Lawrence v. O & G Industries, Inc.
126 A.3d 569
Conn.2015Background
- Workers employed at the Kleen Energy power plant construction site sued multiple contractors after a gas explosion; they alleged negligence caused the explosion and that the resulting shutdown terminated their employment, causing past and future lost wages (purely economic loss).
- Defendants (general contractor and other project contractors) moved to strike the negligence counts seeking purely economic damages; the trial court granted the motions, concluding no duty existed as a matter of public policy.
- The trial court applied the four-factor public policy duty test (Jaworski/Jarmie framework) and relied on longstanding Connecticut precedent limiting recovery for purely economic loss absent privity, personal injury, or property damage.
- Plaintiffs argued foreseeability and certain Superior Court and federal decisions permitted economic-loss recovery for construction professionals and others; defendants relied on RK Constructors and the economic-loss doctrine to argue no duty should be imposed.
- The Connecticut Supreme Court reviewed de novo, accepted that foreseeability was met, but held that public-policy factors (participant expectations, limited incremental safety benefit, increased litigation risk, and majority authority) precluded imposing a duty to recover purely economic losses in this context.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether contractors owe a duty of care to on-site workers to recover purely economic losses (lost wages) caused by contractors' negligence | Foreseeable losses to workers make a negligence duty appropriate; analogous authorities permit economic-loss recovery in construction/professional contexts | Public policy bars such duties absent privity, personal injury, or property damage because recognition would produce limitless, uninsurable liability and little safety benefit | No duty: public policy forbids imposing liability for purely economic loss here; motions to strike were properly granted |
Key Cases Cited
- Connecticut Mut. Life Ins. Co. v. N.Y. & N.H. R.R. Co., 25 Conn. 265 (Conn.) (early Connecticut rule limiting recovery of purely economic loss to avoid remote, indirect claims)
- RK Constructors, Inc. v. Fusco Corp., 231 Conn. 381 (Conn. 1994) (refused negligence recovery for economic losses to a contractor for harms derivative of injury to its employees)
- Jarmie v. Troncale, 306 Conn. 578 (Conn. 2012) (articulated and applied four-factor public policy duty analysis)
- Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303 (U.S. 1927) (foundation of the economic-loss rule barring tort recovery for purely economic harms tied to injuries to others)
- In re Chicago Flood Litigation, 176 Ill. 2d 179 (Ill. 1997) (rejected recovery for broad economic harms from a utility-caused flood; emphasized limitless consequences and uninsurable risk)
- People Express Airlines, Inc. v. Consol. Rail Corp., 100 N.J. 246 (N.J. 1985) (majority/minority split: recognized limited recovery for particular, foreseeable economic losses where plaintiff is within the risk created)
- Aguilar v. RP MRP Washington Harbour, LLC, 98 A.3d 979 (D.C. 2014) (refused recovery for many employees’ lost wages from business closure caused by third-party negligence)