The Eleventh Circuit Court of Appeals certified the following five questions of Florida law that are determinative of a cause pending in that court and for which there appears to be no controlling precedent:
1. WHETHER THE "ECONOMIC LOSS" DOCTRINE OF FLORIDA APPLIES TO ALLEGED TORTS IF THE DEFENDANT HAS PROVIDED SERVICES TO A PRODUCT RATHER THAN HAS SOLD A PRODUCT.
2. WHETHER THE "ECONOMIC LOSS" DOCTRINE OF FLORIDA APPLIES IF THERE IS NO CONTRACTUAL RELATIONSHIP BETWEEN THE PLAINTIFFS AND THE DEFENDANT.
3. WHETHER THE "ECONOMIC LOSS" DOCTRINE OF FLORIDA APPLIES TO THE FACTS OF THIS CASE WITH REGARD TO DAMAGE TO THE TOTAL AIRCRAFT AS OPPOSED TO MERE DAMAGE TO THE LANDING GEAR UNDER THE "OTHER PROPERTY" EXCEPTION.
4. WHETHER THE PROVIDING OF CERTIFIED MECHANICAL SERVICES FALLS UNDER THE CATEGORY OF THE "PROFESSIONAL SERVICES" EXCEPTION TO THE "ECONOMIC LOSS" DOCTRINE OF FLORIDA OR UNDER SOME RELATED SERVICES EXCEPTION.
5. WHETHER THE NEGLIGENT MISREPRESENTATION CLAIM IN THIS CASE PROVIDES AN EXCEPTION TO THE "ECONOMIC LOSS" DOCTRINE OF FLORIDA.
Indemnity Ins. Co. of N. America v. American Aviation, Inc.,
344 F.3d 1136,
1148 (11th Cir. 2003). We have jurisdiction.
See
art.
V, §
3(b)(
6), Fla. Const. For purposes of this opinion, we combine and rephrase the first two certified questions as follows:
WHETHER THE ECONOMIC LOSS DOCTRINE BARS A NEGLIGENCE ACTION TO RECOVER PURELY ECONOMIC LOSS IN A CASE WHERE THE DEFENDANT IS NEITHER A MANUFACTURER NOR DISTRIBUTOR OF A PRODUCT AND THERE IS NO PRIVITY OF CONTRACT.
For the reasons that follow, we answer the rephrased question in the negative. We conclude that the "economic loss doctrine" or "economic loss rule" bars a negligence action to recover solely economic damages only in circumstances where the parties are either in contractual privity or the defendant is a manufacturer or distributor of a product, and no established exception to the application of the rule applies. Because the defendant in this case is neither a manufacturer nor distributor of a product, and the parties are not in privity of contract, this negligence action is not barred by the economic loss rule. The remaining certified questions concerning exceptions to the economic loss doctrine are moot in light of our determination that the economic loss rule does not apply to this case.
FACTS AND PROCEDURAL HISTORY
This case arises from lawsuits filed by Indemnity Insurance Company of North America ("Indemnity") and Profile Aviation Services, Inc. ("Profile") against American Aviation, Inc. ("American") for damages to Profile's aircraft allegedly caused by negligent maintenance and inspection of the aircraft's landing gear. The specific claim of negligence was premised on the fact that the landing gear did
not extend because American had installed the lower thrust bearing of the right main actuator backwards.
The United States District Court for the Middle District of Florida dismissed Indemnity's and Profile's tort claims, finding them barred by Florida's economic loss rule. Indemnity and Profile appealed to the Eleventh Circuit Court of Appeals. In certifying the five questions to this Court, the Eleventh Circuit summarized the pertinent facts as follows:
This action arises from the allegedly negligent maintenance and inspection of an aircraft's landing gear by American. All mechanics who work on aircraft must be FAA-certified. To become certified, a mechanic must graduate from a certified aviation maintenance technical school (or have equivalent practical experience) and must pass a written test on the construction and maintenance of aircraft, the federal regulations, and provisions governing mechanics. They must also pass an oral and a practical skills test.
A FAA-certified mechanic who performs maintenance on an aircraft, airframe, engine, etc., must follow the methods, techniques, and practices prescribed in the aircraft's maintenance manual and perform the maintenance in such a manner that the condition of the aircraft will be at least equal to its original or properly altered condition. Moreover, when maintenance has been performed, a FAA-certified mechanic must give approval before the aircraft, airframe, etc., is returned to service. Before returning the aircraft to service, the certified mechanic must also make an entry into the aircraft's logbook regarding the inspection and maintenance performed. According to appellants, an aircraft owner relies on these records to determine, among other things, if the required maintenance has been performed, if the aircraft can be returned to service, and when the next maintenance is scheduled.
On or around November 22, 1996, American's FAA-certified mechanics, pursuant to a contract to which appellants are not parties, performed the required 30-month end play maintenance and inspection on the landing gear of a Beechcraft KingAir 100 aircraft . . . ("Aircraft"). During the course of the inspection and repair, American's mechanics removed the Aircraft's right main landing gear actuator and lower thrust bearing. After completing the work, American's mechanics certified in the Aircraft's logbook that the work was done in accordance with the Aircraft's maintenance manual and FAA regulations.
Profile purchased the Aircraft subsequent to American's November 1996 maintenance and inspection. Appellants contend that they reasonably relied upon American's representations in the logbook concerning the November 1996 work. On May 14, 1999, the Aircraft was severely damaged when the right main landing gear failed to extend during a landing. The alleged cause of the failed landing gear was that the lower thrust bearing of the right main landing gear actuator was installed backwards. Appellants contend that they could not have discovered American's alleged negligence prior to the accident.
Proceedings in the District Court
On May 10, 2002, Indemnity, which was the Aircraft's insurer, and Profile filed separate four count complaints in the district court. Appellants sought to recover for negligence (Count I), negligence per se (Count II), negligent misrepresentation (Count III), and breach
of warranty (Count IV). American moved to dismiss the complaints, arguing that Florida's economic loss rule barred the tort claims and that no breach of warranty action could be maintained because of a lack of privity between appellants and American.
American Aviation,
344 F.3d at 1137-38 (citations and footnotes omitted).
The federal district court dismissed the tort claims with prejudice, but granted ten days to amend the breach of warranty claim to allege that Profile was an intended third-party beneficiary of the contract between American and the Aircraft's prior owner. Profile could not in good faith amend its complaint to allege intended third-party beneficiary status. Thus, both Profile and Infinity appealed only the dismissal of the tort claims to the Eleventh Circuit. Having doubt as to the correct application of Florida law under the facts of this case, the Eleventh Circuit certified the five questions of law to this Court.
ECONOMIC LOSS RULE
The economic loss rule is a judicially created doctrine that sets forth the circumstances under which a tort action is prohibited if the only damages suffered are economic losses.
1 However, because there has been much confusion about the scope of this doctrine, it is important to review its legal underpinnings. In this state, the economic loss rule has been applied in two different circumstances. The first is when the parties are in contractual privity and one party seeks to recover damages in tort for matters arising from the contract. The second is when there is a defect in a product that causes damage to the product but causes no personal injury or damage to other property.
A. Contractual Privity Economic Loss Rule
The 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.
See, e.g., Ginsberg v. Lennar Fla. Holdings, Inc.,
645 So.2d 490,
494 (Fla. 3d DCA 1994) ("Where damages sought in tort are the same as those for breach of contract a plaintiff may not circumvent the contractual relationship by bringing an action in tort."). Underlying this rule is the assumption that the parties to a contract have allocated the economic risks of nonperformance through the bargaining process. A party to a contract who attempts to circumvent the contractual agreement by making a claim for economic loss in tort is, in effect, seeking to obtain a better bargain than originally made. Thus, when the parties are in privity, contract principles are generally more appropriate for determining remedies for consequential damages that the parties
have, or could have, addressed through their contractual agreement. Accordingly, courts have held that a tort action is barred where a defendant has not committed a breach of duty apart from a breach of contract.
See, e.g., Electronic Sec. Sys. Corp.v. Southern Bell Tel. Tel. Co.,
482 So.2d 518,
519 (Fla. 3d DCA 1986) (stating that "breach of contract, alone, cannot constitute a cause of action in tort . . . [and][i]t is only when the breach of contract is attended by some additional conduct which amounts to an independent tort that such breach can constitute negligence");
Weimar v. Yacht Club Point Estates,Inc.,
223 So.2d 100,
103 (Fla. 4th DCA 1969) ("[N]o cause of action in tort can arise from a breach of a duty existing by virtue of contract.").
The application of this principle is best exemplified by this Court's decision in AFM Corp. v. Southern Bell Telephone Telegraph Co., 515 So.2d 180 (Fla. 1987). In that case, AFM entered into an agreement with Southern Bell Telephone and Telegraph Company that included placing AFM's advertising in the yellow pages. See id. at 180. However, Southern Bell listed an incorrect phone number for AFM, causing AFM economic damages.See id. In asserting a claim for economic losses, AFM chose to proceed solely on a negligence theory in the trial court below rather than base its theory of recovery on any agreement between the parties. See id. at 181. In determining that AFM could not recover economic losses based on a tort theory, this Court noted that AFM's contract with Southern Bell "defined the limitation of liability through bargaining, risk acceptance, and compensation."Id. Because AFM had not proved that Southern Bell committed a tort independent of the breach of contract, this Court concluded that AFM had no basis for recovery in negligence. See id.
Although parties in privity of contract are generally prohibited from recovering in tort for economic damages, we have permitted an action for such recovery in certain limited circumstances. One involves torts committed independently of the contract breach, such as fraud in the inducement. For example, inHTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 685 So.2d 1238
(Fla. 1996), this Court stated:
The economic loss rule has not eliminated causes of action based upon torts independent of the contractual breach even though there exists a breach of contract action. Where a contract exists, a tort action will lie for either intentional or negligent acts considered to be independent from the acts that breached the contract. Fraudulent inducement is an independent tort in that it requires proof of facts separate and distinct from the breach of contract.
Id. at 1239 (citations omitted);
see also Pershing Indus.,Inc. v. Estate of Sanz,
740 So.2d 1246,
1248 (Fla. 3d DCA 1999) (claims for economic damage based on fraud in the inducement, conversion, and civil theft were independent torts and thus actionable despite existence of contract between the parties). Another 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.
See, e.g., Moransais v.Heathman,
744 So.2d 973,
983 (Fla. 1999) ("While provisions of a contract may impact a legal dispute, including an action for professional services, the mere existence of such a contract should not serve per se to bar an action for professional malpractice.").
B. Products Liability Economic Loss Rule
In contrast to the contractual privity economic loss rule, which developed to protect
the integrity of the contract, the products liability economic loss rule developed to protect manufacturers from liability for economic damages caused by a defective product beyond those damages provided for by warranty law. Early in the common law, an innocent third party who purchased a product from a retailer or distributor could not sue the manufacturer for personal injuries sustained, even as the result of the intended use of the product, because of the absence of privity of contract with the manufacturer.
See Matthews v. Lawnlite Co.,
88 So.2d 299,
300
(Fla. 1956) (noting that "the early common law rule . . . inhibited recovery [from a manufacturer of a product] where there was absence of privity of contract"). However, in this jurisdiction and others, "[a] doctrine more in line with reason and justice" emerged that imposed liability on a manufacturer for personal injury caused by the manufacturer's failure to exercise reasonable care in the adoption of a safe plan or design for a product placed in the stream of commerce, regardless of privity.
See id.2 The negligence standard of reasonable care, which initially measured the manufacturer's liability for injury to person or property, eventually evolved into the doctrine of strict liability.
See, e.g., West v. Caterpillar Tractor Co.,
336 So.2d 80,
89 (Fla. 1976) (adopting the theory of strict products liability in Florida).
The doctrine of strict products liability had its origins in the landmark case of Henningsen v. Bloomfield Motors, Inc.,32 N.J. 358, 161 A.2d 69 (1960), involving a defective automobile that crashed and caused property damage and personal injury. Although the parties were not in contractual privity, the New Jersey Supreme Court concluded that the plaintiffs had a cause of action based on breach of implied warranty of fitness.Henningsen, 161 A.2d at 69. The New Jersey court stated that "under modern marketing conditions, when a manufacturer puts a new automobile in the stream of trade and promotes its purchase by the public, an implied warranty that it is reasonably suitable for use as such accompanies it into the hands of the ultimate purchaser." Id. Although couched in terms of an implied warranty of fitness, the Henningsen holding created the foundation for what would become the doctrine of strict products liability in tort. See Spring Motors Distribs., Inc. v. FordMotor Co., 98 N.J. 555, 489 A.2d 660, 666 (1985) (recognizing that Henningsen established the theory of strict products liability).
Eventually, others courts recognized that any theory of recovery premised on warranty doctrine was insufficient to protect consumers from physical injury as a result of defective products. See West, 336 So.2d at 92. Indeed, in West, we explained:
[W]e recognize that in the present day marketing milieu treatment of the manufacturers' liability to ultimate purchasers or consumers in terms of implied warranty is simply using a convenient legal device to accomplish some recourse for an injured person. . . . Ordinarily there is no contract in a real sense between a manufacturer and an ultimate consumer of its product. . . .
The obligation of the manufacturer must become what in justice it ought
to be — an enterprise liability, and one which should not depend upon the intricacies of the law of sales.
Id. Based on this rationale, the doctrine of strict products liability was adopted in Florida.
In Kramer v. Piper Aircraft Corp., 520 So.2d 37, 39 (Fla. 1988), we recognized that, in the absence of privity, the cause of action for breach of implied warranty did not survive the holding in West. In other words, the doctrine of strict liability replaced all no-privity, breach of implied warranty liability. However, a cause of action for breach of implied warranty remains available where the parties are in privity of contract. See id.; see also Seely v. White Motor Co.,63 Cal.2d 9, 45 Cal.Rptr. 17, 403 P.2d 145, 149 (1965) ("Final recognition that `[t]he remedies of injured consumers ought not to be made to depend upon the intricacies of the law of sales' caused . . . court[s] to abandon the fiction of warranty in favor of strict liability in tort.") (citations omitted).
As the theory of strict liability replaced the theory of implied warranties with regard to actions based on defective products that resulted in personal injury, the issue arose as to whether the courts should permit a cause of action in tort by one who suffered purely economic loss due to a defective product. For those who were in contractual privity, actions based on breach of warranty continued as the viable method if the only damages were economic in nature. But for those who were not in contractual privity and who sustained economic losses as a result of defective products, the question became what theory of recovery would be proper.
The California Supreme Court's decision in Seely was the landmark case that held that the doctrine of strict liability in tort had not supplanted causes of action for breach of express warranty. In that case, the court was confronted with a situation in which a plaintiff sought recovery for economic loss resulting from his purchase of a truck that failed to perform according to his expectations. See Seely, 45 Cal.Rptr. 17, 403 P.2d at 149. The California Supreme Court agreed with the trial court that the defendant could recover the money he paid on the purchase price of the truck and for his lost profits on the basis of breach of express warranty, see id., 45 Cal.Rptr. 17, 403 P.2d at 148, but rejected the argument that warranty law had been superseded by the doctrine of strict liability. See id., 45 Cal.Rptr. 17,403 P.2d at 149. The Court concluded that the strict liability doctrine was not intended to undermine the warranty provisions of sales or contract law but, rather, was designed to govern the wholly separate and distinct problem of physical injuries caused by defective products. See id., 45 Cal.Rptr. 17,403 P.2d at 149-50.
According to the court, "[t]he fact that the warranty theory was not suited to the field of liability for personal injuries, however, does not mean that it has no function at all." Id.,45 Cal.Rptr. 17, 403 P.2d at 149. The court recognized that the rules of warranty continued to function well in a commercial setting, allowing the manufacturer to determine the quality of the product and the scope of its liability if the product fails to perform. The California Supreme Court reasoned that a manufacturer's liability under that theory would extend to all subsequent purchasers regardless of whether the manufacturer's promise regarding the fitness of the product was ever communicated to those purchasers. If a manufacturer were strictly liable for economic losses resulting from the failure of its product to perform as promised by the warranty, it would be liable not only to the initial purchaser, but to every consumer who subsequently obtained
possession of the product. See id., 45 Cal.Rptr. 17,403 P.2d at 150.
The California Supreme Court further reasoned that the law of warranty should function to prevent a liability of unknown and unlimited scope:
The distinction that the law has drawn between tort recovery for physical injuries and warranty recovery for economic loss is not arbitrary and does not rest on the "luck" of one plaintiff in having an accident causing physical injury. The distinction rests, rather, on an understanding of the nature of the responsibility a manufacturer must undertake in distributing his products. He can appropriately be held liable for physical injuries caused by defects by requiring his goods to match a standard of safety defined in terms of conditions that create unreasonable risks of harm. He cannot be held for the level of performance of his products in the consumer's business unless he agrees that the product was designed to meet the consumer's demands. A consumer should not be charged at the will of the manufacturer with bearing the risk of physical injury when he buys a product on the market. He can, however, be fairly charged with the risk that the product will not match his economic expectations unless the manufacturer agrees that it will. Even in actions for negligence, a manufacturer's liability is limited to damages for physical injuries and there is no recovery for economic loss alone.
Id.,
45 Cal.Rptr. 17,
403 P.2d at 151 (emphasis supplied). Hence, the Court recognized the continuing utility of warranty law in cases involving economic loss to the product.
When the United States Supreme Court subsequently considered the issue of economic loss resulting from defective products in the context of admiralty, the Court adopted the reasoning ofSeely. See East River Steamship Corp. v. Transamerica Delaval,Inc., 476 U.S. 858, 871, 106 S.Ct. 2295, 90 L.Ed.2d 865 (1986). According to the Supreme Court, when the damage is to the product itself, "the injury suffered — the failure of the product to function properly — is the essence of a warranty action, throughwhich a contracting party can seek to recoup the benefit of itsbargain." Id. at 868, 106 S.Ct. 2295 (emphasis supplied). The Court stated:
Contract law, and the law of warranty in particular, is well suited to commercial controversies of the sort involved in this case because the parties may set the terms of their own agreements. The manufacturer can restrict its liability, within limits, by disclaiming warranties or limiting remedies. In exchange, the purchaser pays less for the product.
Id. at 872-73,
106 S.Ct. 2295 (emphasis supplied) (footnote and citation omitted). Recognizing that extending strict products liability to cover economic damage would result in "contract law . . . drown[ing] in a sea of tort,"
id. at 866,
106 S.Ct. 2295, the Supreme Court held that "a manufacturer in a commercial relationship has no duty under either negligence or strict products-liability to prevent a product from injuring itself."
Id. at 871,
106 S.Ct. 2295.
Relying on Seely and East River, this Court adopted the products liability economic loss rule in Florida Power LightCo. v. Westinghouse Electric Corp., 510 So.2d 899, 902 (Fla. 1987). Florida Power Light (FPL) entered into contracts with Westinghouse in which Westinghouse agreed to design, manufacture, and furnish two nuclear steam supply systems, including six steam generators. FPL discovered leaks in all six generators. FPL brought suit, alleging that Westinghouse was liable for breach of express warranties in the contracts and for negligence, and seeking
damages for the cost of repair, revision, and inspection of the steam generators. Id. at 900.
In determining whether Florida law permitted FPL to recover the economic losses in tort without a claim for personal injury or separate property damage, this Court considered the policy issues supporting the application of a rule that limits tort recovery for economic losses when a product damages itself. Id.
Concluding that warranty law was more appropriate than tort law for resolving economic losses in this context, the Court adopted the holding in East River that "a manufacturer in a commercial relationship has no duty under either a negligence or strict products liability theory to prevent a product from injuring itself." Florida Power, 510 So.2d at 901 (quoting East River,476 U.S. at 871, 106 S.Ct. 2295).
The economic loss rule adopted in Florida Power represents this Court's pronouncement that, notwithstanding the theory of strict liability adopted in West, strict liability has not replaced warranty law as the remedy for frustrated economic expectations in the sale of goods. In exchange for eliminating the privity requirements of warranty law and expanding the tort liability for manufacturers of defective products which cause personal injury, we expressly limited tort liability with respect to defective products to injury caused to persons or damage caused to property other than the defective product itself. In this regard, we also note that the products liability economic loss rule articulated in Seely and East River, and adopted by this Court in Florida Power, applies even in the absence of privity of contract. See Airport Rent-A-Car, Inc. v. PrevostCar, Inc., 660 So.2d 628, 631 (Fla. 1995) (holding cause of action for negligence against manufacturer of defective buses was barred by the economic loss rule notwithstanding absence of privity); Casa Clara Condo. Ass'n, Inc. v. Charley Toppino Sons, Inc., 620 So.2d 1244, 1248 (Fla. 1993) (holding cause of action against manufacturer of defective concrete was barred by the economic loss rule notwithstanding absence of privity).
THIS CASE
This case does not involve a cause of action against a manufacturer or distributor for economic loss caused by a product which damages itself. Thus, the products liability economic loss rule is inapplicable. Nor does this case involve parties who enjoy privity of contract. Thus, the economic loss rule for those in privity of contract is inapplicable. Rather, this case involves plaintiffs who claim economic loss caused by the alleged negligence of a defendant with whom the plaintiffs were not in privity.
Palau International Traders, Inc. v. Narcam Aircraft, Inc.,653 So.2d 412 (Fla. 3d DCA 1995), involved application of the economic loss rule under similar facts. In Palau International, a purchaser of a used airplane brought a negligence action against an airplane mechanic with whom it had no privity of contract. See id. at 413. The buyer and seller had entered into a contract of sale that provided that at the time of delivery and closing of the sale the aircraft would have a current "United States' FAA Certificate of Airworthiness." Id. The seller hired a mechanic to repair and inspect the plane in an effort to obtain an airworthiness certificate from the FAA. See id. at 414. The mechanic completed the application for the certificate and verified that the plane had been inspected and found airworthy. The FAA subsequently issued the airworthiness certificate. However, six months later, the buyer discovered that the landing gear was cracked and filed suit against the mechanic, alleging
that the condition existed at the time the mechanic conducted its inspection. See id. The Third District affirmed the trial court's order granting the mechanic summary judgment based on the economic loss rule. See id. at 418.
Having reviewed the origin and purpose of the economic loss rule, we conclude that it should not be extended to the type of claim presented in Palau International and this case. InMoransais, we recognized the danger in an "unprincipled extension of the rule." 744 So.2d at 981. We stated that those situations in which this Court had permitted recovery for purely economic loss, such as in the context of fraudulent inducement and negligent misrepresentation,
serve[d] as reminders of the distinct limitations of the economic loss rule. Today, we again emphasize that by recognizing that the economic loss rule may have some genuine, but limited, value in our damages law, we never intended to bar well-established common law causes of action, such as those for neglect in providing professional services. Rather, the rule was primarily intended to limit action in the product liability context, and its application should generally be limited to those contexts or situations where the policy considerations are substantially identical to those underlying the product liability-type analysis.
Id. at 983 (footnote omitted). Although we limited our holding in
Moransais to situations involving professional malpractice, we note that some courts have extended the exception to the application of the economic loss rule created in
Moransais to causes of action for breach of fiduciary duty, even if there was an underlying oral or written contract.
See Invo Fla., Inc. v.Somerset Venturer, Inc.,
751 So.2d 1263,
1266 (Fla. 3d DCA 2000);
Performance Paint Yacht Refinishing, Inc. v. Haines,
190 F.R.D. 699,
701 (S.D.Fla. 1999).
Several justices on this Court have supported expressly limiting the economic loss rule to its principled origins. InMoransais, Justice Wells stated "directly that it is [his] view that the economic loss rule should be limited to cases involving a product which damages itself by reason of a defect in the product." Moransais, 744 So.2d at 984 (Wells, J., concurring). Two justices subsequently joined Justice Wells when he reiterated this position in Comptech International, Inc. v. Milam CommercePark, Ltd., 753 So.2d 1219 (Fla. 1999). See id. at 1227 (Wells, J., concurring with an opinion in which Justices Lewis and Pariente joined).
We now agree that the economic loss rule should be expressly limited. First, we reiterate that when the parties have negotiated remedies for nonperformance pursuant to a contract, one party may not seek to obtain a better bargain than it made by turning a breach of contract into a tort for economic loss. Our holding in AFM Corp. illustrates this well-settled rule of law. However, because it may appear that AFM Corp. also expanded the products liability economic loss rule, we recede from AFM Corp.
to the extent that it relied on the principles adopted by this Court in Florida Power. As we recognized in Moransais, AFMCorp. was "unnecessarily over-expansive in [its] reliance on the economic loss rule as opposed to fundamental contractual principles." Moransais, 744 So.2d at 981.
Second, consistent with the original rationale and intent ofSeely, East River, and Florida Power, we hold that a manufacturer or distributor in a commercial relationship has no duty beyond that arising from its contract to prevent a product from malfunctioning or damaging itself.3
In other words, we reaffirm our recognition of the products liability economic loss rule. However, we expressly note that the "other property" exception to the products liability economic loss rule remains viable. Indeed, as the United States Supreme Court noted in East River, "[i]n the traditional `property damage' cases, the defective product damages other property," and "[s]uch damage is considered so akin to personal injury that the two are treated alike." East River,476 U.S. at 867, 106 S.Ct. 2295; see also Comptech, 753 So.2d at 1219
(concluding that computers placed in the warehouse were not an integral part of the product and were therefore "other property"); Southland Constr., Inc. v. Richeson Corp.,642 So.2d 5 (Fla. 5th DCA 1994) (concluding that "other structures" not involved in the building project that were damaged by the failure of the retaining wall, i.e., the adjoining pool deck and a different wall, were other property).
We also reaffirm that in cases involving either privity of contract or products liability, the other exceptions to the economic loss rule that we have developed, such as for professional malpractice,4 fraudulent inducement,5 and negligent misrepresentation,6 or freestanding statutory causes of action, still apply.7
These exceptions remain untouched by our ruling today.
We further conclude that, in general, actionable conduct that frustrates economic interests should not go uncompensated solely because the harm is unaccompanied by any injury to a person or other property. We therefore hold that cases that do not fall into either of the two categories articulated above should be decided on traditional negligence principles of duty, breach, and proximate cause. That said, we express no opinion on the existence of a cause of action or the appropriateness of recovery for certain types of economic damages in individual cases. We also decline to make any per se distinction between damages for direct economic injury, such as the loss of the benefit of the bargain, and consequential economic damages, such as lost profits.
CONCLUSION
In conclusion, we answer the first and second certified questions as rephrased herein in the negative, and decline to address the remaining certified questions, as our holding herein renders those questions moot. As noted above, neither the products liability nor the contract economic loss rules apply to this case. Rather, in this case, Profile and Infinity have alleged that American Aviation was negligent in maintaining and inspecting an aircraft subsequently purchased by Profile. If American Aviation owed Profile a duty, then Profile is not prevented from recovering
for purely economic injuries. We return this case to the Eleventh Circuit for disposition consistent with this opinion. We further disapprove the Third District's decision in
Palau International
to the extent it is inconsistent with this opinion.
It is so ordered.
WELLS, ANSTEAD, LEWIS, QUINCE, CANTERO and BELL, JJ., concur.
CANTERO, J., concurs with an opinion, in which WELLS, J., concurs.