Casa Clara Condo. Ass'n v. Charley Toppino & Sons - 620 So. 2d 1244 (Fla. 1993)

Rule:

The economic loss rule prohibits tort recovery when a product damages itself, causing economic loss, but does not cause personal injury or damage to any property other than itself. The rule is 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.

Facts:

Charley Toppino & Sons, Inc., a dissolved corporation, supplied concrete for numerous construction projects in Monroe County. Some of the concrete supplied by Toppino contained a high content of salt that caused the reinforcing steel inserted in the concrete to rust, which, in turn, caused the concrete to crack and break off. The petitioners owned condominium units and single-family homes built with Toppino’s concrete. In separate actions the homeowners sued numerous defendants and included claims against Toppino for breach of common law implied warranty, products liability, negligence, and violation of the building code. The trial court dismissed all counts against Toppino in each case, holding that petitioners could not recover for purely economic losses from Toppino under a negligence theory. The appellate court applied the economic loss rule and held that, because no person was injured and no other property damaged, the homeowners had no cause of action against Toppino in tort. The appellate court also held that Toppino, a supplier, had no duty to comply with the building code. 

Issue:

1. Did the economic loss rule apply in the present case? 
2. Did the petitioners have a cause of action against the respondent concrete supplier?  

Answer:

1) Yes. 2) No.

Conclusion:

On appeal, the supreme court approved the appellate court's ruling, holding that contract principles were more appropriate than tort principles for recovering economic loss without accompanying physical injury or property damage. The supreme court noted that for recovery in tort there had to be a showing of harm above and beyond disappointed expectations, and a buyer's desire to enjoy the benefit of his bargain was not an interest that tort law traditionally protected. Finally, the supreme court held that respondent's concrete did not damage other property, as required for a claim in tort, because petitioners purchased homes as a finished product, not as individual components.