eNotes: Liability – June 2022 – Washington, DC
June 02, 2022
SIGNIFICANT CASE SUMMARIES
DC CASE SUMMARY
Vantage Commodities Fin. Servs. I, LLC v. Assured Risk Transfer PCC
United States Court of Appeals for the District of Columbia Circuit
31 F.4th 800
Decided: April 22, 2022
Economic loss doctrine bars claims of negligence when claimant seeks to recover purely economic losses.
An insurance broker was sued for negligence, professional negligence, negligent undertaking, and negligent misrepresentation, after a captive that it formed and managed was unable to pay for an adverse judgment. The insurance broker moved for summary judgment based on the economic loss doctrine. D.C.’s Federal Trial Court granted the Motion. The Plaintiff appealed.
The D.C. Circuit Court upheld the entry of summary judgment based on the economic loss doctrine. The economic loss doctrine prohibits claims of negligence when a claimant seeks to recover for purely economic losses. Here, Vantage sought to recover for their economic losses only.
Moreover, the Court visited the “special relationship” exception to the rule and held that it did not apply. As the Court explained, this carve-out only applies when a defendant has an obligation to care for the plaintiff’s economic well-being or an obligation that implicates the Plaintiff’s economic well-being or economic expectancies. However, this special relationship exception only applies when there is a close or intimate connection between the parties. Plaintiff could not show the “intimate nexus” that is required for the exception to apply. Thus, the D.C. Circuit agreed with the Trial Court that those claims were barred by D.C.’s economic loss doctrine.
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