W E L T M A N, W E I N B E R G

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W E L T M A N, W E I N B E R G R E I S C
O., L. P. A.
Economic Loss Rule Under Attack Presented
by Andrew J. Sonderman, Esq.
CULTIVATING RELATIONSHIPS THROUGH RELIABLE
CREDITOR REPRESENTATION
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Historical Context

• Economic losses are intangible losses that do not
  arise from tangible physical harm to persons or
  property
• Where only economic losses are asserted, damages
  may be recovered only in contract there can be
  no recovery in negligence due to the lack of
  physical harm to persons and tangible things

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Ohio Supreme Court Cases

• Rule stated Queen City Terminals Case (1995)
• Explained Corporex Development Case (2005)
  tort law is not designed to compensate parties
  for losses suffered as a result of a breach of
  duties assumed only by agreement

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Ohio Supreme Court Cases

• Exception Haddon View Investment Case (1982)
  accountant liable for negligent misrepresentation
  to third parties for economic losses when that
  third party is a member of a limited class whose
  reliance on the accountants representation is
  specifically foreseen.

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Judicial Districts in Ohio

• The state is divided into twelve appellate
  districts by Article IV, section 3 of the Ohio
  Constitution and section 2501.01 of the Revised
  Code. Each district is served by a court of
  appeals that sits in each of the counties in that
  district. The
• number of judges in each
• district depends on a variety of
• factors, including the court's
• caseload and the size of the
• district. The number of judges
• in each district varies from four
• to twelve.

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The Battle Between the Judicial Districts 3rd
District

• Counties Allen, Auglaize, Crawford, Defiance,
  Hancock, Hardin, Henry, Logan, Marion, Mercer,
  Paulding, Putnam, Seneca, Shelby, Union, Van Wert
  and Wyandot

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The Battle Between the Judicial Districts 3rd
District

• United Telephone v. Williams (1995) Williams
  claims against United Telephone are for recovery
  undertort theories stemming from Uniteds
  failure to fully comply with the requirements of
  R.C. 153.64. In sum the issue presented here is
  whether there exists a relationship between the
  parties to allow for the bringing of a tort
  action under any theory for purely economic
  damages.

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The Battle Between the Judicial Districts 9th
District

• Counties Lorain, Medina, Summit, Wayne
• East Ohio v. Kenmore Construction (2001)
• sufficient nexus exists to recover economic
  damages in tort because R.C. 153.64 creates
  mandatory duty for utility to locate facilities
  for excavators benefit

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The Battle Between the Judicial Districts 6th
District

• Counties Erie, Fulton, Huron, Lucas, Ottawa,
  Sandusky, Williams, Wood
• Columbia Gas of Ohio v. Crestline Paving (2003)
  R.C. 153.64 does not affect rights between
  contractorand the owner of the underground
  utility facilitySince the economic damages rule
  was part of Ohios common law decades before
  enactment of 153.64, it is part of the rights the
  statute specifically states are unaffected by the
  law.
• REJECTS 153.64 AS PRIVITY SUBSTITUTE

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The Battle Between the Judicial Districts 8th
District

• Cuyahoga County
• RWP, Inc. v.Fabrizi Trucking Paving
  Inc.(2006) Accordingly, Plaintiffs reliance
  upon United Telephone and R.C. 153.64 is
  unavailing as neither provides a basis for
  excusing application of the economic-loss rule in
  this matter.

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Trial Court Decisions

• Franklin County Municipal Court Columbia Gas of
  Ohio v. Columbus Asphalt Paving (2005) This
  court agrees with the Sixth District Court of
  appeals analysis of the legislative intent
  behind R.C.153.74the Ohio General Assembly did
  not intend for the statute to serve as a
  substitute for privity.

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The Upcoming Legislative Battle

• Selected comments on Draft amendments to One Call
  Statute (Sen. Buehrer hearings)
• The Utility shall be responsible for all costs
  incurred by the excavator as a result of the
  utilitys failure to accurately mark the
  approximate location of the underground facility
  in accordance with division (A) of section
  3781.29.
• -- Ohio Contractors Association

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The Upcoming Legislative Battle

• More selected commentsShould the Utility fail
  to make necessary repairs within a reasonable
  amount of time, the Utility shall be responsible
  for any losses incurred by the excavator as a
  result of the delay.
• -- Ohio Contractors Association

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The Upcoming Legislative Battle

• More selected comments
• The current Oho Revised Code does not address
  liability in the event of an unmarked utility
  strike. The Ohio Contractors Association has
  proposed adding language that would address such
  instances. The OHDDA agrees with the OCA
  recommendation that these situations be addressed
  as no fault scenarios.
• -- Ohio Horizontal Directional Drilling
  Association

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Thank you for your time.Questions?
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W E L T M A N, W E I N B E R G R E I S C
O., L. P. A.
Andrew J. Sonderman, Esq. Of Counsel Weltman,
Weinberg Reis Co., L.P.A. 175 S. Third St.,
Suite 900 Columbus, OH 43215 614.857.4383
phone [phone] fax asonderman_at_weltman.com
CULTIVATING RELATIONSHIPS THROUGH RELIABLE
CREDITOR REPRESENTATION