Cash & Carry America, Inc. v. Roof Solutions, Inc.
117 A.3d 52
Md. Ct. Spec. App.2015Background
- CCA (a Delaware corporation) sued roofing subcontractor Diogo Depaula and contractor Roof Solutions after a roof-replacement fire at homeowner Merle Coe’s D.C. townhouse allegedly damaged CCA’s computers and software stored in an upstairs office.
- Roof work was subcontracted; D.C. Fire Department and an insurer-hired investigator concluded a roofer’s torch ignited the roof (accidental origin). Coe had shown a Roof Solutions representative two computers during a walkthrough before work began.
- CCA pleaded negligence (including vicarious liability and negligent hiring/supervision), seeking repair/replacement of computer hardware, software, lost time, lost profits, and business-delay damages.
- Defendants moved for summary judgment arguing no tort duty to a non-contracting third-party owner (invoking an "intimate nexus"/economic-loss principle), absence of admissible proof the computers were present, and lack of causation evidence.
- Trial court granted summary judgment for defendants on duty and causation; the Court of Special Appeals reversed, holding roofers owe a tort duty to owners of tangible property inside a structure when their negligence creates a foreseeable risk of physical harm, but limiting recovery for intangible/software and consequential business losses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a roofer/subcontractor owes a tort duty to a third-party owner of personal property inside a structure | CCA: roofers owe an independent tort duty to protect tangible property inside the structure from foreseeable physical harm, even if owner is not a contracting party | Defendants: no duty absent privity or its equivalent; Jacques-style "intimate nexus" required for third parties; economic-loss doctrine bars tort recovery | Held: Duty exists to owners of tangible property located in/at structure when negligent work creates foreseeable risk of physical harm; privity not required where risk is physical (foreseeability governs) |
| Whether the economic-loss doctrine precludes CCA’s tort claim | CCA: doctrine inapplicable because harm was physical damage to tangible property (computers), not merely economic loss | Defendants: rely on economic-loss principles from Jacques/Ultramares to bar third-party tort claims for property damage | Held: Economic-loss doctrine not controlling here; it does not bar tort recovery for physical damage to tangible personal property caused by negligent construction/work |
| Whether CCA can recover for damaged software and lost profits/delays | CCA: seeks repair/replacement costs and consequential business losses | Defendants: such intangible/economic losses are not foreseeable physical risks to be covered by roofer’s tort duty | Held: Duty does NOT extend to intangible software damage or consequential lost profits/delay unless roofer had been specifically informed of and agreed to protect against those risks |
| Whether summary judgment record supported presence of CCA’s computers and causation | CCA: Coe’s affidavit/deposition, photographs, and fire origin reports show computers were present and fire was caused by roofer’s torch | Defendants: dispute admissibility (parol evidence, hearsay, expert disclosure), claim lack of admissible causation proof | Held: Coe’s testimony admissible to show presence (parol rule inapplicable); DCFD and Firemark reports admissible (public- and insurer-investigator) to support causation at summary judgment; trial required on merits |
Key Cases Cited
- Jacques v. First Nat’l Bank of Md., 307 Md. 527 (Court of Appeals of Md.) (establishes "intimate nexus"/privity requirement when harm is solely economic)
- Whiting-Turner Contracting Co. v. 308 Md. 18 (Court of Appeals of Md.) (contractor may owe tort duty to third parties when negligent work creates risk of personal injury or physical harm)
- Village of Cross Keys, Inc. v. U.S. Gypsum Co., 315 Md. 741 (Court of Appeals of Md.) (duty inquiry focuses on whether plaintiff’s interests are entitled to legal protection)
- America Online, Inc. v. St. Paul Mercury Ins. Co., 347 F.3d 89 (4th Cir.) (software is intangible; damage to software is not physical damage to tangible property)
- East River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858 (U.S. Supreme Court) (discusses economic-loss doctrine as boundary between contract and tort)