Condominium associations and individual homeowners in the Florida Keys sued Charley Toppino & Sons, Inc. (a concrete supplier), alleging that concrete supplied for construction of their homes and condominium buildings contained excessive chloride. The chloride allegedly corroded embedded steel reinforcement, leading to cracking, spalling, and deterioration of the concrete. Plaintiffs sought damages for repair and replacement costs, diminution in value, and loss of use—no personal injuries were alleged, and no damage to property other than the structures themselves was claimed. Plaintiffs asserted negligence, strict products liability, negligent misrepresentation, and breach of implied warranty against Toppino. There was no privity of contract between the plaintiffs and Toppino; Toppino sold concrete to the builders/developers. The trial court dismissed the claims under the economic loss rule. On review, the Florida Supreme Court was asked whether such tort and implied warranty claims may proceed when the only losses are economic and the defective component harmed only the completed structures into which it was incorporated.
Can homeowners and condominium associations recover in tort (negligence or strict liability) or on implied warranty against an upstream component supplier for purely economic losses where a defective product (concrete) damages only the completed structure of which it is a part and not other property?
Under Florida's economic loss rule, a party may not recover in tort (including negligence and strict products liability) for purely economic losses caused by a defective product where the product damages only itself and there is no personal injury or damage to other property. For purposes of the "other property" exception, the relevant product is the finished product purchased by the plaintiff; integrated components of that product are not "other property." Absent privity, a plaintiff generally cannot recover purely economic losses on a common-law implied warranty theory against a remote supplier.
No. The economic loss rule bars plaintiffs' negligence and strict liability claims because the defective concrete damaged only the structures themselves—the products the plaintiffs purchased—and not other property. The common-law implied warranty claim fails for lack of privity. The negligent misrepresentation claim likewise cannot proceed under these circumstances.
The Court began by defining economic loss as damages for inadequate value, costs of repair or replacement, and consequential commercial losses without accompanying personal injury or damage to other property. Citing Florida Power & Light Co. v. Westinghouse Electric Corp. and the U.S. Supreme Court's East River S.S. Corp. v. Transamerica Delaval, Inc., the Court reaffirmed that tort law is aimed at safety—preventing personal injury and property damage—whereas contract and warranty law allocate the risk of product quality and performance. Allowing tort remedies for disappointed expectations would circumvent bargained-for risk allocation and privity limits. On the "other property" exception, the Court adopted the integrated product approach: the product is what the plaintiff purchased. These homeowners and associations purchased completed dwellings or condominium units, not sacks of concrete. Because the allegedly defective concrete injured only the buildings into which it was incorporated, the loss was to the product itself. Treating a component as separate "other property" would collapse the tort–contract boundary and expose remote suppliers to indeterminate tort liability for quality defects in finished goods. The Court rejected a proposed "sudden and calamitous" exception under which some courts permit tort recovery if the product fails dangerously, explaining that whether failure is sudden or gradual is immaterial if the only injury is to the product. As to implied warranty, Florida law generally requires privity to recover purely economic loss on common-law implied warranty theories against a remote manufacturer or supplier. Plaintiffs had no privity with Toppino; their remedies, if any, lay in contractual or statutory warranties running from their sellers or developers. Finally, negligent misrepresentation could not salvage the claims because the alleged misstatements were not independently actionable apart from the product defect and purely economic nature of the losses; nor did plaintiffs allege direct representations to, or reliance by, them. Accordingly, the Court reinstated dismissal of the complaint.
Casa Clara is the leading Florida case applying East River's economic loss doctrine to construction defects, making three enduring points: (1) the integrated product test defines the "product" as what the plaintiff purchased, so damage to a finished structure by a defective component is not damage to "other property"; (2) tort claims for product quality and performance are barred absent personal injury or other property damage; and (3) privity is required to recover purely economic loss on implied warranty from a remote supplier. Even after Tiara narrowed the economic loss rule to the products-liability context, Casa Clara continues to govern Florida products cases and is tested frequently for its precise articulation of the other-property analysis and the limits of tort in construction disputes.
Casa Clara draws a firm line between tort and contract in Florida products cases: when a defective component causes only deterioration of the completed product the plaintiff purchased, the loss is economic and remedy lies in contract and warranty, not tort. By treating the completed home as the relevant product and rejecting both 'other property' arguments based on component parts and a 'sudden and calamitous' exception, the Court aligned Florida with East River and curtailed end runs around bargained-for risk allocation.