Thursday, March 7, 2013

Florida Supreme Court: Economic Loss Rule Abolished Outside Of Products Liability Cases

In Tiara Condominium Assoc. v. Marsh & McClennan Companies, Inc. (SC10-1022), the Florida Supreme Court answered a certified question from the 11th Circuit, analyzed the origins of the economic loss rule and abolished application of the rule outside of product liability cases. The court stated: "[w]e answer this question in the negative and hold that the application of the economic loss rule is limited to products liability cases."

The majority opinion concluded by stating:
Having reviewed the origin and original purpose of the economic loss rule, and what has been described as the unprincipled extension of the rule, we now take this final step and hold that the economic loss rule applies only in the products liability context. We thus recede from our prior rulings to the extent that they have applied the economic loss rule to cases other than products liability. The Court will depart from precedent as it does here “when such departure is ‘necessary to vindicate other principles of law or to remedy continued injustice.’ ” Allstate Indem. Co. v. Ruiz, 899 So. 2d 1121, 1131 (Fla. 2005) (quoting Haag v. State, 591 So. 2d 614, 618 (Fla. 1992)). Stare decisis will also yield when an established rule has proven unacceptable or unworkable in practice. See Westgate Miami Beach, Ltd. v. Newport Operating Corp., 55 So. 3d 576, 574 (Fla. 2010). Our experience with the economic loss rule over time, which led to the creation of the exceptions to the rule, now demonstrates that expansion of the rule beyond its origins was unwise and unworkable in practice. Thus, today we return the economic loss rule to its origin in products liability. 
Because we now limit the application of the economic loss rule to cases involving products liability, it is not necessary for us to decide whether the economic loss rule exception for professionals applies to insurance brokers. Based on the foregoing, we answer the rephrased certified question in the negative and hold that the application of the economic loss rule is limited to products liability cases. Having answered the rephrased certified question, we return this case to the Eleventh Circuit Court of Appeals.  
Justice Labarga wrote the opinion for the court, and was joined by Justice Pariente, Justice Lewis, Justice Quince, and Justice Perry. Justice Pariente wrote a concurring opinion that begins on page 19 of the .pdf and was joined by Justice Lewis and Justice Labarga. Chief Justice Polston wrote a dissenting opinion  that begins on page 26 of the .pdf and was joined by Justice Canady. Justice Canady wrote a dissenting opinion that begins on page 28 of the .pdf and was joined by Chief Justice Polston.  


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