Tiara Condominium Ass'n v. Marsh & McLennan Companies
110 So. 3d 399
| Fla. | 2013Background
- Tiara Condominium Association retained Marsh & McLennan as its insurance broker to obtain condominium windstorm coverage.
- Marsh procured Citizens Property Insurance policy with a loss limit claimed to be per-occurrence, near $50 million.
- Tiara was led to believe the per-occurrence limit would yield almost $100 million rather than aggregate $50 million.
- Hurricanes Frances and Jeanne caused extensive Tiara damage; Tiara undertook costly remediation based on the expected coverage.
- Citizens later asserted the loss limit was $50 million in the aggregate; Tiara and Citizens settled for about $89 million.
- Tiara sued Marsh in October 2007 for breach of contract, negligent misrepresentation, implied covenant breach, negligence, and fiduciary duty.
- The trial court granted summary judgment for Marsh on some claims; the Eleventh Circuit certified a question about the economic loss rule and professional services.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the economic loss rule bar the insured's claims against a broker in contract-privity for economic damages? | Tiara contends the broker is a professional service provider. | Marsh argues the rule applies and privity with no independent tort bars recovery. | Negative; rule limited to products liability. |
Key Cases Cited
- Casa Clara Condominium Ass’n, Inc. v. Charley Toppino & Sons, Inc., 620 So.2d 1244 (Fla.1993) (origin of economic loss concept; product-focused context)
- Florida Power & Light Co. v. Westinghouse Elec. Corp., 510 So.2d 899 (Fla.1987) (economic loss rule in products context)
- Am. Aviation, Inc. v. Indem. Ins. Co. of N. Am., 891 So.2d 532 (Fla.2004) (limits tort liability for defective products; preserves exceptions)
- Moransais v. Heathman, 744 So.2d 973 (Fla.1999) (initial push to limit rule to product-defect cases)
- AFM Corp. v. Southern Bell Tel. & Telegraph Co., 515 So.2d 180 (Fla.1987) (expansion of rule to non-product services later retracted)
- East River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858 (U.S.1986) (prod. liability roots; contract vs tort boundary)
- PK Ventures, Inc. v. Raymond James & Assocs., 690 So.2d 1296 (Fla.1997) (economic loss and independent torts context)
- American Aviation, Inc. v. Indem. Ins. Co. of North America, 891 So.2d 532 (Fla.2004) (recited privity emphasis and later limitations)
- Curd v. Mosaic Fertilizer, LLC, 39 So.3d 1216 (Fla.2010) (context regarding economic loss rule history)