 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
Calloway v. City of Reno2/29/2000
ected the applicability of the economic loss doctrine to construction defect cases, and thereby permitted recovery of tort damages. Although we rejected the economic loss doctrine on the basis that the damages sustained were foreseeable, we expressed a clear intent to permit tort damages in a construction defect case:
"Brown and Delta are directly injured parties seeking direct recovery from the tortfeasor. It is not consequential damages they seek but direct damages from the failure to perform a mandatory act. Our citation in [Local Joint Exec. Bd. v. Stern, 98 Nev. 409, 651 P.2d 637 (1982)] to the Restatement (Second) of Torts ยง 766 (1979) . . . makes it clear that the prohibition does not extend to this circumstance [where city failed to require payment bond that would have secured payment to two subcontractors after general contractor became insolvent]."
Id. at 508, 797 P.2d at 953.
Further evidence of this court's long-standing reluctance to extend the economic loss doctrine to construction defect cases is found in National Union Fire Insurance v. Pratt and Whitney, 107 Nev. 535, 540, 815 P.2d 601, 604 (1991). In Pratt and Whitney, an entire aircraft was destroyed because of a defective engine. Id. at 540, 815 P.2d at 604. While the majority concluded that the economic loss doctrine applied and precluded recovery on tort theories, it carefully explained that it was not overruling the Oak Grove decision and that the economic loss doctrine should not preclude recovery on tort theories in construction defect cases. Id. at 538-39, 815 P.2d at 603. The majority in Pratt and Whitney distinguished construction defect cases, where the economic loss doctrine was not applicable, from those cases involving a "single integrated product that 'injured itself'":
"The apartment complex [in Oak Grove] consisted of a number of separate apartment units that were each self-contained and constructed for the separate occupancy of the end users. Indeed, this court has not yet entered the fray among courts as to whether even a "house" constitutes a product for purposes of the law of strict products liability, let alone an entire apartment complex. We deem it safe to conclude, however, that the economic loss doctrine was never intended to apply to construction projects that reflect the products and efforts of so many different manufacturers, laborers, crafts, supervisors and inspectors in the creation of an essentially permanent place of habitation."
Id. at 539, 815 P.2d at 6023 (citation omitted)(emphasis added).
I appreciate the attempt to establish a clear line of demarcation between contract and to damages in the majority opinion, even though it is difficult in construction defect cases. My concern in doing this is that there will be times where unusual factual situations will fall between the clearly defined recovery theories of contract and tort and leave a homeowner of a defectively constructed home without a remedy. Under the majority's opinion and the present state of the law, a subsequent purchaser of a condominium with a latent defect created by a subcontractor and found five years after construction will fall in that category if the contractor has gone bankrupt or out of business. This would occur because tort law would be inapplicable because of the economic loss doctrine and contract damages would provide no viable vehicle for recovery because the homeowner is not in privity with the subcontractor, the contractor is defunct and the construction bond long since exonerated. The owner of the defective condominium would have no viable remedy against the subcontractor even though he may be in business and making millions of dollars.
To av
Page 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Nevada Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|