Legal Alert - Arizona Supreme Court Has the Final Word—Again—on Economic Loss Doctrine


by Richard G. Erickson

Last week, in Sullivan v. Pulte Home Corp., No. CV-12-0419-PR, Arizona’s highest court took on a lingering question about the scope of economic loss doctrine since its landmark decision of Flagstaff Affordable Hous. Ltd. P’ship v. Design Alliance, Inc., 223 Ariz. 320, 321, 223 P.3d 664 (2010). Flagstaff held that the economic loss doctrine limits contracting parties to their contractual claims and remedies and bars tort claims like negligence seeking the same remedies. Sullivan was short and simple: non-contracting parties may bring negligence claims for construction defects because such claims are not barred by the economic loss doctrine. The Supreme Court said this outcome was consistent with its reasoning in Flagstaff.

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