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Calloway v. City of Reno2/29/2000
conomic losses. Thus, notwithstanding the language quoted immediately above, had the gas fitting in Worrell been part of the original construction, the damages would have been restricted to economic losses. However, the losses actually sustained as described in Worrell were not pure economic losses under East River, Pratt and Whitney and Saratoga because an outside component was incorporated into the original construction, which caused damage to "other property." Therefore, in my view, had we reached the issue of whether pure economic losses had been sustained in Worrell, the outcome would have remained unchanged. I also believe that the component parts or subsystems of a house or other building implicate strict liability and negligence issues when personal injuries from construction defects have been sustained or where the defective building component damages "other property," such as a free standing neighboring dwelling.
I concede that the fact pattern in Worrell does not fit neatly within the Restatement Second formulation. However, I would leave Worrell intact and interpret it as invoking a salutory and beneficial public policy allowing recovery when a defect in an addition to a structure causes property damage to the remaining whole, or causes personal injuries, or causes property damage to other structures or self-contained but attached units.
CONCLUSION
While I agree that the economic loss rule is implicated in construction defect litigation, I believe that application of the rule should be limited as suggested above.
ROSE, C.J., dissenting:
I dissent to the application of the economic loss doctrine to construction defect cases. While our prior decisions in this area of the law are neither consistent nor uniformly well reasoned, they do show a clear reluctance to apply the economic loss doctrine to construction defect cases and, in dicta, expressly state just that.
This court first expressed its reluctance to extend the economic loss doctrine to construction defect cases in Oak Grove Investors v. Bell & Gossett Co., 99 Nev. 616, 617, 668 P.2d 1075, 1077 (1983). In Oak Grove, a defective plumbing and heating system caused water leakage and damage throughout an apartment complex. The district court granted summary judgment, concluding that there was no material issue of fact concerning whether the plumbing fitting manufactured by Bell & Gossett was defective and whether the statute of limitations precluded recovery. Id. at 620, 668 P.2d at 1077. We reversed the district court order granting summary judgment, concluding that there were triable issues of material fact as to whether the manufacturer's failure to warn may have rendered the product defective, and whether the statute of limitations had ran. Id. at 625, 668 P.2d at 1081.
Although in Oak Grove the district court did not rule on the applicability of the economic loss doctrine, in dicta we refused to extend the economic loss doctrine by stating:
"the defective plumbing and heating system caused "substantial leakage of water throughout, and damage to, the apartment within the . . . complex." The amount of property damage sustained is a question for the finder of fact. Appellant is not seeking to recover purely economic losses, and therefore has stated causes of action in negligence and strict liability."
99 Nev. at 625, 668 P.2d at 1080-81 (citations omitted). While not expansive in its reasoning, the Oak Grove court clearly refused to apply the economic loss doctrine to a construction defect case.
Many years later, in Charlie Brown Construction Co. v. Boulder City, 106 Nev. 497, 797 P.2d 946 (1990), we again rej
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