04-15-09 Robert R. Dean, et al. v. Barrett Homes, Inc., et al.
A-1479-07T1
Plaintiffs purchased a seven-year old home that was clad in
a stucco-like product known as Exterior Insulation Finishing
System. Plaintiffs secured a home inspection that warned of
potential problems with the siding including the possibility of
structural damage and mold. Plaintiffs took no action and
completed the purchase. One year after occupying the premises,
they observed problems with the siding that ultimately resulted
in water infiltration and structural damage to sheathing,
framing and substrate of the home.
Plaintiffs filed an action against the siding manufacturer,
the builder, home inspector, and various contractors and
subcontractors. Plaintiffs sought relief under the Consumer
Fraud Act (CFA), N.J.S.A. 56:8-1 to -184, and the Products
Liability Act (PLA), N.J.S.A. 2A:58C-1 to -11. Plaintiffs
settled with all parties except the manufacturer.
We affirmed the trial judge's dismissal of the action as to
both theories and concluded that plaintiffs had no cause of
action under the CFA. As to the PLA, we affirmed the judgment
of the Law Division concluding that the "economic loss rule"
precludes relief. We relied, in part, on our recent decision in
Marrone v. Greer & Polman Constr. Inc., 405 N.J. Super. 288
(App. Div. 2009).
Judges Sabatino and Simonelli concur in the judgment. They
agree that these plaintiffs, who were alerted by their home
inspector to the sheathing's risks prior to closing, have no
cause of action against the sheathing manufacturer under either
the CFA or the PLA. However, as a matter of law, they would not
extend the "economic loss" doctrine to bar an innocent home
purchaser from recovering under the PLA from a manufacturer of a
defective component of the home, where that component causes
physical damage to other portions of the home. In that respect,
they disagree with Marrone v. Greer & Polman Construction Co.,
405 N.J. Super. 288 (App. Div. 2009), and instead would adopt
the majority approach cited in the Restatement (Third) of Torts,
Sect. 19, comment e (holding that a defective product
incorporated into an improvement to realty does not lose its
identity as a product, and can trigger strict liability for
physical damages caused to other portions of the realty).
