Contractual Relationship Did Not Preclude Causes of Action Sounding in Tort

In affirming most of Supreme Court’s denial of a defendant’s motion for summary judgment, the Fourth Department explained why the economic loss doctrine did not preclude plaintiff’s recovery in tort, in spite of the contractual relationship between plaintiff and defendant and the contract-based causes of action in the complaint.  Pursuant to two contracts, the defendant supplied electronics and fluorescent-tube recycling systems which allegedly failed resulting in mercury contamination:

…[T]he economic loss doctrine does not preclude plaintiff from recovering in tort as a matter of law.“ Pursuant to that doctrine, a plaintiff may not recover in tort against a manufacturer for economic loss that is contractually based, ‘whether due to injury to the product itself or consequential losses flowing therefrom’ ”…. Where, however, there is harm to persons or property other than the property that is the subject of the contract, a plaintiff is entitled to recover in tort… .  The factors to consider are “the nature of the defect, the injury, the manner in which the injury occurred, and the damages sought”…. We conclude that defendant failed to meet its initial burden on the motion with respect to the causes of action sounding in tort because the evidence submitted by defendant establishes that the mercury contamination of plaintiff’s facility, which was allegedly caused by defendant’s products, caused damage to persons and property other than the property that was the subject of the contracts.   Electrical Waste Recycling Group, Limited v Andela Tool & Machine, Inc…, 626, 4th Dept 6-28-13