While post-Tiara, the Economic Loss Rule (“ELR”) is limited to products liability cases, the Tiara progeny firmly establish that the independent tort doctrine (“ITD”) is alive and well. In a nutshell, the IDT “is a prohibition against tort actions to recover solely economic damages for those in contractual privity is designed to prevent parties to a contract from circumventing the allocation of losses set forth in the contract by bringing an action for economic loss in tort.” Indemnity Ins. Co. of North America v. American Aviation, Inc., 891 So.2d 532, 536-537 (Fla. 2004).
What happens, however, when an employee of a company who is not a party to the contract between the company and a third-party, is alleged by the third party to have made misrepresentations in the performance of the contract? Does the employee have personal liability for those misrepresentations?
Prior to Tiara, the Fifth DCA answered in the negative and held that “when an aggrieved party is barred by the contractual privity economic loss rule from suing a corporation in tort, it cannot avoid the rule by suing a non-professional employee for their alleged negligence in performing the contract on behalf of the corporation.” Vesta Const. v. Lotpeich, 974 So. 2d 1176, 1181 (Fla. 5th DCA 2008)
Flash forward to 2017, and the Third DCA in Peebles came to the same conclusion in the context of the ITD. Peebles v. Puig, 223 So.3d 1065 (Fla. 3d DCA 2017)(holding that in the context of a misrepresentation claim against an officer/principal of a company that had breached a contract “Florida does not allow a party damaged by a breach of contract to recover the exact same contract damages via a fraud claim”).
There are some pre-Tiara some cases that seem to indicate the contrary result. For instance in Output, Inc. v. Danka Business Systems, Inc., 991 So. 2d 941, 944 (Fla. 4th 2008), the Court stated “Key to this court’s opinion is the fact that [defendant] was not a party to the contract…Had [defendant] been a party to the contract, then [plaintiff’s] claim…would not have constituted a claim for fraud in the inducement, but rather a claim for fraud in the performance. Under those circumstances, the economic loss rule would have barred the claim.” However, Output predates Tiara and contains other distinguishing facts. Specifically, Output concerns a statement made by an employee prior to the execution of the contract that induced the party to enter into the contract. Peebles concerns a statement made by an officer/owner during execution of the contract and is thus a misrepresentation regarding performance.