LINCOLN GENERAL INSURANCE COMPANY V. DETROIT DIESEL CORPORATION ET AL.
293 S.W.3d 487 (2009)
NATURE OF THE CASE: The following question of law was certified: Does Tennessee law
recognize an exception to the economic loss doctrine under which recovery in tort is
possible for damage to the defective product itself when the defect renders the product
unreasonably dangerous and causes the damage by means of a sudden, calamitous event?
FACTS: Senators, an insured of Lincoln General Insurance Company (P), purchased a bus
from Prevost (D1). The engine in the bus was produced by Detroit Diesel Corporation (D). The
engine caught fire due to an alleged engine defect. The fire did not cause personal injury
or damage to any property other than the bus itself. P paid Senators $405,250 for the fire
damage pursuant to its insurance policy. P filed a complaint against D for breach of express
and implied warranties, negligence, and strict products liability. The case was removed to
the United States District Court for the Middle District of Tennessee. Prevost (D1) filed a
motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure
12(b)(6), arguing that Lincoln General's tort claims are barred by the economic loss
doctrine.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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