KB HOME v. Superior Court

The economic loss rule bars recovery in tort for economic damages caused by a defective product unless those losses are accompanied by some form of personal injury or damage to property other than the defective product itself. “[T]he economic loss rule allows a plaintiff to recover in strict products liability in tort when a product defect causes damage to ‘other property,’ that is, property other than the product itself. The law of contractual warranty governs damage to the product itself. [Citations.]” (Jimenez v. Superior Court (2002) 29 Cal.4th 473, 483 [ 127 Cal.Rptr.2d 614 , 58 P.3d 450 ] (Jimenez).)

KB Home filed this petition for writ of mandate directing respondent superior court to vacate its orders, based on the economic loss rule, precluding KB Home from pursuing negligence and strict products liability theories to recover from real party in interest Consolidated Industries Corp. (Consolidated) the cost of repairing and replacing defective furnaces manufactured by Consolidated and installed in houses built by KB Home. The challenged order was premised on the trial court’s conclusion, made as a matter of law without first permitting KB Home or Consolidated to…