Moransais v. Heathman
1999 WL 462629, 744 So. 2d 973 (1999)
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Rule of Law:
The economic loss rule does not bar a common law cause of action for professional negligence against an individual professional for purely economic losses, even when the plaintiff's contract is with the professional's corporate employer.
Facts:
- Philippe Moransais entered into a contract to purchase a home from Paul S. Heathman.
- Moransais then contracted with a professional engineering corporation, Bromwell & Carrier, Inc. (BCI), for a pre-purchase inspection of the residence.
- Lennon D. Jordan and J. Larry Sauls, licensed engineers and employees of BCI, performed the inspection.
- In reliance on the engineers' inspection and advice, Moransais completed the purchase of the home.
- After the purchase, Moransais discovered significant defects in the home that were not disclosed in the engineering inspection.
- The undisclosed defects rendered the home uninhabitable, causing Moransais to suffer purely economic damages.
- No personal injury or damage to property other than the defects in the home itself was alleged.
Procedural Posture:
- Philippe Moransais filed suit in a Florida trial court against Bromwell & Carrier, Inc. (BCI) for breach of contract and against its employees, Lennon D. Jordan and J. Larry Sauls, for professional negligence.
- Jordan and Sauls filed a motion to dismiss the negligence claims against them, arguing they were barred by the economic loss rule.
- The trial court granted the motion and dismissed the claims against the individual engineers with prejudice.
- Moransais, as appellant, appealed the dismissal to the Florida Second District Court of Appeal.
- The Second District Court of Appeal affirmed the trial court's dismissal.
- The Second District Court of Appeal certified a question of great public importance to the Supreme Court of Florida.
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Issue:
Does the economic loss rule bar a cause of action for professional negligence against individual engineers for purely economic damages when the plaintiff contracted with the engineers' corporate employer for inspection services?
Opinions:
Majority - Anstead, J.
No. The economic loss rule does not bar a cause of action against a professional for negligence even though the damages are purely economic and the aggrieved party has entered into a contract with the professional's employer. Florida common law recognizes a distinct cause of action for professional malpractice, and statutes governing professional corporations explicitly preserve the personal liability of professionals for their own negligent acts. The economic loss rule was primarily intended to limit actions in the product liability context and was never intended to extinguish well-established common law causes of action like professional malpractice, where damages are often purely economic. To apply the rule here would effectively eliminate such claims, which was not the Court's original intent.
Concurring - Wells, J.
No. The majority opinion is correct, but it should be stated more directly that the economic loss rule should be strictly limited to cases involving a product which damages itself by reason of a defect. The Court's prior decision in AFM Corp. v. Southern Bell Telephone & Telegraph Co. erroneously applied the rule to a service contract, which created widespread confusion about the rule's proper scope, and that precedent should be receded from.
Dissenting - Overton, Senior Justice
Yes. The economic loss rule should bar this tort action, as established in the Court's recent precedent of Casa Clara Condominium Ass'n v. Charley Toppino & Sons, Inc. The purpose of the rule is to maintain the distinction between contract law and tort law. The plaintiff has a remedy for his economic losses through a breach of contract action against the engineering corporation with which he contracted. Allowing a parallel tort action against the individual employees obliterates the distinction between tort and contract, effectively allowing contract law to be 'drowned in a sea of tort' and leading to increased costs for professional services.
Analysis:
This decision significantly curtailed the expansive application of Florida's economic loss rule, clarifying that it does not bar well-established common law torts like professional malpractice. The ruling establishes that professionals have an independent duty of care, and they can be held personally liable for negligence even when working for a corporation and even if the damages are purely economic. This reaffirms the personal accountability of licensed professionals and limits the ability to use the economic loss rule as a shield in professional services disputes, impacting not just engineers but also lawyers, accountants, and other professionals.
