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City Express Inc. v. Express Partners6/19/1998
Opinion OF THE COURT BY NAKAYAMA, J.
Respondent-appellant/cross-appellee Express Partners filed an appeal of this action after a directed verdict was entered in favor of petitioners-appellees/cross-appellants Architects 2, Inc., Douglas Sonoda, and Lloyd Sako [hereinafter collectively referred to as Architects 2]. The Intermediate Court of Appeals (ICA) affirmed in part, vacated in part, and remanded for a new trial. We granted certiorari to address the application of the economic loss rule to a negligence action between an owner and an architect who are in privity of contract. Because we hold that the circuit court was correct in ruling that the economic loss rule bars Express Partners' negligence action, we: (1) reverse the opinion of the ICA; (2) order the opinion of the ICA depublished pursuant to Rule 2(a) of the Rules of the Intermediate Court of Appeals; and (3) affirm the ruling of the circuit court, which granted a directed verdict in favor of Architects 2.
I. BACKGROUND
On April 14, 1983, the president of plaintiff City Express, Inc., in his individual capacity, entered into a joint venture agreement with developer Thomas Enomoto to construct a new warehouse suited for the purposes of City Express, a warehouse and trucking company. The business entity created by this joint venture agreement is Express Partners.
Express Partners, through Thomas Enomoto, hired Architects 2 to design the warehouse. Architects 2 prepared blueprints, and the warehouse was constructed by Land Process Services Corporation, Ind-Comm Properties, Inc. (Ind-Comm), and Dura/Constructors, Inc. (Dura/Constructors). The warehouse was constructed with two levels and a ramp from the first to the second floor. Douglas Sonoda and Lloyd Sako, an architect and engineer respectively employed by Architects 2, testified at trial that it was their understanding, in designing the building, that the second floor would not be utilized by forklifts. Instead, the second floor would be used solely for storage of light objects. However, a portion of the blueprints prepared by Architects 2 indicates that the ramp was "for forklift use."
City Express moved into the warehouse upon its completion and began to utilize forklifts on the second floor of the structure. The use of forklifts caused the floor on the second level to crack. In an attempt to correct the problem, an additional five inches of cement was poured. However, City Express claimed that this did not solve the problem. The additional weight caused structural damage and the floor again began cracking. City Express had to temporarily vacate the building while remedial work was done.
In January 1985, Express Partners, the owner of the building, notified City Express that the type of forklifts commonly utilized in the industry could not be operated on the second floor. On March 1, 1985, City Express went out of business. The building was subsequently converted to office use.
On July 31, 1985, City Express filed a complaint against Express Partners. On January 10, 1986, Express Partners filed a third-party complaint against Architects 2. Architects 2 then filed a fourth-party complaint against various entities, including Enomoto. On February 23, 1989, City Express amended its complaint to include claims against Architects 2, Dura/Constructors, and Ind-Comm.
On September 5, 1992, the parties reached a settlement agreement that disposed of all claims except: (1) Express Partners' third party claims against Architects 2; and (2) Architects 2's claims against other parties for indemnification and contribution if found liable on Express Partners' claim. The case proceeded to t
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