The "Economic Loss Doctrine" Revisited
The case the Supreme Court heard on September 29, 2005 is not exactly a construction case. But its impact on one of construction law's most formidable doctrines -- the "economic loss doctrine" -- could be significant indeed.
The Supreme Court is reviewing the decision in Alejandre v. Bull, 123 Wn. App. 611, 98 P.3d 844 (2004), which arose from the purchase and sale of a home where the septic tank wasn't to the buyer's satisfaction. The buyer sued for damages. The trial court ruled for the seller, holding that the "economic loss doctrine" barred the claim. The Court of Appeals disagreed.
The issue before the Supreme Court is whether the economic loss rule, which bars tort claims for purely economic damages arising from a contractual agreement, requires that the contract expressly allocate the specific risk giving rise to the tort claims. The contract in the home sale at issue lacked any such allocation of risk, and on that basis the Court of Appeals held that doctrine was inapplicable.
Going out on a limb, WCL looks for the Supreme Court to reverse and reinstate judgment for the seller in this case. The economic loss doctrine probably turns on the existence of the contract itself, not whether the contract specifically allocates any particular risk. But, hey, I don't wear the black robe.