Application of economic loss rule is limited to product liability cases.

The broker secured windstorm coverage for the condominium association through an insurance company. The association's condominium was damaged by hurricanes. It proceeded with expensive remediation efforts after the broker assured it that the loss limits coverage was per occurrence. However, the loss limit was in the aggregate. The broker was granted summary judgment on all of the association's claims. The court of appeals did not affirm as to the negligence and breach of fiduciary duty claims, certifying a question to the Supreme Court as to whether the economic loss rule prohibits recovery. The Supreme Court held that the application of the economic loss rule was limited to product liability cases. Thus, it receded from its prior rulings to the extent that they applied the economic loss rule to cases other than product liability. The Supreme Court has previously expressed its desire to return the economic loss rule to its intended purpose. In each instance, however, it left intact a number of exceptions that continued the rule's unprincipled expansion. Expansion of the rule beyond its origins was determined to be unwise and unworkable in practice. Thus, the Supreme Court returned the economic loss rule to its origin in product liability.

Case Law Alerts - 2nd Quarter 2013