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33 U. Fla. L. Rev. 485 (1980-1981)
Negligence and Economic Damage: The California-Florida Nexus

handle is hein.journals/uflr33 and id is 491 raw text is: NEGLIGENCE AND ECONOMIC DAMAGE: THE CALIFORNIA-FLORIDA NEXUS WALTEI PROBT* Historically, the availability of a remedy for negligence has depended upon the type of interest affected. While over the past few decades the availability of a cause of action in tort for personal injuries has increased dramatically, legal protection of purely economic interests has been slow in developing. Although loss of earnings, loss of profit, and other economic damage have been tradi- tionally compensated in the ordinary negligence claim when parasitic to a physical injury, such damages have not been available outside of a contractual relationship in cases involving purely economic loss. Courts are, however, be- ginning to reconsider doctrines which inhibited recovery for such damages. The most rapid expansion of the cause of action for damage to economic interests is occurring in service transactions. Historically, if the negligent per- formance of a contract to provide service resulted in purely economic harm, no cause of action existed unless the aggrieved party had a contractual relation- ship with the party providing the services., The privity barrier is, however, eroding due to the increasing willingness of courts to protect purely economic interests. The history of this development originated with the English case of Winterbottom v. Wright2 and its enunciation of the privity doctrine. Under- lying the doctrine was the assumption that the cost of negligence was best al- located by the contracting parties through negotiation or simply left to fate and the marketplace. The doctrine of privity predominated until 1916 when Justice Cardozo wrote his famous opinion in MacPherson v. Buick Motor Co.8 which led to the demise of the privity barrier for product-related personal in- juries. Personal injury claims which arose from construction or other service contracts were subsequently excepted from the privity requirement. Neverthe- less, the requirement remained intact for claims resulting from negligently inflicted economic damage stemming from service transactions. Even in that area, however, the barrier is now being eroded in California, Florida and other jurisdictions. In those states, a great variety of independent contractors have been held liable for purely economic damage to individuals directly affected by their performance but with whom there was no contractual relationship.4 *Professor of Law, University of Florida. B.S., J.D., University of Oregon; J.S.D., Yale. My sincere appreciation to Jacalyn Kolk for her research assistance and to Robert A. Hendricks, Atlanta attorney, with whom exploration of this area began. 1. Winterbottom v. Wright, 152 Eng. Rep. 402 (Ex. 1842). 2. 152 Eng. Rep. 402 (Ex. 1842). 3. 217 N.Y. 882, 111 N.E. 1050 (1916). 4. Although the emphasis of this article is on economic damage claims stemming from a defendant's negligent performance of a contract, this work will also consider claims for such damage arising from negligence in any activity. With minor exceptions, courts have denied claims for negligent interference with contract. See Robins Dry Dock & Repair Co. v. Flint,

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