Jimenez

*476 Opinion

In California, a manufacturer, distributor, or retailer of a defective product is strictly liable in tort for any resulting harm to a person or to property other than the product itself. This case presents two issues: (1) Can a manufacturer of windows installed in a mass-produced home during its construction ever be strictly liable in tort for harm resulting from defects in those windows? (2) If so, is that manufacturer strictly liable in tort for resulting physical damage to other parts of the house in which the windows have been installed? We answer “yes” to both questions.

I. Facts and Proceedings

In 1988, developer McMillin Scripps II completed the Galleria and Renaissance housing developments in the Scripps Ranch area of San Diego. Viking Industries, Inc. (Viking) manufactured the windows in the Galleria development; T.M. Cobb Company (Cobb) manufactured the windows in the Renaissance development.

Plaintiffs Filipina and Nestor Jimenez, owners of one of the Galleria homes, brought this action against window manufacturers Viking and Cobb, and also against two companies (Medallion Industries, Inc., and Minnoch Supply Co.) that had supplied and installed the…

The majority opinion, which I authored, holds that the economic loss rule does not bar recovery for damages that defective windows cause to other components of mass-produced homes in which they are installed. (Maj. opn., ante, at p. 484.) It does not hold, however, that the economic loss rule can never bar recovery for damages that one part or element of a finished product causes to other parts or elements of the same finished product. I write separately to express and explain my view that the crucial inquiry for applying the economic loss rule in this context is whether the component part has been so integrated into the overall unit that it has lost its separate identity.

The economic loss rule limits tort recovery under strict products liability to damages for physical harm to a person or to property other than the defective product itself. (Maj. opn., ante, at p. 483.) To apply the economic loss rule, therefore, one must first determine what the product at issue is. Only then can one determine whether the injury is to the product itself (and therefore subject to the economic loss rule) or to property other than the *486 defective product (and thus subject to strict products…

In a single paragraph and without significant analysis (maj. opn., ante, at p. 484), the majority sharply narrows the economic loss rule and thereby substantially erodes the demarcation between contract and tort law in California. Plaintiffs allege they bought a product (a mass-produced home) that included defective components (the windows), which malfunctioned, damaging the product as a whole but otherwise causing no personal injury or property damage. In short, plaintiffs claim they did not get the full benefit of their bargain because the product they bought deteriorated in value due to the malfunctioning of a component. The case raises no issue of public safety, nor does it involve an injury that exceeds the subject matter of the parties’ bargain. As such, it is a purely commercial dispute involving failure to deliver bargained-for value (monetary harm) and dependent for its resolution on the terms of the parties’ agreement. Plaintiffs have not shown that traditional warranty principles are somehow inadequate to provide redress for the harm at issue here. Nevertheless, the majority permits a strict products liability action without discussing why a tort remedy is appropriate…

McAfee Harmeyer, Jeff G. Harmeyer, Greg A. McAtee and Robert J. Hudock for Real Party in Interest Viking Industries, Inc.

Horton & Ryan, Sullivan & Christiani, William B. Sullivan and Toni L. Christiani, San Diego, for Real Party in Interest T.M. Cobb Company.

Acker, Kowalick & Whipple, Los Angeles, and Brian F. Drazich for Premier Window Products Corporation and Guaranteed Products Corporation as Amicis Curiae on behalf of Real Parties in Interest.

Monteleone & McCrory, William J. Ingalsbe and G. Robert Hale, Santa Ana, for Southern California Ready Mixed Concrete Association as Amicus Curiae on behalf of Real Parties in Interest.

Sieving & DeMund, Sieving & Momjian, Richard N. Sieving and Julie P. Momjian, Sacramento, for Jeld-Wen, Inc., as Amicus Curiae on behalf of Real Parties in Interest.

McCutcheon, Doyle, Brown & Enersen, Michael I. Begert, Frank Kennamer and Todd A. Williams, for Louisiana-Pacific Corporation as Amicus Curiae on behalf of Real Parties in Interest.

Summers & Shives, San Diego, and Robert V. Closson, for Professional Association of Specialty Contractors as Amicus Curiae on behalf of Real Parties in Interest.

Sullivan Wertz McDade & Wallace and John…