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State v. United States Steel Corp.6/24/1996
cts liability.
There is no need to extend manufacturers' products liability into an area already occupied by the UCC. To extend manufacturers' products liability to include purely economic losses would undermine the UCC's "comprehensive and finely tuned statutory mechanism for dealing with the rights of parties to a sales transaction with respect to economic losses. The judicial adoption of manufacturers' products liability in Oklahoma was never intended to replace the statutory provisions of the UCC. Its adoption signaled the end of warranty defenses, such as lack of privity and warranty disclaimers, when a product causes personal injury or damage to other property. But when purely economic losses are caused by a product, the economic expectations of the buyer are protected by the UCC.
Id. at 652-53 (citations omitted and emphasis added).
However, although this reasoning is sound in the case of the overlap between products liability and contract -- in that actions sounding in products liability were not intended to remedy purely pecuniary economic losses which are already recoverable in contract -- the same is not true of available damages in actions founded on negligent misrepresentation. As previously discussed, section 552 expressly contemplates the recovery of purely pecuniary losses in an action based on negligent misrepresentation.
Moreover, and perhaps most importantly, the UCC itself contemplates actions based on misrepresentation. Section 1-103 of Hawai'i's version of the UCC expressly provides that
unless displaced by the particular provisions of this chapter, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy , or other validating or invalidating cause shall supplement its provisions.
HRS § 490:1-103 (1993) (emphasis added). Similarly, section 2-721 provides:
Remedies for material misrepresentation or fraud include all remedies available under this Article for nonfraudulent breach. Neither rescission or a claim for rescission of the contract for sale nor rejection or return of the goods shall bar or be deemed inconsistent with a claim for damages or other remedy.
HRS § 490:2-721 (1993) (emphasis added). See also Coastal Group v. Dryvit Systems, 274 N.J. Super. 171, 643 A.2d 649, 652 (N.J. Super. 1994) (holding trial court erred in holding that economic loss rule precluded plaintiff's claim for fraud and misrepresentation, citing sections 1-103 and 2-721 of New Jersey's version of the UCC).
For the foregoing reasons, we hold that: (1) the economic loss rule applies to bar recovery of pure economic loss in actions based on products liability; (2) the economic loss rule does not bar actions based on negligent misrepresentation or fraud; and (3) the circuit court therefore erred in dismissing the state's negligent misrepresentation claim against USX based on the economic loss rule.
c. Negligent Misrepresentation Actions Based on Section 552 of the Restatement Are Not Limited to Parties Whose Business it Is to Supply Information For the Guidance of Others.
Alternatively, USX argues that, even if the economic loss rule does not operate to bar the state's negligent misrepresentation claim, actions based on section 552 should be limited to parties whose business is to supply information for the guidance of others. We disagree for three reasons.
i. plain reading and commentary
First, section 552 does not expressly provide that its provisions apply
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