{"id":901961,"date":"2023-12-06T14:56:39","date_gmt":"2023-12-06T21:56:39","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=901961"},"modified":"2023-12-06T14:56:41","modified_gmt":"2023-12-06T21:56:41","slug":"tennessee-supreme-court-holds-economic-loss-doctrine-does-not-apply-to-construction-services-contracts-2","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/tennessee-supreme-court-holds-economic-loss-doctrine-does-not-apply-to-construction-services-contracts-2\/","title":{"rendered":"Tennessee Supreme Court Holds Economic Loss Doctrine Does Not Apply to Construction Services Contracts"},"content":{"rendered":"\n<p>Emma Wolfe and M. Ryder Lee | <a href=\"https:\/\/www.klconstructionlawblog.com\/2023\/10\/12\/tennessee-supreme-court-holds-economic-loss-doctrine-does-not-apply-to-construction-services-contracts\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">K&amp;L Gates<\/a><\/p>\n\n\n\n<p>On 28 September 2023, the Tennessee Supreme Court held that the <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/economic-loss-doctrine-tennessee-contracts-for-services\/\">economic loss doctrine<\/a> (ELD) \u201conly applies in products liability cases and should not be extended to other claims.\u201d After years of confusion and guessing by the lower courts and federal district courts in the state, the Court in&nbsp;<em><a href=\"https:\/\/www.tncourts.gov\/courts\/supreme-court\/opinions\/2023\/09\/28\/commercial-painting-company-inc-v-weitz-company-llc-et-al\" target=\"_blank\" rel=\"noreferrer noopener\">Commercial Painting Company, Inc. v. The Weitz Company, LLC, et al.<\/a>&nbsp;<\/em>(<em>Weitz<\/em>) declined to extend the ELD and clarified that it does not apply to contracts for services, including construction contracts.<\/p>\n\n\n\n<p>The ELD is a judicially-created rule aimed at preserving the distinction between contract and tort law by precluding recovery in tort for purely economic or commercial losses arising out of a contractual relationship. As stated in&nbsp;<em>Weitz<\/em>, it was created to prevent the \u201ctortification\u201d of contract law. The ELD first arose in the products liability context, but has since been extended to apply in other contexts in varying degrees and subjected to numerous exceptions and tests by courts in other jurisdictions. Noting how the ELD\u2019s \u201cunprincipled expansion\u201d had resulted in a \u201cconfusing morass\u201d elsewhere, the Supreme Court declined to extend the ELD in Tennessee.<\/p>\n\n\n\n<p>The issue in&nbsp;<em>Weitz&nbsp;<\/em>was whether Tennessee\u2019s ELD precluded a drywall subcontractor\u2019s sizeable jury award for compensatory and punitive damages in its suit against a general contractor. The Tennessee Court of Appeals held that the ELD applied to limit the subcontractor\u2019s recovery, but the Supreme Court reversed. The Court noted that it found \u201cno compelling reason to extend the economic loss doctrine to services contracts,\u201d including the one at issue.<\/p>\n\n\n\n<p>The immediate impact of this decision is softened by the fact that it merely affirms the status quo in Tennessee. It does, however, remove a great deal of uncertainty surrounding the ELD\u2019s applicability in construction disputes. But, the&nbsp;<em>Weitz&nbsp;<\/em>opinion will not necessarily preclude the application of the ELD to disputes involving a contract for the sale of goods in connection with a construction project. For typical materials suppliers, application of the ELD would be consistent with the doctrine\u2019s origins and proper in the products liability context, which the Court affirmed. It is likewise possible that a Tennessee court might apply the ELD in the context of construction contract disputes involving vendors of manufacturing equipment where the services provided are only incidental to the products provided. The Court\u2019s reasoning seems to leave that door cracked, at least for now.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Emma Wolfe and M. Ryder Lee | K&amp;L Gates On 28 September 2023, the Tennessee Supreme Court held that the economic loss doctrine (ELD) \u201conly applies in products liability cases and should not be extended to other claims.\u201d After years of confusion and guessing by the lower courts and federal district courts in the state,&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/tennessee-supreme-court-holds-economic-loss-doctrine-does-not-apply-to-construction-services-contracts-2\/\">Continue reading <span class=\"screen-reader-text\">Tennessee Supreme Court Holds Economic Loss Doctrine Does Not Apply to Construction Services Contracts<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9],"tags":[9895,224,269],"class_list":["post-901961","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","tag-advise-consult","tag-construction-contract","tag-economic-loss-doctrine","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Tennessee Supreme Court Holds Economic Loss Doctrine Does Not Apply to Construction Services Contracts - Advise &amp; 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