Economic Loss Rule Clogs the Pipes for Homebuilder’s Negligence Claim

Pursuant to a contract with Chapman Custom Homes, Duncan Plumbing installed the plumbing in a house Chapman was building in Frisco, Texas.  But a year-and-a-half later, those pipes sprung a leak and damaged the house.  The Court of Appeals, however, found that Chapman could not recover for negligence because the economic loss rule bars such a tort claim where a contract governs the parties’ relationship.  The Court rejected Chapman’s argument that the economic loss rule only bars recovery for damages to the “plumbing system itself” (while its damages based on injuries to the entire home), because “the only duty [Chapman] alleged Dallas Plumbing breached was its contractual duty.”

Chapman Custom Homes v. Dallas Plumbing Co.

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