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Keywords

contractbreach of contracttortnegligenceappealtrialsummary judgmenttrustcontractual obligation
contracttortnegligenceappealtrialtrust

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Chapman Custom Homes, Inc. v. Dallas Plumbing Co., 445 S.W.3d 716, 57 Tex. Sup. Ct. J. 1264

Facts

Chapman Custom Homes, Inc. contracted with Michael B. Duncan, trustee of the M.B. Duncan Trust, to build a home. The builder then hired Dallas Plumbing Company to install the plumbing. After the home was completed, plumbing leaks allegedly caused extensive damage, leading the builder and the trust to sue the plumber for breach of contract, breach of express warranty, and negligence. The trial court granted summary judgment in favor of the plumber, which was affirmed by the court of appeals.

Chapman Custom Homes, Inc. contracted with Michael B. Duncan, trustee of the M.B. Duncan Trust, to build a home. The builder then hired Dallas Plumbing Company to install the plumbing.

Issue

Whether a homeowner has stated a cognizable negligence claim for water damage to new construction allegedly caused by a plumber's negligent performance under its subcontract with the homeowner's general contractor.

Whether a homeowner has stated a cognizable negligence claim for water damage to new construction allegedly caused by a plumber's negligent performance under its subcontract with the homeowner's general contractor.

Rule

The economic loss rule generally precludes recovery in tort for economic losses resulting from a party's failure to perform under a contract when the harm consists only of the economic loss of a contractual expectancy. However, it does not bar all tort claims arising out of a contractual setting, particularly when the duty allegedly breached is independent of the contractual undertaking.

The economic loss rule generally precludes recovery in tort for economic losses resulting from a party's failure to perform under a contract when the harm consists only of the economic loss of a contractual expectancy.

Analysis

The court found that the plumber had an implied duty not to flood or damage the trust's house while performing its contract with the builder. The court disagreed with the court of appeals' view that the property damage was merely an economic loss arising from the contract, stating that the plumber's duty not to cause damage was independent of its contractual obligations. Therefore, the landowner's claims were valid and not barred by the economic loss rule.

The court found that the plumber had an implied duty not to flood or damage the trust's house while performing its contract with the builder.

Conclusion

The Supreme Court reversed the court of appeals' judgment and remanded the case to the trial court for further proceedings, allowing the landowner's negligence claim to proceed.

The Supreme Court reversed the court of appeals' judgment and remanded the case to the trial court for further proceedings.

Who won?

The Supreme Court ruled in favor of the landowner, concluding that the economic loss rule did not bar the negligence claim, thus allowing the case to move forward.

The Supreme Court ruled in favor of the landowner, concluding that the economic loss rule did not bar the negligence claim, thus allowing the case to move forward.

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