economic loss doctrine in Arizona

2016“Rather than rely on the economic loss doctrine to preclude tort claims by non-contracting parties, courts should instead focus on whether the applicable substantive law allows liability in the particular context.” Id. at 327, ¶ 39 .

2016P'ship v. Design All., Inc., 223 Ariz. 320, 323, ¶ 12 (2010). ¶8 On appeal, the Parkses argue that (1) for public policy reasons, the court erred in barring the negligence claim; (2) ABS was estopped from relying on the economic loss doctrine; (3) the economic loss doctrine does not apply because ABS's faulty work damaged "other property" and (4) the economic loss doctrine does not apply because the Parkses' claim did not arise out of contract. ¶9 We need not decide whether the court erred in granting ABS's motion for judgment on the negligence claim based on the economic loss doctrine because

2010Architect argued that the contract claim is barred by the statute of repose in Arizona Revised Statutes (“AR.S.”) section 12-552 (2003), which provides that no action based in contract may be brought against a person who “furnishes the *322 design ... of an improvement to real property more than eight years after substantial completion of the improvement.” Architect argued that the negligence claim should be dismissed based on Carstens v. City of Phoenix, which held that the economic loss doctrine precludes tort recovery of economic losses in the “construction defect setting.” 206 Ariz. 123 ,

2010Architect argued that the contract claim is barred by the statute of repose in Arizona Revised Statutes (“AR.S.”) section 12-552 (2003), which provides that no action based in contract may be brought against a person who “furnishes the *322 design ... of an improvement to real property more than eight years after substantial completion of the improvement.” Architect argued that the negligence claim should be dismissed based on Carstens v. City of Phoenix, which held that the economic loss doctrine precludes tort recovery of economic losses in the “construction defect setting.” 206 Ariz. 123 ,

2022See Sullivan, 232 Ariz. at 345–46 ¶¶ 8–9 (concluding the economic loss doctrine bars the original homebuyer from asserting a negligence claim to recover repair costs); Sullivan v. Pulte Home Corp., 237 Ariz. 547 , 548 ¶¶ 1–3 (App. 2015) (holding that a subsequent homebuyer cannot maintain a negligence action against a builder to recover repair costs because the builder does not owe a duty to that homebuyer); see also Sewell v. Gregory, 371 S.E.2d 82 , 84–85 (W.

2015"The economic loss doctrine prohibits certain tort actions seeking pecuniary damage[s] not arising from injury to the plaintiff's person or from physical harm to property.” Sullivan v. Pulte Home Corp., 232 Ariz. 344, 345, ¶ 8 , 306 P.3d 1, 2 (2013).

2009Valley Forge, 220 Ariz. 512, ¶ 7 , 207 P.3d at 767 . “[W]e may not disregard or modify the law as articulated by the Arizona Supreme Court.” State v. Bejarano, 219 Ariz. 518, ¶ 6 , 200 P.3d 1015, 1017 (App.2008).

2009Valley Forge, 220 Ariz. 512, ¶ 7 , 207 P.3d at 767 . “[W]e may not disregard or modify the law as articulated by the Arizona Supreme Court.” State v. Bejarano, 219 Ariz. 518, ¶ 6 , 200 P.3d 1015, 1017 (App.2008).

2013In that case, the Ad-zona Supreme Court held that “[wjhere economic loss, in the form of repair costs, diminished value, or lost profits, is the plaintiffs only loss, the policies of the law generally will be best served by leaving the parties to their commercial remedies.” Id. at 379 , 694 P.2d at 209. ¶ 13 The Arizona Supreme Court next expressly considered the economic loss rule in Flagstaff.

2010In Flagstaff, 223 Ariz. 320, ¶ 14 , 223 P.3d at 667 , our supreme court summarized the policy bases for the application of the economic loss rule it had set forth in Salt River Project Agricultural Improvement & Power District v. Westinghouse Electric Corp., 143 Ariz. 368 , 694 P.2d 198 (1984).

2013Co. v. Oberg/Hunt/Gilleland, 139 Ariz. 184 , 677 P.2d 1292 (1984), “correctly implied that [the economic loss doctrine] would not apply to negligence claims by a plaintiff who has no contractual relationship with the defendant”).

2013Co. v. Oberg/Hunt/Gilleland, 139 Ariz. 184 , 677 P.2d 1292 (1984), “correctly implied that [the economic loss doctrine] would not apply to negligence claims by a plaintiff who has no contractual relationship with the defendant”).

2010Compare Apollo Group, Inc. v. Avnet, Inc., 58 F.3d 477, 480 (9th Cir.1995) (stating that Salt River reflects that Arizona applies the economic loss rule “broadly”), with Evans v. Singer, 518 F.Supp.2d 1134, 1142-45 (D.Ariz.2007) (stating Salt River “provided anything but” a broad reading of the rule); compare also Carstens, 206 Ariz. at 128 ¶ 21, 75 P.3d at 1086 (arguing that Salt River supports applying doctrine to bar homeowners’ claim for economic losses from construction defects), with Valley Forge Ins.

2005See Apollo Group, Inc. v. Avnet, Inc., 58 F.3d 477, 481 (9th Cir.1995) (applying Arizona law and holding that the economic loss rule barred the plaintiff from recasting a U.C.C. breach of warranty claim as a “common law” tort-based breach of warranty claim).

2009Homes, Inc., 142 Ariz. 439, 444-45 , 690 P.2d 158, 163-64 (App.1984) (no valid negligence claim where “damage claimed ... involve[d] the structure itself’ and not “damage to personal property or personal injury”).

2009Homes, Inc., 142 Ariz. 439, 444-45 , 690 P.2d 158, 163-64 (App.1984) (no valid negligence claim where “damage claimed ... involve[d] the structure itself’ and not “damage to personal property or personal injury”).

2010We subsequently rejected Donnelly's reliance on foreseeability to determine the existence of a duty of care for purposes of tort law, see Gipson v. Kasey, 214 Ariz. 141 , 144 ¶¶ 14-15, 150 P.3d 228, 231 (2007), an issue unrelated to the economic loss doctrine. 5 .

2010We subsequently rejected Donnelly's reliance on foreseeability to determine the existence of a duty of care for purposes of tort law, see Gipson v. Kasey, 214 Ariz. 141 , 144 ¶¶ 14-15, 150 P.3d 228, 231 (2007), an issue unrelated to the economic loss doctrine. 5 .

2009However, as we recently explained in Valley Forge Insurance Co. v. Sam’s Plumbing, LLC, 220 Ariz. 512, ¶¶ 10-11 , 207 P.3d 765, 768-69 (App.2009), Carstens’s articulation of the economic loss doctrine is contrary to our supreme court’s decision in Salt River, 143 Ariz. 368 , 694 P.2d 198 . 5 ¶ 15 Determination of whether the economic loss doctrine applies does not rest solely on whether there was a personal injury or damage to secondary property.

2009However, as we recently explained in Valley Forge Insurance Co. v. Sam’s Plumbing, LLC, 220 Ariz. 512, ¶¶ 10-11 , 207 P.3d 765, 768-69 (App.2009), Carstens’s articulation of the economic loss doctrine is contrary to our supreme court’s decision in Salt River, 143 Ariz. 368 , 694 P.2d 198 . 5 ¶ 15 Determination of whether the economic loss doctrine applies does not rest solely on whether there was a personal injury or damage to secondary property.

2013See Sullivan, 231 Ariz. at 57 ¶ 14, 290 P.3d at 450 . ¶ 13 We are not persuaded that the economic loss doctrine should apply to bar the negligence claims simply because the Sulli-vans had a possible contractual remedy under an implied warranty claim.

2013See Sullivan, 231 Ariz. at 57 ¶ 14, 290 P.3d at 450 . ¶ 13 We are not persuaded that the economic loss doctrine should apply to bar the negligence claims simply because the Sulli-vans had a possible contractual remedy under an implied warranty claim.

2010In Kawamata Farms, Inc. v. United Agri Products, 86 Hawaii 214 , 948 P.2d 1055, 1094-95 (1997), for example, the court concluded the economic loss rule did not apply; the plaintiffs had alleged not just the loss of the defective agricultural fungicides at issue, but “their farm crops, i.e., the Plaintiffs’ ‘other property.’ ” Likewise, a Florida court determined the economic loss rale did not apply where a plaintiffs tomato crop had been damaged by defective fungicides.

2010In Kawamata Farms, Inc. v. United Agri Products, 86 Hawaii 214 , 948 P.2d 1055, 1094-95 (1997), for example, the court concluded the economic loss rule did not apply; the plaintiffs had alleged not just the loss of the defective agricultural fungicides at issue, but “their farm crops, i.e., the Plaintiffs’ ‘other property.’ ” Likewise, a Florida court determined the economic loss rale did not apply where a plaintiffs tomato crop had been damaged by defective fungicides.

2010P’ship v. Design Alliance, Inc., 223 Ariz. 320, 321, ¶ 1 , 223 P.3d 664, 665 (2010) (applying the economic loss doctrine in a construction defect case to limit the property owner to its contractual remedies); 1800 Ocotillo, LLC v. WLB Group, Inc., 219 Ariz. 200, 201, ¶ 1 , 196 P.3d 222, 223 (2008) (upholding a liability-limitation clause in the contract between the parties).

2010P’ship v. Design Alliance, Inc., 223 Ariz. 320, 321, ¶ 1 , 223 P.3d 664, 665 (2010) (applying the economic loss doctrine in a construction defect case to limit the property owner to its contractual remedies); 1800 Ocotillo, LLC v. WLB Group, Inc., 219 Ariz. 200, 201, ¶ 1 , 196 P.3d 222, 223 (2008) (upholding a liability-limitation clause in the contract between the parties).

2010Id. at 437 , 441 ¶¶ 13-14, 30, 212 P.3d at 129, 133 . ¶ 8 We granted Architect’s petition for review because the application of the economic loss doctrine in this context is an issue of first impression and statewide importance.

2010Id. at 437 , 441 ¶¶ 13-14, 30, 212 P.3d at 129, 133 . ¶ 8 We granted Architect’s petition for review because the application of the economic loss doctrine in this context is an issue of first impression and statewide importance.

2009See, e.g., Moffitt v. Icynene, Inc., 407 F.Supp.2d 591, 596, 600-01 (D.Vt.2005) (owner assembling prefabricated cabin contracted with insulation installer; economic loss doctrine did not bar claim against installer when faulty insulation damaged rest of cabin); Gunkel v. Renovations, Inc., 822 N.E.2d 150, 155-56 (Ind. 2005) (declining to apply economic loss doctrine to bar claim for damage caused to home by defective installation of stone facade).

2009See, e.g., Moffitt v. Icynene, Inc., 407 F.Supp.2d 591, 596, 600-01 (D.Vt.2005) (owner assembling prefabricated cabin contracted with insulation installer; economic loss doctrine did not bar claim against installer when faulty insulation damaged rest of cabin); Gunkel v. Renovations, Inc., 822 N.E.2d 150, 155-56 (Ind. 2005) (declining to apply economic loss doctrine to bar claim for damage caused to home by defective installation of stone facade).

2009See, e.g., Moffitt v. Icynene, Inc., 407 F.Supp.2d 591, 596, 600-01 (D.Vt.2005) (owner assembling prefabricated cabin contracted with insulation installer; economic loss doctrine did not bar claim against installer when faulty insulation damaged rest of cabin); Gunkel v. Renovations, Inc., 822 N.E.2d 150, 155-56 (Ind. 2005) (declining to apply economic loss doctrine to bar claim for damage caused to home by defective installation of stone facade).

2009See, e.g., Moffitt v. Icynene, Inc., 407 F.Supp.2d 591, 596, 600-01 (D.Vt.2005) (owner assembling prefabricated cabin contracted with insulation installer; economic loss doctrine did not bar claim against installer when faulty insulation damaged rest of cabin); Gunkel v. Renovations, Inc., 822 N.E.2d 150, 155-56 (Ind. 2005) (declining to apply economic loss doctrine to bar claim for damage caused to home by defective installation of stone facade).

2020Co., 227 Ariz. 331, 332 , 335 n.6 (App. 2011), for the proposition that the economic loss rule limits recovery to a party’s contract damages even in the face of fraud.

2013In that context, absent this type of loss, a plaintiff can only obtain contract remedies. ¶ 14 Relying on Flagstaff, we applied the economic loss rule to certain claims for negligence, negligent and intentional misrepresentation, and common law fraud in Cook v. Orkin Exterminating Co., 227 Aiz. 331, 258 P.3d 149 (App.2011).

2022See Sullivan, 232 Ariz. at 345–46 ¶¶ 8–9 (concluding the economic loss doctrine bars the original homebuyer from asserting a negligence claim to recover repair costs); Sullivan v. Pulte Home Corp., 237 Ariz. 547 , 548 ¶¶ 1–3 (App. 2015) (holding that a subsequent homebuyer cannot maintain a negligence action against a builder to recover repair costs because the builder does not owe a duty to that homebuyer); see also Sewell v. Gregory, 371 S.E.2d 82 , 84–85 (W.

2016We review an award of damages for an abuse of discretion and the award “will not be disturbed on appeal except for the most cogent of reasons.” Fernandez v. United Acceptance Corp., 125 Ariz. 459, 464 (App. 1980).

2014See Trantor v. Fredrikson, 179 Ariz. 299, 300 , 878 P.2d 657, 658 (1994) (“[A]bsent extraordinary circumstances, errors not raised in the trial court cannot be raised on appeal.”). 3 II.

2014See Trantor v. Fredrikson, 179 Ariz. 299, 300 , 878 P.2d 657, 658 (1994) (“[A]bsent extraordinary circumstances, errors not raised in the trial court cannot be raised on appeal.”). 3 II.

2013Courtesy Pontiac GMC-Truck, Inc., 693 So.2d 602, 610-11 (Fla.Ct.App.1997) (declining to apply the economic loss rule to the Florida Deceptive and Unfair Trade Practices Act); see also Eddward P. Ballinger, Jr. & Samuel A. Thumma, The History, Evolution and Implications of Arizona’s Economic Loss Rule, 34 Ariz. St.

2013See, e.g., Stuart v. Weisflog’s Showroom, Gallery, Inc., 308 Wis.2d 103 , 746 N.W.2d 762, 773-74, ¶¶ 35-37 (2008) (declining to apply the economic loss rule to a cause of action under Wisconsin’s Home Improvement Practices Act); Comptech Int’l, Inc. v. Milam Commerce Park, Ltd., 753 So.2d 1219, 1221-23 (Fla. 1999) (holding that the economic loss rule does not apply to a cause of action for injury resulting from the violation of Florida’s Southern Building Code).

2013See, e.g., Stuart v. Weisflog’s Showroom, Gallery, Inc., 308 Wis.2d 103 , 746 N.W.2d 762, 773-74, ¶¶ 35-37 (2008) (declining to apply the economic loss rule to a cause of action under Wisconsin’s Home Improvement Practices Act); Comptech Int’l, Inc. v. Milam Commerce Park, Ltd., 753 So.2d 1219, 1221-23 (Fla. 1999) (holding that the economic loss rule does not apply to a cause of action for injury resulting from the violation of Florida’s Southern Building Code).

2013See, e.g., Stuart v. Weisflog’s Showroom, Gallery, Inc., 308 Wis.2d 103 , 746 N.W.2d 762, 773-74, ¶¶ 35-37 (2008) (declining to apply the economic loss rule to a cause of action under Wisconsin’s Home Improvement Practices Act); Comptech Int’l, Inc. v. Milam Commerce Park, Ltd., 753 So.2d 1219, 1221-23 (Fla. 1999) (holding that the economic loss rule does not apply to a cause of action for injury resulting from the violation of Florida’s Southern Building Code).

2013See, e.g., Stuart v. Weisflog’s Showroom, Gallery, Inc., 308 Wis.2d 103 , 746 N.W.2d 762, 773-74, ¶¶ 35-37 (2008) (declining to apply the economic loss rule to a cause of action under Wisconsin’s Home Improvement Practices Act); Comptech Int’l, Inc. v. Milam Commerce Park, Ltd., 753 So.2d 1219, 1221-23 (Fla. 1999) (holding that the economic loss rule does not apply to a cause of action for injury resulting from the violation of Florida’s Southern Building Code).

2010We agree and therefore vacate the court’s judgment. *144 Background ¶2 “On appeal from a grant of summary judgment, we view all facts and reasonable inferences therefrom in the light most favorable to the party against whom judgment was entered.” Bothell v. Two Point Acres, Inc., 192 Ariz. 313, ¶ 2 , 965 P.2d 47, 49 (App.1998).

2010We agree and therefore vacate the court’s judgment. *144 Background ¶2 “On appeal from a grant of summary judgment, we view all facts and reasonable inferences therefrom in the light most favorable to the party against whom judgment was entered.” Bothell v. Two Point Acres, Inc., 192 Ariz. 313, ¶ 2 , 965 P.2d 47, 49 (App.1998).