Wednesday, June 9, 2010

3d DCA Watch -- The Sad Decline of the Economic Loss Rule.


I've written about this before, but there was a time a few decades ago when all anyone wanted to talk about was the Economic Loss Rule.

Could it apply here? Why doesn't it apply here? Let's have a lunch seminar and discuss it!

It was everywhere, the "metadata" or pesto wrap flatbread legal trend of its time.

But as the bunkerized Robed Ones remind us, ding dong the ELR is dead:
This “prohibition against tort actions to recover solely economic damages for those in contractual privity is designed to prevent parties to a contract from circumventing the allocation of losses set forth in the contract by bringing an action for economic loss in tort.” Indem. Ins. Co., 891 So. 2d at 536. Moreover, when discussing the exemptions to the economic loss rule, the Florida Supreme Court, citing Moransais as an example, stated that “[a]nother situation involves cases such as those alleging neglect in providing professional services, in which this Court has determined that public policy dictates that liability not be limited to the terms of the contract.” Indem. Ins. Co., 891 So. 2d at 537. In Moransais, the Florida Supreme Court tacitly acknowledged that an extra-contractual remedy against a negligent professional is necessary because contractual remedies in such a situation may be inadequate. Moransais, 744 So. 2d at 983 (“While the parties to a contract to provide a product may be able to protect themselves through contractual remedies, we do not believe the same may be necessarily true when professional services are sought and provided.”). By allowing a professional negligence claim against an individual on common law and statutory grounds, and finding that the doctrine designed to prevent “parties to a contract from circumventing the allocation of losses set forth in the contract” does not preclude such a claim, the Florida Supreme Court implicitly acknowledged that claims of professional negligence operate outside of the contract.
Ahh Moransais -- it's been a while, welcome back my dear friend. Come sit next to my pal Venetian Salami.

But I guess my question is why?

What is it about professional services contracts in particular such that public policy compels -- in all circumstances -- that there be extra contractual remedies available in addition to those agreed to by the parties (or in Judge Shepherd's words, the "ancient concepts of freedom of contract")?

In other words, the court is not allowed to pay any attention to the circumstances of the contract formation or its terms, which typically can provide an equitable basis for extra contractual relief -- unequal bargaining power, obscure or buried terms, terms of adhesion, unconscionable terms, whether the parties are sophisticated etc.

Apparently all of the usual equitable tools get thrown out the window where professional services are involved, and it's simply the case that extra contractual remedies are always available?

I've never been a fan of the ECL, but at least I'd like to understand the reasoning for the exceptions.

Perhaps another way of looking at it is why shouldn't this exception extend beyond the professional service setting if there are compelling equitable grounds?

16 comments:

Anonymous said...

Feeling gassy-- must be the venetian salami.

Anonymous said...

Where do farts go when you hold them in?

Does it leak out slowly without the person knowing it?

Anonymous said...

Every time Ervin Gonzalez farts, god kills a Kitten. See Venetian Salami Co. v. Parthenais, 554 So.2d 499 (1989).

Anonymous said...

Do not run after you fart- when running away from the smell, your movement can literally drag it along with you.

Anonymous said...

Farter: Dr. Fartstein, how can I silence my farts?

Dr. Fartstein: The trick is seperate your butt cheeks when needing to fart so it creates no vibration, therefore no sound. These ones stink alot though-- Silent But Deadly [S.B.D]

Anonymous said...

I just dropped some serious chinese drywall in my office. Hopefully my assitant doesn't walk in for at least the next few minutes.

Anonymous said...

12:50--How to conceal a fart-- use a handful of loose toilet paper, cover your butt hole and it will muffle the farting; I call it the 'Buff Muff'!"

Anonymous said...

Silent but deadly farts emerge as the notorious, warm and often in amounts too small to produce a good sound, but excelling in stench

Anonymous said...

Rothstein 50 years!

Will be reduced to 30.

Anonymous said...

Harry Stoner: Everybody misses.

Margo: Not professionals.

Harry Stoner: Oh yeah, professionals too. Quarterbacks get knocked down, nurses get knocked up, somebody invented the Edsel. Everybody misses.

Shoot The Lawyers said...

Forget the ELR. Gotta love that picture. Save The Tiger. I remember the film only too well. Very depressing. Lemmon, known for some of the great comedic roles of all time (Some Like It Hot, The Fortune Cookie, The Odd Couple) was even better in dramatic roles. Who can forget him in Glengarry and The Apartment. Save The Tiger is one of my all time favorites. Can't get that scene out of my mind. Am going to go home early tonight and open a bottle of scotch and watch it twice.

Anonymous said...

Save the Shumie

Anonymous said...

Ditto 3:52.

GB said...

STL - I was just discussing with a certain robed fan o this blog, whether Some Like It Hot is one of the Greatest Movies of All Time. My vote is Who's Afraid of Virginia Woolf. Or Indian Jones. Or anything - and I do mean ANYTHING - with Angelina Jolie.

But you can't argue with Marilyn in Some Like it Hot. Or Lemon, for that matter. I mean his acting, of course.

Shoot The Lawyers said...

Some Like It Hot reminds me of my first girlfriend. Who's Afraid of Virginia Woolf reminds me of my first marriage. End of discussion.

GB said...

ditto