Economic Loss Doctrine In Claims Against Professionals
In Arizona, actions against attorneys and accountants are permitted for negligence in performing their professional services. See, e.g., Glaze v. Larsen, 207 Ariz. 26, 29, PP 12-13, 83 P.3d 26, 29 (2004) (discussing basic elements of attorney malpractice); Sato v. Van Denburgh, 123 Ariz. 225, 599 P.2d 181 (1979) (recognizing tort of professional negligence against accountant and applying two-year statute of limitations requirement applicable to tort claims).
The nature of professional services rendered by attorneys and accountants is such that personal injury or property damage is rarely a consequence of the negligent performance of these services, yet we do not preclude recovery against these professionals on the basis of the economic loss doctrine.
It would be illogical and unjustifiable to prevent recovery for purely economic losses against architects but allow analytically similar recoveries against attorneys and accountants.
Such an approach would impair the long-standing common law tort of professional negligence.
Other jurisdictions, in applying the economic loss doctrine to claims against architects but not attorneys, have attempted to distinguish these two professions. See, e.g., Klass v. Winstein, Kavensky, Wallace & Doughty, 219 Ill. App. 3d 817, 579 N.E.2d 365, 369-70, 161 Ill. Dec. 817 (Ill. App. Ct. 1991); SME Indus., Inc. v. Thompson, Ventulett, Stainback & Assocs., Inc., 2001 UT 54, 28 P.3d 669, 682 n.9 (Utah 2001).
These cases tend to focus on the nature and scope of duties performed by attorneys as opposed to those of an architect. While we recognize that architects do not owe precisely the same duties that attorneys owe to their clients, the basic premises underlying the two actions are the same: a duty implied in law arising from the professional relationship, the breach of which often results in purely economic losses.
Similar concerns have been enunciated in other jurisdictions.
In Moransais v. Heathman, 744 So.2d 973, (Fla. 1999), the Supreme Court of Florida ruled that the economic loss doctrine does not bar a cause of action against a professional for negligence even though purely economic damages resulted. 744 So.2d at 983-84.
The court recognized that the economic loss doctrine was originally intended to limit actions in the products liability domain. Id. at 983 (stating that application of the economic loss doctrine "should generally be limited to those contexts or situations where the policy considerations are substantially identical to those underlying the product liability-type analysis").
With this limitation in view, the court emphasized that the economic loss doctrine should not bar a well-established tort such as professional negligence. Id.
The court in Robinson Redevelopment Co. v. Anderson, 155 A.D.2d 755, 547 N.Y.S.2d 458 (N.Y. App. Div. 1989), likewise rejected the application of the economic loss doctrine to a claim against an architect. 547 N.Y.S.2d at 460.
In that case, the defendant argued that plaintiff's cause of action was based in contract, not tort. In rejecting this argument, the court determined that the architect owed a duty to the plaintiff that arose from their professional relationship. Id.
Like Moransais, the court in Anderson refused to apply the economic loss doctrine because to "hold otherwise would eliminate the availability of malpractice claims against professionals such as architects where the damages are essentially pecuniary in nature." Id.
In Business Men's Assurance Co. of America v. Graham, 891 S.W.2d 438 (Mo. Ct. App. 1994), the Missouri Court of Appeals held that an architect "had a duty to provide professional architectural services in a manner consistent with the skill and competence of other members of its profession." 891 S.W.2d at 454.
The court found that because this duty arose not out of contract, but in the architect's "common law duty to provide architectural services in a professional manner," the economic loss doctrine did not apply. Id. See also Magnolia Const. Co., Inc. v. Miss. Gulf S. Eng'rs Inc., 518 So.2d 1194, 1202 (Miss. 1988) ("Mississippi law imposes on design professionals (architects/engineers) the duty to 'exercise ordinary professional skill and diligence.'"); E. Steel Constructors, Inc. v. City of Salem, 209 W. Va. 392, 549 S.E.2d 266, 275 (W.Va. 2001) (allowing recovery of purely economic damages in a professional negligence action against a design professional).