Depending on how you read it, the Florida Supreme Court’s recent Tiara Condominium1  opinion  renouncing the contractual privity branch of the economic loss rule either threw open the courthouse doors to plaintiffs seeking to bolster purely contractual disputes with tort claims or simply renounced a relatively recent judge-made doctrine in favor of long-standing common law principles that do the same job under a different label. 

We believe a close reading of the opinion and relevant precedents better support the latter conclusion. Nevertheless, the practical effect is that defense counsel will need to be careful to articulate their arguments more precisely now that lower courts may no longer dismiss tort claims, as they have done for the past 25 years, with a simple cite to the “economic loss rule.”2

The court in Tiara renounced the “contractual privity” branch of the rule, a judicially created doctrine that barred parties in contractual privity from asserting tort claims for purely economic loss where the defendant had not breached an independent duty apart from the breach of contract.3

Tiara arose out of a federal case where a condominium association sued its insurance broker alleging the broker had failed to properly advise it with respect to its insurance needs. The plaintiff asserted claims for breach of contract, negligent misrepresentation, breach of the implied duty of good faith and fair dealing, negligence and breach of fiduciary duty, all of which were dismissed on summary judgment by the district court.4