Opinion ID: 2607625
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Heading: Extraordinary Dangers Catastrophic Event The Majority Standard

Text: The most recent adjudication providing the clearest persuasion is the Washington Supreme Court decision in Washington Water Power Co. v. Graybar Elec. Co., 112 Wash.2d 847, 774 P.2d 1199, amended 779 P.2d 697 (1989), [27] in recognition of the countervailing concept of East River. That court defined East River: In its opinion, the Court assessed the relative merits of several different conceptions of economic loss. For purposes of the law of admiralty, it chose the conception that defendants urge us to adopt under the WPLA. When a product damages only itself, and not persons or other property, the Court held, the proper remedy lies in contract, not in tort, no matter what risk of harm the product defect poses, and no matter how the product injury occurred. Washington Water Power Co., 774 P.2d at 1208. Recognizing that denial of remedy might provide greater certainty, the Washington court rejected East River: In our opinion, however, this increased certainty comes at too high a price. If manufacturers can contract successfully around liabilities for product injuries, a principal deterrent to unsafe practices  the threat of legal liability  will be lost. See Cloud v. Kit Mfg. Co., 563 P.2d 248, 250-51 (Alaska 1977); Salt River Project Agricultural Imp. & Power Dist. v. Westinghouse Elec. Corp., 143 Ariz. 368, 694 P.2d 198, 211 (1984); Mid Continent Aircraft Corp. v. Curry [Cy.] Spraying Serv., Inc., 572 S.W.2d 308, 316-18 (Tex. 1978) (Pope, J., dissenting). Washington Water Power Co., 774 P.2d at 1209. In conclusion, the court compared the reason for rejection: The Court's analysis in East River, we believe, unjustifiably dismisses the safety concerns attendant to product injuries caused by hazardous defects. For this reason, we find East River's approach to economic loss unsuited to what the Legislature intended under the WPLA. Product injuries, the Court says, do not raise safety concerns, but are essentially a performance problem. Id. 774 P.2d at 1209. Washington Water Power Co. does not stand alone. While the Washington court used risk of harm as the basis of economic damage liability for a defective product, Oregon courts use a strict liability standard which applies if the defect is unreasonably dangerous to the user. Brown v. Western Farmers Assoc., 268 Or. 470, 521 P.2d 537, 540 (1974). See Heaton v. Ford Motor Co., 248 Or. 467, 435 P.2d 806 (1967). Since East River, the federal courts have continued to apply the Oregon law for diversity cases as shown by Bancorp Leasing and Financial Corp. v. Agusta Aviation Corp., 813 F.2d 272 (9th Cir.1987). The basis of Oregon law in Brown, 521 P.2d at 540 is justification for the imposition of strict liability upon suppliers of defective products when creating hazard to life and health by sale of a product which presents danger in defect. Oregon differentiated this dangerously defective product argument from the disappointed buyer, Price v. Gatlin, 241 Or. 315, 405 P.2d 502 (1965), and denied product liability relief to the purchaser of chicken feed which, although arguably defective, was not unreasonably dangerous. The court left open the unreasonably dangerous test whether to be applied only to persons or to be applied to property. Brown, 521 P.2d at 542. It is noteworthy that the special concurrence in Brown, 521 P.2d at 543 based denial of the claim on being purely economic, loss of profits and, secondly, the loss was not accidental. Brown cited Wulff v. Sprouse-Reitz Co., 262 Or. 293, 498 P.2d 766 (1972), where the defective electric blanket burned up the house. The issue left open in Brown, 521 P.2d 537 of attribution of unreasonable dangerousness to only person or also to property was resolved in Russell v. Ford Motor Co., 281 Or. 587, 575 P.2d 1383 (1978) as man endangering. Certainly, a reeving block on a large crane equally meets the test with the defective weld on the axle housing in Russell. Insofar as the premise of responsibility for the marketing of a dangerously defective product states a norm for the producer and seller, that norm either has or has not been met at the time the product is sold. Whether the seller has met this responsibility cannot depend on the fortuitous extent of the damage done when the danger created by the defect subsequently comes to pass. Moreover, if a plaintiff is able to trace the damage to the seller's negligence, he may recover for economic losses of a kind that the seller should have been able to foresee. Id. 575 P.2d at 1386-87. That court again distinguished between disappointed user and the endangered one: The premise of his liability also controls its extent. The loss must be a consequence of the kind of danger and occur under the kind of circumstances, accidental or not, that made the condition of the product a basis for strict liability. This distinguishes such a loss from economic losses due only to the poor performance or the reduced resale value of a defective, even a dangerously defective, product. It is the distinction between the disappointed users in Price and Brown, and the endangered ones in Brownell v. White Motor Corp. [260 Or. 251, 490 P.2d 184 (1971)] and Wulff v. Sprouse-Reitz Co. Id. 575 P.2d at 1387. The relation between the terms given to damaged property and the ability to maintain a tort action under Illinois law was well illustrated in Kishwaukee Community Health Services Center v. Hospital Bldg. and Equipment Co., 638 F. Supp. 1492 (N.D.Ill. 1986). Kishwaukee Community Health Services Center analyzed the lead case in Illinois, Moorman Mfg. Co. v. National Tank Co., 91 Ill.2d 69, 61 Ill.Dec. 746, 435 N.E.2d 443 (1982). That court said Moorman Mfg. Co. could be read to approve one (or more) of three tests. The bright line test  this is the East River denial of recovery unless there is injury beyond the product  allows a suit in tort if the damage involves anything other than the product itself. The commercial expectation test allows a suit in tort if the damage caused by a product's failure was unexpected. The sudden and dangerous test allows a suit in tort if the damage occurred suddenly and dangerously. Kishwaukee Community Health Services Center, 638 F. Supp. at 1497. Under Washington law, categories two and three would fall as a character risk of harm. The federal judge in Kishwaukee Community Health Services Center, 638 F. Supp. at 1499, under a post- East River exception in the Seventh Circuit Court of Appeals, observed [t]he Seventh Circuit appears to reject the bright line test in favor of a commercial expectation approach and to be undecided in its views toward the sudden and dangerous test. This case becomes complicated because the judge seems to reject recovery which East River would have permitted as damage to other property. Obviously, damage to other property is not economic damage within the linguistic adaptations found on the subject in these cases. Kishwaukee Community Health Services Center is one of the few cases where recovery is denied and which East River would have permitted. Moorman Mfg. Co., 435 N.E.2d 443 is compatible with Washington Water Power Co., 774 P.2d 1199 when it is cited for a result not recognized in Kishwaukee Community Health Services Center. The majority in Moorman Mfg. Co., 435 N.E.2d at 451 denied tort relief where the defect was qualitative and the harm related to the consumer expectancy of fitness for purpose: The policy considerations against allowing recovery for solely economic loss in strict liability cases apply to negligence actions as well. When the defect is of a qualitative nature and the harm relates to the consumer's expectation that a product is of a particular quality so that it is fit for ordinary use, contract, rather than tort, law provides the appropriate set of rules for recovery. That court further observed: The demarcation between physical harm or property damage on the one hand and economic loss on the other usually depends on the nature of the defect and the manner in which the damage occurred. Id. at 449. Cited as respectable authority was Cloud v. Kit Mfg. Co., 563 P.2d 248, 251 (Alaska 1977), which originated the sudden and calamitous damage factor. The special concurrence in Moorman Mfg. Co., 435 N.E.2d at 455 questioned defining economic loss based on absence or appearance of physical harm. That judge made an interesting comment which, if true, may account for the obvious trend toward the Washington Water Power Co., 774 P.2d 1199 risk of harm concept. One should not have to choose wholesale between Santor v. A & M Karagheusian, Inc. (1965), 44 N.J. 52, 207 A.2d 305, and Seely v. White Motor Co. (1965), 63 Cal.2d 9, 403 P.2d 145, 45 Cal. Rptr. 17; I believe the proper approach is to adopt the valid concerns behind each. Moorman Mfg. Co., 435 N.E.2d at 456. Scott & Fetzer Co. v. Montgomery Ward & Co., 112 Ill.2d 378, 98 Ill.Dec. 1, 493 N.E.2d 1022 (1986) clarified that non-product property damage did not come within the economic loss doctrine of non-recoverable economic damage. The nature of the fire as sudden and dangerous was emphasized. The economic loss doctrine applied neither to fire damage to adjacent tenants nor to deny contribution to Montgomery Ward & Co. against the fire service equipment supplier. Lack of an accident in water damaged apartments denied punitive damages for any tort claim in Morrow v. L.A. Goldschmidt Associates Inc., 112 Ill.2d 87, 96 Ill.Dec. 939, 492 N.E.2d 181 (1986). Similarly, faulty workmanship with damage not occurring from a sudden and dangerous occurrence bespoke to recovery denial within the economic damage doctrine in Foxcroft Townhome Owners Ass'n v. Hoffman Rosner Corp., 96 Ill.2d 150, 70 Ill.Dec. 251, 449 N.E.2d 125 (1983). See Redarowicz v. Ohlendorf, 92 Ill.2d 171, 65 Ill.Dec. 411, 441 N.E.2d 324 (1982). See likewise the recognition of the difference between deterioration and sudden and calamitous damage, Chicago Heights Venture v. Dynamit Nobel of America, Inc., 782 F.2d 723 (7th Cir.1986) (Illinois law), in finding economic loss within a qualitative defect reducing the consumer's expectation of a product's fitness. The admiralty rule of East River compared to state law standards of product responsibility was defined in City of Greenville v. W.R. Grace & Co., 827 F.2d 975 (1987), reh'g denied 840 F.2d 219 (4th Cir.1988), which provided further authority for the Washington Water Power Co., 774 P.2d 1199 differentiation. [28] City of Greenville supplied Monokote fireproofing for the city hall construction. Six months after the manufacturer developed an asbestos free product, it continued to supply the old Monokote which contained the dangerous asbestos material. The circuit court affirms substantial judgments for both actual and punitive damages on a product liability basis. East River was largely inapposite when lacking claim of injury or threat of injury to persons or other property. Conversely, the asbestos contained insulation material was a product [which] threatens a substantial and unreasonable risk of harm   . City of Greenville, 827 F.2d at 978. It was noted the defense could not be justified on the basis that no one had yet developed an asbestos-related disease. Id. at 978. See also Board of Educ. of City of Chicago v. A, C & S, Inc., 171 Ill. App.3d 737, 121 Ill.Dec. 643, 525 N.E.2d 950 (1988), which is also a school asbestos material case. Comparable to City of Greenville is 2000 Watermark Ass'n, Inc. v. Celotex Corp., 784 F.2d 1183 (4th Cir.1986), where asphalt shingles were poorly but not dangerously manufactured and installed. The shingles might not shed the rain so long nor look so good as desired and expected when blistered, but they did not threaten life or other property. [29] The product failure similar to Washington Water Power Co., 774 P.2d 1199 was litigated in Salt River Project Agr. Imp. and Power Dist. v. Westinghouse Elec. Corp., 143 Ariz. 368, 694 P.2d 198 (1984) claiming tort liability of a commercial seller to a commercial buyer. The district purchased a gas turbine generator which proved to have problems within its operating P-50 computer. A course of trouble lead to the purchase of a manual control LMC (Local Maintenance Controller) unit. The LMC malfunctioned when installed and 1.9 million dollars damage to the entire turbine resulted. In searching the interaction of tort and contract law, the court reached for definitional limitations where tort recovery for internal product damage might occur. The manner in which the loss occurred was next considered whether in accident or calamity. Differentiated was the nature of the defect as defective in a way that poses an unreasonable danger to those that use or consume it or only found to be not fit for the intended purpose without unreasonable danger of causing injury to person or property. Last then considered was the type of loss or damage. The Arizona court recognized the fire and explosion was not merely a commercial defect or `non-dangerous impairment of quality' and recognized the endangered persons and other property from the accident for which tort law provides a proper rationale. Salt River Project Agr. Imp. and Power Dist., 694 P.2d at 210 (quoting Posttape Associates v. Eastman Kodak Co., 537 F.2d 751, 755 (3rd Cir.1976)). Salt River Project Agr. Imp. and Power Dist. also cited Arrow Leasing Corp. v. Cummins Arizona Diesel, Inc., 136 Ariz. 444, 666 P.2d 544 (1983) and Cloud, 563 P.2d at 251. That court then determined [w]hether the major item of property damage is classified as a loss to other property of the plaintiff or a loss only to the defective product itself, [plaintiff] has a claim in tort   . Salt River Project Agr. Imp. and Power Dist., 694 P.2d at 210-11. [30] The court in Salt River Project Agr. Imp. and Power Dist. then explored a further contention which apparently arises here of possible denial of tort remedy to a commercial user. The court found no justified reason for commercial user-consumer differentiation in right of tort remedy access. Washington Water Power Co. and Salt River Project Agr. Imp. and Power Dist. both cited with approval and followed the name case on this subject from Alaska, Cloud, 563 P.2d 248, which is the progenitor of the economic damage recovery rule where unreasonable danger exists from faulty products. In Cloud, a rug pad ignited and caused a fire which destroyed the trailer house. Suit was filed in theories of strict liability, negligence and implied warranty. That court first recognized that property and personal physical injury should be similarly treated in the adaptation of product liability litigation. The question then was to distinguish between economic loss and direct property damage. The court, in adaptation of terms, defined that sudden and calamitous damage would almost always result in property damage as distinguished from deterioration, internal breakage and depreciation which that court defined as economic loss. The sudden, violent and calamitous harm justified tort recovery for the damaged trailer house and its contents. West Virginia followed the same principle after review of nationwide precedent by statement in Star Furniture Co. v. Pulaski Furniture Co., 297 S.E.2d 854, 859 (W. Va. 1982): Physical harm to the defective product belongs with tort principles; reduction in value merely because of the product flaw falls into contract law. See, e.g., Gherna v. Ford Motor Co., 246 Cal. App.2d 639, 55 Cal. Rptr. 94 (1966); Gibson v. Reliable Chevrolet, Inc., 608 S.W.2d 471 (Mo. App. 1981); Russell v. Ford Motor Co., 281 Or. 587, 575 P.2d 1383 (1978). Therefore, we reject the line of cases begun by Santor v. A & M Karagheusian, Inc., 44 N.J. 52, 207 A.2d 305 (1964), which have permitted use of strict liability to recover the difference between the value of the product received and its purchase price in the absence of a sudden calamitous event. See, e.g., Cova v. Harley Davidson Motor Co., 26 Mich. App. 602, 182 N.W.2d 800 (1971); Air Products & Chemicals, Inc. v. Fairbanks Morse, Inc., 58 Wis.2d 193, 206 N.W.2d 414 (1973) (applying Pennsylvania law). In West Virginia, property damage to defective products which results from a sudden calamitous event is recoverable under a strict liability cause of action. Damages which result merely because of a bad bargain are outside the scope of strict liability. Star Furniture Co. was followed by a federal court certification request in Basham v. General Shale, 377 S.E.2d 830 (W. Va. 1988), where the defective bricks in deterioration did not produce the required calamitous event. In a most recent analysis, the West Virginia court effectively and directly considered East River and Star Furniture Co. where a 475B Michigan front-end loader was burned up by an alleged hydraulic fuel leak in its system (comparable to the fuel pump example, infra ). Capitol Fuels, Inc., 382 S.E.2d 311. The strict liability based verdict for the buyer for the value of the destroyed machine was affirmed. That court continued its intermediate position,   , where recovery is permitted for a defect in the product if it is dangerous to the users and destroys the product in a sudden calamitous event,   . Id. at 312. What appears obvious from Star Furniture is that under the bad bargain concept, the fact that the product may be flawed or defective, such that it does not meet the purchaser's expectations or is even unusable because of the defect, does not mean that he may recover the value of the product under a strict liability in tort theory. The purchaser's remedy is through the Uniform Commercial Code. See Kesner v. Lancaster, ___ W. Va. ___, 378 S.E.2d 649 (1989). In order to recover under Star Furniture, the damage to the product must result from a sudden calamitous event attributable to the dangerous defect or design of the product itself. In this case, we reaffirm our decision in Star Furniture. The front-end loader was not merely an ineffective product which failed to meet the customer's expectations. A defect in the front-end loader caused an abrupt fire which continued to burn until the loader was destroyed. The operator of the loader escaped without injury. The defect in the front[-]end loader created a potentially dangerous situation and the risk associated with the defect was not one ordinarily contemplated by a purchaser. Clearly, this is the type of property damage resulting from a sudden calamitous event which is recoverable under Star Furniture, ___ W. Va. at ___, 297 S.E.2d at 859. Id. at 313. Alaska's Cloud, 563 P.2d 248 was also followed in Georgia for a federal certification question in Vulcan Materials Co., Inc. v. Driltech, Inc., 251 Ga. 383, 306 S.E.2d 253, 257 (1983) (quoting Flintkote Co. v. Dravo Corp., 678 F.2d 942, 948 (11th Cir.1982)): The economic loss rule prevents recovery in tort when a defective product has resulted in the loss of the value or use of the thing sold, or the cost of repairing it. Under such circumstances, the duty breached is generally a contractual one and the plaintiff is merely suing for the benefit of his bargain. The rule does not prevent a tort action to recover for injury to other property and persons because the duty breached generally arises independent of the contract. Nor does it preclude recovery for damages to the defective product itself, where the injury resulted from an accident.  (Footnote omitted.) (Emphasis supplied.) See also Watkins v. Barber-Colman Co., Inc., 625 F.2d 714 (5th Cir.1980), where injuries resulted. Comparable in result is City of Franklin v. Badger Ford Truck Sales, Inc., 58 Wis.2d 641, 207 N.W.2d 866 (1973), although the court did not make a specific finding of dangerousness of wheels that fell off of a fire engine when it was being driven around a corner. Confusion in terminology again is recognized in Cova v. Harley Davidson Motor Co., 26 Mich. App. 602, 182 N.W.2d 800 (1970) permitting tort recovery for the damaged product but perhaps not loss of profits in consequential damages. See, however, Mulholland, 443 N.W.2d 340. City of La Crosse v. Schubert, Schroeder & Associates, Inc., 72 Wis.2d 38, 240 N.W.2d 124 (1976) followed City of Franklin, 207 N.W.2d 866 in tort recovery for other property as well as the faulty and damaged roof. Cova, 182 N.W.2d 800 was also cited with approval. Compare Sunnyslope Grading, Inc. v. Miller, Bradford and Risberg, Inc., 148 Wis.2d 910, 437 N.W.2d 213 (1989), where dangerousness was not an issue and the decision was premised on the nature of the transaction as commercial with pure economic loss where adverse warranty terms existed. Sunnyslope Grading, Inc. was distinguished and the unreasonably dangerous rule applied in Tony Spychalla Farms, Inc. v. Hopkins Agr. Chemical Co., 151 Wis.2d 431, 444 N.W.2d 743 (App. 1989). Defectiveness and unreasonable dangerous to the user or his property was the test applied for tort liability to a product purchased as a sprout suppressant for potatoes after an awarded and affirmed judgment of $227,050 for crop damage. The potentially hazardous product was recognized in Pennsylvania in Industrial Uniform Rental Co., Inc. v. International Harvester Co., 317 Pa.Super. 65, 463 A.2d 1085 (1983), overruled sub nom. REM Coal Co., Inc. v. Clark Equipment Co., 563 A.2d 128 (Pa.Super. 1989), but the law of that state today seems less than definitive. Compare the federal court analysis in Pennsylvania Glass Sand Corp. v. Caterpillar Tractor Co., 652 F.2d 1165 (3rd Cir.1981) with Aloe Coal Co. v. Clark Equipment Co., 816 F.2d 110 (3rd Cir.), cert. denied 484 U.S. 853, 108 S.Ct. 156, 98 L.Ed.2d 111 (1987). However, in the latter case, the unreasonable dangerous nature of defect was not a considered issue. [31] The Nebraska court has employed the unreasonably dangerous test in discussion and case analysis. In recent opinion, it said by quotation in National Crane Corp. v. Ohio Steel Tube Co., 213 Neb. 782, 332 N.W.2d 39, 43 (1983) to be followed in Nerud v. Haybuster Mfg., Inc., 215 Neb. 604, 340 N.W.2d 369, 375 (1983): A majority of courts that have considered the applicability of strict liability to recover damages to the defective product itself have permitted use of the doctrine, at least where the damage occurred as a result of a sudden, violent event and not as a result of an inherent defect that reduced the property's value without inflicting physical harm to the product. See Star Furniture Co. v. Pulaski Furniture Co., 297 S.E.2d 854 (W. Va. 1982). In essence, this court has reached the same result. See Morris v. Chrysler Corp., 208 Neb. 341, 303 N.W.2d 500 (1981). In most recent decision, the Ohio Supreme Court forsook a Santor v. A & M Karagheusian, Inc., 44 N.J. 52, 207 A.2d 305 (1965) posture, but moved no further than the Cloud, 563 P.2d 248 fortuity and dangerousness status. Chemtrol Adhesives, Inc. v. American Mfrs. Mut. Ins. Co., 42 Ohio St.3d 40, 537 N.E.2d 624 (1989). Lacking a defect with an unreasonable risk of harm, strict liability would not lie. See, however, Mead Corp. v. Allendale Mut. Ins. Co., 465 F. Supp. 355 (N.D. Ohio 1979); Iacono v. Anderson Concrete Corp., 42 Ohio St.2d 88, 326 N.E.2d 267 (1975); and Note, Recovery of Direct Economic Loss: The Unanswered Questions of Ohio Products Liability Law, 27 Case W. Res. L. Rev. 683 (1977). The New Jersey court readjusted its posture originally adopted in Santor, 207 A.2d 305 to create a differentiated rule for commercial transactions where tort remedies would be denied for the economic damage internal product defects and loss in Spring Motors Distributors, Inc. v. Ford Motor Co., 98 N.J. 555, 489 A.2d 660 (1985). However, neither that case nor more recent opinions from New Jersey have addressed the risk of harm-unreasonable danger or calamitous event subjects which are now before this court. See also Perth Amboy Iron Works, Inc. v. American Home Assur. Co., 226 N.J. Super. 200, 543 A.2d 1020 (1988). Cf. Dreier Co., Inc. v. Unitronix Corp., 218 N.J. Super. 260, 527 A.2d 875 (1986). Within the volume of cases considered, an almost exact duplication in kind of equipment damage occurred in John R. Dudley Const., Inc. v. Drott Mfg. Co., 66 A.D.2d 368, 412 N.Y.S.2d 512 (1979). The crane boom suddenly collapsed without injury to people or damage to other property. The first inquiry was strict product liability recovery, although the only property damage was to the crane itself. The court distinguished the benefit of the bargain cases demonstrated by Santor, 207 A.2d 305 and granted relief by virtue of the nature of the accidental collapse and dangerous character of the alleged product defect. John R. Dudley Const., Inc. was followed by a number of New York cases which defined its scope to the same principles later enunciated in Washington Water Power Co., 774 P.2d 1199 and somewhat earlier in Cloud, 563 P.2d 248. In confinement of the principle involved in support for the decision made, see Schiavone Const. Co. v. Elgood Mayo Corp., 81 A.D.2d 221, 439 N.Y.S.2d 933 (1981), rev'd 56 N.Y.2d 667, 451 N.Y.S.2d 720, 436 N.E.2d 1322 (1982), Silverman, J., dissenting, with dissent adopted in Trustees of Columbia University v. Exposaic Industries, Inc., 122 A.D.2d 747, 505 N.Y.S.2d 882 (1986); Hartford Ins. Group v. Curry Chevrolet Sales & Service, Inc., 119 A.D.2d 546, 500 N.Y.S.2d 720 (1986); and Schiavone Const. Co. v. Elgood Mayo Corp., 56 N.Y.2d 667, 451 N.Y.S.2d 720, 436 N.E.2d 1322 (1982). Cf. Graham v. Rockwell Intern. Corp., 135 A.D.2d 1128, 523 N.Y.S.2d 992 (1987) (dissent which compared factually the case with those where only the benefit of the bargain issues were presented, e.g., Hemming v. Certainteed Corp., 97 A.D.2d 976, 468 N.Y.S.2d 789 (1983)). See also other economic damage cases where clearly neither dangerousness nor calamitous events occurred, Krzys v. American Honda Motor Co., Inc., 124 A.D.2d 947, 508 N.Y.S.2d 355 (1986) and Cayuga Harvester, Inc. v. Allis-Chalmers Corp., 95 A.D.2d 5, 465 N.Y.S.2d 606 (1983). The convergence of three cases provides for California a posture which is perhaps different on the subject of economic damages resulting from the damage to the product itself than perhaps exists in any other state. These cases are J'Aire Corp. v. Gregory, 24 Cal.3d 799, 157 Cal. Rptr. 407, 598 P.2d 60 (1979); Cronin v. J.B.E. Olson Corp., 8 Cal.3d 121, 104 Cal. Rptr. 433, 501 P.2d 1153 (1972); and Seely v. White Motors Co., 63 Cal.2d 9, 45 Cal. Rptr. 17, 403 P.2d 145 (1965). In Seely, Justice Traynor initiated the counterpoint rule to Santor, 207 A.2d 305 in directing recourse to contract. Seely did not resolve nor consider the unreasonably dangerous, non-accidental divergence later developed for permitted recovery in tort as now most clearly identified in Washington Water Power Co., 774 P.2d 1199. Cronin, 501 P.2d 1153 deleted the requirement in California product liability cases to prove the factor of unreasonably dangerousness. See Recent Development, Products Liability  Strict Liability in Tort: Defect Need Not Render Product Unreasonably Dangerous  Cronin v. J.B.E. Olson Corp., 8 Cal.3d 121, 104 Cal. Rptr. 433, 501 P.2d 1153 (1972), 49 Wash. L. Rev. 231 (1973). See also Barker v. Lull Engineering Co., Inc., 20 Cal.3d 413, 143 Cal. Rptr. 225, 573 P.2d 443 (1978). J'Aire Corp., 598 P.2d 60 provided a broad territory for recovery of economic damages under California law, including contractual and implied contractual proceedings as well as negligence claims. In result from these three cases, faulty product internal damage litigation has, as expressed by one commentator, tended to be targeted within theories of contractual adaptation. Rabin, Tort Recovery for Negligently Inflicted Economic Loss: A Reassessment, 37 Stan. L. Rev. 1513 (1985). See however Franklin, When Worlds Collide: Liability Theories and Disclaimers in Defective-Product Cases, 18 Stan. L. Rev. 974 (1966). In California, economic recovery is permitted in negligence actions where the economic loss is especially foreseeable despite the absence of physical injury or property damage. Ales-Peratis Foods Intern., Inc. v. American Can Co., 164 Cal. App.3d 277, 209 Cal. Rptr. 917 (1985). Consequently, the case is balanced upon a result which was clearly foreseeable rather than the product which was unreasonably dangerous. Pisano v. American Leasing, 146 Cal. App.3d 194, 194 Cal. Rptr. 77 (1983). Compare, however, Kaiser Steel Corp. v. Westinghouse Elec. Corp., 55 Cal. App.3d 737, 127 Cal. Rptr. 838 (1976); Gherna v. Ford Motor Co., 246 Cal. App.2d 639, 55 Cal. Rptr. 94 (1966); and Fentress v. Van Etta Motors, 157 Cal. App.2d Supp. 863, 323 P.2d 227 (1958). [32] The incongruity of the California law and any logical validity to a commercial setting dichotomy is currently illustrated by GEM Developers v. Hallcraft Homes of San Diego, Inc., 213 Cal. App.3d 419, 261 Cal. Rptr. 626 (1989). That case should be carefully reviewed before adaptation of any California case is currently pursued to justify this majority opinion. The significant difference in GEM Developers is the insurance carrier paid part of the economic loss damages owed from a judgment based on strict liability, negligence and warranty and assigned its subrogation claims to the buyer. Here, Continental paid the damages and took the subrogation claim from the buyer.