Gunkel v. Renovations, Inc.

797 N.E.2d 841, 2003 Ind. App. LEXIS 1980, 2003 WL 22417508
CourtIndiana Court of Appeals
DecidedOctober 24, 2003
Docket76A01-0306-CV-206
StatusPublished
Cited by1 cases

This text of 797 N.E.2d 841 (Gunkel v. Renovations, Inc.) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gunkel v. Renovations, Inc., 797 N.E.2d 841, 2003 Ind. App. LEXIS 1980, 2003 WL 22417508 (Ind. Ct. App. 2003).

Opinion

OPINION

BAKER, Judge.

The law occasionally-almost uncannily-throws together parties and counsel within what seems a close degree of kinship. Here, appellants-plaintiffs Lawrence and Judy Lynn Gunkel-through their at-tormney David W. Stong, IV, appeal the entry of summary judgment in favor of appellees-defendants J & N Stone, Inc., in a case involving stone masonry. 1 Specifically, the Gunkels contend that the trial court erred in granting J & N Stone's motion for summary judgment because the economic loss doctrine should not have barred the Gunkels' negligence claim as a matter of law. Concluding that the trial court correctly applied the economic loss rule to bar the Gunkels' claims for damage to the Gunkels' home itself, we affirm.

FACTS

The facts most favorable to the Gunkels, the non-moving party, reveal that on March 9, 1999, the Gunkels contracted with Renovations, Inc., for the construction of a home in Fremont, Indiana. J & N Stone was hired by the Gunkels to do facade work on the home. Shortly after the project was completed, moisture began to develop, and water entered through gaps in the fagade. As a result, the Gunk- *843 els filed suit against Renovations, Inc., for breach of contract on October 24, 2000, seeking compensation for loss of use and repair costs.

The Gunkels amended their complaint on December 14, 2000, adding J & N Stone as a defendant under a heading titled "COUNT II." The language of COUNT II stated that the Gunkels "re-assert each and every allegation as set forth in their Complaint for Damages of October 24, 2000, against Defendants-Renovations, Ine." Appellant's App. p. 140. COUNT II also alleged that J & N Stone "negligently, carelessly and in a shoddy and unwork-manlike manner" installed the masonry of the Gunkels' home. Appellant's App. p. 328. On May 10, 2002, J & N Stone filed a motion for partial summary judgment. J & N Stone argued that inasmuch as the Gunkels' contract claim made no mention of the existence of a contractual relationship between J & N Stone and the Gunk-els, a claim for contractual damages could not stand. The trial court agreed and entered partial summary judgment for J & N Stone on July 5, 2002. The Gunkels did not appeal this ruling.

Rather, on September 17, 2002, the Gunkels filed a second motion to amend their complaint, where they sought to allege a claim of negligence against Renovations, Inc. The trial court held a hearing on October 7, 2002, on the Gunkels' motion. During the hearing, counsel for J & N Stone voiced concern that the Gunkels would attempt to resurrect the contract claims that had already been disposed of on partial summary judgment. The trial court, however, reasserted its July 5, 2002 holding that all contract-based claims against J & N Stone had been terminated and that only a negligence claim remained:

[J & N Stone]: Your Honor, I just want, is the claim against my client still as the Court summarized in the beginning and Mr. Stout ...
[Trial Court]: Negligence. Let me make that very clear.
[J & N Stone]: Negligence only?
[Trial Court]: Yes.

Appellees' App. p. 95. At the close of the hearing, the trial court granted the Gunk-els' motion to amend their complaint.

On November 6, 2002, J & N Stone filed its motion for summary judgment, arguing that purely economic damages may not be recovered under a negligence theory. Following a hearing on J & N Stone's motion, the trial court entered summary judgment for J & N Stone on January 14, 2003. The Gunkels now appeal.

DISCUSSION AND DECISION

In resolving this issue, we first note that when reviewing the entry of summary judgment, we use the same standard used by the trial court: summary judgment is appropriate if the designated evidence shows that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Corr v. Amer. Fam. Ins., 767 N.E.2d 535, 537 (Ind.2002). Moreover, we construe all facts and reasonable inferences in favor of the non-moving party. Id. at 537-38. If "material facts conflict or undisputed facts lead to conflicting inferences, summary judgment is inappropriate, even if the court believes the non-moving party will not succeed at trial." Greathouse v. Armstrong, 616 N.E.2d 364, 366 (Ind.1993).

At issue here is the application of the economic loss rule. This rule applies to bar recovery "where a negligence claim is based upon a product's failure to perform as expected and the plaintiff suffers only economic damages." Martin Rispens & Son v. Hall Farms, 621 N.E.2d 1078, 1089 (Ind.1993). The concept behind the rule is that "[Inljegligence theory protects interests related to safety of freedom from physical harm." Bamberger & Feibleman *844 v. Indianapolis Power & Light Co., 665 N.E.2d 933, 938 (Ind.Ct.App.1996). If no physical harm occurs such that a loss is only pecuniary, courts deny recovery. Id.

The pragmatic reason behind the economic loss rule is straightforward: "The physical consequences of negligence usually have been limited, but the indirect economic repercussions of negligence may be far wider, indeed virtually open-ended." Fowler Harper, The Law of Torts § 25.18A (1986). Thus, the fear of "crushing useful activity by liability" is the moving force behind the rule. Id. As Judge Benjamin Cardozo put it, the economic loss doctrine prevents "liability in an indeterminate amount for an indeterminate time to an indeterminate class." Ultramares Corp. v. Touche, Niven & Co., 255 N.Y. 170, 174 N.E. 441, 444 (1931).

Our supreme court employed the economic loss rule in Rispens to deny recovery for lost profits. In Rispens, the plaintiff, a watermelon farmer, sued his seed supplier because the seeds were diseased. The Rispens court held that "Hall Farms' claim is based on damage to the product itself. Strict liability in tort is inapplicable to claims of such damage because the proper remedy is warranty." Rispens, 621 N.E.2d at 1089.

The U.S. Supreme Court stated its view of the economic loss rule in East River Steamship Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 106 S.Ct. 2295, 90 L.Ed.2d 865 (1986). In Hast River, the plaintiff-a ship charterer-sought recovery against the designer of the ship's turbines because the turbines had malfune-tioned. 'Only the turbines were damaged, but the charterer lost income because the ship was out of service.

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Related

Gunkel v. Renovations, Inc.
822 N.E.2d 150 (Indiana Supreme Court, 2005)

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