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Lincoln General Insurance Company v. Detroit Diesel Corporation

Supreme Court of Tennessee
293 S.W.3d 487 (2009)


Facts

Senators Rental, Inc. (Senators) bought a bus manufactured by Prevost Car (US) Inc. (Prevost) (defendant), which contained an engine produced by Detroit Diesel Corporation (Detroit Diesel) (defendant). The bus caught fire, allegedly due to an engine defect. The only damage was to the bus itself. The insurer for Senators, Lincoln General Insurance Company (Lincoln General) (plaintiff), sued Prevost and Detroit Diesel for breach of express and implied warranties, negligence, and strict products liability. Prevost moved to dismiss Lincoln General’s tort claims based on the economic loss doctrine. Lincoln General argued that it should be allowed to recover damages to the bus that resulted from a sudden, calamitous event. The United States District Court for the Middle District of Tennessee certified the question to the Supreme Court of Tennessee of whether Tennessee recognizes an exception to the economic loss doctrine for damages to the defective product that are caused by a sudden calamitous event.

Rule of Law

Issue

Holding and Reasoning (Holder, C.J.)

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