CAN’T DODGE THE “ECONOMIC LOSS RULE”

Clark v. PFPP Limited Partnership d/b/a Planet Dodge
Dallas Court of Appeals, No. 05-14-00280-CV (February 4, 2015)
Chief Justice Wright and Justices Fillmore (Opinion) and O’Neill (ret.)
Clark got a sweet deal on a new Dodge pickup. Too sweet, it turned out. Her seller purported to be a fleet dealer with extra inventory, but he was in fact selling trucks stolen from a dealership, Planet Dodge. Upon learning her new truck was stolen, Clark surrendered it to the sheriff and then filed suit against a number of defendants, seeking to recover the price she paid for the truck. Among the defendants was Planet Dodge, against which she asserted a claim of negligent hiring, supervision, and retention with respect to the employee that had stolen her future truck—and others—from the dealership, thereby enabling Clark's seller to make the bogus deal with her. Planet Dodge moved for summary judgment, contending Clark had to prove physical injury to recover under her negligence theories. Clark conceded she’d suffered no physical injury but argued she needed to prove only “legally compensable injury.” The trial court granted summary judgment to Planet Dodge, and the Dallas Court of Appeals affirmed, relying on the “economic loss rule.” The Court explained, “[t]he economic loss rule is a doctrine that limits the recovery of purely economic damages in an action for negligence” and, in particular, “when the injury is only the economic loss to the subject of a contract itself, the action sounds in contract alone.” The Dallas Court acknowledged that where the defendant is a “stranger” to the contract at issue, as Planet Dodge was here, the economic loss rule does not always bar a claim in negligence. But in this instance the only injury Clark claimed due to Planet Dodge’s allegedly negligent conduct was the purely economic harm she suffered when her seller breached his contract, i.e., the price she paid for the truck under the contract. So, the Court held, under these circumstances the economic loss rule bars Clark from recovering this loss from Planet Dodge based on a negligence claim.

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