Opinion ID: 2627992
Heading Depth: 1
Heading Rank: 3

Heading: conclusion

Text: ¶ 36 In this case involving the sale of a residence with a defective septic system, we hold that the economic loss rule applies and forecloses the buyers' claim that the seller negligently misrepresented the condition of the septic system. The buyers' claim of fraudulent conveyance is not subject to the economic loss rule. However, the buyers failed to present sufficient evidence on this claim and on their claims of fraudulent misrepresentation to take these issues to the jury. The trial court properly dismissed all of the claims under CR 50 at the close of the plaintiffs-buyers' case. ¶ 37 We reverse the Court of Appeals and reinstate the trial court's judgment, including the award of attorney fees and costs, and we award attorney fees and costs to Ms. Bull for the appeal and this discretionary review, as provided for in the parties' contract. WE CONCUR: GERRY L. ALEXANDER C.J., CHARLES W. JOHNSON, SUSAN OWENS, MARY E. FAIRHURST, JAMES M. JOHNSON, BOBBE J. BRIDGE, JJ. CHAMBERS, J. (concurring in result). ¶ 38 I agree with the majority in result but write separately to suggest a different analytical approach to the economic loss rule. ¶ 39 Like the majority, I would reject Arturo and Norma Alejandre's negligent misrepresentation claim. Once the economic loss rule is applied, this negligent misrepresentation claim is revealed to be a breach of contract claim, not remediable in tort. Like the majority, I would hold that the contract does not control the Alejandres' fraudulent concealment claim. In this state, fraud is not a contract claim. Like the majority, I would hold that the Alejandres failed to present sufficient evidence on all of their claims and that the trial court properly dismissed them. ¶ 40 Unlike the majority, I do not believe that the best approach to the economic loss rule is to find it bars recovery for any undefined economic loss between parties whose relationship is governed by contract unless an exception applies. Cf. majority at ____. The economic loss rule is a misnomer, and the majority mistakes the name of the doctrine for its function. ¶ 41 Instead, I would approach the economic loss rule in light of what it is: a tool we use to ensure that tort is tort, contract is contract, and that each comes with its own remedies. The distinction between tort and contract matters because our society has made the rational choice to limit contract remedies to the typically efficient remedies laid out by the specific contract signed by the parties or provided by background contract and commercial law. Spring Motors Distribs., Inc. v. Ford Motor Co., 98 N.J. 555, 561, 489 A.2d 660 (1985). [1] Our society has also made the rational choice that tort remedies should make the victim whole and thus often include significant consequential damages, such as pain and suffering, which are generally inappropriate for mere breaches of contract. See Rardin v. T & D Mach. Handling, Inc., 890 F.2d 24, 25-26 (7th Cir.1989). Only after I determined that there was a potential question as to whether a suit filed in tort should instead sound in contract would I examine whether the loss was, rightly understood, an economic loss  that is to say, a commercial loss, properly addressed in contract law. Miller v. U.S. Steel Corp., 902 F.2d 573, 574 (7th Cir.1990). In this case, either approach achieves the same results. ¶ 42 The majority aptly recites the relevant facts. Mary Bull, an elderly widow, sold her home to a young couple. The house had a septic system that had needed significant repair in recent years. A repairman told her that her system was unrepairably defective and that she should connect to the city's sewer system. Bull made some initial inquiries about connecting to the sewer system but did not follow through. ¶ 43 At the time the Alejandres made an offer on the house, the septic system was performing adequately. Bull disclosed that she had had the system repaired recently. She did not disclose (and it appears may not have remembered or understood) the extent of the septic system's problems or that she had been told to connect to the city's sewer system. ¶ 44 Before buying Bull's home, the Alejandres had her septic system inspected by two different inspectors. Their inspectors reported that the septic system appeared to be working, though one cautioned that he was unable to examine parts of it. Unfortunately, shortly after the Alejandres purchased the home, the system began to fail. By chance, the Alejandres sought help from the very person who had originally told Bull that the system was fatally flawed. In the end, the couple spent around $30,000 to have adequate plumbing in a house they purchased for $115,000.