Id. at 521, 486 N.W.2d 612. See also Frankenmuth Mut. Ins. Co. v. Ace Hardware Corp., 899 F. Supp. 348, 351 (W.D.Mich. 1995). In cases where the economic loss doctrine does not apply, a plaintiff is not limited to UCC theories of recovery.
Frankenmuth Mut. Ins. Co. v. Ace Hardware Corp., 899 F.Supp. 348, 350 (W.D. Mich. 1995) (citing Neibarger v. Universal Cooperatives, Inc., 439 Mich. 512, 515 (1992)). Other than a general assertion in its Statement of Issues Presented that this doctrine bars Axle's claim, however, Detroit IT offers no rationale as to why this doctrine should apply.
Plaintiffs argue that Neibarger prohibits application of the economic loss doctrine outside of commercial transactions, and therefore, does not prevent tort claims by consumers who have neither the skill nor the bargaining power to negotiate warranties or other remedies. See, e.g., Republic Ins. Co. v. Broan Mfg. Co., Inc., 960 F. Supp. 1247, 1249 (E.D. Mich. 1997) ("The [economic loss] doctrine has no application outside the commercial realm"); Frankenmuth Mut. Ins. Co. v. Ace Hardware Corp., 899 F. Supp. 348, 351 (W.D. Mich. 1995) (economic loss doctrine does not appear to apply to a consumer who purchases for personal use); Chiasson v. Winnebago, No. 01-74809, 2002 U.S. Dist. LEXIS 27462, at *29 (E.D. Mich. May 16, 2002) (recognizing distinction between commercial and consumer plaintiffs in applying economic loss doctrine—consumer's remedies should not be barred by economic loss doctrine when not in privity with manufacturer). But, the cases supporting Plaintiffs' position were decided by federal courts applying Michigan law either before or just days after Sherman expanded the economic loss doctrine to consumer transactions.
The Sixth Circuit has noted that "tort claims for damage to other property are barred by the economic loss doctrine if those losses are direct and consequential losses that were within the contemplation of the parties and that, therefore, could have been the subject of negotiations between the parties." Detroit Edison Co. v. NABCO, Inc., 35 F.3d 236, 241 (6th Cir. 1994) (damages caused to a power plant's walls and equipment when a defective pipe exploded were economic losses because the parties could have contemplated such an accident); see also Frankenmuth Mut. Ins. Co. v. Ace Hardware Corp., 899 F. Supp. 348, 351-52 (W.D. Mich. 1995). While Deem's complaint does allege damage to "other property" within his home, the only damage specified is damage to the windows themselves.
See Sullivan v. Double Seal Glass Co., 193 Mich. App. 333, 342-43 (1991); Great American Ins. Co. v. Paty's Inc., 154 Mich. App 634, 642 (1986). See also Frankenmuth Mut. Ins. Co. v. Ace Hardware Corp., 899 F. Supp. 348, 353 (W.D. Mich. 1995). "The court did not address the language in Spencer which, at the very least, suggested that the Michigan Supreme Court was abolishing privity altogether."
"Determining when the economic loss doctrine applies requires 'consideration of the underlying policies of tort and contract law as well as the nature of damages.'" Frankenmuth Mut. Ins. Co. v. Ace Hardware Corp., 899 F. Supp. 348, 351 (W.D.Mich. 1995). The principal rationale behind this doctrine is that "tort law is a superfluous and inapt tool for resolving purely commercial disputes" and therefore contract law should be the exclusive source of law governing commercial controversies.
The trial court correctly dismissed the negligence and strict liability claims. Some courts have pointed out the economic loss rule applies only in a commercial context, Bowling Green Mun. Utilities v. Thomasson Lumber Co., 902 F. Supp. 134, 136 (W.D.Ky. 1995), not to a consumer who purchases goods for personal, residential use. Frankenmuth Mut. Ins. Co. v. Ace Hardware Corp., 899 F. Supp. 348, 351 (W.D.Mich. 1995). The plaintiff in this case does not argue the doctrine is inapplicable because the sale of the bricks was not a commercial transaction.