Call (954) 601-3732
Florida , Michigan , Massachusetts , New York

Florida Supreme Court Rolls Back the Clock on the Economic Loss Rule

Florida Supreme Court Rolls Back the Clock on the Economic Loss Rule The Florida Supreme Court just rolled back the clock on the Economic Loss Rule (ELR) inTiara Condominium Assoc., Inc. v. Marsh & McLennan Companies, Inc., 38 Fla. L. Weekly S151a (Fla. March 7, 2013), holding that the ELR only applies in Products Liability Cases. Over the years, civil defense lawyers have been quick to assert that, in general, tort claims are barred when they are premised on a dispute on an underlining contract. Often attorneys sued in tort, rather than contract, because torts opened the floodgates for punitive damages, whereas breach of contract claims limited the remedies to the provisions within the contract itself. Explained simply, a tort is an action either intentional or negligent, which breaches a legal duty owed to another person. Previously, the ELR barred a lawyer for suing for both fraudulent misrepresentation and breach of contract. The risk was that if one sued for the tort and was opposed by diligent opposing counsel and a wise judge, then the entire lawsuit might be thrown out at the motion to dismiss stage of the proceeding because breach of contract was the appropriate remedy. Now with the ELR no longer serving as a barrier, a lawyer can confidently sue for both and survive a motion to dismiss. (Note: fraudulent inducement was always exempt from the ELR). In essence, the Court has reverted back to the original intent of the ELR, thus narrowing the scope of the rules application. In her concurrence, Justice Pariente states that this ruling does not allow for a massive expansion of...