economic loss rule in Florida

2013For example, in HTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 685 So.2d 1238 (Fla.1996), we stated: The economic loss rule has not eliminated causes of action based upon torts independent of the contractual breach even though there exists a breach of contract action.

2008We simply observe that the negligence claim appears to be barred by the economic loss rule because the parties were in contractual privity, the property damaged was the subject of the contract, and the negligence was not "independent from acts that breached the contract." HTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 685 So.2d 1238, 1239 (Fla.1996).

2013In Casa Clara Condominium Ass’n, Inc. v. Charley Toppino and Sons, Inc., 620 So.2d 1244 (Fla.1993), we recognized the economic loss rule as “the fundamental boundary between contract law, which is designed to enforce the expectancy interests of the parties, and tort law, which imposes a duty of reasonable care and thereby encourages citizens to avoid causing physical harm to others.” Id. at 1246 (quoting Sidney R.

2013In Casa Clara Condominium Ass’n, Inc. v. Charley Toppino and Sons, Inc., 620 So.2d 1244 (Fla.1993), we recognized the economic loss rule as “the fundamental boundary between contract law, which is designed to enforce the expectancy interests of the parties, and tort law, which imposes a duty of reasonable care and thereby encourages citizens to avoid causing physical harm to others.” Id. at 1246 (quoting Sidney R.

2013ANALYSIS Origin and Development of the Economic Loss Rule “The exact origin of the economic loss rule is subject to some debate and its application and parameters are somewhat ill-defined.” Moransais v. Heathman, 744 So.2d 973, 979 (Fla.1999).

2013We also noted in Moransais , that “[w]hile we continue to believe the outcome of [AFM ] is sound, we may have been unnecessarily over-expansive in our reliance on the economic loss rule as opposed to fundamental contractual principles.” Moransais, 744 So.2d at 981 .

2008Aviation Inc., 891 So.2d 532, 537 (Fla.2004) ("Fraudulent inducement is an independent tort in that it requires proof of facts separate and distinct from the breach of contract."); Taylor v. Maness, 941 So.2d 559, 564 (Fla. 3d DCA 2006) (observing that "a fraud in the inducement claim is not barred by the economic loss rule so long as the claim is based on conduct that is separate and distinct from the conduct constituting the breach of contract"); Hotels of Key Largo, Inc. v. RHI Hotels, Inc., 694 So.2d 74, 77 (Fla. 3d DCA 1997) (observing that "where the only alleged misrepresentation concer

2008Aviation Inc., 891 So.2d 532, 537 (Fla.2004) ("Fraudulent inducement is an independent tort in that it requires proof of facts separate and distinct from the breach of contract.”); Taylor v. Maness, 941 So.2d 559, 564 (Fla. 3d DCA 2006) (observing that "a fraud in the inducement claim is not barred by the economic loss rule so long as the claim is based on conduct that is separate and distinct from the conduct constituting the breach of contract”); Hotels of Key Largo, Inc. v. RHI Hotels, Inc., 694 So.2d 74, 77 (Fla. 3d DCA 1997) (observing that "where the only alleged misrepresentation concer

2013We also noted that “the products liability economic loss rule articulated in Seely and East River , and adopted by this Court in Florida Power, applies even in the absence of privity of contract.” Id. (citing Airport Rent-A-Car, Inc. v. Prevost Car, Inc., 660 So.2d 628, 631 (Fla.1995) (holding cause of action for negligence against manufacturer of defective buses was barred by the economic loss rule notwithstanding absence of privity)); see also Casa Clara, 620 So.2d at 1248 (holding cause of action against manufacturer of defective concrete was barred by the economic loss rule notwithstanding

2013In the aftermath of American Aviation, which clearly stated an intent to “expressly limit[ ]” the economic loss rule, American Aviation, 891 So.2d at 542 , it was no longer clear whether our decisions permitted application of the rule to situations involving contractual privity.

1997In HTP, Ltd. v. Lineas Aereas Costarricenses S.A., 661 So.2d 1221 (Fla. 3d DCA 1995), this Court held that a claim for fraudulent inducement is an independent tort and thus not barred by the economic loss rule.

1996Co., 282 F.2d 106, 110 (9th Cir.1960), cert. denied, 368 U.S. 822 , 82 S.Ct. 41 , 7 L.Ed.2d 27 (1961)); see also HTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 661 So.2d 1221 (Fla. 3d DCA 1995), rev. granted, 670 So.2d 938 (Fla.1996) (affirming trial court's ruling that plaintiff's action for fraud in the inducement was an independent tort that was not barred by the economic loss rule); Burton v. Linotype Co., 556 So.2d 1126, 1128 (Fla. 3d DCA 1989), rev. denied, 564 So.2d 1086 (Fla.1990) ("Fraud in the inducement and deceit are independent torts for which compensatory and punitive damages m

2008See, e.g., Taylor v. Maness, 941 So.2d 559, 564 (Fla. 3d DCA 2006) ("the Taylors cannot escape the economic loss rule in their negligent misrepresentation claim as the alleged negligent misrepresentation relates to the performance of the contract"); Allen v. Stephan Co., 784 So.2d 456, 457 (Fla. 4th DCA 2000) ("The law is well established that the economic loss rule does not bar tort actions based on fraudulent inducement and negligent misrepresentation . . . [i]f the fraud occurs in connection with misrepresentations, statements or omissions which cause the complaining party to enter into a t

2008Aviation Inc., 891 So.2d 532, 537 (Fla.2004) ("Fraudulent inducement is an independent tort in that it requires proof of facts separate and distinct from the breach of contract.”); Taylor v. Maness, 941 So.2d 559, 564 (Fla. 3d DCA 2006) (observing that "a fraud in the inducement claim is not barred by the economic loss rule so long as the claim is based on conduct that is separate and distinct from the conduct constituting the breach of contract”); Hotels of Key Largo, Inc. v. RHI Hotels, Inc., 694 So.2d 74, 77 (Fla. 3d DCA 1997) (observing that "where the only alleged misrepresentation concer

2013The contractual privity application of the economic loss rule is best exemplified by our decision in AFM Corp. v. Southern Bell Telephone & Telegraph Co., 515 So.2d 180 (Fla.1987). 2 There, AFM entered into an agreement with Southern Bell that included placing AFM’s advertising in the yellow pages.

2013We have repeatedly explained that the expansion of the economic loss rule beyond products liability to cover situations in which the parties are in privity of contract is best illustrated by AFM Corp. v. Southern Bell Telephone & Telegraph Co., 515 So.2d 180, 181 (Fla.1987), where the Court held that there was “no basis for recovery in negligence” since the plaintiff could not prove that “a tort independent of the breach [of contract] itself was committed.” The Court subsequently indicated, however, that its decision in AFM “may have been unnecessarily over-expansive” in its “reliance on the e

2013Justice Wells, joined by Justice Lewis and myself, similarly explained in Comptech International, Inc. v. Milam Commerce Park, Ltd., 753 So.2d 1219, 1227 (Fla.1999) (Wells, J., concurring), that “in order to clarify the application of the economic loss rule,” the Court should “expressly state that its application is limited to product claims.” Today, the Court has done so.

2001Nissan, Inc., 739 So.2d 138 (Fla. 5th DCA 1999), rev. denied, 760 So.2d 947 (Fla.2000); La Pesca Grande Charters, Inc. v. Moran, 704 So.2d 710 (Fla. 5th DCA 1998); see also Comptech Int'l, Inc. v. Milam Commerce Park, Ltd., 753 So.2d 1219 (Fla.1999); [4] Mejia v. Jurich, 781 So.2d 1175, 1178 (Fla. 3d DCA 2001) (stating, "[W]hen fraudulent misrepresentations in the formation of the contract are alleged, as is the case here, the economic loss rule does not bar recovery.") (citations omitted).

2001We relied on this reasoning in PK Ventures, wherein we held that the economic loss rule did not preclude a cause of action by the buyer of commercial property against the seller's broker for negligent misrepresentation. 690 So.2d at 1297 .

1999We relied on this reasoning in PK Ventures, wherein we held that the economic loss rule did not preclude a cause of action by *982 the buyer of commercial property against the seller's broker for negligent misrepresentation. 690 So.2d at 1297 .

2013We also noted that “the products liability economic loss rule articulated in Seely and East River , and adopted by this Court in Florida Power, applies even in the absence of privity of contract.” Id. (citing Airport Rent-A-Car, Inc. v. Prevost Car, Inc., 660 So.2d 628, 631 (Fla.1995) (holding cause of action for negligence against manufacturer of defective buses was barred by the economic loss rule notwithstanding absence of privity)); see also Casa Clara, 620 So.2d at 1248 (holding cause of action against manufacturer of defective concrete was barred by the economic loss rule notwithstanding

2004See Airport Rent-A-Car, Inc. v. Prevost Car, Inc. , 660 So.2d 628 , 631 (Fla. 1995) (holding cause of action for negligence against manufacturer of defective buses was barred by the economic loss rule notwithstanding absence of privity); Casa Clara Condo.

2001In HTP, Ltd., we held that a claim for fraudulent inducement constituted a tort independent from the underlying contract and, therefore, was not barred by the economic loss rule.... 685 So.2d at 1239 ; see also Woodson v. Martin, 685 So.2d 1240 (Fla.1996).

1999In HTP, Ltd., we held that a claim for fraudulent inducement constituted a tort independent from the underlying contract and, therefore, was not barred by the economic loss rule.... 685 So.2d at 1239 ; see also Woodson v. Martin, 685 So.2d 1240 (Fla.1996).

2008See, e.g., Taylor v. Maness, 941 So.2d 559, 564 (Fla. 3d DCA 2006) ("the Taylors cannot escape the economic loss rule in their negligent misrepresentation claim as the alleged negligent misrepresentation relates to the performance of the contract"); Allen v. Stephan Co., 784 So.2d 456, 457 (Fla. 4th DCA 2000) ("The law is well established that the economic loss rule does not bar tort actions based on fraudulent inducement and negligent misrepresentation . . . [i]f the fraud occurs in connection with misrepresentations, statements or omissions which cause the complaining party to enter into a t

2008July 20, 2004) ("Thus, it is only where the fraudulent inducement claims involve alleged misrepresentations that are later explicitly covered by unambiguous provisions in a written contract, that such tort claims are barred by the economic loss rule.”); but see Allen v. Stephan Co., 784 So.2d 456, 457 (Fla. 4th DCA 2000) ("The law is well established that the economic loss rule does not bar tort actions based on fraudulent inducement and negligent misrepresentation.

1999Frizzell Architects, Inc., 609 So.2d 1349 (Fla. 2d DCA 1992), which held that the economic loss rule barred a tort action against an architect by a condominium association where the damages alleged were purely economic and the plaintiff had no direct relationship with the architects.

1998Frizzell Architects, Inc., 609 So.2d 1349 (Fla. 2d DCA 1992), another case involving a homeowner association and one performing architect/engineering services, did consider the economic loss issue and upheld the applicability of the economic loss rule.

2007The issue in Delgado was "whether the economic loss rule has eliminated a claim brought under the FDUTPA when, as [in Delgado], the consumer transaction is based on a written sales contract." Delgado, 693 So.2d at 606 .

2004See, e.g., Delgado v. JW Courtesy Pontiac GMC-Truck, Inc., 693 So.2d 602, 607-609 (Fla. 2d DCA 1997) (holding that the economic loss rule does not apply to limit the application of the Florida's Deceptive and Unfair Trade Practices Act).

1999The economic loss rule "is a judge-made limitation on common law tort remedies," Facchina v. Mutual Benefits Corp., No. 97-2580, ___ So.2d ___, ___, 1999 WL 19185, at *2 (Fla. 4th DCA Jan.20, 1999), providing that "`absent a tort independent of breach of contract, remedy for economic loss lies in contract law,'" Wassail v. Payne, 682 So.2d 678, 681 (Fla. 1st DCA 1996)(quoting Monco Enters., Inc. v. Ziebart Corp., 673 So.2d 491, 492 (Fla. 1st DCA 1996)).

1997The First District then followed with Wassall v. Payne, 682 So.2d 678, 681 (Fla. 1st DCA 1996), concluding: “Thus where, as here, fraudulent misrepresentation and negligent misrepresentation in the formation of a contract are alleged, the economic loss rule does not bar the tort action based on such misrepresentations.” Accordingly, on the basis of HTP, Ltd., Ponto and Wassail, we reverse the judgment entered for appellee on rehearing and remand with instructions that the judgment of July 13, 1995, entered in favor of appellant, be reinstated.

2013Corp., 510 So.2d 899 (Fla.1987), our seminal case on the applicability of the economic loss rule.

2009The Economic Loss Rule FPL also argues that the economic loss rule bars Ramos’ claims, citing such cases as Florida Power & Light Co. v. Westinghouse Electric Corp., 510 So.2d 899 (Fla.1987), and Casa Clara Condominium Ass’n, Inc. v. Charley Toppino & Sons, Inc., 620 So.2d 1244 (Fla.1993).

1999See HTP, Ltd. v. Lineas Aereas Costarricenses, *353 S.A., 685 So.2d 1238, 1239 (Fla. 1996); Wassall, 682 So.2d at 681 ; TGI Dev., Inc. v. CV Reit, Inc., 665 So.2d 366 (Fla. 4th DCA), approved, 689 So.2d 255 (Fla.1996).

1996As we did in TGI Development, Inc. v. CV Reit, Inc., 665 So.2d 366 (Fla. 4th DCA 1996), we conclude that the economic loss rule (ELR) does not bar a common law fraud in the inducement claim seeking to recover only economic losses.

1997The court concluded its analysis, therefore, by recognizing "that fraudulent inducement claims may coexist with breach of contract claims, safe from the economic loss rule...." Id. at 1240 (emphasis added) (approving reasoning of dissent in Woodson v. Martin, 663 So.2d 1327, 1330 (Fla. 2d DCA 1995) (en banc) (Altenbernd, J., dissenting)), quashed, 685 So.2d 1240 (Fla. 1996).

1996To the contrary, in Woodson v. Martin, 663 So.2d 1327, 1329 (Fla. 2d DCA 1995), the second district held that under the economic loss rule, the nature of the damages suffered determines whether recovery is barred for tort actions, explaining that if the damages sought are economic losses only, the party seeking recovery for those damages must proceed on contract theories of liability.

2018Ass'n. v. Marsh & McLennan Cos. , 110 So.3d 399 , 401-07 (Fla. 2013) (discussing the origin and development of the economic loss rule).

2018Ass'n. v. Marsh & McLennan Cos., 110 So. 3d 399, 401-07 (Fla. -2- 2013) (discussing the origin and development of the economic loss rule).

2000As described in the frequently-quoted Huron Tool and Engineering Co. v. Precision Consulting Services, Inc., 209 Mich.App. 365 , 532 N.W.2d 541, 545 (1995), "[f]raud in the inducement presents a special situation where parties to a contract appear to negotiate freely-which normally would constitute grounds for invoking the economic loss doctrine-but where in fact the ability of one part to negotiate fair terms and make an informed decision is undermined by the other party's fraudulent behavior." Each case must be evaluated on its facts to ascertain the independence of the fraud from the perfor

2000As described in the frequently-quoted Huron Tool and Engineering Co. v. Precision Consulting Services, Inc., 209 Mich.App. 365 , 532 N.W.2d 541, 545 (1995), "[f]raud in the inducement presents a special situation where parties to a contract appear to negotiate freely-which normally would constitute grounds for invoking the economic loss doctrine-but where in fact the ability of one part to negotiate fair terms and make an informed decision is undermined by the other party's fraudulent behavior." Each case must be evaluated on its facts to ascertain the independence of the fraud from the perfor

2008Frank Chopin, P.A., 724 So.2d 577, 579 (Fla. 4th DCA 1998) (concluding that the economic loss rule barred commercial tenants' claim against landlord for negligent misrepresentation, *1119 where alleged misrepresentations were directly related to landlord's performance under lease); Hotels of Key Largo, Inc. v. RHI Hotels, Inc., 694 So.2d 74, 78 (Fla. 3d DCA 1997) (observing "where the alleged fraudulent misrepresentation is inseparable from the essence of the parties' agreement, the economic loss rule applies and the parties are limited to pursuing their rights in contract").

2008Frank Chopin, P.A., 724 So.2d 577, 579 (Fla. 4th DCA 1999) (holding that "the economic loss rule bars the tenants' claim for negligent misrepresentation because, absent a tort independent of breach of contract, the remedy for economic loss lies in contract law," and explaining that the "action for negligent misrepresentation in the instant case was barred by the economic loss rule because the subject misrepresentations were directly related to the breaching party's performance under the subject lease agreement.").

2006La Pesca Grande Charters, Inc. v. Moran, 704 So.2d 710, 713 (Fla. 5th DCA 1998); see also Indem.

2001Nissan, Inc., 739 So.2d 138 (Fla. 5th DCA 1999), rev. denied, 760 So.2d 947 (Fla.2000); La Pesca Grande Charters, Inc. v. Moran, 704 So.2d 710 (Fla. 5th DCA 1998); see also Comptech Int'l, Inc. v. Milam Commerce Park, Ltd., 753 So.2d 1219 (Fla.1999); [4] Mejia v. Jurich, 781 So.2d 1175, 1178 (Fla. 3d DCA 2001) (stating, "[W]hen fraudulent misrepresentations in the formation of the contract are alleged, as is the case here, the economic loss rule does not bar recovery.") (citations omitted).

2013Justice Canady points most recently to Curd v. Mosaic Fertilizer, LLC, 39 So.3d 1216 (Fla.2010), and American Aviation, as indicating that the contractual privity application of the economic loss rule is settled Florida law.

2013Just two years ago, in Curd v. Mosaic Fertilizer, LLC, 39 So.3d 1216, 1223 (Fla.2010), the same majority that decides today’s case joined in an opinion stating the general principle that “the economic loss rule in Florida is applicable” not only in the products liability context but also “where the parties are in contractual privity and one party seeks to recover damages in tort for matters arising out of the contract.” The majority in Curd simply restated Florida law.