Florida Supreme Court issued a decision in Tiara Condominium Association, Inc. v. The Marsh and McLennan Companies, Inc.
On March 7, 2013, the Florida Supreme Court issued a decision in Tiara Condominium Association, Inc. v. The Marsh and McLennan Companies, Inc. concerning the application of the economic loss rule. In Tiara, the Supreme Court strictly limited the economic loss rule to cases involving claims of product liability. Departing from prior decisions barring suits in tort where there was an underlying contract, the Supreme Court now holds that the economic loss rule is not a bar to a lawsuit despite the existence of a contract. Specifically, the Supreme Court held that lawsuits in tort can proceed provided that the plaintiff establishes that there was a duty owed and that the duty had been breached. The decision concerns defendants due to a possibility of “opening the flood gates” to litigation in tort despite the existence of a contract. Judge Pariente’s concurring opinion, however, states that parties can avoid tort liability by drafting contractual clauses that limit their duties to the other party. Therefore, in addition to being aware of this decision, contracting parties seeking to avoid liability in tort should consider reviewing their contracts to eliminate as many duties and/or damages that are foreseeable.