Yesterday the Supreme Court of Florida issued an opinion in an attempt to clear up any confusion with regard to the applicability of the Economic Loss Rule in the state of Florida. In the case of Tiara Condominium Association v. Marsh & McLennan Companies, Inc., the Supreme Court of Florida has now limited the application of the Economic Loss Rule to only those cases involving product liability claims.
The Tiara case involved allegations by an insured against its insurance broker relating to statements allegedly made with regard to amounts of coverage for claims arising from the 2004 hurricanes in Florida. The Supreme Court of Florida was asked to consider if the Economic Loss Rule barred tort claims brought by an insured against its insurance broker where the parties were in contractual privity with one another and the damage sought was solely for economic loss. The Court provided a detailed historical review of the Economic Loss Rule and provided a detailed analysis of the doctrine and its history as applied by various Florida courts.
The Court cited its concern with what is perceived as “overexpansion of the Economic Loss Rule” as a result of a number of exceptions to the doctrine adopted in various cases over the years. To make a clear ruling of the doctrine’s intended application and to bring some “finality” to the issue, the Florida Supreme Court held:
Having reviewed the origin and original purpose of the economic loss rule, and what has been described as the unprincipled extension of the rule, we now take this final step and hold that the economic loss rule applies only in the products liability context. We thus recede from our prior rulings to the extent that they have applied the economic loss rule to cases other than products liability.