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Keywords

contracttortdamagesnegligenceliabilityappealtrialsummary judgmentstrict liability
contracttortdamagesnegligenceliabilitystrict liability

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Giddings & Lewis, Inc. v. Industrial Risk Insurers, 348 S.W.3d 729, Prod.Liab.Rep. (CCH) P 18,640

Facts

Ingersoll Rand purchased a Diffuser Cell System from Giddings & Lewis for its manufacturing plant. The system malfunctioned after seven years of operation, resulting in significant repair costs covered by Ingersoll Rand's insurers. The insurers subsequently sued Giddings & Lewis for various claims, including breach of warranty and negligence, seeking to recover the amounts paid for repairs. The trial court granted summary judgment in favor of Giddings & Lewis, citing the economic loss rule, which the Court of Appeals partially affirmed.

Ingersoll Rand purchased a Diffuser Cell System from Giddings & Lewis for its manufacturing plant. The system malfunctioned after seven years of operation, resulting in significant repair costs covered by Ingersoll Rand's insurers.

Issue

Does the economic loss rule apply to bar tort claims for negligence and strict liability in Kentucky, and is there a 'calamitous event' exception to this rule?

Does the economic loss rule apply to bar tort claims for negligence and strict liability in Kentucky, and is there a 'calamitous event' exception to this rule?

Rule

The economic loss rule prevents a commercial purchaser from suing in tort for economic losses arising from the malfunction of a product, requiring such damages to be recovered under contract law.

The economic loss rule prevents a commercial purchaser from suing in tort for economic losses arising from the malfunction of a product, requiring such damages to be recovered under contract law.

Analysis

The court applied the economic loss rule to the facts of the case, determining that the damages sought by the insurers were purely economic losses related to the malfunction of the Diffuser Cell System. The court found that the claims for negligence and strict liability were barred by this rule, as they did not involve injuries to persons or other property. Additionally, the court rejected the argument for a 'calamitous event' exception, emphasizing that the nature of the damages did not change the application of the economic loss rule.

The court applied the economic loss rule to the facts of the case, determining that the damages sought by the insurers were purely economic losses related to the malfunction of the Diffuser Cell System.

Conclusion

The Supreme Court affirmed the application of the economic loss rule in Kentucky, concluding that the insurers' claims for negligence and strict liability were barred. The court also upheld the trial court's rejection of the 'calamitous event' exception.

The Supreme Court affirmed the application of the economic loss rule in Kentucky, concluding that the insurers' claims for negligence and strict liability were barred.

Who won?

Giddings & Lewis prevailed in the case because the court upheld the economic loss rule, which barred the insurers' tort claims for purely economic losses.

Giddings & Lewis prevailed in the case because the court upheld the economic loss rule, which barred the insurers' tort claims for purely economic losses.

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