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Case Notes

By ALM Staff | Law Journal Newsletters |
February 20, 2009

Economic Loss Doctrine

The economic loss doctrine barred the claims for damages to other property in an action alleging various defective product and warranty claims. Albers v. Deere & Company, Case No. 1:08-cv-040, D.ND., Sept. 24, 2008.

The buyer purchased a combine and a combine header from the seller. No warranties were provided because the equipment was used. After the combine ignited and was completely destroyed, the buyer sued the seller under various tort remedies. The seller argued that the economic loss doctrine barred the claims. The court reviewed the twists and turns of the economic loss doctrine and noted that the North Dakota Supreme Court has not addressed the specific issue in this case. The United States Court of Appeals for the Eighth Circuit, however, had predicted that the North Dakota Supreme Court would apply a foreseeability approach, and the court was bound to follow that ruling. Under that approach, the court concluded that the damage to the header and the loss of the combine's gasoline were clearly foreseeable in the event of a loss such as occurred in this case and something that could have been addressed at the time of the combine's purchase. Consequently, the buyer's tort claims had to be dismissed for this reason. The court went on to find that, even under a more liberal test for permitting component-to-component damage, the facts of this case would not support allowing tort recovery. The court granted the seller's motion for summary judgment.

Economic Loss Doctrine

The economic loss doctrine barred the claims for damages to other property in an action alleging various defective product and warranty claims. Albers v. Deere & Company, Case No. 1:08-cv-040, D.ND., Sept. 24, 2008.

The buyer purchased a combine and a combine header from the seller. No warranties were provided because the equipment was used. After the combine ignited and was completely destroyed, the buyer sued the seller under various tort remedies. The seller argued that the economic loss doctrine barred the claims. The court reviewed the twists and turns of the economic loss doctrine and noted that the North Dakota Supreme Court has not addressed the specific issue in this case. The United States Court of Appeals for the Eighth Circuit, however, had predicted that the North Dakota Supreme Court would apply a foreseeability approach, and the court was bound to follow that ruling. Under that approach, the court concluded that the damage to the header and the loss of the combine's gasoline were clearly foreseeable in the event of a loss such as occurred in this case and something that could have been addressed at the time of the combine's purchase. Consequently, the buyer's tort claims had to be dismissed for this reason. The court went on to find that, even under a more liberal test for permitting component-to-component damage, the facts of this case would not support allowing tort recovery. The court granted the seller's motion for summary judgment.

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