IN THE SUPREME COURT OF TENNESSEE

AT JACKSON

November 9, 2022 Session

COMMERCIAL PAINTING COMPANY INC. v. THE WEITZ COMPANY 

LLC ET AL.

Appeal by Permission from the Court of Appeals

Chancery Court for Shelby County

No. CH-06-1573 JoeDae L. Jenkins, Chancellor

___________________________________

No. W2019-02089-SC-R11-CV

___________________________________

SARAH K. CAMPBELL, J., with whom JEFFREY S. BIVINS, J., joins, dissenting.

The economic-loss doctrine bars recovery in tort for purely economic losses in certain 

situations. In this case, the Court is asked to apply that doctrine to bar tort claims brought 

by a subcontractor against a general contractor, where the relationship between the 

subcontractor and general contractor is governed by a contract. The majority opinion cabins 

the economic-loss doctrine to products liability cases and refuses to extend it to contracts 

for services for fear that doing so would require that we also create various exceptions. I 

respectfully disagree with that holding. The core rationale underlying the economic-loss 

doctrine—to create a boundary line between tort and contract law to ensure that parties can 

allocate risks and responsibilities as they see fit—applies equally to cases involving 

contracts for services. And to the extent that any exceptions to the rule would be needed, 

their creation would not be nearly as difficult or messy as the majority predicts. I would 

hold that the economic-loss doctrine applies here and precludes the subcontractor from 

recovering punitive damages and pre-judgment interest.

I.

This appeal arises from a decades-old dispute between a general contractor—The 

Weitz Company, LLC—and its drywall subcontractor—Commercial Painting Company, 

Inc.—during the construction of a retirement community in Shelby County. Weitz is a large 

commercial contractor that, at the time of the project, was the largest builder of continuingcare retirement communities in the country. Commercial Painting had a staff of thirty-five 

employees.

In 2004, Weitz and Commercial Painting executed a standard form subcontract 

agreement related to the Shelby County project. Commercial Painting’s president reviewed 

09/28/2023
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the subcontract terms in detail, initialing each page, and requested a number of changes to 

certain parts of the subcontract, including the scope of work provisions. The agreement 

provided that Commercial Painting would be paid $3.22 million for proper performance.

The subcontract incorporated the plans and specifications for the project and 

addressed in detail the scope of Commercial Painting’s work, the project schedule, 

available remedies, attorney’s fees, and myriad other items. Of particular relevance here, 

the subcontract provided that Commercial Painting “shall be entitled to an extension of the 

Subcontract Time and/or reimbursement for delay damages only to the extent that [Weitz] 

actually receives an extension of time and/or reimbursement for delay damages under the 

Prime Contract for events pertaining to [Commercial Painting’s] Work.” With the 

exception of those pass-through rights, Commercial Painting “waive[d] and release[d] 

[Weitz] from any and all [c]laims for such delay damages, including without limitation 

[c]laims attributable to breach of contract or tort.”

In a provision titled “Contract Terms Control,” the subcontract further stated that 

Weitz would “[i]n no event . . . be obligated to pay [Commercial Painting] any anticipatory 

profit or indirect, special or consequential damages, however caused” and made clear that 

Commercial Painting was “waiv[ing] all such [c]laims.” In the same provision, 

Commercial Painting “specifically agree[d] that it shall not be entitled to assert . . . any 

[c]laims in quantum meruit, interest on late payments, or any other measure of damages 

other than as specifically provided” in certain other provisions of the subcontract.

The subcontract detailed whether and when Weitz and Commercial Painting could 

modify the scope of Commercial Painting’s work or the amounts owed under the 

subcontract. For example, the subcontract expressly permitted Weitz to charge Commercial 

Painting for the cost of any “additional services . . . required . . . to assist [Commercial 

Painting] in performing its obligations” under the subcontract, including “supplemental 

manpower.” And it entitled Commercial Painting to payment for additional work only as 

“properly authorized” by Weitz.

As for the schedule, the subcontract obligated Commercial Painting to “meet or 

better the durations established in [Weitz’s] [s]chedule” but also provided that the schedule 

would be “updated periodically to reflect actual job progress.” Commercial Painting was 

required to “provide sufficient crews, materials and equipment to maintain or improve upon 

[Weitz’s] [s]chedule.” Weitz, meanwhile, had “the right to suspend [Commercial 

Painting’s] performance from time to time, or to reschedule or re-sequence [its] [w]ork.”

Weitz was already more than eight months behind schedule when the subcontract 

was executed. Although Weitz was aware of the delay, it did not share that information 

with Commercial Painting before entering the subcontract and instead included an outdated 

construction schedule as an exhibit to the subcontract.
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Trouble began soon after Commercial Painting started work on the project. Because 

of pre-existing delays and slow progress by other subcontractors, Commercial Painting 

struggled to comply with the performance schedule set by Weitz. Weitz hired additional 

workers to supplement Commercial Painting’s work. Weitz also issued “notices to comply” 

to Commercial Painting, claiming that Commercial Painting was failing to perform a 

“Level 4” drywall finish even though the subcontract required only a “Level 3” finish. By 

the end of the project, Weitz had withheld more than half a million dollars in payments to 

Commercial Painting for “supplementation charges and supervision charges.” And it 

refused Commercial Painting’s requests for additional compensation related to extra work 

necessitated by the poor performance of other subcontractors. The project was not 

completed until February 2006.

Commercial Painting sued Weitz and various other defendants in late 2004.

1 The 

operative complaint for purposes of this appeal—Commercial Painting’s second amended 

complaint—asserted breach of contract and tort claims, including negligent and intentional 

misrepresentation and unjust enrichment claims against Weitz.2 Commercial Painting 

alleged that it had fully performed the subcontract and that Weitz had breached the 

agreement by failing to pay in full. It further alleged that Weitz had made material 

misrepresentations by failing to inform Commercial Painting that the project schedule 

would be compressed or that it would supplement Commercial Painting’s drywall work 

with other subcontractors. Commercial Painting sought compensatory damages of nearly 

$2 million plus pre-judgment interest and attorney’s fees, along with punitive damages of 

$200 million.

Weitz counterclaimed and alleged that Commercial Painting had breached the 

subcontract by delaying the project and performing defective work. Weitz sought damages 

of $500,000, interest, and attorney’s fees.

A jury trial was held in September and October 2018. As relevant here, the jury 

returned verdicts in favor of Commercial Painting on its breach of contract, intentional 

misrepresentation, and unjust enrichment claims against Weitz and further found that 

Commercial Painting was entitled to pre-judgment interest and punitive damages. The trial 

court approved the verdict and awarded Commercial Painting $1,729,122 in compensatory 

 

1 Weitz’s sureties—Federal Insurance Company and St. Paul Fire & Marine Insurance Company—

were among those defendants. They are also appellants in this case.

2 As explained in more detail by the majority opinion, this case has a lengthy procedural history 

that included two appeals before this one. Those appeals preceded the filing of Commercial Painting’s 

second amended complaint in 2017. See Com. Painting Co. v. Weitz Co., No. W2019-02089-COA-R3-CV, 

2022 WL 737468, at *1–4 (Tenn. Ct. App. Mar. 11, 2022).
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damages plus pre-judgment interest, $3,900,000 in punitive damages, and $1,103,549 in 

attorney’s fees.

3

The Court of Appeals affirmed in part, reversed in part, and vacated in part. See 

Com. Painting Co. v. Weitz Co., No. W2019-02089-COA-R3-CV, 2022 WL 737468, at *1

(Tenn. Ct. App. Mar. 11, 2022). The court affirmed the award of compensatory damages.

Id. at *29. But it reversed the punitive damages and pre-judgment interest awards. The 

court concluded that the economic-loss doctrine precluded Commercial Painting from 

recovering tort damages and that Commercial Painting was limited to remedies under the 

subcontract, which did not allow for punitive damages or pre-judgment interest. Id. at *30.

Finally, the court vacated the attorney’s fees award and remanded the case to the trial court 

to determine the amount of attorney’s fees incurred exclusively in obtaining the 

compensatory damages award. Id. at *31. The court denied Commercial Painting’s request 

for attorney’s fees on appeal, reasoning that Weitz was the “prevailing party” on appeal 

because it had “obtain[ed] reversal of a significant portion of the damages awarded by the 

jury.” Id.

We granted Commercial Painting’s application for permission to appeal. We 

instructed the parties to address two issues: first, whether the Court of Appeals erred by 

expanding the application of the economic-loss doctrine to the circumstances of this case; 

and second, whether the Court of Appeals erred in vacating the trial court’s award of 

attorney’s fees and in limiting the scope of recoverable fees on remand, and whether the 

Court of Appeals erred in denying Commercial Painting costs and fees on appeal.

II.

The majority holds that the economic-loss doctrine does not apply outside the 

products liability context and upholds a jury verdict awarding Commercial Painting nearly 

$4 million in punitive damages. I would instead conclude that the economic-loss doctrine 

precludes Commercial Painting from recovering tort damages and affirm the Court of 

Appeals’ judgment reversing the award of punitive damages and pre-judgment interest. I 

begin with an overview of the economic-loss doctrine. I then explain why the doctrine 

should apply in cases involving contracts for services. Finally, I address the majority’s 

contention that extending the doctrine would cause too much confusion. 

A.

The term “economic-loss doctrine” or “economic-loss rule” is a bit of a misnomer 

because it suggests a single rule that is uniformly and consistently applied. See Dan B. 

Dobbs et al., Dobbs’ Law of Torts § 607, Westlaw (database updated May 2023) (“[T]he 

 

3 The compensatory damages award was later reduced to $1,272,952.46 to account for an 

extrajudicial payment.
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implication of references to ‘the’ economic loss rule that there is but a single overarching 

economic loss rule is misleading.”). In fact, the doctrine is a collection of “‘somewhat 

similar doctrines that tend to limit liability’ but work in different ways in different contexts, 

for not necessarily identical reasons.” Milan Supply Chain Sols., Inc. v. Navistar, Inc., 627 

S.W.3d 125, 145 (Tenn. 2021) (quoting Oscar S. Gray, Some Thoughts on “The Economic 

Loss Rule” and Apportionment, 48 Ariz. L. Rev. 897, 898 (2006)); see also Jay M. 

Feinman, The Economic Loss Rule and Private Ordering, 48 Ariz. L. Rev. 813, 813 (2006) 

(“Because the rule applies to a diverse range of situations, there is not one economic loss 

rule, but several.”). In its broadest form, the doctrine precludes recovery in tort for harm 

that is purely economic. See Vincent R. Johnson, The Boundary-Line Function of the 

Economic Loss Rule, 66 Wash. & Lee. L. Rev. 523, 525 (2009). But most courts apply a 

narrower version of the rule that prohibits tort liability for purely economic losses only in 

certain circumstances. See id.

What we now call the economic-loss doctrine originated in products liability cases 

in the 1960s. As one commentator has noted, “[t]he economic loss rule was not formally 

stated” before then, but “only because it was not needed.” Feinman, supra, at 815; see also 

Milan, 627 S.W.3d at 142 n.15. “At the outset of the twentieth century, product defect 

claims were squarely within the province of contract law—one could only recover if in 

privity of contract with the product seller, and only in accordance with the specific 

provisions and limitations of contract.” Catherine M. Sharkey, The Remains of the Citadel 

(Economic Loss Rule in Products Cases), 100 Minn. L. Rev. 1845, 1845 (2016). By the 

1960s, however, “an injured consumer not in privity with the manufacturer could often 

successfully sue using both a breach of contract (implied warranty) theory and a tort theory 

(either negligence or strict liability).” Id. at 1846.

The California Supreme Court was the first to apply a form of the economic-loss 

doctrine. See Seely v. White Motor Co., 403 P.2d 145 (Cal. 1965). In Seely, the court 

rejected the contention that strict liability should displace the law of warranty in cases 

involving economic losses. The court explained that “[t]he distinction that the law has 

drawn between tort recovery for physical injuries and warranty recovery for economic loss 

is not arbitrary” but rather “rests . . . on an understanding of the nature of the responsibility 

a manufacturer must undertake in distributing his products.” Id. at 151. On the one hand, a

manufacturer “can appropriately be held liable for physical injuries caused by defects by 

requiring his goods to match a standard of safety defined in terms of conditions that create 

unreasonable risks of harm.” Id. On the other hand, he “cannot be held [liable] for the level 

of performance of his products in the consumer’s business unless he agrees that the product 

was designed to meet the consumer’s demands.” Id. The court noted that applying “the 

rules of warranty” instead of strict liability helped prevent manufacturers from being held 

“liable for damages of unknown and unlimited scope.” Id. at 150–51.

Twenty years later, the United States Supreme Court adopted Seely’s approach and 

held that “a manufacturer in a commercial relationship has no duty under either a 
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negligence or strict products-liability theory to prevent a product from injuring itself.” E. 

River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 871 (1986). In the Court’s 

view, the “reasons for imposing a tort duty are weak and those for leaving the party to its 

contractual remedies are strong.” Id. The Court explained that “[c]ontract law, and the law 

of warranty in particular, is well suited to commercial controversies . . . because the parties 

may set the terms of their own agreements.” Id. at 872–73. The Court saw “no reason to 

intrude into the parties’ allocation of the risk,” and it echoed Seely’s concern that 

“[p]ermitting recovery for all foreseeable claims for purely economic loss could make a 

manufacturer liable for vast sums.” Id. at 874. Allowing products liability to encroach too 

far on the law of warranty, the Court explained, would cause “contract law [to] drown in a 

sea of tort.” Id. at 866. 

Our Court, too, originally adopted the economic-loss doctrine in products liability 

cases for reasons similar to those underlying the Seely and East River decisions. See Ritter 

v. Custom Chemicides, Inc., 912 S.W.2d 128, 132–33 (Tenn. 1995) (implicitly applying 

doctrine to bar negligent-misrepresentation claim by farmers alleging that chemical 

product that was intended to protect crops from frost was defective); Lincoln General Ins. 

Co. v. Detroit Diesel Corp., 293 S.W.3d 487, 491–92 (Tenn. 2009) (expressly adopting the 

doctrine in products liability case against a bus manufacturer); see also Milan, 627 S.W.3d 

at 153 (applying doctrine in a products liability case and noting that “this Court has never 

applied” the doctrine outside that context).

In Lincoln General, we explained that “the remedies available to” the owners of a 

defective product “should derive from the parties’ agreements, not from the law of torts, 

lest we disrupt the parties’ allocation of risk.” 293 S.W.3d at 491. We reasoned that a 

contrary holding “would make it more difficult for parties to predict the consequences of 

their business transactions, the cost of which ultimately falls on consumers in the form of 

increased prices.” Id. We ultimately adopted the East River approach because it “fairly 

balances the competing policy interests and clearly delineates between the law of contract 

and the law of tort.” Id. at 492.

Our more recent decision in Milan likewise underscored the need to protect parties’ 

freedom to contract and “preserv[e] the boundary line between tort and contract law.” 627 

S.W.3d at 155. We declined to adopt a broad fraud exception to the economic-loss doctrine 

because doing so would undermine the parties’ contractual bargain “by importing tort 

remedies into the deal.” Id. (quoting HealthBanc Int’l, LLC v. Synergy Worldwide, Inc., 

435 P.3d 193, 197–98 (Utah 2018)).

Although the economic-loss doctrine originated in products liability cases, at least 

thirteen jurisdictions—Arizona, Colorado, Hawaii, Idaho, Illinois, Indiana, Nevada, Texas, 

Utah, Vermont, Virginia, Washington, and Wyoming—have extended it to cases involving 

other contractual relationships, including contracts for services. See Flagstaff Affordable 

Hous. Ltd. P’ship v. Design All., Inc., 223 P.3d 664, 665 (Ariz. 2010) (applying doctrine 
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to contract for architectural design services); BRW, Inc. v. Dufficy & Sons, Inc., 99 P.3d 

66, 67–68 (Colo. 2004) (applying doctrine to contract for bridge design and construction); 

Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256, 1264–66 (Colo. 2000) (applying 

doctrine to contract for installation of a water system); City Express, Inc. v. Express 

Partners, 959 P.2d 836, 839–40 (Haw. 1998) (applying doctrine to contract for 

architectural services); Brian & Christie, Inc. v. Leishman Elec., Inc., 244 P.3d 166, 170 

(Idaho 2010) (“The economic loss rule applies to negligence cases in general; its 

application is not restricted to products liability cases.”) (quoting Ramerth v. Hart, 983 

P.2d 848, 851 (Idaho 1999))); Fireman’s Fund Ins. Co. v. SEC Donohue, Inc., 679 N.E.2d 

1197, 1200–01 (Ill. 1997) (applying doctrine to contract for engineering services); 

Anderson Elec., Inc. v. Ledbetter Erection Corp., 503 N.E.2d 246, 249 (1986) (applying 

doctrine to contract for electrical services); Indianapolis-Marion Cnty. Pub. Libr. v. 

Charlier Clark & Linard, P.C., 929 N.E.2d 722, 742 (Ind. 2010) (applying doctrine to 

contracts for construction design and inspection services); Gunkel v. Renovations, Inc., 822 

N.E.2d 150, 153 (Ind. 2005) (“[D]amage from a defective product or service may be 

recoverable under a tort theory if the defect causes personal injury or damage to other 

property, but contract law governs damage to the product or service itself and purely 

economic loss arising from the failure of the product or service to perform as expected.” 

(emphasis added)); Terracon Consultants W., Inc. v. Mandalay Resort Grp., 206 P.3d 81, 

89 (Nev. 2009) (applying doctrine to contracts for architectural and engineering services); 

LAN/STV v. Martin K. Eby Constr. Co., 435 S.W.3d 234, 245–46 (Tex. 2014) (applying 

doctrine to contract for architectural services); Hayes v. Intermountain GeoEnvironmental 

Servs., Inc., 498 P.3d 435, 439–43 (Utah 2021) (applying doctrine to contract for 

engineering services); Davencourt at Pilgrims Landing Homeowners Ass’n v. Davencourt 

at Pilgrims Landing, LC, 221 P.3d 234, 244, 249 (Utah 2009) (applying doctrine to 

construction contracts); SME Indus., Inc. v. Thompson, Ventulett, Stainback & Assocs., 

Inc., 28 P.3d 669, 681–82 (Utah 2001) (applying doctrine to contract for architectural 

services); Springfield Hydroelectric Co. v. Copp, 779 A.2d 67, 71 (Vt. 2001) (“The 

economic loss rule clearly applies to commercial disputes outside the confines of product 

liability . . . .”); Long Trail House Condo. Ass’n v. Engelberth Constr., Inc., 59 A.3d 752, 

755–61 (Vt. 2012) (applying doctrine to construction contract); Filak v. George, 594 

S.E.2d 610, 614 (Va. 2004) (applying doctrine to contract to procure homeowners’ 

insurance); Berschauer/Phillips Constr. Co. v. Seattle Sch. Dist. No. 1, 881 P.2d 986, 992 

(Wash. 1994) (applying doctrine to contract for architectural services); Excel Constr., Inc. 

v. HKM Eng’g, Inc., 228 P.3d 40, 45–46 (Wyo. 2010) (applying doctrine to contracts for 

engineering and design services); Rissler & McMurry Co. v. Sheridan Area Water Supply 

Joint Powers Bd., 929 P.2d 1228, 1235 (Wyo. 1996) (applying doctrine to contract for 

engineering services).

These courts have reasoned that applying the economic-loss doctrine to services 

contracts furthers the rationales underlying the doctrine by protecting parties’ ability to 

allocate risks and responsibilities by contract. As the Illinois Supreme Court put it, “[t]he 

policy interest supporting the ability to comprehensively define a relationship in a service 
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contract parallels the policy interest supporting the ability to comprehensively define a 

relationship in a contract for the sale of goods.” Congregation of the Passion v. Touche 

Ross & Co., 636 N.E.2d 503, 514 (Ill. 1994); see also Indianapolis-Marion Cnty. Pub. 

Libr., 929 N.E.2d at 742 (“[T]he policy justifications for the economic loss rule discussed 

throughout this opinion amply support applying the rule to products and services alike.”). 

The Indiana Supreme Court acknowledged that the Uniform Commercial Code (“UCC”) 

“does not apply to service contracts,” but it found that distinction immaterial because “the 

common law of contracts has well developed rules of interpretation and doctrines to protect 

the reasonable expectations of the parties.” Indianapolis-Marion Cnty. Pub. Libr., 929 

N.E.2d at 742.

Some of these courts have extended the doctrine to cases involving contracts for 

services in the construction context, without indicating whether they would apply the 

doctrine to contracts for other kinds of services. These courts have pointed out that the

policy rationales for the doctrine apply especially strongly in the construction context. See, 

e.g., Flagstaff Affordable Hous., 223 P.3d at 669 (reasoning that “[t]he contract law policy 

of upholding the expectations of the parties has as much, if not greater, force in construction 

defect cases as in product defect cases”); Terracon Consultants, 206 P.3d at 90 (“The work 

provided by construction contractors or the services rendered by design professionals in 

the commercial building process are both integral to the building process and impact the 

quality of building projects. Therefore, when the quality is deemed defective, resulting in 

economic loss, remedies are properly addressed through contract law.”); City Express, 959 

P.2d at 840 (“Construction projects are characterized by detailed and comprehensive 

contracts that form the foundation of the industry’s operations. Contracting parties are free 

to adjust their respective obligations to satisfy their mutual expectations.” (quoting Am. 

Towers Owners Ass’n v. CCI Mech. Inc., 930 P.2d 1182, 1190 (Utah 1996))); Davencourt 

at Pilgrims Landing, 221 P.3d at 242 (stating that the economic-loss doctrine is 

“particularly applicable to claims of negligent construction based on the construction 

industry’s use of detailed and comprehensive contracts that form obligations and 

expectations” (internal quotation marks omitted)); Berschauer/Phillips Constr., 881 P.2d 

at 992 (“We hold parties to their contracts. If tort and contract remedies were allowed to 

overlap, certainty and predictability in allocating risk would decrease and impede future 

business activity. The construction industry in particular would suffer, for it is in this 

industry that we see most clearly the importance of the precise allocation of risk as secured 

by contract.”); Excel Constr., 228 P.3d at 45 (“The Court continues to believe that parties 

to a construction contract have the opportunity to allocate the economic risks associated 

with the work, and that they do not need the special protections of tort law to shield them 

from losses arising from risks . . . which are inherent in performance of the contract.”).

Supreme courts in only three jurisdictions—Minnesota, Wisconsin, and Florida—

have declined to apply the economic-loss doctrine in cases involving services contracts. 

See McCarthy Well Co., Inc. v. St. Peter Creamery, Inc., 410 N.W.2d 312, 314–15 (Minn. 
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1987); Ins. Co. of N. Am. v. Cease Elec. Inc., 688 N.W.2d 462, 467–72 (Wis. 2004); Tiara 

Condo. Ass’n, Inc. v. Marsh & McLennan Cos., Inc., 110 So. 3d 399, 406–07 (Fla. 2013).

Both the Minnesota Supreme Court and the Wisconsin Supreme Court distinguished 

contracts for services on the ground that, unlike contracts for goods, such contracts are not 

governed by the UCC. In McCarthy, the Minnesota Supreme Court explained that the 

economic-loss doctrine is “premised on the existence of certain rights and remedies 

provided for in the [UCC]” and the notion that “allow[ing] tort liability in commercial 

transactions would totally emasculate [the warranty and liability] provisions of the [UCC].” 

410 N.W.2d at 314 (second alteration in original) (internal quotation marks omitted). 

Similarly, in Cease, the Wisconsin Supreme Court noted that “the existence of [certain] 

rights and remedies” under the UCC is “one of the critical rationales underlying the 

economic loss doctrine.” 688 N.W.2d at 469. “[I]f a commercial purchaser were allowed 

to sue in tort to recover solely economic loss,” the court explained, the UCC “provisions 

designed to govern such disputes could be circumvented entirely,” id., and “contract law 

would drown in a sea of tort,” id. (quoting E. River, 476 U.S. at 874). Cease concluded that 

the same rationale does not apply to services contracts, because “[u]nlike contracts for 

products or goods, which enjoy the benefit of well-developed law under the [UCC], no 

such benefit exists for contracts for services.” Id. 

The Cease court also reasoned that extending the economic-loss doctrine to services 

contracts would do little to further the policy rationales underlying the doctrine. The court 

noted that contracts for services are often “simple and informal” and do not necessarily 

reflect the “fundamental premise” that “bargaining parties will allocate the risks and 

remedies.” Id. at 470. The court also worried that extending the doctrine would put the 

court “on a slippery slope of having to decide whether an exception should be made for 

some or all professional groups” such as lawyers and accountants. Id. at 471.

The Florida Supreme Court initially applied the economic-loss doctrine to services 

contracts while carving out exceptions for professional services and tort claims that were 

independent of any breach of contract. See AFM Corp. v. S. Bell Tel. & Tel. Co., 515 So. 2d 

180, 181–82 (Fla. 1987) (extending economic-loss doctrine to contract for advertising 

services); Moransais v. Heathman, 744 So. 2d 973, 983 (Fla. 1999) (declining to apply 

doctrine to contracts for professional services); Indem. Ins. Co. of N. Am. v. Am. Aviation, 

Inc., 891 So. 2d 532, 542–43 (Fla. 2004) (declining to apply economic-loss doctrine where 

parties were not in privity, but affirming other exceptions). 

In Tiara, however, a deeply divided court reversed course, overruled earlier 

precedents, and limited the economic-loss doctrine to products liability cases. 110 So. 3d 

at 400. The majority concluded that applying the doctrine to contracts for services did not 

further its original purpose, which was “to protect manufacturers from liability for 

economic damages caused by a defective product beyond those damages provided by 

warranty law.” Id. at 403. The majority’s “experience with the economic loss rule over 
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time, which led to the creation of the exceptions to the rule,” had demonstrated “that 

expansion of the rule beyond its origins was unwise and unworkable in practice.” Id. at 

407. Other than pointing to the court’s creation of various exceptions to the doctrine, 

however, the majority did not explain in what way extension of the doctrine had proved 

unworkable.

Justice Pariente, joined by two other Justices, concurred in the majority opinion but 

wrote separately to explain that the decision to limit the economic-loss doctrine to the 

products liability context “does not undermine Florida’s contract law or provide for an 

expansion in viable tort claims.” Id. at 408 (Pariente, J., concurring). That was because 

“[b]asic common law principles already restrict the remedies available to parties who have 

specifically negotiated for those remedies.” Id. “[T]o bring a valid tort claim,” for example, 

a party must satisfy “all of the required elements for the cause of action,” including that 

“the tort is independent of any breach of contract claim.” Id. The concurrence 

acknowledged that the economic-loss doctrine “has provided a simple way to dismiss tort 

claims interconnected with breach of contract claims” but found it “neither a necessary nor 

a principled mechanism for doing so” because “basic contractual principles” accomplish 

the same result. Id. at 409. In the concurrence’s view, common-law contract principles 

already “properly delineate the general boundary between contract law and tort law.” Id. 

And “[a]pplication of the economic loss rule to serve this function outside the products 

liability context simply allows for the possibility of confusion, overuse, and the restriction 

of well-established common law remedies.” Id.

Justice Polston dissented and accused the majority of “greatly expand[ing] the use 

of tort law at a cost to Florida’s contract law.” Id. at 410 (Polston, J., dissenting). Justice 

Canady dissented as well, likewise contending that the majority was expanding “tort law 

at the expense of contract law.” Id. at 411 (Canady, J., dissenting). In his view, “[t]he goal 

of preventing contract law from drowning in a sea of tort is as compelling in the broader 

context of contract-based relationships as it is in the product liability context.” Id. at 413. 

And “[t]he fact that the economic loss rule is subject to certain recognized exceptions—

exceptions that are based on specific policy considerations—does not undermine the 

integrity of the general rule or obliterate the purpose on which it is based.” Id.

B.

Unlike the majority, I would join those courts that have extended the economic-loss 

doctrine to contracts for services. I reach this conclusion for two primary reasons.

First, applying the economic-loss doctrine to contracts for services directly furthers 

its “central purpose of preserving the boundary line between tort and contract law.” Milan, 

627 S.W.3d at 155. Early cases adopting the economic-loss doctrine reflected several 

different policy rationales, including the need to prevent unbounded and unpredictable 

liability, the superiority of warranty law in addressing product defects, and the preference 

for private allocation of risk. See, e.g., Johnson, supra, at 542–47. Today, however, it is 
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widely accepted that the principal and strongest rationale for the economic-loss rule is its 

“critical boundary-line function, separating the law of torts from the law of contracts.” Id.

at 546; see also Feinman, supra, at 817 (“As expressed in the case law and the literature, 

the principal explanation for the rise of the economic loss rule . . . is the preference for 

private ordering over public regulation.”); Dobbs, supra, at § 614 (“Perhaps the strongest 

[rationale for the economic-loss doctrine] is to honor the contract by enforcing its express 

or implied allocations of responsibility.”). By limiting parties to their remedies under the 

contract, the economic-loss doctrine respects and encourages private ordering, which does 

a better job of furthering individual and societal interests than tort law. See Johnson, supra,

at 548, 580 (explaining that the boundary-line function of the doctrine ensures that “the 

adjudication of tort remedies defers to private ordering”); Feinman, supra, at 817 

(attributing the economic-loss rule to “a belief that there is a meaningful distinction 

between contract law and tort law, and that in cases of potential overlap, contract law is a 

superior system for regulating behavior and achieving socially optimal results”).

Application of the economic-loss doctrine to contracts for services, no less than 

contracts for the purchase of goods, directly furthers this rationale. Contracts for services, 

like contracts for goods, allow parties to “allocate[] the risks and benefits of performance.” 

Feinman, supra, at 814. As with contracts for goods, the court “upsets that allocation when 

it imposes liability . . . outside the contract” and “undermines the process of contracting.” 

Id.; see also Dobbs, supra, at § 614 (“[I]f the contract limits liability, the rule eliminating 

tort claims prevents the plaintiff from circumventing the contract’s allocation of loss.”). 

This is true even when a contract is “simple and informal.” Cease, 688 N.W.2d at 470. And 

it is especially true in the construction industry, where “detailed and comprehensive 

contracts” are routinely used to establish obligations and expectations. City Express, 959 

P.2d at 840 (quoting Am. Towers, 930 P.2d at 1190); see also Davencourt at Pilgrims 

Landing, 221 P.3d at 242–43 (same). 

The majority posits that “[o]ne party need not have to consider another party’s fraud 

among the potential risks and costs when negotiating a contract in good faith.” But the 

majority’s decision to cabin the economic-loss doctrine is not limited to fraud claims. By 

altogether refusing to extend the economic-loss doctrine to contracts for services, the 

majority opinion opens the door to any and all tort claims, including those alleging nothing 

more than negligent performance of the contract. In any event, the Court already considered

in Milan whether fraud justifies interfering with the freedom of contract. 627 S.W.3d at 

154. And it held that, “[w]hen the alleged fraud concerns pre-contractual 

misrepresentations and nondisclosures” about matters “that are the subject of a contract 

between sophisticated business entities, Tennessee’s interest in freedom of contract 

prevails, and the economic loss doctrine applies.” Id. Tennessee’s interest in the freedom 

of contract should prevail here too.

The majority also suggests that the doctrine’s boundary-line function is stronger in 

products liability cases than the services context because the UCC ensures that a contract-
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law remedy is readily available. It may be that the doctrine’s “boundary-line function . . . is 

most clearly established in the field of products liability.” Johnson, supra, at 549. But that 

does not mean the function is absent in other contractual contexts. To the contrary, 

Professor Johnson acknowledges that the “purpose of the economic loss rule is . . . 

to ensure respect for private ordering by relegating a plaintiff to contract remedies in cases 

where there is an agreement between the parties allocating economic risks.” Id. at 555. 

That purpose is served when the economic-loss doctrine is applied to claims between 

parties to any contractual agreement, regardless of its subject matter. 

This case does not require us to extend the economic-loss doctrine to claims between 

parties lacking contractual privity or other situations in which it could be said that the 

boundary-line function of the doctrine is less directly implicated. See, e.g., Johnson, supra, 

at 553, 555 (noting that “[a] number of courts have rejected arguments that contract 

principles define the extent of a duty where the economic injurer and victim were not in 

privity” and arguing that “decisions holding that third-party claims are not foreclosed by 

the [economic-loss] rule make sense” in light of the rule’s boundary-line function).

Whether to extend the doctrine in those situations presents a more difficult question. This 

case merely asks us to treat contracts for services the same as contracts for goods. Because 

I see no good reason to distinguish between the two, I would hold that the economic-loss 

doctrine applies here.

Second, unlike the majority, I am not convinced that existing limiting principles in 

Tennessee’s common law will provide sufficient “safeguards against disproportionate 

liability.” The majority notes that the law “already precludes double or excessive recovery 

for the same damages.” True enough. But “tort law frequently offers potential plaintiffs 

more generous terms of recovery” than contract remedies. Johnson, supra, at 549. As one

example, “punitive damages and attorney fees are sometimes available in tort actions, but 

generally cannot be had in breach of contract claims.” Grams v. Milk Prods., Inc., 699 

N.W.2d 167, 171, 171 n. 4 (Wis. 2005) (noting that “[t]ort law generally offers a ‘broader 

array’ of damages than contract” (quoting Cease, 688 N.W.2d at 467)). That means that 

even if a plaintiff is precluded from recovering overlapping damages in both contract and 

tort, tort damages often will far exceed contract damages. This case proves the point: 

Commercial Painting’s tort claim resulted in a punitive damages award of nearly $4 

million—damages that would have been unavailable had Commercial Painting been 

limited to its contract remedies. See Com. Painting, 2022 WL 737468, at *28.

The majority also trusts that “concepts[] such as foreseeability and proximate 

causation” will prove sufficient. Properly applied, principles governing foreseeability and 

proximate causation will likely provide some protection from excessive tort liability. But 

that protection will depend on the facts of each case and will not afford contracting parties 

nearly the same certainty or predictability as the economic-loss doctrine. See Lincoln

General, 293 S.W.3d at 489 (describing the economic-loss doctrine as a “bright-line rule”).
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The common-law principle that holds the most promise as a potential limiting force 

is one the majority fails to mention: the independent-duty rule. That rule “is closely related 

to the economic loss rule” and provides that “[a] tort action only arises when the act 

constituting the contract breach also constitutes a breach of a common law duty 

independent of the contractual relationship.” Com. Painting, 2022 WL 737468, at *12 

(quoting E Sols. for Bldgs., LLC v. Knestrick Contractor, Inc., No. M2018-02028-COAR3-CV, 2019 WL 5607473, at *9 (Tenn. Ct. App. Oct. 30, 2019)); see also Tiara, 110 

So. 3d at 408 (Pariente, J., concurring) (pointing to the independent-duty rule in concluding 

that “common law principles [of contract] already restrict the remedies available to parties 

who have specifically negotiated for those remedies”).4 But our Court has yet to expressly 

adopt the independent-duty rule. It therefore remains unclear whether that rule will 

adequately protect contracting parties.

In sum, I would extend the economic-loss doctrine to contracts for services because 

there is no principled basis to distinguish those contracts from contracts for the purchase 

of goods and because existing common-law principles are not an adequate substitute for 

application of the doctrine.

C.

The majority’s strongest objection to extending the economic-loss doctrine to 

contracts for services is that doing so would “necessitate[] finding and justifying very 

numerous and confusing exceptions.” To be sure, some exceptions may be necessary. But 

I do not find those exceptions as confusing as the majority, and certainly no more confusing 

than exceptions that exist in countless other areas of the law.

Most of the exceptions that exist in jurisdictions that have extended the economicloss doctrine to contracts for services are simply the flipside of the independent-duty rule: 

When a claim is premised on a common-law duty that is independent of the contractual 

relationship, the economic-loss doctrine will not bar the claim. See, e.g., Hermansen v. 

Tasulis, 48 P.3d 235, 240 (Utah 2002) (“[T]he initial inquiry in cases where the line 

between contract and tort blurs is whether a duty exists independent of any contractual 

obligations between the parties.”); Town of Alma, 10 P.3d at 1262 (explaining that a tort 

action premised on breach of a duty that arises independently of the parties’ contractual 

duties remains viable); Springfield Hydroelectric Co., 779 A.2d at 71 (“The underlying 

analysis turns on whether there is ‘a duty of care independent of any contractual 

obligations.’” (quoting Grynberg v. Agri Tech, Inc., 10 P.3d 1267, 1269 (Colo. 2000))); 

Congregation of the Passion, 636 N.E.2d at 514 (holding that the economic-loss doctrine 

does not prohibit tort recovery for breach of a duty arising outside the contract).

 

4 Weitz argued to the Court of Appeals that the independent-duty rule precluded Commercial 

Painting’s tort claims, but the Court of Appeals held that Weitz had waived that argument by failing to 

preserve it in the trial court. See Com. Painting, 2022 WL 737468, at *12–13.
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It is on this basis that courts have excepted from the economic-loss doctrine claims 

against certain professionals such as attorneys and physicians. See, e.g., Davencourt at 

Pilgrims Landing, 221 P.3d at 247 (citing the attorney-client relationship as an example of 

an independent duty of care); S K Peightal Eng’rs, LTD v. Mid Valley Real Est. Sols. V, 

LLC, 342 P.3d 868, 875 (Colo. 2015) (explaining that certain “special relationships” such 

as the attorney-client relationship and physician-patient relationship “automatically trigger 

independent duties of care” (quoting Grynberg, 10 P.3d at 1271)). Courts’ approaches to 

determining exactly which claims fall into this “independent duty” category have varied. 

But nothing prevents us from adopting the approach we deem best or developing an 

approach of our own. 

The other notable category of exceptions includes claims alleging intentional torts

and negligent misrepresentation. Again, courts’ approaches to these exceptions have 

varied. See, e.g., Milan, 627 S.W.3d at 146 (explaining that “[a]t least three approaches 

have emerged” regarding application of the economic-loss doctrine to fraud claims). But 

we have already grappled with these exceptions in products liability cases, see id. at 153–

54 (adopting middle-ground approach to fraud claims), and could apply the same approach

in cases involving contracts for services.

Finally, the majority’s decision to cabin the economic-loss doctrine to products 

liability cases is likely to create confusion of its own. In other jurisdictions that have 

declined to extend the economic-loss doctrine to contracts for services, courts soon faced 

questions about contracts for items that are neither clearly goods nor clearly services and 

hybrid contracts involving both goods and services. In Linden v. Cascade Stone Co., for 

example, the Wisconsin Supreme Court adopted “the predominant purpose test to 

determine whether a mixed contract for products and services is predominately a sale of a 

product and therefore subject to the economic loss doctrine or predominately a contract for 

services and therefore not subject to the economic loss doctrine.” 699 N.W.2d 189, 193 

(Wis. 2005) (citations omitted). Applying that test to a contract for the construction of a 

home, the court held that the economic-loss doctrine applied because the homeowners had 

“bargained for [a] finished product, a house; not its various components.” Id. at 198. That 

decision has been subject to criticism, however, because “a residential real estate 

transaction is not a contract for a product, and residential real estate transactions are 

protected by neither manufacturer warranties nor the U.C.C.” Below v. Norton, 751 N.W.2d 

351, 366 (Wis. 2008) (Bradley, J., dissenting). Minnesota adopted a similar predominantpurpose test for hybrid contracts, but its application has yielded inconsistent answers. The 

Minnesota Supreme Court declined to apply the economic-loss doctrine to a contract for 

well-restoration services and installation of a new pump after determining that it was 

primarily a contract for services. McCarthy, 410 N.W.2d at 315. The following year, by 

contrast, the Minnesota Court of Appeals applied the economic-loss doctrine to a contract 

for the sale, assembly, and installation of a silo after determining that it was primarily a 
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contract for goods. Holstad v. Sw. Porcelain, Inc., 421 N.W.2d 371, 373–75 (Minn. Ct. 

App. 1988).

Given that some confusion is inevitable whichever path we take, I would choose the 

path that furthers the important interests underlying the economic-loss doctrine and join 

those jurisdictions that have extended the doctrine to contracts for services. 

______________________________

 SARAH K. CAMPBELL, JUSTICE