On March 7th
, the Florida Supreme Court held that the economic loss rule (the doctrine that an economic loss is not recoverable under a tort theory unless accompanied by physical property damage or personal injury) applies only to products liability cases, effectively eliminating use of the doctrine in consumer cases. Tiara Condominium Ass'n, Inc. v. Marsh & McLennan Cos., Inc.,
2013 WL 828003 (Fla. Mar. 7, 2013). In Tiara
, a condominium association sued its insurance broker under both tort and contract theories for failing to inform the association that it was underinsured for property damage caused by two hurricanes. Tiara,
2013 WL 828003 at 1. The federal district court granted summary judgment in favor of the broker on all claims. Id.
The Eleventh Circuit Court of Appeals affirmed in part and certified the following question to the Florida Supreme Court: "Does an insurance broker provide a 'professional service' such that the insurance broker is unable to successfully assert the economic loss rule as a bar to tort claims seeking economic damages that arise from the contractual relationship between the insurance broker and the insured?" Id.
The Florida Supreme Court reframed the question to directly address the application of the economic loss rule: "Does the economic loss rule bar an insured's suit against an insurance broker where the parties are in contractual privity with one another and the damages sought are solely for economic losses?" Id.
The Florida Supreme Court then answered that question in the negative. Id
. In doing so, the Court explicitly limited the economic loss rule to products liability cases. Id.
at 7 The Court noted that the economic loss rule originated in the context of products liability. Id
. at 2. And though it acknowledged that a line of Florida decisions had expanded the rule beyond this limited context, the Court held that these decisions had "extend[ed] the application of the rule beyond our original limited intent." Id.
at 6. The long and short of this decision is that it confirms the economic loss rule no longer applies in Florida consumer lawsuits, eliminating another potential defense to consumer tort claims. For more information on consumer finance litigation topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.