Summary of 535 Madison Ave. Gourmet Foods, Inc. v. Finlandia Ctr. Inc. (2001) Pg. 544, 750 N.E.2d 1097 (N.Y. 2001)
Parties: Appellant – Plaintiff – Gourmet Foods
Appellee – Defendant – Finlandia Ctr.
Court: Supreme Court of New York, 2001
Facts: A wall partially collapsed from a 39-story office tower in downtown Manhattan. All the bricks and mortar fell on Madison Avenue causing the closure of 15 blocks for two weeks and some businesses remained closed for longer (5 weeks). The collapse was caused by a construction project drilling 94 holes for windows in the building that aggravated existing structural defects. Plaintiffs are suing for economic loss for not being able to stay open and losing business.
Procedural Posture: TC – dismissed plaintiff’s negligence claims because of the following:
1. Defendants owed no duty of care of purely economic loss in absence of personal injury or property damage.
2. The public nuisance claims on the grounds that the injuries were the same in kind as those suffered by all of the business in the community.
MC – Reversed two of the three cases by reinstating negligence and public nuisance claims on the grounds that the defendants’ duty to keep premise in reasonably safe condition, and it was reasonably foreseen to cause injury if not. (Proximate cause).
Issue: Can a plaintiff recover for purely economic loss without suffering personal injury or property damage?
Judgment: Reversed MC’s on the two cases, and Affirmed on the third case.
Holding: The court ruled that economic loss alone without personal injury or property damage can not entitle a plaintiff relief. It would open a Pandora’s Box of litigation which could extend to unlimited liability.
Relevant Rule: A plaintiff can not recover for economic loss alone if there is no existence of personal injury or property damage accompanying the claim.