United States Gypsum Co. v. Mayor and City Council of Baltimore9/12/1994
nd had contaminated furniture, equipment and books in the school. Consequently, the City was required to pay for the cleaning and storage of each piece of furniture, equipment, and all books, and then to remove all asbestos fireproofing from the building. The remainder of the damages against Asbestospray comprised the cost of removing some or all of the asbestos-containing fireproofing located in the five other buildings at issue in this appeal, as well as the cost of operations and management programs for that asbestos which still remains.
Asbestospray raises numerous issues on appeal, and additional facts will be set forth in the particular parts of this opinion to which those facts specifically relate.
I.
A threshold matter concerns the availability of negligence and § 402A strict liability tort remedies in an action by a property owner seeking only property damages because of a defect in a product which the owner had purchased. The compensatory damages which the City sought and recovered were for the cost of discovering, managing, rectifying the effects of, and removing the defective product, namely the asbestos-containing building material.
Traditionally, in cases to recover damages because of defective products, the loss of value or use of the product itself, and the cost to repair or replace the product, have usually been viewed as economic losses. See Decoster v. Westinghouse, 333 Md. 245, 250-251, 634 A.2d 1330, 1332-1333 (1994); 2 M. Stuart Madden, Products Liability § 22.21, at 334 (2d ed. 1988); William L. Prosser, The Law of Torts § 101, at 665 (4th ed. 1971); Comment, Manufacturer's Liability to Remote Purchasers for "Economic Loss" Damages - Tort or Contract?, 114 U.Pa.L.Rev. 539 (1966). Tort recovery for purely economic losses has ordinarily not been allowed. Instead, a purchaser suffering only economic loss because of a defective product will normally be limited to contract causes of action, including breach of implied and express warranties, and, in the case of fraud, to an action for deceit. Decoster v. Westinghouse, supra, 333 Md. at 250, 634 A.2d at 1332; Prosser, supra, § 107, at 708.
As previously indicated, in this case the greater part of the damages against Asbestospray was for the removal of the defective fireproofing from the Walbrook Senior High School, costs normally recoverable only by a contract action. Nevertheless, in the circumstances here, we hold that the City's tort claims for compensatory damages in this asbestos action are fully cognizable.
Even where a recovery, based on a defective product, is considered to be for economic loss, a plaintiff may still recover in tort if the defect creates a substantial and unreasonable
risk of death or personal injury . This legal principle was firmly established in Maryland by Council of Co-Owners v. Whiting-Turner, 308 Md. 18, 517 A.2d 336 (1986), in which we upheld a negligence action to recover the cost of correcting a dangerous condition allegedly created by the failure of a general contractor and certifying architects to construct a ten-story condominium with the proper fire resistant materials. No fire had yet occurred, and the builder and architects sought to defend, in part, on the ground that the plaintiff council of unit owners had suffered only economic loss. 308 Md. at 24, 517 A.2d at 339. This Court, in an opinion by Judge McAuliffe, refused to penalize the plaintiffs for "the fortuitous circumstance of the nature of the resultant damage." 308 Md. at 35,
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