PRODUCT LIABILITY ECONOMIC LOSS RULE AND “OTHER PROPERTY” DAMAGE

One of the best defenses a manufacturer has, particularly in non-personal injury cases, is the economic loss rule.  Lo and behold, a recent opinion out of the Middle District of Florida, Dero Roofing, LLC v. Triton, Inc., 2022 WL 14636884 (M.D.Fla. 2022), touches on this very subject with cogent analysis regarding “other property” damage for purposes of the economic loss rule.

In Dero Roofing, a roofing contractor repaired hurricane damage to roofs of condominium buildings. The roofing contractor became a certified applicator of the manufacturer Triton’s products. After the roofer applied certain products with a sprayer, the products “streaked down the roof tiles onto ‘the exterior and interior of the [Condos], including penetration of the residents’ screens, gutters, and other related areas.”  Dero Roofing, supra, at *1.  The roofing contractor obtained an assignment of the condominium’s claims and sued the manufacturer and distributor of the (Triton manufactured) products.

The defendants moved to dismiss under the economic loss doctrine.

The economic loss doctrine “prohibits tort recovery when a product damages itself, causing economic loss, but does not cause personal injury or damage to any property other than itself.”  Dero Roofing, supra, at *3 (quotation and citation omitted).

Well, what is other property?  The Dero Roofing opinion explains.

When a defective product is ‘an integral or component part’ of a larger item, then damage to the larger item ‘caused by this component part was not damage to separate property.’  As the rationale flows, a component becomes part of the purchased product, so they are one.  If nothing else was damaged, therefore, the economic loss rule applies because there was no damage to other property.

To qualify as other property, there must be damage to something ‘unrelated and unconnected to the product sold.’ In other words, ‘there is no privity between the owner of the property damaged and the distribution chain for the product causing the damage.’  And, crucially, ‘The character of the loss determines the appropriate remedies.’  That’s lawyer-speak for saying ‘one must look to the product purchased by the plaintiff, not the product sold by the defendant.’

Dero Roofing, supra, at *3 (internal quotations omitted).

Based on this definition of “other property” for purposes of the economic loss doctrine, the trial court held the economic loss doctrine applied to bar most of the plaintiff’s claims:

[The roofer] applied [the manufacturer’s products] to the roofs.  They were component parts of each respective roof.  And notably, the Condos presumably paid for completed roofs, not individual parts that could later make up a roof.  In short, [the roofer] cannot bring a products liability action for damages to the roofs because those theories are barred by the economic loss doctrine.

Dero Roofing, supra, at *4.

However, since this was at the motion to dismiss stage, the court is allowing, in a limited capacity, certain arguments relating to one of the products to move forward, but with an important analysis (caveat) that is prudent analysis for anyone dealing with a products liability claim relating to damage to “other property”:

This case is still at the pleading stage (when the Court must accept well-pled allegations as true and view them most favorably to Dero [the roofer]).  In part, Dero alleges the Condos suffered damage to their screens. As the Court understands it, TritoCryl [one of the producs] oozed below the roof onto either the window or lanai screens—damaging those screens and potentially whatever was beneath or inside them. There are no allegations to suggest the screens were anything but other property for the purposes of the economic loss rule. Specifically, nothing implies the screens were connected in any manner to the roofs or their repairs. So at this time, Dero plausibly alleged damage to other property of “the exterior and interior of the buildings, including penetration of the residents’ screens, gutters, and other related areas.”

To be sure, the damage as it relates to the gutters plus “exterior and interior of the buildings” (which the Court assumes could mean fascias, soffits, and walls) is a much closer call than the screens. While it leaves final resolution for another day, the Court notes an inclination to conclude this is not other property. Gutters, fascias, and soffits may be part of a complete roof (i.e., what the Condos bargained for). What’s more, the wall immediately adjoining the roof beneath a soffit would seem intimately connected with the roof. So the economic loss rule might eventually bar these types of damages too. But there is no need to step out on a limb over these matters today given the impossibility of concluding the screens weren’t other property on these allegations.

One final point. Even for the screens, ownership of that property might doom Dero’s claims. In Florida, it is settled that plaintiff must own the “other property.”  Again, the Complaint does not clarify who owns the screens. If individual residents are the property owners, then Dero (through the Condos) cannot claim that as damage to other property. But that is a factual issue well outside the pleadings to resolve at a later stage.

Dero Roofing, supra, at *5.

 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

 

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