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RICHARDS v. MIDLAND BRICK SALES CO.5/31/1996
Mary Richards appeals the dismissal of her claim for negligence, breach of implied warranty, and strict liability. We affirm.
Richards entered into a contract with Yarrow and Kinsey Construction Company to build a home in Ankeny, Iowa. The contract required Yarrow and Kinsey to use brick, which they purchased from Midland Brick Sales Company, Inc.
Construction of the house began in June 1983, and was completed in November 1983. The bricks were purchased during this period of time.
Around January 1, 1992, Richards began to notice the bricks used in the construction of the house were chipping and cracking. On November 9, 1993, she filed suit against Yarrow Construction as well as Midland Brick. Her claim against Midland Brick was based on negligence, breach of implied warranty of merchantability, and strict liability.
Midland Brick moved for summary judgment. It claimed no tort remedies were available to Richards as a matter of law since her suit did not involve personal injury . It also argued all claims were barred by the applicable statute of limitations. The district court granted the motion for summary judgment.
I. Summary Judgment
We review a ruling on a motion for summary judgment to correct errors at law. Keller v. State, 475 N.W.2d 174, 179 (Iowa 1991). Our task is to determine the existence of a genuine issue of material fact and whether the law is correctly applied by the district court. Collins v. Kenealy, 492 N.W.2d 679, 680 (Iowa 1992).
II. Negligence-Strict Liability Claims
It is a generally recognized principle of law that plaintiffs cannot recover in tort when they have suffered only economic harm. Nelson v. Todd's Ltd., 426 N.W.2d 120, 123 (Iowa 1988); Nebraska Innkeepers Inc. v. Pittsburgh-Des Moines Corp., 345 N.W.2d 124, 126 (Iowa 1984). This principle [551 NW2d Page 651]
is known as the "economic loss doctrine." Purely economic losses usually result from the breach of a contract and should ordinarily be compensable in contract actions, not tort actions. See Nelson, 426 N.W.2d at 124-25. The rationale for this rule was first articulated by Chief Justice Traynor of the California Supreme Court in Seely v. White Motor Company, 63 Cal.2d 9, 24, 45 Cal.Rptr. 17, 27, 403 P.2d 145, 155 (1965):
The distinction that the law has drawn between tort recovery for physical injuries and warranty recovery for economic loss is not arbitrary and does not rest on the "luck" of one plaintiff in having an accident causing physical injury. The distinction rests, rather, on an understanding of the nature of the responsibility a manufacturer must undertake in distributing his products. He can appropriately be held liable for physical injuries caused by defects by requiring his goods to match a standard of safety defined in terms of conditions that create unreasonable risks of harm. He cannot be held [liable] for the level of performance of his products in the consumer's business unless he agrees that the product was designed to meet the consumer's demands. A consumer should not be charged at the will of the manufacturer with bearing the risk of physical injury when he buys a product on the market. He can, however, be fairly charged with the risk that the product will not match his economic expectations unless the manufacturer agrees that it will.
Consequently, losses in product liability cases are generally limited to physical harm to the plaintiff or physical harm to property of the plaintiff other than the product itself. Nelson, 426 N.W.2d at 122-25. Economic losses to the product itself are excluded. Id. Notwithstanding, we ultimately look to the policies behind to
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