Joyeria Paris, SRL v. Gus & Eric Custom Svcs., 2013 U.S. Dist. LEXIS 176674 (12/17/13)

A rose by any other name would smell as sweet: Scaling back economic loss rule fails to prevent dismissal of tort claims which are not independent of contract.

The plaintiff entered into a brokerage agreement with the defendants by which they would sell the plaintiff's gold to Florida customers. The parties had an oral contract governing their relationship. The plaintiff filed a three-count action for breach of contract, fraud and a violation of the Florida Deceptive and Unfair Trade Practices Act. The alleged fraud concerned the commission rate to apply to the sales. In response to a motion to dismiss, the plaintiff argued that, since the economic loss rule no longer applies outside of the context of products liability litigation, the fraud count should remain. However, the District Court focused on Justice Pariente's concurrence in Tiara Condo and held that basic common law principles already restrict the remedies available to those who have specifically negotiated for those remedies, and the clarification of the economic loss rule's applicability does nothing to alter these concepts. In order to bring a valid tort claim, it still must be distinguishable or independent of the breach of contract. Since the parties' contract covered the commission schedule, the court ruled that the plaintiff failed to state a cause of action for fraud. See also Altenel, Inc. v. Millennium Partners LLC, 947 F.Supp.2d 1357 (S.D. Fla. 2013).             

Case Law Alerts, 3rd Quarter, July 2014