Jimenez v. Superior Court
127 Cal. Rptr. 2d 614, 58 P.3d 450, 29 Cal. 4th 473 (2002)
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Rule of Law:
The manufacturer of a defective component part installed in a mass-produced home is strictly liable in tort for physical damage that the component causes to other parts of the home (i.e., 'other property'), and such recovery is not barred by the economic loss rule.
Facts:
- In 1988, developer McMillin Scripps II completed the Galleria and Renaissance housing developments.
- Viking Industries, Inc. (Viking) manufactured the windows installed in the Galleria development.
- T.M. Cobb Company (Cobb) manufactured the windows installed in the Renaissance development.
- Filipina and Nestor Jimenez, along with other homeowners in the developments, owned homes containing these windows.
- The homeowners alleged that the windows were defective and that these defects caused physical damage to other parts of their homes, including the stucco, insulation, framing, and drywall.
Procedural Posture:
- Filipina and Nestor Jimenez, on behalf of a class of homeowners, sued window manufacturers T.M. Cobb Company and Viking Industries, Inc. in a California trial court, asserting claims for strict liability and negligence.
- Defendant Cobb filed a motion for summary adjudication on the strict liability cause of action.
- The trial court granted Cobb's motion.
- The parties stipulated that the court's ruling would also apply to defendant Viking.
- Plaintiffs (petitioners) petitioned the Court of Appeal for a writ of mandate.
- The Court of Appeal issued the writ, directing the trial court to vacate its order and holding that strict liability could apply to the component manufacturers.
- Defendant window manufacturers Cobb and Viking (petitioners) petitioned for review by the Supreme Court of California.
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Issue:
Does the economic loss rule bar a homeowner from recovering in strict products liability against the manufacturer of a defective component part for physical damage the component causes to other parts of the mass-produced home in which it was installed?
Opinions:
Majority - Kennard, J.
No. The economic loss rule does not bar a homeowner's recovery in tort for damage that a defective window causes to other parts of the home in which it has been installed. The policies underlying strict products liability—such as consumer protection, risk reduction, and equitable loss distribution—apply equally to manufacturers of component parts as they do to manufacturers of finished products. For the purpose of the economic loss rule, which limits tort recovery to damage to 'other property,' the defective component (the window) is the 'product,' and the rest of the house that it damages is the 'other property.' This view is consistent with prior California case law which has expanded the concept of recoverable physical injury to include damage to one part of a product caused by another, defective part.
Concurring - Kennard, J.
No. While agreeing with the majority's conclusion, this opinion proposes a specific analytical framework for applying the economic loss rule in this context. The crucial inquiry should be whether the component part has been so integrated into the overall unit that it has lost its separate identity. If the component retains its separate identity and can be readily separated from the larger unit—as windows can be from a house—it should be treated as a distinct product. Therefore, damage it causes to the larger unit is damage to 'other property' and is recoverable in tort.
Concurring-in-part-and-dissenting-in-part - Brown, J.
Yes. The economic loss rule should bar recovery in tort for this type of damage. Strict products liability was created to address safety concerns involving personal injury or damage to property truly separate from the product sold; it was not designed to handle disputes over a product's failure to meet economic expectations. In this case, the homeowners purchased an integrated product—a house. When a component of that product damages another part of it, the product has only damaged itself, which is a classic economic loss recoverable under contract and warranty law, not tort. The majority's holding improperly blurs the line between contract and tort and turns virtually every product failure into a tort claim.
Analysis:
This decision significantly clarifies the application of the economic loss rule to component parts within larger, integrated products like mass-produced homes. By defining the defective component as the 'product' and the rest of the house as 'other property,' the court expanded the scope of strict products liability for component manufacturers. This holding provides homeowners a direct cause of action in tort against manufacturers of defective building materials that cause consequential physical harm to the structure, rather than limiting them to contract or warranty claims against the developer. It shifts a greater burden of liability onto component suppliers within the construction industry.
