Daniel and Sondra Estelle hired Allenâ??s firm to renovate a home they owned in Ladoga, Indiana. To finance the cost, they obtained a line of credit from Banc One, Indiana, which required periodic inspections to disburse funds. Allen was on the job every day and supervised all of the work. He designed all of the structural changes, including a floor system for the bedroom over the living room, the floor system of the living room, and the stairway to the second floor. He did all of the electrical, plumbing, and carpentry work and installed all of the windows. He did most of the drywall taping and finishing and most of the painting. The Estellesâ?? found much of this work to be unacceptable, and the bankâ??s inspector
agreed that is was of poor quality. When Allen failed to act on the Estelleâ??s complaints, they filed a suit in an Indiana State court against Allen Construction and Allen personally, alleging in part that his individual work on the project was negligent. Can both Allen and his corporation be held liable for this tort? Explain.
[Greg Allen Construction C. v. Estelle, 798 N.E.2d 171 (Ind. 2003)]
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Allen and his corporation cannot be held liable for the tort of negligence. The theory of negligence protects interests related to safety or freedom from physical harm, including not only personal injuries, but also damage caused by defective personal property. Where there is no accident, and no physical damage, and the only loss is a pecuniary one, through loss of value - or the cost of repairing it, the courts have adhered to the rule - that purely economic interests are not entitled to protection against mere ...
The distinction between contract and tort is presented.