New Hope For Tort Claims In Contract Litigation

Since the Washington Supreme Court's decision in Alejandre v. Bull in 2007, a plaintiff was generally prohibited from recovering money damages in tort (e.g. a claim based on negligence) if (a) the plaintiff and defendant had a contract and (b) the tort arose out of the subject matter of that contract. Dubbed the "Economic Loss Rule," the logic was to encourage parties in a contractual relationship to allocate the risk of loss in the contract. For example, in Alejandre, the Supreme Court precluded homebuyers from pursuing a negligence claim against their seller when the septic tank turned out to be defective. Instead, the buyers were limited to whatever claims they had under their contract with the sellers.