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Filing # 192424059 E-Filed 02/21/2024 01:10:58 PM
IN THE CIRCUIT COURT OF
THE NINTH JUDICIAL CIRCUIT
IN AND FOR OSCEOLA
COUNTY, FLORIDA
VILLAS AT EMERALD LAKE Case No.: 2020-CA-002942
HOMEOWNERS ASSOCIATION, INC., a
Florida not for profit corporation,
Plaintiff,
v.
ROYAL OAK HOMES, LLC, a Florida
limited liability company;
Defendants.
___________________________________/
And All Related Actions.
___________________________________/
PLAINTIFF’S RESPONSE IN OPPOSITION TO ROYAL OAK
HOMES, LLC’S MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO
COUNT I OF PLAINTIFF’S SECOND AMENDED COMPLAINT FOR
NEGLIGENCE AND VICARIOUS LIABILITY AND
INCORPORATED MEMORANDUM OF LAW
Plaintiff, Villas at Emerald Lake Homeowners Association, Inc. (the
“Association”), by and through undersigned counsel, and pursuant to Fla. R. Civ. P.
1.510, hereby files its Opposition (the “Opposition”) to the Motion for Partial
Summary Judgment as to Count I of Plaintiff’s Second Amended Complaint for
Negligence and Vicarious Liability (Doc. No. 925) (“Motion”), filed by Defendant
Royal Oak Homes, LLC’s (“ROH”), and states as follows:
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I. SUMMARY OF ARGUMENT
ROH seeks summary judgment for an improvement to real property based
upon the economic loss rule (“ELR”). But the Florida Supreme Court unequivocally
abolished the economic loss rule outside of “products liability cases” in Tiara
Condo. Assoc., Inc. v. March & Mclennan Co., Inc., 110 So. 3d 399 (Fla. 2013)
(“application of the [ELR] is limited to products liability cases.”). And an
improvement to real property is not a product under well-established Florida law.
Nor is ROH a manufacturer of a product.
Because an improvement to real property is not a product, and ROH is not a
manufacturer, the ELR cannot apply. Further, ROH and several of its subcontractors
were licensed contractors who provided construction services at the Project. As the
party holding the burden of persuasion on its ELR affirmative defense at trial, and
as the Movant, ROH must provide sufficient record evidence and law supporting its
assertion that the ELR bars the Association’s claims, in whole or in part. ROH fails
to do so, therefore its Motion should be denied.
II. BACKGROUND AND INTRODUCTION
1. The instant case arises out of construction and design defects that exist
at the Villas at Emerald Lake Townhomes, located in Osceola County, Florida (the
“Community”).
2. The Villas at Emerald Lake townhome community contains 12 two-
2
story residential buildings, comprised of 88 individual townhomes, as well as a
clubhouse and other common areas. See Compl. ¶ 39; see also the operative Second
Am. Compl., ¶¶ 40-41.
3. ROH constructed and developed 10 buildings comprised of 76 units
(units 110-149; and 162-197) within the Community of the townhomes (“Project”).
See Compl., ¶ 41 and Compl. Fn. 2.; see also Second Am. Compl., ¶ 42; and Second
Am. Compl. Fn. 2.
4. ROH admitted it contracted with independent contractors to construct
the Community. ROH also admits the size and composition of the Community. See
ROH’s Answer, ¶¶ 13, 41, and 43.
5. As the developer, ROH owed a statutory duty 1 to the public (to whom
it marketed the townhomes), and particularly to the Townhome purchasers (who
make up the Association) to comply with the Florida Building Code (“FBC” or
“Code”).
6. Further, as the licensed general contractor and permit applicant, ROH
owed a common law duty to supervise, direct, and manage the construction services
at the Community in a non-negligent manner, including compliance with the FBC,
plans, specifications, industry standards, and in a good and workmanlike manner.2
1
Under Fla. Stat. 553.84.
2
Plaintiff has separately filed a Motion for Summary Judgment against ROH for its Non Delegable Duty to
construct the Project. (Doc. No. 941)
3
7. The Project was ultimately constructed with numerous Code violations.
8. On November 23, 2020, the Association filed its initial Complaint in
this action, which asserts three causes of action against ROH for: (i) Negligence and
Vicarious Liability (“Count I”); (ii) Breach of the FBC (“Count II”); and (iii) Breach
of Implied Warranties (“Count III”). All Counts relate to the negligent and defective
construction of the Community. See Complaint (Doc. No. 2); see also Second
Amended Complaint (Doc. No. 506).
9. The Association filed its operative Second Amended Complaint against
the Summary Judgment Defendants alleging negligence and violation of the building
code pursuant to § 553.84, Fla. Stat. See Plaintiff’s Second Amended Complaint
(Doc. No. 506).
10. On or around March 24, 2023, ROH filed its Unopposed Motion for
Leave to file its Second Amended Crossclaim Complaint, wherein which it asserted
its eleventh affirmative defense alleging that the Association’s claims should be
barred under the ELR. (Doc. No. 739).
11. On January 19, 2024, ROH filed its Motion arguing, consistent with its
eleventh affirmative defense, that the Association’s claims should be barred under
the Economic Loss Rule. (Doc. No. 925).
12. On January 22, 2024, the Association filed its own Motion for Partial
Summary Judgment as to Various Defendants’ Economic Loss Rule Affirmative
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Defenses, arguing: (1) Summary Judgment Defendants waived the affirmative
defense of ELR because Defendants’ pleadings are insufficient as a matter of law;
(2) the Florida Supreme Court unequivocally abolished the economic loss rule
outside of “products liability cases” in Tiara Condo; and the Villas at Emerald Lake
Community – an improvement to real property – is not a product under Florida law;
the ELR does not apply to licensed professionals like ROH or HMC; and (4) theELR
does not apply to claims for violation of the Florida Building Code. (Doc. No. 940).
13. Here, the Association incorporates the arguments made therein and
further asserts: (1) ROH fails to cite any binding authority in support of its position;
(2) the Project is an improvement to real property – not a product – and ROH is not
a manufacturer; and (3) Even if the ELR applied (and it does not) ROH’s negligence
has caused damage to other property, and therefore the ELR does not bar the
Association’s action.
14. Accordingly, under the Florida Supreme Court’s ruling in Tiara, ROH
fails to meet its burden because the “court must draw every inference in favor of the
non-moving party [the Association] when considering whether a genuine issue of
material fact exists. . .” Allen v. Board of Public Educ. For Bibb Cnty., 495 F. 3d
1306, 1313 (11th Cir. 2007) (emphasis added).
III. MEMORANDUM OF LAW
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A. Summary Judgment Standard.
Summary judgment is only appropriate where the pleadings, depositions, and
affidavits show that there is no genuine issue of material fact, and that the movant
is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317,
322 (1986).
An issue of fact is “material” if it is a legal element of the claim under
applicable substantive law which might affect the outcome of the case.
Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986); Allen v. Tyson
Foods, 121 F.3d 642, 646 (11th Cir.1997). An issue of fact is “genuine”
if the record taken as a whole could lead a rational trier of fact to find
for the non-moving party. Allen, 121 F.3d at 646. On a motion for
summary judgment, the Court must view all the evidence and all
factual inferences drawn therefrom in the light most favorable to
the non-moving party, and determine whether that evidence could
reasonably sustain a jury verdict. Celotex, 477 U.S. at 322-23; Allen,
121 F.3d at 646. While the burden on the movant is great, the opposing
party has a duty to present affirmative evidence in order to defeat a
properly supported motion for summary Judgment. Anderson, 477
U.S. at 252.
Downs v. U.S., No. 06-20861-CIV, 2007 WL 842136 at *3 (S.D. Fla. Mar. 20, 2007).
(Emphasis added).
Importantly, Fla. R. Civ. P. 1.510 does not immediately shift the burden of
disproving an affirmative defense to a nonmovant; that burden remains with ROH
until satisfied. On April 29, 2020, the Florida Supreme Court issued Opinion No.
SC20-1490, In re: Amendments to Florida Rule of Civil Procedure 1.510, noting that
the evidentiary burden that a party must meet at trial is the touchstone that
accurately measures whether a genuine issue of fact exists:
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First, those applying new rule 1.510 must recognize the fundamental
similarity between the summary judgment standard and the directed
verdict standard. … under both standards, the substantive evidentiary
burden of proof that the respective parties must meet at trial is the only
touchstone that accurately measures whether a genuine issue of
material fact exists to be tried.
In re Amendments to Fla. Rule of Civil Procedure 1.510, No. SC20-1490, 6-7 (Fla.
Apr. 29, 2021) (emphasis added) (“Amendment”). Thus, while “a moving party that
does not bear the burden of persuasion at trial can obtain summary judgment without
disproving the nonmovant’s case,” the converse is equally true: a movant with the
burden of proof must disprove the nonmovant’s case - here, that there is no genuine
issue of material fact as to the ELR Defense:
If the movant bears the burden of persuasion at trial, “that party must
support its motion with credible evidence—using any of the materials
specified in Rule 56(c)—that would entitle it to a directed verdict if not
controverted at trial.” Celotex, 477 U.S. at 331. Any doubt regarding
whether a trial is necessary must be resolved in favor of the
nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
United States v. Friedman, No. 15-80407-CIV, 2015 WL 12550904, at *1 (S.D. Fla.
July 7, 2015).
The ELR is an affirmative defense. Republic Nat. Bank v. Araujo, 697 So. 2d
164, 166 (Fla. 3rd DCA 1997) (“[Defendant]’s economic loss rule argument was
effectively waived where it was not timely raised in [Defendant]’s answer or
affirmative defenses . . .”). Therefore, ROH has the burden of persuasion at trial.
Hess v. Philip Morris USA, Inc., 175 So. 3d 687, 694–95 (Fla. 2015) (“The defendant
7
has the burden to prove an affirmative defense.”). Accordingly, ROH has the burden
to show that it is entitled to a directed verdict on its affirmative defense under the
ELR when all evidence and inferences are drawn in favor of the Association.
B. Summary Judgment is Properly Entered Against a Movant Under Fla.
R. Civ. P. 1.510(f).
Under the newly amended Fla. R. Civ. P. 1.510(f)(1), the Court may “grant
summary judgment for a nonmovant.” Under the Florida Supreme Court’s Opinion,
a party “that does not bear the burden of persuasion at trial can obtain summary
judgment without disproving the nonmovant’s case.” Opinion, pg. 6. “Under Celotex
and therefore the new rule, such a movant can satisfy its initial burden of production
in either of two ways: ‘[I]f the nonmoving party must prove X to prevail [at trial],
the moving party at summary judgment can either produce evidence that X is not so
or point out that the nonmoving party lacks the evidence to prove X.” Id., pg. 6-7
(emphasis added). “A movant for summary judgment need not set forth evidence
when the nonmovant bears the burden of persuasion at trial.” Id.
Thus, it logically follows that where a movant bears the burden of proof at
trial (as ROH does, asserting summary judgment under an affirmative defense of
ELR), the nonmovant (Association) can simply point out that the moving party
“lacks the evidence to prove” that the ELR applies and therefore obtain summary
judgment on an affirmative defense like that sought by ROH.
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IV. ARGUMENT
A. The Economic Loss Rule applies only to products liability cases,
and this is not a products liability case.
The Florida Supreme Court has unequivocally abolished the ELR except for
“products liability cases,” which this case is not. Tiara Condo. Assoc., Inc., 110 So.
3d 399 (Fla. 2013) (“application of the [ELR] is limited to products liability cases.”).
Florida courts, including the First District Court of Appeal (“DCA”), have been clear
that improvements to real property are NOT products for the purpose of products
liability actions. Harrell v. Ryland Group, 277 So. 3d 292, 293 (Fla. 1st DCA 2019).
Accordingly, the ELR does not apply to this case.
In Tiara, the Florida Supreme Court stressed that “despite [the Court’s] effort
to roll back the economic loss rule to its products liability roots, we left untouched a
number of exceptions which continue to extend the application of the rule beyond
our original limited intent.” Tiara Condo. Ass'n v. Marsh & McLennan Cos., 110 So.
3d 399, 406 (Fla. 2013). The Court then held that “[h]aving reviewed the origin and
original purpose of the economic loss rule, and what has been described as the
unprincipled extension of the rule, we now take this final step and hold that the
economic loss rule applies only in the products liability context. We thus recede
from our prior rulings to the extent that they have applied the economic loss
rule to cases other than products liability.” Id. at 407.
Since Tiara, Florida Courts have recognized that the Economic Loss Rule
9
does not apply to construction defect matters and applies only to products liability
cases. For example, in Grace and Naeem Uddin, Inc. v. Singer Architects, Inc., the
Fourth DCA stated the following:
The architect also relies on a per curiam decision of ours in which
the dissent suggested the Economic Loss Rule barred a contractor
from pursuing economic damages in tort. D.I.C. Commercial Constr.
v. Broward County, 668 So. 2d 697, 698 (Fla. 4th DCA 1996). Since
D.I.C. Commercial Constr., our Supreme Court has limited the
application of the Economic Loss Rule to products liability actions.
Tiara Condo. Ass'n v. Marsh & McLennan Cos., 110 So. 3d 399, 407
(Fla. 2013).”).
278 So. 3d 89, 93, 2019 WL 4049511, at n.2 (Fla. 4th DCA 2019).
Likewise, in Kuehne v. FSM Capital Mgmt., LLC, 12-80880-CIV, 2013 WL
1814903 (S.D. Fla. Apr. 29, 2013), the Court rejected the application of the
economic loss rule to plaintiff’s negligence claim arising from defendant’s
mismanagement of tax accounts, holding that “[b]ecause this is not a products-
liability case, however, the economic-loss rule can no longer serve as a basis under
Florida law for dismissing Plaintiff's claims”). See also F.D.I.C. v. Floridian Title
Grp. Inc., 12-21890-CIV, 2013 WL 5237362 * 7 (S.D. Fla. Sept. 17, 2013) (Chief
Judge Moreno denying summary judgment by rejecting the defendant’s argument
that negligence-based claims “inextricably intertwined” with contract-based claims
are barred by the economic loss rule: “Defendant is apparently operating under the
assumption that it can unilaterally rebrand the Economic Loss Rule as the
Inextricable Intertwining Rule and that the Court will buy this otherwise defective
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product. The Court will make no such purchase. The Economic Loss Rule applies
only in the products liability context and this Court declines to rename the
Economic Loss Rule.”). The present case is not a products liability case and, as such,
this Court should deny ROH’s Motion.
1. Florida courts have repeatedly held that projects like Villas at
Emerald Lake are improvements to real property and are not
products subject to the Economic Loss Rule.
Florida law is very clear that structural improvements to real property are not
considered products for purposes of products liability actions. See Easterday v.
Masiello, 518 So. 2d 260 (Fla.1988) (jail facility); Seitz v. Zac Smith & Co., Inc., 500
So. 2d 706 (Fla. 1st DCA 1987) (floodlight tower); Craft v. Wet ‘N Wild, Inc., 489
So. 2d 1221 (Fla. 5th DCA 1986) (amusement park water slide); Neumann v. Davis
Water and Waste, Inc., 433 So. 2d 559 (Fla. 2d DCA 1983), review denied, 441 So.
2d 632 (Fla.1983) (sewage treatment tank); and Edward M. Chadbourne, Inc. v.
Vaughn, 491 So.2d 551 (Fla.1986) (public road). Plaza v. Fisher Dev., Inc., 971 So.
2d 918, 921 (Fla. 3d DCA 2007).
In Easterday v. Masiello, 518 So. 2d 260, 261 (Fla.1988), the Florida
Supreme Court held that “products liability does not apply to structural
improvements to real estate.” Similarly, the First DCA, relying on Easterday, held
“that [a] movie theater seating system was a structural improvement to real
property and, thus, not a product.” (emphasis added). Simmons v. Rave Motion
11
Pictures Pensacola, L.L.C., 197 So. 3d 644, 647 (Fla. 1st DCA 2016).
The Court found that the general contractor was not the manufacturer of the
theater seating system, that the seating system is an integral part of the movie
theatre's operation, as it was installed as part of the construction of the theater, and,
accordingly, the theater seating system was an improvement to real property and not
a product subject to a products liability claim. Id. As such, no action for products
liability existed as against the general contractor.
Likewise, in Harrell v. Ryland Group, the First DCA held that an attic ladder
installed in a home by the builder as part of the initial construction, and sold as part
of the home, was not a product subject to products liability claims. 277 So. 3d 292,
293 (Fla. 1st DCA 2019) (holding that both the ladder and the home were
improvements to real property and not subject to products liability claims); see
also Bernard Schoninger Shopping Ctrs., Ltd. v. J.P.S. Elastomerics, Corp., 102
F.3d 1173, 1175 (11th Cir. 1997) (finding section 95.11(3)(c) applicable to the
appellant's claims stemming from a leaky roof the appellee had installed because
“[t]he installation of over 100,000 square feet of membrane and fiberboard [on top
of the existing roof] at a cost of tens of thousands of dollars is a ‘valuable addition’
to the Kmart building, and it therefore qualifies as an ‘improvement’” (citation
omitted)); Jackson v. L.A.W. Contracting Corp., 481 So. 2d 1290, 1292 (Fla 5th DCA
1986) (“[T]he concept of strict liability applies to consumer products and does not
12
apply to improvements to real property.”).
2. Numerous Florida trial courts have applied the Florida Supreme
Court’s ruling in Tiara that the Economic Loss Rule does not apply to
construction defect cases against contractors.
In Islander Townhome Homeowners Association, Inc. v. KB Home
Jacksonville, LLC No. CA19-0670, (Fla. 7th Cir. Ct., St. Johns County, Oct. 15,
2019, J. Smith), a construction defect case, the Court held as follows:
Defendant [a subcontractor] argues that Count IX – Negligence is
barred by the Economic Loss Rule. The Motion to dismiss Count IX
– Negligence is hereby DENIED. In Tiara Condominium Ass'n, Inc.
v. Marsh & McLennan Companies, Inc., 110 So. 3d 399,401 (Fla.
2013) the supreme court held that the Economic Loss Rule applies
only in the products liability context and receded from prior rulings
to the extent that they have applied the Economic Loss Rule to cases
other than products liability.
See Order attached as Exhibit A.
Similarly, in 22 Lantern v. Arlington Construction Services, LLC, No. 2016-
CA-003849 (Fla. 4th Cir. Ct., Duval County, September 12, 2022, J. Aho), in the
context of two apartment complex construction projects, the Court also held that
such projects are not products:
The economic loss rule is limited to products liability cases. See Tiara
Condominium Association, Inc. v. Marsh & McLennan, Inc., 110 So.3d
399, 401 (Fla. 2013). Plaintiff’s claims against ACS are not product
liability claims; therefore, ACS’ fourth affirmative defense [economic
loss rule] fails as a matter of law.
See Order attached as Exhibit B (emphasis added).
In Latitude on the River Condominium Ass’n Inc v. Allied Tube & Conduit
13
Crop, 2020 WL 1038599 (Fla. 11th Cir. Ct.), the Court denied the Defendant’s
motions for summary judgment stating that,
“The Economic Loss Rule, as limited to product liability, does not
shelter non-manufacturer and non-distributor defendants.
Therefore, the Miami, Riverfront, Suffolk, and Summers’ Summary
Judgment motion against Plaintiff is denied on the Economic Loss
Rule.”
Id. at *6. The Court was clear to note that Miami Riverfront Partners, LLC was the
“Developer (construction defendant),” Suffolk Construction was the “General
Contractor (construction defendant),” and Summers was the “Fire Suppression
System subcontractor to Suffolk (construction defendant).” Id. at *2. While the
Latitude Court granted summary judgment as to the distributor and manufacturer
defendants who supplied products that were installed at the condominium by others,
the Court denied summary judgment for the developer, general contractor, and
subcontractors who performed construction service. Id.
Additionally, in Mann v. Island Resorts Development Inc., 2008 WL 5381381,
at *2 (N.D. Fla. 2008), the plaintiffs alleged that “Yates (as a general contractor)
violated the Florida Building Code, [was] negligent, and [breached the] warranty”
as a result of “drainage problems on the [condominium] terrace that eventually
caused damage to the condominium in the form of mold and water damage.”
(emphasis added). The Mann court held that for a general contractor, “[t]he
Economic Loss Rule is inapplicable to Yates because this case does not involve a
14
cause of action against a manufacturer or distributor for economic loss caused by a
product that damages itself, nor does this case involve parties who enjoy privity of
contract,” and therefore denied Yates’s motion to dismiss. Id. (emphasis added).3
In Riverwalk at Sunrise Homeowners Association, Inc. v. Biscayne Painting
Corp., 2015 WL 13273069 (Fla. 17th Cir. Ct. January 12, 2015) (J. Mily Powell), a
homeowners association sued a paint company for defective installation of exterior
paint on the association’s buildings. The Court denied the defendant painter’s motion
to dismiss the plaintiff’s fraud and negligence claims based on the Economic Loss
Rule, finding the argument “without merit” and citing Tiara.
Notably, ROH offers no facts or evidence to establish that the townhomes
within the Project at issue are products; instead, ROH offers mere supposition and
conjecture as to how the townhomes may have been purchased. Further, ROH relies
on non-binding federal case law to define townhomes as a product. See generally,
Motion, Doc. No. 925.
Additionally, ROH’s reliance on Gazzarra v. Pulte Home Corp. to illustrate
this point is unpersuasive. 207 F. Supp. 3d 1306, 1209 (M.D. Fla. 2016). Gazzarra
is not binding on this Court as it is a federal trial court opinion on a Motion to
Dismiss. In Gazzarra, the Court did not have to discern whether there was any
evidence supporting whether a townhome is a product or not. Id. Here, ROH holds
3
The Supreme Court in Tiara abolished the “privity” application of the Economic Loss Rule.
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the evidentiary burden in showing as much. It fails to do so.
While the Association disputes that a townhome is a product, that dispute is
largely irrelevant in this case. Irrespective of whether a townhome may be
considered a product for some other type of case, the issue before the Court is not to
decide whether a townhome could be considered a product. Rather, the issues that
the Court must address are (1) whether this is a “products liability” action; (2) and
whether ROH can be considered a manufacturer or distributor of a product when all
inferences are drawn in favor of the Association, or instead if ROH contracted to
provide construction services as an installer. As shown below, ROH is neither a
manufacturer nor distributor of a product and this case is not a “products liability
case.” For this reason, ROH’s Motion must be denied.
i. Negligent construction of an improvement to real property is not
a “products liability case” under Florida law, and the ELR
therefore does not apply.
A contractor (or subcontractor) is not subject to strict product liability and thus
does not have the protection of the ELR. Jackson v. L.A.W. Contracting Corp., 481
So. 2d 1290, 1292 (Fla 5th DCA 1986) (“[T]he concept of strict liability applies to
consumer products and does not apply to improvements to real property.”). The use
of building materials in the ordinary course of providing installation services does
not transform an installer into a distributor or manufacturer. Id. (holding that road
contractor was not liable in warranty as a distributor for defective sealant applied to
16
road surface); Arvida Corp. v. A.J. Indus., Inc., 370 So. 2d 809, 810, 812 (Fla. 4th
DCA 1979) (per curiam) (contractor not liable under UCC for parts and materials
used in repairing bathroom fixtures). Florida law is very clear that structural
improvements to real property are not generally considered products for purposes of
products liability cases. See e.g., Easterday v. Masiello, 518 So. 2d 260, 261
(Fla.1988) (“products liability does not apply to structural improvements to real
estate.”). Similarly, the First DCA, relying on Easterday, held “that [a] movie theater
seating system was a structural improvement to real property and, thus, not a
product.” Simmons v. Rave Motion Pictures Pensacola, L.L.C., 197 So. 3d 644, 647
(Fla. 1st DCA 2016) (emphasis added).
In Simmons, Isaac Simmons was injured when the welding in a movie theater
seat broke. Id. at 645. Mr. Simmons sued “Universal the general contractor that
bought the seating system and installed it.” Id. The Court found that “Universal…
[was] not the manufacturer of the theater seating system. There is also evidence that
the seating system is an integral part of the movie theatre's operation, as it was
installed as part of the construction of the theater, and the entire seating system
was bolted to the floor.” Id. (Emphasis added). For this reason, the Court held that
the theater seating system was not a product for purposes of products liability, but
rather was an improvement to real property. As such, no action for products liability
existed as against the general contractor.
17
Like Universal, ROH did not manufacture a product, but rather constructed
an improvement to real property as installers. Accordingly, because the ELR was
abolished in Florida except for “products liability cases,” and this is not a products
liability case, the ELR does not apply.
Likewise, in Harrell v. Ryland Group, the First District recently held that an
attic ladder installed in a home by the builder as part of the initial construction, and
sold as part of the home, was not a product subject to products liability claims.
Harrell v. Ryland Group, 277 So. 3d 292, 293 (Fla. 1st DCA 2019). Rather, the Court
held that both the ladder and the home were improvements to real property and not
subject to products liability claims. See also Bernard Schoninger Shopping Ctrs.,
Ltd. v. J.P.S. Elastomerics, Corp., 102 F.3d 1173, 1175 (11th Cir.
1997) (finding section 95.11(3)(c) applicable to the appellant's claims stemming
from a leaky roof the appellee had installed because “[t]he installation of over
100,000 square feet of membrane and fiberboard [on top of the existing roof] at a
cost of tens of thousands of dollars is a ‘valuable addition’ to the Kmart building,
and it therefore qualifies as an ‘improvement’”)(citation omitted). Jackson, 481 So.
2d at 1292 (“[T]he concept of strict liability applies to consumer products and
does not apply to improvements to real property.”).
While Florida law is clear that claims relating to improvements to real
property are not product liability claims, ROH’s Motion further fails because neither
18
the Association nor ROH presents a single allegation that the products used in the
construction of the Project were defective. Simply put, this is a case concerning the
negligent construction (i.e., improvement) of townhomes, not issues with any
defective product(s). Without question, the townhomes are improvements to real
property.
Accordingly, as a matter of law the ELR does not and cannot apply in this
case because binding Florida law is clear that improvements to real property are not
considered products for product liability purposes. The Court should accordingly
deny ROH’s Motion.
3. The Florida Supreme Court has been clear that the Economic Loss
Rule only applies to manufacturers and distributors subject to strict
products liability, not to providers of construction services such as
Summary Judgment Defendants.
Further, Tiara and American Aviation hold clearly that the Economic Loss
Rule is strictly limited to circumstances where “the defendant is a manufacturer or
distributor of a product.” Indemnity Insurance Co. of North America v. American
Aviation, Inc., 891 So. 2d 532 (Fla. 2004); Tiara, 110 So. 3d at 405. This is because
only a manufacturer or distributor of a product is subject to products liability claims
(i.e., strict liability), and the Economic Loss Rule has been abolished except for
product liability claims.
American Aviation and Tiara decisions both held that the Economic Loss Rule
is extremely limited in Florida and has no application in the context of building
19
construction, because Florida recognizes a clear distinction between contractors who
furnish services (such as ROH), and manufacturers and distributors who supply
products, in connection with improving real property. See Jackson v. L.A.W.
Contracting Corp., 481 So. 2d 1290, 1292 (Fla 5th DCA 1986) (stating that asphalt
installer in that case was a provider of services and not goods, distinguishing cases
in which contractor applied road sealant from one in which contractor applied and
manufactured road sealant).
Since a contractor or subcontractor is not subject to strict product liability, the
ELR affirmative defense is inapplicable. Jackson, at 1292 (Fla 5th DCA 1986)
(“[T]he concept of strict liability applies to consumer products and does not apply
to improvements to real property.”). The use of building materials in the ordinary
course of providing installation services does not transform a subcontractor/installer
into a distributor. Id. See also Segovia at World Commerce Homeowners’
Association, Inc. v. Mattamy Florida, LLC, Case No CA20-573 (Fla. 7th Cir. Ct.
April 9, 2021) (J. Janesk) (Denying Defendant’s Motion to Dismiss based on
application of the economic loss rule, stating that Defendant “does not sit in the same
position of the fire suppression system fittings in 2711 Hollywood. SEGOVIA
alleges that BFS was negligent in the preparation and installation of windows.”). See
Exhibit C.
The distinction between a contractor and a manufacturer or distributor who
20
simply provides a product installed by others, cannot be overlooked. For example,
in Casa Clara, “[t]he issue [was] whether a homeowner can recover for purely
economic losses from a concrete supplier under a negligence theory.” Casa Clara
Condominium Ass'n, Inc. v. Charley Toppino and Sons, Inc., 620 So. 2d 1244, 1245
(Fla. 1993). The district court also held that Toppino, a supplier, had no duty to
comply with the building code. Id. at 1245. Notably, the Supreme Court in Tiara
expressly receded from Casa Clara in an effort to curtail the Economic Loss Rule.
“We thus recede from our prior rulings to the extent that they have applied the
economic loss rule to cases other than products liability.” Tiara at 407
Just as in Latitude, Mann, and Segovia, ROH and its subcontractors in this
case are not manufacturers or distributors of products, but rather providers of
construction services for improvements to real property. Accordingly, ROH cannot
sufficiently prove its ELR affirmative defense and, therefore, the Motion should be
denied.
4. Other areas of Florida Law clearly distinguish between products
liability claims and negligent construction of real property.
Florida law distinguishes between product manufacturers subject to strict
liability and a twelve-year statute of repose, and developers of real property who are
not subject to strict liability and have a ten-year statute of repose. C.f. § 95.11(3)(c),
Fla. Stat. (2018) (providing a ten-year statute of repose for construction defect
lawsuits); § 95.031(2)(b), Fla. Stat. (providing for a twelve-year statute of repose for
21
products liability actions).
The applicable statue repose in the construction defect case for this
Community is section 95.11(3)(c), Florida Statutes, which states in part:
“(c) An action founded on the design, planning, or
construction of an improvement to real property, with the
time running from the date of actual possession by the
owner, the date of the issuance of a certificate of
occupancy, the date of abandonment of construction if not
completed, or the date of completion of the contract or
termination of the contract between the professional
engineer, registered architect, or licensed contractor and
his or her employer, whichever date is latest; except that,
when the action involves a latent defect, the time runs from
the time the defect is discovered or should have been
discovered with the exercise of due diligence. […]”
§ 95.11(3)(c), Fla. Stat. (2018) (emphasis added).
The Association did not allege any products liability claims in its Complaint
and no party is arguing that the applicable statute of repose applicable in the present
case is section 95.031(2)(b), Florida Statutes, which is the statute of repose for
products liability claims. Clearly, this a construction defect claim against contractors
for their defective construction services throughout the course of an improvement to
real property and is not a product liability claim. Accordingly, the ELR does not
apply and the Motion should be denied.
C. Alternatively, the Economic Loss Rule does not apply to licensed
professionals.
Over the years, the courts have recognized several exceptions to the judicially
22
created Economic Loss Rule, including the professional negligence exception.
Martinez v. QBE Specialty Insurance Company, 2018 WL 4354831 (Fla. M.D. 2018)
(“The professional negligence exception to the economic loss rule was originally
developed in Moransais, in which the Florida Supreme Court addressed whether a
purchaser of a home had a cause of action for professional malpractice against an
individual engineer who was an employee of the engineering corporation who
performed engineering services.”). This exception to the Economic Loss Rule
continues to remain valid post-Tiara as recognized Marino v. Phaidon International,
Inc.:
Next, Plaintiff argues this case falls within the exception allowed for
the “quasi-contractual professional negligence theory.” See Monroe,
746 So.2d 539. The Court agrees that Florida law allows for such an
exception. See Moransais v. Heathman, 744 So.2d 93, 979 (1999)
(economic loss rule did not bar homeowner’s professional negligence
claim against engineers who inspected home and allegedly failed to
detect and disclose certain defects, even where there was no personal
injury or property damage other than the defects in the home inspected).
Marino, 2022 WL 1913266 (Fla. M.D. 2022); see also, Jerue v. Drummond
Company, Inc.:
However, like with most rules, over time various exceptions to the
economic loss rule have gained acceptance. For instance, persons who
suffer purely economic damages due to professional malpractice may
now sue under a theory of negligence despite the absence of bodily
harm or property damage. Monroe, 746 So. 2d at 535-36.
Jerue, 2017 WL 10876737 (Fla. M.D. 2017).
ROH’s ELR affirmative defense is rendered moot because it is a licensed
23
professional. To do any construction work on the Project, ROH was required to pull
permits, which required using its general contractor license. Florida law requires any
person or entity engaged in the business of contracting to be certified after passing
an examination. See Section 489.113(1), Florida Statutes.
Further, William Colby Franks, a certified general contractor, served as the
qualifying agent for ROH so that ROH could construct the Community. See
Deposition Transcript of William Colby Franks, dated September 21, 2022, attached
as Exhibit D, pp. 21:17-23; and 24:15-19. During all relevant time periods, Mr.
Franks was an employee of and equity partner in ROH. Id. Additionally, one of
ROH’s subcontractors, Hugh Macdonald, Inc.’s (“HMC”) principal, owner, and
corporate representative testified that he holds both a general contractor license and
a roofer’s license. See Deposition Transcript of Hugh Macdonald, dated July 13,
2023, attached as Exhibit E, pp. 12:16-23; and 14:14-15:24.
Under Florida law, licensed contractors are professionals. See Sunset Beach
Investments, LLC v. Kimley-Horn and Associates, Inc., 207 So. 3d 012 (Fla. 4th DCA
2017) (holding that “[a]t a minimum, in a profession where a license exists, the
existence of a license is a valid barometer for determining whether a person is
classified as a professional.”).
As such, ROH and HMC are licensed “professionals” under Sunset Beach,
and thus the Economic Loss Rule cannot bar the Association’s negligence claims
24
against ROH and its subcontractors. Therefore, ROH’s Motion should be denied.
D. Even if the ELR did apply (it does not), and this were a “products
liability case” (it is not), the ELR still would not apply to the
Association’s claim because DRH’s work has caused damage to other
property.
The ELR applies only to claims brought with respect to a defective product
which only damages “itself.” See Tiara, 110 So. 2d at 405. The Supreme Court has
explained that this excludes cases where two products are combined to form another
substance, such as the case where subcontractors and contractors combine other
materials that compose a structural improvement to real property. See Adobe Bldg.
Ctrs., Inc., v. Reynolds, 403 So. 2d 1033, 1033, 1035 (Fla. 4th DCA 1981), review
dismissed, 411 So. 2d 380 (Fla. 1981) (holding that retailer or wholesaler is subject
to tort liability when purchaser combines product with another product or substance
and suffers economic damages from use of the final amalgam). Adobe was expressly
disapproved by the Florida Supreme Court. See Casa Clara Condo. Ass’n v. Charley
Toppino & Sons, Inc., 620 So. 2d 1244, 1248 (Fla. 1993). Accordingly, where
defective building materials damage materials that come from different suppliers,
the ELR does not apply because these manufacturers did not supply “a building” as
their product, only constituent parts. Accordingly, ROH’s Motion should be denied.
V. CONCLUSION
As a matter of law, the Economic Loss Rule does not and cannot apply in this
case because Florida law is clear that improvements to real property are not
25
considered products for product liability purposes. Without question, the townhomes
are improvements to real property. Furthermore, the Association’s claims pertain to
defective construction services provided by ROH and its subcontractors, not
defective products manufactured or supplied by the same – this is the same as the
case in Mann, Latitude, 22 Lantern, Segovia and Jackson. Accordingly, the
Economic Loss Rule is inapplicable. Further, the ELR also does not apply to licensed
professionals like ROH or HMC, and also does not apply to building code violation
claims. Lastly, ROH failed to support its affirmative defense of the economic loss
rule with record evidence. For these reasons, the Court should deny ROH’s Motion.
DATED: This 21st day of February, 2024.
BALL JANIK LLP
By: /s/ Keegan A. Berry__
Phillip E. Joseph, FL Bar No. 1000368
Evan J. Small, FL Bar No. 57306
Keegan A. Berry FL Bar No. 106279
Jeffrey A. Widelitz FL Bar No. 105642
Christopher S. Tribbey, FL Bar No. 100311
Kasey L. Joyce, FL Bar No. 1024705
201 E Pine Street, Suite 600
Orlando, FL 32801
Telephone: (407) 455-5664
Facsimile: (407) 902-2105
pjoseph@balljanik.com
esmall@balljanik.com
kberry@balljanik.com
26
jwidelitz@balljanik.com
ctribbey@balljanik.com
kjoyce@balljanik.com
dtodd@balljanik.com
cbetancourt@balljanik.com
bburton@balljanik.com
orlandodocket@balljanik.com
Counsel for Plaintiff Villas at Emerald Lake
Homeowners Association, Inc.
CERTIFICATE OF SERVICE
I certify that a true copy of the foregoing has been filed via the Florida Courts
E-Filing Portal on February 21, 2024.
/s/ Keegan A. Beryy
Keegan A. Berry Esq.
SERVICE LIST
LUIS PRATS THAMIR A.R. KADDOURI, JR.
LANNIE D. HOUGH, JR. PENELOPE T. ROWLETT
JAMES MICHAEL WALLS BETH ANN TOBEY
27
ROBIN H. LEAVENGOOD Law Office of Thamir A.R. Kaddouri,
Carlton Fields, P.A. Jr. P.A.
4221 W. Boy Scout Boulevard 3220 West Cypress Street
Tampa, FL 33607-5780 Tampa, FL 33607
(813) 223-7000 (813) 879-5752
lprats@carltonfields.com thamir.kaddouri@tampalaw.org
lhough@carltonfields.com service@tampalaw.org
mwalls@carltonfields.com beth.tobey@tampalaw.org
rleavengood@carltonfields.com
mramos@carltonfields.com Counsel for Defendant, Imperial
nbonilla@carltonfields.com Building Corporation
ejohnson@carltonfields.com
krick@carltonfields.com
Counsel for Defendant, Royal Oak
Homes, LLC
PAUL SIDNEY ELLIOTT PETER J. KAPSALES
P.O. Box 274204 MARGARET M. EFTA
Tampa, FL 33688-4204 Milne Law Group, P.A.
(813) 265-1314 301 E. Pine Street, Suite 525
pse@psejd.com Orlando, FL 32801
(321) 558-7700
Counsel for Defendant, Hugh pkapsales@milnelawgroup.com
MacDonald Construction, Inc. (HMC) mefta@milnelawgroup.com
eservice@milnelawgroup.com
DENISE M. ANDERSON
ASHLEY M. MATTINGLY Counsel for Defendant, Weathermaster
Butler Weihmuller Katz Craig LLP Building Products, Inc.
400 N. Ashley Drive, Suite 2300
Tampa, FL 33602
(813) 281-1900
danderson@butler.legal
amattingly@butler.legal
krieck@butler.legal
rjorge@butler.legal
Co-Counsel for Defendant, Hugh
MacDonald Construction, Inc.
DENISE M. ANDERSON ANDREW E. HOLWAY
28
DAVID A. MERCER J. ROCCO CAFARO
Butler Weihmuller Katz Craig, LLP Hill Ward Henderson
400 N. Ashley Drive, Suite 2300 101 E. Kennedy Blvd., Suite 3700
Tampa, FL 33602 Tampa, FL 33602
danderson@butler.legal (813) 221-3900
dmercer@butler.legal andrew.holway@hwhlaw.com
krieck@butler.legal derrick.calandra@hwhlaw.com
rjorge@butler.legal jill.kuty@hwhlaw.com
tbarry@butler.legal kathy.wernsing@hwhlaw.com
rocco.cafaro@hwhlaw.com
Counsel for Defendant, Don King’s tracy.coale@hwhlaw.com
Concrete, Inc.
Counsel for Defendant/Cross
Defendant, Weintraub Inspections &
Forensics, Inc. n/k/a Weintraub
Engineering and Inspections, Inc.
JAYNE ANN PITTMAN BRUCE R. CALDERON
NATALIE C. FISCHER ALICIA Z. GROSS
Conroy Simberg BARRI A. REISCH
Two South Orange Avenue, Suite 300 Milber Makris Plousadis & Seiden,
Orlando, FL 32801 LLP
(407) 649-9797 1900 NW Corporate Blvd.
eserviceorl@conroysimberg.com East Tower, Suite 440
jpittman@conroysimberg.com Boca Raton, FL 33431
mmaitland@conroysimberg.com (561) 994-7310
nfischer@conroysimberg.com bcalderon@milbermakris.com
azgross@milbermakris.com
Counsel for Defendant, Advanced breisch@milbermakris.com
Wrapping and Concrete Solutions of kmcdowell@milbermakris.com
Central Florida, Inc. sskowronski@milbermakris.com
Counsel for Defendant/Cross-
Defendant, Brown + Company
Architecture, Inc.
JENNIFER MILLER BROOKS S. SCOTT ROSS
KIRA TSIRING Groelle & Salmon, P.A.
Hamilton, Miller & Birthisel, LLP 1715 N. Westshore Blvd., Suite 320
150 Southeast Second Avenue, Suite Tampa, FL 33607
1200 (813) 849-7200
29
Miami, FL 33131-2332 gstcourtdocs@gspalaw.com
(305) 379-3686 sross@gspalaw.com
jmiller@hamiltonmillerlaw.com cebanks@gspalaw.com
ktsiring@hamiltonmillerlaw.com mcoleman@gspalaw.com
jcasaccio@hamiltonmillerlaw.com
Counsel for Third-Party Defendant,
Counsel for Defendant/Cross- Helberg Enterprises, LLC
Defendant, TGK Stucco, Inc.
VICKI LAMBERT ANDREW T. MARSHALL
ALEC MASSON SARA W. MAPES
Luks, Santaniello, Petrillo & Cohen Hamilton, Price & Marshall, P.A.
201 S. Orange Avenue, Suite 400 2400 Manatee Ave. W.
Orlando, FL 32801 Bradenton, FL 34205
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Preview
Filing # 192424059 E-Filed 02/21/2024 01:10:58 PM IN THE CIRCUIT COURT OF THE NINTH JUDICIAL CIRCUIT IN AND FOR OSCEOLA COUNTY, FLORIDA VILLAS AT EMERALD LAKE Case No.: 2020-CA-002942 HOMEOWNERS ASSOCIATION, INC., a Florida not for profit corporation, Plaintiff, v. ROYAL OAK HOMES, LLC, a Florida limited liability company; Defendants. ___________________________________/ And All Related Actions. ___________________________________/ PLAINTIFF’S RESPONSE IN OPPOSITION TO ROYAL OAK HOMES, LLC’S MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO COUNT I OF PLAINTIFF’S SECOND AMENDED COMPLAINT FOR NEGLIGENCE AND VICARIOUS LIABILITY AND INCORPORATED MEMORANDUM OF LAW Plaintiff, Villas at Emerald Lake Homeowners Association, Inc. (the “Association”), by and through undersigned counsel, and pursuant to Fla. R. Civ. P. 1.510, hereby files its Opposition (the “Opposition”) to the Motion for Partial Summary Judgment as to Count I of Plaintiff’s Second Amended Complaint for Negligence and Vicarious Liability (Doc. No. 925) (“Motion”), filed by Defendant Royal Oak Homes, LLC’s (“ROH”), and states as follows: 1 I. SUMMARY OF ARGUMENT ROH seeks summary judgment for an improvement to real property based upon the economic loss rule (“ELR”). But the Florida Supreme Court unequivocally abolished the economic loss rule outside of “products liability cases” in Tiara Condo. Assoc., Inc. v. March & Mclennan Co., Inc., 110 So. 3d 399 (Fla. 2013) (“application of the [ELR] is limited to products liability cases.”). And an improvement to real property is not a product under well-established Florida law. Nor is ROH a manufacturer of a product. Because an improvement to real property is not a product, and ROH is not a manufacturer, the ELR cannot apply. Further, ROH and several of its subcontractors were licensed contractors who provided construction services at the Project. As the party holding the burden of persuasion on its ELR affirmative defense at trial, and as the Movant, ROH must provide sufficient record evidence and law supporting its assertion that the ELR bars the Association’s claims, in whole or in part. ROH fails to do so, therefore its Motion should be denied. II. BACKGROUND AND INTRODUCTION 1. The instant case arises out of construction and design defects that exist at the Villas at Emerald Lake Townhomes, located in Osceola County, Florida (the “Community”). 2. The Villas at Emerald Lake townhome community contains 12 two- 2 story residential buildings, comprised of 88 individual townhomes, as well as a clubhouse and other common areas. See Compl. ¶ 39; see also the operative Second Am. Compl., ¶¶ 40-41. 3. ROH constructed and developed 10 buildings comprised of 76 units (units 110-149; and 162-197) within the Community of the townhomes (“Project”). See Compl., ¶ 41 and Compl. Fn. 2.; see also Second Am. Compl., ¶ 42; and Second Am. Compl. Fn. 2. 4. ROH admitted it contracted with independent contractors to construct the Community. ROH also admits the size and composition of the Community. See ROH’s Answer, ¶¶ 13, 41, and 43. 5. As the developer, ROH owed a statutory duty 1 to the public (to whom it marketed the townhomes), and particularly to the Townhome purchasers (who make up the Association) to comply with the Florida Building Code (“FBC” or “Code”). 6. Further, as the licensed general contractor and permit applicant, ROH owed a common law duty to supervise, direct, and manage the construction services at the Community in a non-negligent manner, including compliance with the FBC, plans, specifications, industry standards, and in a good and workmanlike manner.2 1 Under Fla. Stat. 553.84. 2 Plaintiff has separately filed a Motion for Summary Judgment against ROH for its Non Delegable Duty to construct the Project. (Doc. No. 941) 3 7. The Project was ultimately constructed with numerous Code violations. 8. On November 23, 2020, the Association filed its initial Complaint in this action, which asserts three causes of action against ROH for: (i) Negligence and Vicarious Liability (“Count I”); (ii) Breach of the FBC (“Count II”); and (iii) Breach of Implied Warranties (“Count III”). All Counts relate to the negligent and defective construction of the Community. See Complaint (Doc. No. 2); see also Second Amended Complaint (Doc. No. 506). 9. The Association filed its operative Second Amended Complaint against the Summary Judgment Defendants alleging negligence and violation of the building code pursuant to § 553.84, Fla. Stat. See Plaintiff’s Second Amended Complaint (Doc. No. 506). 10. On or around March 24, 2023, ROH filed its Unopposed Motion for Leave to file its Second Amended Crossclaim Complaint, wherein which it asserted its eleventh affirmative defense alleging that the Association’s claims should be barred under the ELR. (Doc. No. 739). 11. On January 19, 2024, ROH filed its Motion arguing, consistent with its eleventh affirmative defense, that the Association’s claims should be barred under the Economic Loss Rule. (Doc. No. 925). 12. On January 22, 2024, the Association filed its own Motion for Partial Summary Judgment as to Various Defendants’ Economic Loss Rule Affirmative 4 Defenses, arguing: (1) Summary Judgment Defendants waived the affirmative defense of ELR because Defendants’ pleadings are insufficient as a matter of law; (2) the Florida Supreme Court unequivocally abolished the economic loss rule outside of “products liability cases” in Tiara Condo; and the Villas at Emerald Lake Community – an improvement to real property – is not a product under Florida law; the ELR does not apply to licensed professionals like ROH or HMC; and (4) theELR does not apply to claims for violation of the Florida Building Code. (Doc. No. 940). 13. Here, the Association incorporates the arguments made therein and further asserts: (1) ROH fails to cite any binding authority in support of its position; (2) the Project is an improvement to real property – not a product – and ROH is not a manufacturer; and (3) Even if the ELR applied (and it does not) ROH’s negligence has caused damage to other property, and therefore the ELR does not bar the Association’s action. 14. Accordingly, under the Florida Supreme Court’s ruling in Tiara, ROH fails to meet its burden because the “court must draw every inference in favor of the non-moving party [the Association] when considering whether a genuine issue of material fact exists. . .” Allen v. Board of Public Educ. For Bibb Cnty., 495 F. 3d 1306, 1313 (11th Cir. 2007) (emphasis added). III. MEMORANDUM OF LAW 5 A. Summary Judgment Standard. Summary judgment is only appropriate where the pleadings, depositions, and affidavits show that there is no genuine issue of material fact, and that the movant is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An issue of fact is “material” if it is a legal element of the claim under applicable substantive law which might affect the outcome of the case. Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986); Allen v. Tyson Foods, 121 F.3d 642, 646 (11th Cir.1997). An issue of fact is “genuine” if the record taken as a whole could lead a rational trier of fact to find for the non-moving party. Allen, 121 F.3d at 646. On a motion for summary judgment, the Court must view all the evidence and all factual inferences drawn therefrom in the light most favorable to the non-moving party, and determine whether that evidence could reasonably sustain a jury verdict. Celotex, 477 U.S. at 322-23; Allen, 121 F.3d at 646. While the burden on the movant is great, the opposing party has a duty to present affirmative evidence in order to defeat a properly supported motion for summary Judgment. Anderson, 477 U.S. at 252. Downs v. U.S., No. 06-20861-CIV, 2007 WL 842136 at *3 (S.D. Fla. Mar. 20, 2007). (Emphasis added). Importantly, Fla. R. Civ. P. 1.510 does not immediately shift the burden of disproving an affirmative defense to a nonmovant; that burden remains with ROH until satisfied. On April 29, 2020, the Florida Supreme Court issued Opinion No. SC20-1490, In re: Amendments to Florida Rule of Civil Procedure 1.510, noting that the evidentiary burden that a party must meet at trial is the touchstone that accurately measures whether a genuine issue of fact exists: 6 First, those applying new rule 1.510 must recognize the fundamental similarity between the summary judgment standard and the directed verdict standard. … under both standards, the substantive evidentiary burden of proof that the respective parties must meet at trial is the only touchstone that accurately measures whether a genuine issue of material fact exists to be tried. In re Amendments to Fla. Rule of Civil Procedure 1.510, No. SC20-1490, 6-7 (Fla. Apr. 29, 2021) (emphasis added) (“Amendment”). Thus, while “a moving party that does not bear the burden of persuasion at trial can obtain summary judgment without disproving the nonmovant’s case,” the converse is equally true: a movant with the burden of proof must disprove the nonmovant’s case - here, that there is no genuine issue of material fact as to the ELR Defense: If the movant bears the burden of persuasion at trial, “that party must support its motion with credible evidence—using any of the materials specified in Rule 56(c)—that would entitle it to a directed verdict if not controverted at trial.” Celotex, 477 U.S. at 331. Any doubt regarding whether a trial is necessary must be resolved in favor of the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). United States v. Friedman, No. 15-80407-CIV, 2015 WL 12550904, at *1 (S.D. Fla. July 7, 2015). The ELR is an affirmative defense. Republic Nat. Bank v. Araujo, 697 So. 2d 164, 166 (Fla. 3rd DCA 1997) (“[Defendant]’s economic loss rule argument was effectively waived where it was not timely raised in [Defendant]’s answer or affirmative defenses . . .”). Therefore, ROH has the burden of persuasion at trial. Hess v. Philip Morris USA, Inc., 175 So. 3d 687, 694–95 (Fla. 2015) (“The defendant 7 has the burden to prove an affirmative defense.”). Accordingly, ROH has the burden to show that it is entitled to a directed verdict on its affirmative defense under the ELR when all evidence and inferences are drawn in favor of the Association. B. Summary Judgment is Properly Entered Against a Movant Under Fla. R. Civ. P. 1.510(f). Under the newly amended Fla. R. Civ. P. 1.510(f)(1), the Court may “grant summary judgment for a nonmovant.” Under the Florida Supreme Court’s Opinion, a party “that does not bear the burden of persuasion at trial can obtain summary judgment without disproving the nonmovant’s case.” Opinion, pg. 6. “Under Celotex and therefore the new rule, such a movant can satisfy its initial burden of production in either of two ways: ‘[I]f the nonmoving party must prove X to prevail [at trial], the moving party at summary judgment can either produce evidence that X is not so or point out that the nonmoving party lacks the evidence to prove X.” Id., pg. 6-7 (emphasis added). “A movant for summary judgment need not set forth evidence when the nonmovant bears the burden of persuasion at trial.” Id. Thus, it logically follows that where a movant bears the burden of proof at trial (as ROH does, asserting summary judgment under an affirmative defense of ELR), the nonmovant (Association) can simply point out that the moving party “lacks the evidence to prove” that the ELR applies and therefore obtain summary judgment on an affirmative defense like that sought by ROH. 8 IV. ARGUMENT A. The Economic Loss Rule applies only to products liability cases, and this is not a products liability case. The Florida Supreme Court has unequivocally abolished the ELR except for “products liability cases,” which this case is not. Tiara Condo. Assoc., Inc., 110 So. 3d 399 (Fla. 2013) (“application of the [ELR] is limited to products liability cases.”). Florida courts, including the First District Court of Appeal (“DCA”), have been clear that improvements to real property are NOT products for the purpose of products liability actions. Harrell v. Ryland Group, 277 So. 3d 292, 293 (Fla. 1st DCA 2019). Accordingly, the ELR does not apply to this case. In Tiara, the Florida Supreme Court stressed that “despite [the Court’s] effort to roll back the economic loss rule to its products liability roots, we left untouched a number of exceptions which continue to extend the application of the rule beyond our original limited intent.” Tiara Condo. Ass'n v. Marsh & McLennan Cos., 110 So. 3d 399, 406 (Fla. 2013). The Court then held that “[h]aving reviewed the origin and original purpose of the economic loss rule, and what has been described as the unprincipled extension of the rule, we now take this final step and hold that the economic loss rule applies only in the products liability context. We thus recede from our prior rulings to the extent that they have applied the economic loss rule to cases other than products liability.” Id. at 407. Since Tiara, Florida Courts have recognized that the Economic Loss Rule 9 does not apply to construction defect matters and applies only to products liability cases. For example, in Grace and Naeem Uddin, Inc. v. Singer Architects, Inc., the Fourth DCA stated the following: The architect also relies on a per curiam decision of ours in which the dissent suggested the Economic Loss Rule barred a contractor from pursuing economic damages in tort. D.I.C. Commercial Constr. v. Broward County, 668 So. 2d 697, 698 (Fla. 4th DCA 1996). Since D.I.C. Commercial Constr., our Supreme Court has limited the application of the Economic Loss Rule to products liability actions. Tiara Condo. Ass'n v. Marsh & McLennan Cos., 110 So. 3d 399, 407 (Fla. 2013).”). 278 So. 3d 89, 93, 2019 WL 4049511, at n.2 (Fla. 4th DCA 2019). Likewise, in Kuehne v. FSM Capital Mgmt., LLC, 12-80880-CIV, 2013 WL 1814903 (S.D. Fla. Apr. 29, 2013), the Court rejected the application of the economic loss rule to plaintiff’s negligence claim arising from defendant’s mismanagement of tax accounts, holding that “[b]ecause this is not a products- liability case, however, the economic-loss rule can no longer serve as a basis under Florida law for dismissing Plaintiff's claims”). See also F.D.I.C. v. Floridian Title Grp. Inc., 12-21890-CIV, 2013 WL 5237362 * 7 (S.D. Fla. Sept. 17, 2013) (Chief Judge Moreno denying summary judgment by rejecting the defendant’s argument that negligence-based claims “inextricably intertwined” with contract-based claims are barred by the economic loss rule: “Defendant is apparently operating under the assumption that it can unilaterally rebrand the Economic Loss Rule as the Inextricable Intertwining Rule and that the Court will buy this otherwise defective 10 product. The Court will make no such purchase. The Economic Loss Rule applies only in the products liability context and this Court declines to rename the Economic Loss Rule.”). The present case is not a products liability case and, as such, this Court should deny ROH’s Motion. 1. Florida courts have repeatedly held that projects like Villas at Emerald Lake are improvements to real property and are not products subject to the Economic Loss Rule. Florida law is very clear that structural improvements to real property are not considered products for purposes of products liability actions. See Easterday v. Masiello, 518 So. 2d 260 (Fla.1988) (jail facility); Seitz v. Zac Smith & Co., Inc., 500 So. 2d 706 (Fla. 1st DCA 1987) (floodlight tower); Craft v. Wet ‘N Wild, Inc., 489 So. 2d 1221 (Fla. 5th DCA 1986) (amusement park water slide); Neumann v. Davis Water and Waste, Inc., 433 So. 2d 559 (Fla. 2d DCA 1983), review denied, 441 So. 2d 632 (Fla.1983) (sewage treatment tank); and Edward M. Chadbourne, Inc. v. Vaughn, 491 So.2d 551 (Fla.1986) (public road). Plaza v. Fisher Dev., Inc., 971 So. 2d 918, 921 (Fla. 3d DCA 2007). In Easterday v. Masiello, 518 So. 2d 260, 261 (Fla.1988), the Florida Supreme Court held that “products liability does not apply to structural improvements to real estate.” Similarly, the First DCA, relying on Easterday, held “that [a] movie theater seating system was a structural improvement to real property and, thus, not a product.” (emphasis added). Simmons v. Rave Motion 11 Pictures Pensacola, L.L.C., 197 So. 3d 644, 647 (Fla. 1st DCA 2016). The Court found that the general contractor was not the manufacturer of the theater seating system, that the seating system is an integral part of the movie theatre's operation, as it was installed as part of the construction of the theater, and, accordingly, the theater seating system was an improvement to real property and not a product subject to a products liability claim. Id. As such, no action for products liability existed as against the general contractor. Likewise, in Harrell v. Ryland Group, the First DCA held that an attic ladder installed in a home by the builder as part of the initial construction, and sold as part of the home, was not a product subject to products liability claims. 277 So. 3d 292, 293 (Fla. 1st DCA 2019) (holding that both the ladder and the home were improvements to real property and not subject to products liability claims); see also Bernard Schoninger Shopping Ctrs., Ltd. v. J.P.S. Elastomerics, Corp., 102 F.3d 1173, 1175 (11th Cir. 1997) (finding section 95.11(3)(c) applicable to the appellant's claims stemming from a leaky roof the appellee had installed because “[t]he installation of over 100,000 square feet of membrane and fiberboard [on top of the existing roof] at a cost of tens of thousands of dollars is a ‘valuable addition’ to the Kmart building, and it therefore qualifies as an ‘improvement’” (citation omitted)); Jackson v. L.A.W. Contracting Corp., 481 So. 2d 1290, 1292 (Fla 5th DCA 1986) (“[T]he concept of strict liability applies to consumer products and does not 12 apply to improvements to real property.”). 2. Numerous Florida trial courts have applied the Florida Supreme Court’s ruling in Tiara that the Economic Loss Rule does not apply to construction defect cases against contractors. In Islander Townhome Homeowners Association, Inc. v. KB Home Jacksonville, LLC No. CA19-0670, (Fla. 7th Cir. Ct., St. Johns County, Oct. 15, 2019, J. Smith), a construction defect case, the Court held as follows: Defendant [a subcontractor] argues that Count IX – Negligence is barred by the Economic Loss Rule. The Motion to dismiss Count IX – Negligence is hereby DENIED. In Tiara Condominium Ass'n, Inc. v. Marsh & McLennan Companies, Inc., 110 So. 3d 399,401 (Fla. 2013) the supreme court held that the Economic Loss Rule applies only in the products liability context and receded from prior rulings to the extent that they have applied the Economic Loss Rule to cases other than products liability. See Order attached as Exhibit A. Similarly, in 22 Lantern v. Arlington Construction Services, LLC, No. 2016- CA-003849 (Fla. 4th Cir. Ct., Duval County, September 12, 2022, J. Aho), in the context of two apartment complex construction projects, the Court also held that such projects are not products: The economic loss rule is limited to products liability cases. See Tiara Condominium Association, Inc. v. Marsh & McLennan, Inc., 110 So.3d 399, 401 (Fla. 2013). Plaintiff’s claims against ACS are not product liability claims; therefore, ACS’ fourth affirmative defense [economic loss rule] fails as a matter of law. See Order attached as Exhibit B (emphasis added). In Latitude on the River Condominium Ass’n Inc v. Allied Tube & Conduit 13 Crop, 2020 WL 1038599 (Fla. 11th Cir. Ct.), the Court denied the Defendant’s motions for summary judgment stating that, “The Economic Loss Rule, as limited to product liability, does not shelter non-manufacturer and non-distributor defendants. Therefore, the Miami, Riverfront, Suffolk, and Summers’ Summary Judgment motion against Plaintiff is denied on the Economic Loss Rule.” Id. at *6. The Court was clear to note that Miami Riverfront Partners, LLC was the “Developer (construction defendant),” Suffolk Construction was the “General Contractor (construction defendant),” and Summers was the “Fire Suppression System subcontractor to Suffolk (construction defendant).” Id. at *2. While the Latitude Court granted summary judgment as to the distributor and manufacturer defendants who supplied products that were installed at the condominium by others, the Court denied summary judgment for the developer, general contractor, and subcontractors who performed construction service. Id. Additionally, in Mann v. Island Resorts Development Inc., 2008 WL 5381381, at *2 (N.D. Fla. 2008), the plaintiffs alleged that “Yates (as a general contractor) violated the Florida Building Code, [was] negligent, and [breached the] warranty” as a result of “drainage problems on the [condominium] terrace that eventually caused damage to the condominium in the form of mold and water damage.” (emphasis added). The Mann court held that for a general contractor, “[t]he Economic Loss Rule is inapplicable to Yates because this case does not involve a 14 cause of action against a manufacturer or distributor for economic loss caused by a product that damages itself, nor does this case involve parties who enjoy privity of contract,” and therefore denied Yates’s motion to dismiss. Id. (emphasis added).3 In Riverwalk at Sunrise Homeowners Association, Inc. v. Biscayne Painting Corp., 2015 WL 13273069 (Fla. 17th Cir. Ct. January 12, 2015) (J. Mily Powell), a homeowners association sued a paint company for defective installation of exterior paint on the association’s buildings. The Court denied the defendant painter’s motion to dismiss the plaintiff’s fraud and negligence claims based on the Economic Loss Rule, finding the argument “without merit” and citing Tiara. Notably, ROH offers no facts or evidence to establish that the townhomes within the Project at issue are products; instead, ROH offers mere supposition and conjecture as to how the townhomes may have been purchased. Further, ROH relies on non-binding federal case law to define townhomes as a product. See generally, Motion, Doc. No. 925. Additionally, ROH’s reliance on Gazzarra v. Pulte Home Corp. to illustrate this point is unpersuasive. 207 F. Supp. 3d 1306, 1209 (M.D. Fla. 2016). Gazzarra is not binding on this Court as it is a federal trial court opinion on a Motion to Dismiss. In Gazzarra, the Court did not have to discern whether there was any evidence supporting whether a townhome is a product or not. Id. Here, ROH holds 3 The Supreme Court in Tiara abolished the “privity” application of the Economic Loss Rule. 15 the evidentiary burden in showing as much. It fails to do so. While the Association disputes that a townhome is a product, that dispute is largely irrelevant in this case. Irrespective of whether a townhome may be considered a product for some other type of case, the issue before the Court is not to decide whether a townhome could be considered a product. Rather, the issues that the Court must address are (1) whether this is a “products liability” action; (2) and whether ROH can be considered a manufacturer or distributor of a product when all inferences are drawn in favor of the Association, or instead if ROH contracted to provide construction services as an installer. As shown below, ROH is neither a manufacturer nor distributor of a product and this case is not a “products liability case.” For this reason, ROH’s Motion must be denied. i. Negligent construction of an improvement to real property is not a “products liability case” under Florida law, and the ELR therefore does not apply. A contractor (or subcontractor) is not subject to strict product liability and thus does not have the protection of the ELR. Jackson v. L.A.W. Contracting Corp., 481 So. 2d 1290, 1292 (Fla 5th DCA 1986) (“[T]he concept of strict liability applies to consumer products and does not apply to improvements to real property.”). The use of building materials in the ordinary course of providing installation services does not transform an installer into a distributor or manufacturer. Id. (holding that road contractor was not liable in warranty as a distributor for defective sealant applied to 16 road surface); Arvida Corp. v. A.J. Indus., Inc., 370 So. 2d 809, 810, 812 (Fla. 4th DCA 1979) (per curiam) (contractor not liable under UCC for parts and materials used in repairing bathroom fixtures). Florida law is very clear that structural improvements to real property are not generally considered products for purposes of products liability cases. See e.g., Easterday v. Masiello, 518 So. 2d 260, 261 (Fla.1988) (“products liability does not apply to structural improvements to real estate.”). Similarly, the First DCA, relying on Easterday, held “that [a] movie theater seating system was a structural improvement to real property and, thus, not a product.” Simmons v. Rave Motion Pictures Pensacola, L.L.C., 197 So. 3d 644, 647 (Fla. 1st DCA 2016) (emphasis added). In Simmons, Isaac Simmons was injured when the welding in a movie theater seat broke. Id. at 645. Mr. Simmons sued “Universal the general contractor that bought the seating system and installed it.” Id. The Court found that “Universal… [was] not the manufacturer of the theater seating system. There is also evidence that the seating system is an integral part of the movie theatre's operation, as it was installed as part of the construction of the theater, and the entire seating system was bolted to the floor.” Id. (Emphasis added). For this reason, the Court held that the theater seating system was not a product for purposes of products liability, but rather was an improvement to real property. As such, no action for products liability existed as against the general contractor. 17 Like Universal, ROH did not manufacture a product, but rather constructed an improvement to real property as installers. Accordingly, because the ELR was abolished in Florida except for “products liability cases,” and this is not a products liability case, the ELR does not apply. Likewise, in Harrell v. Ryland Group, the First District recently held that an attic ladder installed in a home by the builder as part of the initial construction, and sold as part of the home, was not a product subject to products liability claims. Harrell v. Ryland Group, 277 So. 3d 292, 293 (Fla. 1st DCA 2019). Rather, the Court held that both the ladder and the home were improvements to real property and not subject to products liability claims. See also Bernard Schoninger Shopping Ctrs., Ltd. v. J.P.S. Elastomerics, Corp., 102 F.3d 1173, 1175 (11th Cir. 1997) (finding section 95.11(3)(c) applicable to the appellant's claims stemming from a leaky roof the appellee had installed because “[t]he installation of over 100,000 square feet of membrane and fiberboard [on top of the existing roof] at a cost of tens of thousands of dollars is a ‘valuable addition’ to the Kmart building, and it therefore qualifies as an ‘improvement’”)(citation omitted). Jackson, 481 So. 2d at 1292 (“[T]he concept of strict liability applies to consumer products and does not apply to improvements to real property.”). While Florida law is clear that claims relating to improvements to real property are not product liability claims, ROH’s Motion further fails because neither 18 the Association nor ROH presents a single allegation that the products used in the construction of the Project were defective. Simply put, this is a case concerning the negligent construction (i.e., improvement) of townhomes, not issues with any defective product(s). Without question, the townhomes are improvements to real property. Accordingly, as a matter of law the ELR does not and cannot apply in this case because binding Florida law is clear that improvements to real property are not considered products for product liability purposes. The Court should accordingly deny ROH’s Motion. 3. The Florida Supreme Court has been clear that the Economic Loss Rule only applies to manufacturers and distributors subject to strict products liability, not to providers of construction services such as Summary Judgment Defendants. Further, Tiara and American Aviation hold clearly that the Economic Loss Rule is strictly limited to circumstances where “the defendant is a manufacturer or distributor of a product.” Indemnity Insurance Co. of North America v. American Aviation, Inc., 891 So. 2d 532 (Fla. 2004); Tiara, 110 So. 3d at 405. This is because only a manufacturer or distributor of a product is subject to products liability claims (i.e., strict liability), and the Economic Loss Rule has been abolished except for product liability claims. American Aviation and Tiara decisions both held that the Economic Loss Rule is extremely limited in Florida and has no application in the context of building 19 construction, because Florida recognizes a clear distinction between contractors who furnish services (such as ROH), and manufacturers and distributors who supply products, in connection with improving real property. See Jackson v. L.A.W. Contracting Corp., 481 So. 2d 1290, 1292 (Fla 5th DCA 1986) (stating that asphalt installer in that case was a provider of services and not goods, distinguishing cases in which contractor applied road sealant from one in which contractor applied and manufactured road sealant). Since a contractor or subcontractor is not subject to strict product liability, the ELR affirmative defense is inapplicable. Jackson, at 1292 (Fla 5th DCA 1986) (“[T]he concept of strict liability applies to consumer products and does not apply to improvements to real property.”). The use of building materials in the ordinary course of providing installation services does not transform a subcontractor/installer into a distributor. Id. See also Segovia at World Commerce Homeowners’ Association, Inc. v. Mattamy Florida, LLC, Case No CA20-573 (Fla. 7th Cir. Ct. April 9, 2021) (J. Janesk) (Denying Defendant’s Motion to Dismiss based on application of the economic loss rule, stating that Defendant “does not sit in the same position of the fire suppression system fittings in 2711 Hollywood. SEGOVIA alleges that BFS was negligent in the preparation and installation of windows.”). See Exhibit C. The distinction between a contractor and a manufacturer or distributor who 20 simply provides a product installed by others, cannot be overlooked. For example, in Casa Clara, “[t]he issue [was] whether a homeowner can recover for purely economic losses from a concrete supplier under a negligence theory.” Casa Clara Condominium Ass'n, Inc. v. Charley Toppino and Sons, Inc., 620 So. 2d 1244, 1245 (Fla. 1993). The district court also held that Toppino, a supplier, had no duty to comply with the building code. Id. at 1245. Notably, the Supreme Court in Tiara expressly receded from Casa Clara in an effort to curtail the Economic Loss Rule. “We thus recede from our prior rulings to the extent that they have applied the economic loss rule to cases other than products liability.” Tiara at 407 Just as in Latitude, Mann, and Segovia, ROH and its subcontractors in this case are not manufacturers or distributors of products, but rather providers of construction services for improvements to real property. Accordingly, ROH cannot sufficiently prove its ELR affirmative defense and, therefore, the Motion should be denied. 4. Other areas of Florida Law clearly distinguish between products liability claims and negligent construction of real property. Florida law distinguishes between product manufacturers subject to strict liability and a twelve-year statute of repose, and developers of real property who are not subject to strict liability and have a ten-year statute of repose. C.f. § 95.11(3)(c), Fla. Stat. (2018) (providing a ten-year statute of repose for construction defect lawsuits); § 95.031(2)(b), Fla. Stat. (providing for a twelve-year statute of repose for 21 products liability actions). The applicable statue repose in the construction defect case for this Community is section 95.11(3)(c), Florida Statutes, which states in part: “(c) An action founded on the design, planning, or construction of an improvement to real property, with the time running from the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion of the contract or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest; except that, when the action involves a latent defect, the time runs from the time the defect is discovered or should have been discovered with the exercise of due diligence. […]” § 95.11(3)(c), Fla. Stat. (2018) (emphasis added). The Association did not allege any products liability claims in its Complaint and no party is arguing that the applicable statute of repose applicable in the present case is section 95.031(2)(b), Florida Statutes, which is the statute of repose for products liability claims. Clearly, this a construction defect claim against contractors for their defective construction services throughout the course of an improvement to real property and is not a product liability claim. Accordingly, the ELR does not apply and the Motion should be denied. C. Alternatively, the Economic Loss Rule does not apply to licensed professionals. Over the years, the courts have recognized several exceptions to the judicially 22 created Economic Loss Rule, including the professional negligence exception. Martinez v. QBE Specialty Insurance Company, 2018 WL 4354831 (Fla. M.D. 2018) (“The professional negligence exception to the economic loss rule was originally developed in Moransais, in which the Florida Supreme Court addressed whether a purchaser of a home had a cause of action for professional malpractice against an individual engineer who was an employee of the engineering corporation who performed engineering services.”). This exception to the Economic Loss Rule continues to remain valid post-Tiara as recognized Marino v. Phaidon International, Inc.: Next, Plaintiff argues this case falls within the exception allowed for the “quasi-contractual professional negligence theory.” See Monroe, 746 So.2d 539. The Court agrees that Florida law allows for such an exception. See Moransais v. Heathman, 744 So.2d 93, 979 (1999) (economic loss rule did not bar homeowner’s professional negligence claim against engineers who inspected home and allegedly failed to detect and disclose certain defects, even where there was no personal injury or property damage other than the defects in the home inspected). Marino, 2022 WL 1913266 (Fla. M.D. 2022); see also, Jerue v. Drummond Company, Inc.: However, like with most rules, over time various exceptions to the economic loss rule have gained acceptance. For instance, persons who suffer purely economic damages due to professional malpractice may now sue under a theory of negligence despite the absence of bodily harm or property damage. Monroe, 746 So. 2d at 535-36. Jerue, 2017 WL 10876737 (Fla. M.D. 2017). ROH’s ELR affirmative defense is rendered moot because it is a licensed 23 professional. To do any construction work on the Project, ROH was required to pull permits, which required using its general contractor license. Florida law requires any person or entity engaged in the business of contracting to be certified after passing an examination. See Section 489.113(1), Florida Statutes. Further, William Colby Franks, a certified general contractor, served as the qualifying agent for ROH so that ROH could construct the Community. See Deposition Transcript of William Colby Franks, dated September 21, 2022, attached as Exhibit D, pp. 21:17-23; and 24:15-19. During all relevant time periods, Mr. Franks was an employee of and equity partner in ROH. Id. Additionally, one of ROH’s subcontractors, Hugh Macdonald, Inc.’s (“HMC”) principal, owner, and corporate representative testified that he holds both a general contractor license and a roofer’s license. See Deposition Transcript of Hugh Macdonald, dated July 13, 2023, attached as Exhibit E, pp. 12:16-23; and 14:14-15:24. Under Florida law, licensed contractors are professionals. See Sunset Beach Investments, LLC v. Kimley-Horn and Associates, Inc., 207 So. 3d 012 (Fla. 4th DCA 2017) (holding that “[a]t a minimum, in a profession where a license exists, the existence of a license is a valid barometer for determining whether a person is classified as a professional.”). As such, ROH and HMC are licensed “professionals” under Sunset Beach, and thus the Economic Loss Rule cannot bar the Association’s negligence claims 24 against ROH and its subcontractors. Therefore, ROH’s Motion should be denied. D. Even if the ELR did apply (it does not), and this were a “products liability case” (it is not), the ELR still would not apply to the Association’s claim because DRH’s work has caused damage to other property. The ELR applies only to claims brought with respect to a defective product which only damages “itself.” See Tiara, 110 So. 2d at 405. The Supreme Court has explained that this excludes cases where two products are combined to form another substance, such as the case where subcontractors and contractors combine other materials that compose a structural improvement to real property. See Adobe Bldg. Ctrs., Inc., v. Reynolds, 403 So. 2d 1033, 1033, 1035 (Fla. 4th DCA 1981), review dismissed, 411 So. 2d 380 (Fla. 1981) (holding that retailer or wholesaler is subject to tort liability when purchaser combines product with another product or substance and suffers economic damages from use of the final amalgam). Adobe was expressly disapproved by the Florida Supreme Court. See Casa Clara Condo. Ass’n v. Charley Toppino & Sons, Inc., 620 So. 2d 1244, 1248 (Fla. 1993). Accordingly, where defective building materials damage materials that come from different suppliers, the ELR does not apply because these manufacturers did not supply “a building” as their product, only constituent parts. Accordingly, ROH’s Motion should be denied. V. CONCLUSION As a matter of law, the Economic Loss Rule does not and cannot apply in this case because Florida law is clear that improvements to real property are not 25 considered products for product liability purposes. Without question, the townhomes are improvements to real property. Furthermore, the Association’s claims pertain to defective construction services provided by ROH and its subcontractors, not defective products manufactured or supplied by the same – this is the same as the case in Mann, Latitude, 22 Lantern, Segovia and Jackson. Accordingly, the Economic Loss Rule is inapplicable. Further, the ELR also does not apply to licensed professionals like ROH or HMC, and also does not apply to building code violation claims. Lastly, ROH failed to support its affirmative defense of the economic loss rule with record evidence. For these reasons, the Court should deny ROH’s Motion. DATED: This 21st day of February, 2024. BALL JANIK LLP By: /s/ Keegan A. Berry__ Phillip E. Joseph, FL Bar No. 1000368 Evan J. Small, FL Bar No. 57306 Keegan A. Berry FL Bar No. 106279 Jeffrey A. Widelitz FL Bar No. 105642 Christopher S. Tribbey, FL Bar No. 100311 Kasey L. Joyce, FL Bar No. 1024705 201 E Pine Street, Suite 600 Orlando, FL 32801 Telephone: (407) 455-5664 Facsimile: (407) 902-2105 pjoseph@balljanik.com esmall@balljanik.com kberry@balljanik.com 26 jwidelitz@balljanik.com ctribbey@balljanik.com kjoyce@balljanik.com dtodd@balljanik.com cbetancourt@balljanik.com bburton@balljanik.com orlandodocket@balljanik.com Counsel for Plaintiff Villas at Emerald Lake Homeowners Association, Inc. CERTIFICATE OF SERVICE I certify that a true copy of the foregoing has been filed via the Florida Courts E-Filing Portal on February 21, 2024. /s/ Keegan A. Beryy Keegan A. Berry Esq. SERVICE LIST LUIS PRATS THAMIR A.R. KADDOURI, JR. LANNIE D. HOUGH, JR. PENELOPE T. ROWLETT JAMES MICHAEL WALLS BETH ANN TOBEY 27 ROBIN H. LEAVENGOOD Law Office of Thamir A.R. Kaddouri, Carlton Fields, P.A. Jr. P.A. 4221 W. Boy Scout Boulevard 3220 West Cypress Street Tampa, FL 33607-5780 Tampa, FL 33607 (813) 223-7000 (813) 879-5752 lprats@carltonfields.com thamir.kaddouri@tampalaw.org lhough@carltonfields.com service@tampalaw.org mwalls@carltonfields.com beth.tobey@tampalaw.org rleavengood@carltonfields.com mramos@carltonfields.com Counsel for Defendant, Imperial nbonilla@carltonfields.com Building Corporation ejohnson@carltonfields.com krick@carltonfields.com Counsel for Defendant, Royal Oak Homes, LLC PAUL SIDNEY ELLIOTT PETER J. KAPSALES P.O. Box 274204 MARGARET M. EFTA Tampa, FL 33688-4204 Milne Law Group, P.A. (813) 265-1314 301 E. Pine Street, Suite 525 pse@psejd.com Orlando, FL 32801 (321) 558-7700 Counsel for Defendant, Hugh pkapsales@milnelawgroup.com MacDonald Construction, Inc. (HMC) mefta@milnelawgroup.com eservice@milnelawgroup.com DENISE M. ANDERSON ASHLEY M. MATTINGLY Counsel for Defendant, Weathermaster Butler Weihmuller Katz Craig LLP Building Products, Inc. 400 N. Ashley Drive, Suite 2300 Tampa, FL 33602 (813) 281-1900 danderson@butler.legal amattingly@butler.legal krieck@butler.legal rjorge@butler.legal Co-Counsel for Defendant, Hugh MacDonald Construction, Inc. DENISE M. ANDERSON ANDREW E. HOLWAY 28 DAVID A. MERCER J. ROCCO CAFARO Butler Weihmuller Katz Craig, LLP Hill Ward Henderson 400 N. Ashley Drive, Suite 2300 101 E. Kennedy Blvd., Suite 3700 Tampa, FL 33602 Tampa, FL 33602 danderson@butler.legal (813) 221-3900 dmercer@butler.legal andrew.holway@hwhlaw.com krieck@butler.legal derrick.calandra@hwhlaw.com rjorge@butler.legal jill.kuty@hwhlaw.com tbarry@butler.legal kathy.wernsing@hwhlaw.com rocco.cafaro@hwhlaw.com Counsel for Defendant, Don King’s tracy.coale@hwhlaw.com Concrete, Inc. Counsel for Defendant/Cross Defendant, Weintraub Inspections & Forensics, Inc. n/k/a Weintraub Engineering and Inspections, Inc. JAYNE ANN PITTMAN BRUCE R. CALDERON NATALIE C. FISCHER ALICIA Z. GROSS Conroy Simberg BARRI A. REISCH Two South Orange Avenue, Suite 300 Milber Makris Plousadis & Seiden, Orlando, FL 32801 LLP (407) 649-9797 1900 NW Corporate Blvd. eserviceorl@conroysimberg.com East Tower, Suite 440 jpittman@conroysimberg.com Boca Raton, FL 33431 mmaitland@conroysimberg.com (561) 994-7310 nfischer@conroysimberg.com bcalderon@milbermakris.com azgross@milbermakris.com Counsel for Defendant, Advanced breisch@milbermakris.com Wrapping and Concrete Solutions of kmcdowell@milbermakris.com Central Florida, Inc. sskowronski@milbermakris.com Counsel for Defendant/Cross- Defendant, Brown + Company Architecture, Inc. JENNIFER MILLER BROOKS S. SCOTT ROSS KIRA TSIRING Groelle & Salmon, P.A. Hamilton, Miller & Birthisel, LLP 1715 N. Westshore Blvd., Suite 320 150 Southeast Second Avenue, Suite Tampa, FL 33607 1200 (813) 849-7200 29 Miami, FL 33131-2332 gstcourtdocs@gspalaw.com (305) 379-3686 sross@gspalaw.com jmiller@hamiltonmillerlaw.com cebanks@gspalaw.com ktsiring@hamiltonmillerlaw.com mcoleman@gspalaw.com jcasaccio@hamiltonmillerlaw.com Counsel for Third-Party Defendant, Counsel for Defendant/Cross- Helberg Enterprises, LLC Defendant, TGK Stucco, Inc. VICKI LAMBERT ANDREW T. MARSHALL ALEC MASSON SARA W. MAPES Luks, Santaniello, Petrillo & Cohen Hamilton, Price & Marshall, P.A. 201 S. Orange Avenue, Suite 400 2400 Manatee Ave. W. Orlando, FL 32801 Bradenton, FL 34205 (407) 540-9170 (941) 748-0550 luksorl-pleadings@ls-law.com andrew@hamiltonpricelaw.com amason@insu