitled
to economic damages, but since personal injury is involved, you may have a
case.
The Beginning of the Economic Loss Rule
The economic loss law
expanded into the realm of service contracts after coming up in many product
liability cases. Service providers could use the economic loss rule to protect
themselves against lawsuits that do not include property damage or personal
injury. Product manufacturers then began using this law to their advantage as
well as protection in liability cases, specifically preventing the breach of
contract between two parties in the case of solely economic losses.
For example, in the Casa
Clara case, the tort claim could not recover the economic losses for the
plaintiff because the concrete was a defective part of the overall product in
question, the home supplied by the defendant. This case made the economic loss
rule more ambiguous, particularly in that contract principles were a better way
to handle these types of disputes.
Tiara Condominium Association v. Marsh & McLennan Companies
This case is another
significant example in the evolution of the economic loss rule. The new owner
of a condo complex filed a claim with the insurance company after two
hurricanes damaged the property.
Unfortunately, because the
hurricanes were two separate occurrences, the owner’s insurance coverage did not
actually consist of the $100 million the broker guaranteed. Instead, the
coverage only totaled to $50 million, or per occurrence. The condo owner
overspent and as a result filed a claim of negligence against the broker who
incorrectly informed the owner of the policy limits. The claim was struck down,
however, and the condo association appealed the ruling.
In this case, the court
stated that the economic loss rule only applied to product liability cases. The
legal team of the plaintiff then researched the origins of the rule and
determined that it had already been expanded into the realm of contracts.
Your Miami Business Litigation Attorneys — Contact Us Now
Do you
need help pursuing litigation for your business in Miami, or nearby area in the
state of Florida? The experienced business litigation lawyers at the Campbell Law
Group is always available to take your call. Even if you don't think you have a
case, let us evaluate your situation to make sure. Call
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