Last week, the Supreme Court of Florida limited the application of the economic loss rule to products liability cases in Tiara Condominium Association, Inc. v. Marsh & McLennan Companies, Inc., No. SC10-1022, a copy of which can be found HERE.

Tiara was a federal court case that reached the Supreme Court of Florida after the United States Court of Appeals for the Eleventh Circuit certified the following question:

“DOES AN INSURANCE BROKER PROVIDE A “PROFESSIONAL SERVICE” SUCH THAT THE INSURANCE BROKER IS UNABLE TO SUCCESSFULLY ASSERT THE ECONOMIC LOSS RULE AS A BAR TO TORT CLAIMS SEEKING ECONOMIC DAMAGES THAT ARISE FROM THE CONTRACTUAL RELATIONSHIP BETWEEN THE INSURANCE BROKER AND THE INSURED?”

Because the question as certified by the Eleventh Circuit was premised on the continued applicability of the economic loss rule in cases involving contractual privity, the Supreme Court of Florida subsequently rephrased the 11th Circuit’s certified question to:

“DOES THE ECONOMIC LOSS RULE BAR AN INSURED’S SUIT AGAINST AN INSURANCE BROKER WHERE THE PARTIES ARE IN CONTRACTUAL PRIVITY WITH ONE ANOTHER AND THE DAMAGES SOUGHT ARE SOLELY FOR ECONOMIC LOSSES?”

Justice LaBarga, writing for the Supreme Court, answered the rephrased question negatively, concluding it unnecessary “to decide whether the economic loss rule exception for professionals applies to insurance brokers” because “application of the economic loss rule is limited to products liability cases.” The case was remanded to Judge Hurley in the federal appeals court, for that court to enter judgment in accordance with Florida law as
announced by the Supreme Court of Florida.