Salt River Project Agric. Improvement & Power Dist. v. Westinghouse Elec. Corp
In Salt River Project Agric. Improvement & Power Dist. v. Westinghouse Elec. Corp., 143 Ariz. 368, 694 P.2d 198 (1984), the court proposed five hypothetical equipment failures and resulting damages. Id. at 378, 694 P.2d at 208.
In two of the hypotheticals, the defect was discovered or caused a malfunction but did not injure anyone or cause damage to any other equipment, although losses for shutdown, start-up, testing costs, and/or loss of profits were incurred. Id.
The court stated that in such instances the economic losses were not recoverable in tort because "there was no accident; the danger remained latent, even though the loss is attributable to a defect that could have become unreasonably dangerous. The loss is only economic in nature." Id. at 379, 694 P.2d at 209.