ROBERT LAWRENCE et al. v. O&G INDUSTRIES, INC., et al., SC 19330; CAROLYN BEAMER et al. v. O&G INDUSTRIES, INC., et al., SC 19331 

Judicial District of Hartford

 

     Negligence; Whether Public Policy Prohibits Recovery of Purely Economic Damages in Negligence Action Absent Physical Injury or Property Damage.  The construction of a power plant in Middletown was halted due to a gas explosion at the site.  The plaintiffs are employees of subcontractors on the project who were not physically injured, and they brought these actions against several companies involved in the construction project alleging that their negligence caused the explosion.  The plaintiffs claimed that, as a result of the defendants’ negligence, they lost their jobs and suffered economic damages in the form of lost past and future wages.  The defendants moved to strike the plaintiffs’ claims based on the economic loss doctrine, which provides that purely economic losses are unrecoverable in negligence actions in the absence of personal injury or property damage.  The trial court noted that the primary issue before it was whether the defendants owed the plaintiffs a duty of care and that a duty analysis required it to consider whether the harm to the plaintiffs was foreseeable and whether the recognition of a duty of care to the plaintiffs under the circumstances comported with public policy.  The court ruled that the foreseeability prong was satisfied, reasoning that it was foreseeable that, if the plant was destroyed, the plaintiffs would be out of work.  The court determined, however, that public policy considerations militated against imposing a duty on the defendants.  In so ruling, the court found that the defendants would not expect to be held liable in negligence for purely economic losses in the absence of privity of contract between the parties and that extending the defendants’ liability to such a claim would  create a virtually limitless class of potential plaintiffs and greatly increase future litigation of similar claims.  Finally, in striking the plaintiffs’ claims, the court noted that decisions of other jurisdictions also weighed strongly against the imposition of a duty here.  The plaintiffs appeal, claiming, among other things, that the trial court improperly relied on the economic loss doctrine in granting the motions to strike.  Contending that the economic loss doctrine bars only negligence claims for purely economic losses when the parties are in privity of contract, the plaintiffs assert that the doctrine is not applicable here because there is no contractual relationship between the plaintiffs and the defendants.  The plaintiffs also challenge the court’s conclusion that public policy considerations do not support the imposition of a duty upon the defendants.  They maintain that the defendants should have expected that the plaintiffs would assert negligence claims against them for purely economic losses because the Connecticut Superior Court has permitted such claims in similar circumstances in the past.  With respect to the other public policy factors, the plaintiffs assert that recognition of a duty here would not increase litigation and that other jurisdictions have recognized similar claims for economic loss brought by construction professionals in the absence of privity of contract.