This is essentially Sullivan II; Sulllivan I, described by this opinion as such, is here and here. (The opinion hyperlinks in those blogs are working; we’re aware that the links in some number of our blogs no longer do and we apologize but we really don’t have the time to update 390 blogs every time the courts decide to change the file structure of their servers.) That was essentially a case about the economic-loss doctrine; the Sullivans, subsequent purchasers, sued Pulte for a defective retaining wall.The Supreme Court remanded to allow the negligence claim to proceed while suggesting, citing the Restatement, that it ultimately couldn’t work. This is the appeal of the negligence claim which, after remand, the trial court dismissed. The Court of Appeals affirms, with a dissent.
The court quotes the paragraph from the Supreme Court’s opinion that threw cold water on the negligence claim. But the Sullivans, we will assume in conscious response to that paragraph, had done a clever thing: they disclaimed reliance on common law and insisted that Pulte’s duty of care to them was created by Arizona statutes (apparently the contractor-licensing statutes) and the Phoenix building code. The argument was that those things established a public policy under which they were a protected class of persons.
But the building code says specifically that it isn’t intended to create a protected class. Even if it did, protected-class policy protects against injury, not economic loss. The same goes with the statutes.
The dissent argues that the defective retaining wall might have hurt someone so injury, not mere economic loss, is at issue and a duty should therefore exist. The dissent makes this point in its first paragraph then spends nine more pages making it again, and again, and again in case anyone didn’t get it the first or second or fifteenth time. Actually, though, the dissent carefully avoids using the words “might” or “speculative” in this connection. To the dissent, only the Sullivans’ ability to buy homeowners’ insurance (relevant to risk-spreading theories mentioned in the Restatement) is a “speculative” thing that “might” have happened. The retaining wall hurting someone is in the category of things that “have not yet” happened.