The Economic Loss Rule Applies to Professional Malpractice Claims Too
Virginia law continues to apply a strict division between contract claims and tort claims. This rule holds true in the context of professional malpractice claims as well. Many states apply legal rules where professional malpractice claims arise from negligence or both negligence and contract. This is not the case - from 1976 forward, the Supreme Court of Virginia stated in Oleyar v. Kerr that a claim for professional malpractice, while sounding in tort, was actually a claim for breach of contract with a contract statute of limitations.
The nature of professional services does present a somewhat different posture for the economic loss rule than simple contracts cases. A licensed professional is regulated by the Commonwealth and required to meet express professional services prior to licensure. Many of the statutes and regulations that govern professionals expressly provide that in addition to duties assumed pursuant to contract, the law imposes duties towards the safety of the general public on the licensed professional.
Despite these license implications, Virginia again applies the economic loss rule in the context of professional services. In Gerald M. Moore & Son, Inc. v. Drewry, the Supreme Court of Virginia considered a case where the plaintiff had a contract with an engineering corporation. In its claim for economic losses, the plaintiff sued both the engineering corporation and the individual engineer for negligence. The Supreme Court of Virginia ruled that in the absence of privity, a party could not be held liable for damages caused by negligent performance of a contract and that the same rule applies to professional engineers.
See our previous economic loss rule posts.
Wow! I hadn't considered these sorts of implications. Thanks for the heads up!
Definitely a lot of interesting wrinkles ... the economic loss rule and how tort versus contract law interact is probably the most rich area of legal argument I have dealt with in my construction practice and it just keeps on going, year after year.
That's you Tim, the energizer bunny of the economic loss rule
I can think of worse legal titles to hold :D
Great post on an interesting topic. A few months ago Florida's Third District Court of Appeal held the economic loss rule did not preclude the plaintiff from bringing an action against a professional.
The court stated "Because a professional negligence claim exists and operates outside of a professional services contract, it would be inapposite to limit such a remedy to the confines of the very document outside of which it was intended to operate. A cause of action in negligence against an individual professional exists irrespective, and essentially, independent of a professional services agreement?"
I had a post about the Florida decision which can be found at the following link:
http://www.floridalegalblog.org/2009/06/liability-for-professional-negligence.html
Thanks,
-Jeff
Jeff,
Thanks for your comment - this is definitely a realm where the law can vary wildly from state to state. I plan on commenting on some of the local variations on this them sometime soon, but great point to where Florida is so different.
I look forward to tracking your blog too Jeff, keep stopping by!
Thanks for the information Timothy and for the clarification you provided: http://twitter.com/imadnaffa/status/8512008574