Tiara Condominium Association, Inc., v. Marsh & McLennan Companies, Inc., 38 Fla. L. Weekly S151a, Supreme Court of Florida, Case No SC10-1022, filed March 7, 2013. In a 5-2 opinion (Polston and Canady dissenting in separate opinions and Justice Pariente concurring in a separate opinion), the court responded in the negative to a re-stated certified question form the 11th Circuit Court of Appeals, as follows:
DOES THE ECONOMIC LOSS RULE BAR AN INSURED’S SUIT AGAINST AN INSURANCE BROKER WHERE THE PARTIES ARE IN CONTRACTUAL PRIVITY WITH ONE ANOTHER AND THE DAMAGES SOUGHT ARE SOLELY FOR ECONOMIC DAMAGES?
In holding that the ELR applies ONLY in products liability cases, the majority opinion states the court is receding from it prior rulings in all other cases, which it characterized as “unwise and unworkable in practice. In this case, the condominium’s insurance broker represented that the association had property damage coverage of $50 million PER OCCURANCE; after being damages by two hurricanes (Frances and Jeanne), the association began a more expensive remediation of damages based on this representation, but the insurer (Citizens Property Insurance Corporation) took the position that the coverage was limited to a total of only $50 million for both occurrences. The parties settled for $89 million, and the association sought the balance from its broker based on (1) breach of contract, (2) negligent misrepresentation, (3) breach of the implied covenant fo good faith and fair dealing, (4) negligence, and (5) breach of fiduciary duty..
The trial court granted summary judgment in favor of the broker on all claims, and the 11th Circuit affirmed that result as to all claims except for the negligence and breach of fiduciary duty claims, and certified the question as to these remaining claims in terms of whether the ELR precluded recovery and whether the broker was a “professional” within the exception to the ELR under the holding of Moransais v. Heathman, 744 So. 2d 973 (Fla. 1999), and its predecessor cases. The court’s majority restated the certified question so as to ignore the “professional” exception to the ELR, since they were receding to a “products” only application of the rule.
In his dissent, Justice Canady agreed that the original certified question should be answered in the negative as well, but only because he did not find the insurance broker to within the “professional” exception to this rule. He stated: “With today’s decision, we face the prospect of every breach of contract claim being accompanied by a tort claim.” (from RPPTL Construction Regulation Subcommittee Monthly Report).