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Calloway v. City of Reno2/29/2000
a defendant from unlimited liability for all of the economic consequences of a negligent act, particularly in a commercial or professional setting, and thus . . . . keep the risk of liability reasonably calculable." Stern, 98 Nev. at 411, 651 P.2d at 638. Permitting plaintiffs to recover in tort for purely economic losses would result in open-ended liability, since it is virtually impossible to predict all the economic consequences of a given act. See State of La. ex rel. Guste v. M/V Testbank, 752 F.2d 1019, 1022 (5th Cir. 1985). Thus, the economic loss doctrine precludes recovery for strictly economic losses in tort –- regardless whether such damages are sought from an injurious product.
This court has applied the economic loss doctrine outside of the products liability context, see Stern, 98 Nev. at 410-11, 651 P.2d at 638, and has suggested that it could apply with respect to damages to a dwelling. See Oak Grove, 99 Nev. at 625, 668 P.2d at 1080. Additionally, the economic loss doctrine has been specifically applied by other jurisdictions in construction defects cases. See, e.g., Nastri v. Wood Bros. Homes, Inc., 690 P.2d 158 (Ariz. Ct. App. 1984) (applying the economic loss doctrine to a negligent construction action against builder); 2314 Lincoln Park West Condo. v. Mann, 555 N.E.2d 346 (Ill. 1990) (applying the economic loss doctrine to an architectural malpractice action); Atherton Condo. Bd. v. Blume Dev., 799 P.2d 250 (Wash. 1990) (applying the economic loss doctrine to a negligent construction claim).
We conclude that damages sought, in tort, for economic losses from a defective building are just as offensive to tort law as damages sought for economic losses stemming from a defective product. The Florida Supreme Court has fittingly recognized that the economic loss doctrine must be considered in construction defects cases:
Buying a house is the largest investment many consumers ever make, and homeowners are an appealing, sympathetic class. If a house causes economic disappointment by not meeting a purchaser's expectations, the resulting failure to receive the benefit of the bargain is a core concern of contract, not tort, law. There are protections for homebuyers, however, such as statutory warranties, the general warranty of habitability, and the duty of sellers to disclose defects, as well as the ability of purchasers to inspect houses for defects. Coupled with homebuyers' power to bargain over price, these protections must be viewed as sufficient when compared with the mischief that could be caused by allowing tort recovery for purely economic losses.
Casa Clara v. Charley Toppino and Sons, 620 So. 2d 1244, 1247 (Fla. 1993) (citations and footnotes omitted). Accordingly, our Pratt and Whitney dictum notwithstanding, we conclude that the economic loss doctrine applies to construction defects cases.
C. Appellants' negligence claim against the subcontractors
With respect to the construction industry, courts have recognized negligence actions brought by real property owners for personal injury and property damage. See generally Edie Lindsay, Strict Liability and the Building Industry, 33 Emory L.J. 175, 201-02 (1984); see also Woodward v. Chirco Constr. Co., 687 P.2d 1269 (Ariz. 1984); Cosmopolitan Homes, Inc., v. Weller, 663 P.2d 1041 (Colo. 1983); Theis v. Heuer, 280 N.E.2d 300 (Ind. 1972). Under the economic loss doctrine, however, economic losses are not recoverable in negligence absent personal injury or damage to property other than the defective entity itself. See Central Bit Supply, 102 Nev. at 140-41, 717 P.2d at 36-37; Stern, 98 Nev. at 410-11, 651 P.2d at 638; see generally American Law of Products Liability (3d) § 60:52
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