Breach of Express Warranty Damages

In Seely v. White Motor Co., supra, 63 Cal. 2d 9, widely recognized as the progenitor of the economic loss rule, the court held a commercial trucker who purchased a defective truck was entitled to breach of express warranty damages for lost profits from his heavy-duty hauling business and for money paid on the purchase price, but could not recover these economic losses under strict product liability. (Id. at pp. 13-17.) Tracing the development of warranty and strict liability law, the Seely court observed "warranty 'grew as a branch of the law of commercial transactions and was primarily aimed at controlling the commercial aspects of these transactions." (Id. at p. 16.) It concluded warranty rules "function well in a commercial setting." (Ibid.) Warranty adequately protected the Seely plaintiff, a trucker who "could have shopped around until he found the truck that would fulfill his business needs," and "could be fairly charged with the risk that the product would not match his economic expectations, unless the manufacturer agreed that it would." (Id. at p. 19, italics added.) On the other hand, the Seely court reasoned, strict liability for purely economic losses would unjustifiably expose the manufacturer "for damages of unknown and unlimited scope." ( Seely v. White Motor Co., supra, 63 Cal. 2d at p. 17.) Explaining, it observed commercial enterprises have widely varying needs which are ordinarily communicated to the dealer, not the manufacturer, who would be liable even though it never agreed the product would perform as a particular purchaser needed it to perform. (Id. at pp. 16-17.) In Seely, for instance, the truck proved unsatisfactory for the plaintiff's heavy-duty hauling business, but performed well for the subsequent purchaser, who, after the dealer made only minor alterations to the truck, drove it 82,000 miles for a less demanding enterprise. (Id. at pp. 16-17.) For this reason and others which we need not reiterate, the court found, "Without an agreement, defined by practice or otherwise, defendant should not be liable for these commercial losses." (Id. at p. 17, italics added.) The Seely court did not end its discussion there, however. It added a final paragraph regarding the plaintiff's contention the trial court erred in denying strict liability recovery for physical damage to the truck itself. Significantly, the court agreed with the plaintiff's argument that "even though the law of warranty governs the economic relations between the parties, the doctrine of strict liability in tort should be extended to govern physical injury to plaintiff's property, as well as personal injury." (Seely v. White Motor Co., supra, 63 Cal. 2d at p. 19, italics added.) The court found "physical injury to property is so akin to personal injury that there is no reason to distinguish them." (Ibid.) The plaintiff was barred from recovering strict liability damages for physical injury to the truck not by the economic loss rule, but only because he failed to prove causation. (Ibid.)