Economic Loss Rule Bars Claims Against Manufacturer
November 02, 2020 —
David Adelstein - Florida Construction Legal UpdatesThe economic loss rule lives to bar a claim against a product manufacturer in a real estate transaction. In a products liability action, there needs to be personal injury or property damage, other than to the property itself, in order to recover economic damages. Otherwise, the economic loss rule will bar the recovery of such economic losses when the economic losses deal to the product itself. This is important to keep in mind in any product liability action against a manufacturer.
In a recent case, 2711 Hollywood Beach Condominium Assoc’n, Inc., v. TRG Holiday, Ltd., 45 Fla. L. Weekly D2179a (Fla. 3d DCA 2020), a condominium association purchased the condominium from the developer. Subsequently, it noticed leaks with the fire suppression system in the condominium and sued multiple parties for damages for repairs due to the leaks and the replacement of the fire suppression system. One of the parties sued in negligence and strict liability was a manufacturer of pipe fittings used in the fire suppression system. The manufacturer moved for summary judgment based on the economic loss rule and relying on the 1993 Florida Supreme Court opinion in Casa Clara Condominium Assoc’n v. Charley Toppino & Sons, Inc., 620 So.2d 1244 (Fla. 1993), holding “the economic loss rule limited a defendant’s tort liability for allegedly defective products to injuries caused to persons or damage caused to property other than the defective product itself.” 2711 Hollywood Beach Conominium Assoc’n, supra. The trial court agreed with the manufacturer and granted summary judgment. On appeal, the Third District affirmed based on the economic loss rule:
The Association bargained for, purchased and received a building; [the manufactuer’s] fittings were only a component of the FSS [fire suppression system], incorporated into the building. Applying the rule set forth in Casa Clara, the Association purchased a completed building from the developer. [The manufactuer’s] fittings were “an integral part of the finished product and, thus, did not injure ‘other’ property.” Injury to the building itself is not injury to “other” property because the product purchased by the Association was the building. See Casa Clara, 620 So. 2d at 1247. The economic loss rule therefore bars the Association’s recovery as to [the manufacturer] to the extent that it sought damages to replace the FSS [fire suppression system] and repair damage to the building.
2711 Hollywood Beach Conominium Assoc’n, supra (internal citations omitted).
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Housing Starts in U.S. Little Changed From Stronger January
March 19, 2014 —
Jeanna Smialek – BloombergHousing starts in the U.S. were little changed in February after declining less than previously estimated a month earlier, indicating the home-building industry is stabilizing after bad winter weather curbed construction.
The 0.2 percent decrease to 907,000 homes at an annualized rate last month followed a revised 909,000 pace in January, figures from the Commerce Department in Washington showed today. The median estimate in a Bloomberg survey called for a 910,000 rate after a previously reported 880,000 in January.
Warmer temperatures, a pickup in demand during the spring selling season and limited housing supply may help fuel further gains in new residential construction. The outlook for the industry later this year depends on whether hiring picks up enough to overcome higher mortgage rates and home prices.
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Jeanna Smialek, BloombergMs. Smialek may be contacted at
jsmialek1@bloomberg.net
Pennsylvania Supreme Court Rules that Insurance Salesman had No Fiduciary Duty to Policyholders
July 19, 2017 —
Austin D. Moody - Saxe Doernberger & Vita, P.C.On June 20, 2017, the Pennsylvania Supreme Court ruled that a life insurance salesman had no fiduciary duty to his customers where the customers retained decision-making authority regarding which policies to purchase. In Yenchi v. Ameriprise Fin., Inc., the Court returned a 4-2 verdict, overturning the lower court’s finding that it was possible that a fiduciary relationship existed between the parties.
The suit arose from a series of transactions between Eugene and Ruth Yenchi and Bryan Holland, a financial advisor for IDS Life Insurance Corporation.
The relationship began when Holland cold-called the Yenchis and asked to meet with them regarding their “financial stuff.” For a fee of $350, Holland met with the Yenchis on several occasions and counseled them regarding their insurance needs. On Holland’s advice, the Yenchis cashed out several existing polices and purchased a whole-life policy for Mr. Yenchi and a deferred variable annuity in Mrs. Yenchi’s name.
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Austin D. Moody, Saxe Doernberger & Vita, P.C.Mr. Moody may be contacted at
adm@sdvlaw.com
Coverage Exists for Landlord as Additional Insured
September 03, 2014 —
Tred R. Eyerly – Insurance Law HawaiiThe Indiana Court of Appeals determined the landlord was entitled to coverage as an additional insured under the tenant's policy. Selective Ins. Co. v. Erie Ins. Exch., 2014 Ind. App. LEXIS 365 (Ind. Ct. App. July 30, 2014).
Rangeline, LLC owned a warehouse. Rangeline negotiated a lease with Hammons Storage to store insulation manufactured by Knauf Insulation. Pursuant to requirements in the lease, Hammons secured liability coverage with Erie Insurance naming Rangeline as an additional insured.
After Hammons moved insulation into the warehouse for storage, the pipes of the sprinkler system burst, causing damage to the insulation. The cause of the loss was determined to be water from the system freezing, which led to the cast iron fittings cracking, causing the failure of the sprinkler heads.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Reminder: Just Being Incorporated Isn’t Enough
June 29, 2020 —
Christopher G. Hill - Construction Law MusingsI have discussed why contractors need to incorporate previously here at Construction Law Musings. Among the many reasons to incorporate are possible tax benefits and the protection of personal assets (like your house and your dog) from judgement and collection actions. This latter reason is key in the construction world in which Murphy can look like an optimist and projects have so many moving parts that something is likely to go wrong.
The reason incorporation works as at least a partial shield is that the company and the owners are separate “people” or entities from a legal perspective and a contract with one “person” cannot be enforced against another. This same logic applies in the context of corporate versus individual actions, i. e. the actions of one person cannot be legally attributed to another person. By extension the assets of an individual cannot be collected to satisfy a purely corporate debt or judgment.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Navigate the New Health and Safety Norm With Construction Technology
August 03, 2020 —
Jeremy Larsen - Construction ExecutiveSafety has always been a pressing issue in construction, and as states reopen and construction projects pick up steam once again, the industry will become even more closely scrutinized than before. Construction safety looks a lot different than it did six months ago. In addition to the concerns around keeping workers safe on construction sites, today’s contractors are faced with a whole new category of risk, and with new health and safety measures that may vary by county, state or region. New requirements range from social distancing and limits on the size of crews, to requiring masks and temperature checks for all workers.
OPERATING IN THE NEW NORM
This sudden onset of COVID-19 put otherwise healthy businesses into a state of chaos that, months later, is still hard to navigate. By March of 2020, reports indicated that nearly one-third of construction projects had come to a halt. Now, as the industry emerges, balancing business continuity efforts with trying to get crews back to work and jobsites moving again will no doubt present challenges. New health and safety measures, plus the fact that no one wants to touch paper in the field, will add another layer of administrative and procedural oversight to the construction process. Of course, these measures are absolutely needed, but construction businesses can’t ignore the fact that it changes the very way projects and jobsites are managed. And, without the right tools in place, it may be a bumpy ride.
Reprinted courtesy of
Jeremy Larsen, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Mr. Larsen may be contacted at
jeremy.larsen@viewpoint.com
New York: The "Loss Transfer" Opportunity to Recover Otherwise Non-Recoverable First-Party Benefits
May 13, 2014 —
Robert M. Caplan – White and Williams LLPNew York’s “no-fault” legislation reflects a public policy designed to make the insurer of first-party benefits absorb the economic impact of loss without resort to reimbursement from its insured or, by subrogation, from the tortfeasor. Country Wide Ins. Co. v. Osathanugrah, 94 A.D.2d 513, 515 (N.Y. 1st Dept. 1983). The no-fault concept embodied in New York’s Insurance Law modifies the common law system of reparation for personal injuries under tort law. Safeco Ins. Co. of Am. v. Jamaica Water Supply Co., 83 A.D.2d 427, 431 (N.Y. 2nd Dept. 1981). “[F]irst party benefits are a form of compensation unknown at common law, resting on predicates independent of the fault or negligence of the injured party.” Id. at 431. The purpose of New York’s no-fault scheme is “to promote prompt resolution of injury claims, limit cost to consumers and alleviate unnecessary burdens on the courts.” Byrne v. Oester Trucking, Inc., 386 F. Supp. 2d 386, 391 (S.D.N.Y. 2005).
New York’s no-fault scheme—contained in Article 51 of its Consolidated Laws (“Comprehensive Motor Vehicle Insurance Reparations”)—requires owners of vehicles to carry insurance with $50,000 minimum limits which covers basic economic loss, i.e., first-party benefits, on account of personal injury arising from the use or operation of a motor vehicle. Basic economic loss includes, among other things: (1) medical expenses; (2) lost earnings up to $2,000 per month for three years; and (3) out-of-pocket expenses up to $25 per day for one year. N.Y. INS. LAW § 5102(a).
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Robert M. Caplan, White and Williams LLPMr. Caplan may be contacted at
caplanr@whiteandwilliams.com
Washington Supreme Court Upholds King County Ordinance Requiring Utility Providers to Pay for Access to County’s Right-of-Way and Signals Approval for Other Counties to Follow Suit
March 02, 2020 —
Kristina Southwell - Ahlers Cressman & Sleight PLLCOn December 5, 2019, the Washington State Supreme Court released its opinion in King County v. King County Water Districts, et al.,[1] upholding King County’s Ordinance 18403, which requires utility companies who are franchise grantees to pay “franchise compensation” for their use of the County rights-of-way. Generally, utility companies must apply for and obtain from the County a franchise permitting it to do necessary work in the County rights-of-way. [2] Previously, King County only charged an administrative fee associated with issuing such a franchise. But with the new franchise compensation charges, King County estimates that it will raise approximately $10 million dollars per year for its general fund.
Ordinance 18403 passed in November 2016 and was the first of its kind in the state. The ordinance created a rule, set forth in RCW 6.27.080, requiring electric, gas, water, and sewer utilities who are granted a franchise by King County to pay “franchise compensation” in exchange for the right to use the County’s rights-of-way. The rule provides that franchise compensation is in the nature of an annual rent payment to the County for using the County roads. King County decides an initial estimate of the charge by considering various factors such as the value of the land used, the size of the area that will be used, and the density of the households served. But utility companies can negotiate with the County over the final amount of franchise compensation.
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Kristina Southwell, Ahlers Cressman & Sleight PLLCMs. Southwell may be contacted at
kristina.southwell@acslawyers.com
