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People v. Consolidated Rail Corp.

Decided: June 12, 1984.

PEOPLE EXPRESS AIRLINES, INC., PLAINTIFF-APPELLANT,
v.
CONSOLIDATED RAIL CORPORATION, BASF WYANDOTTE COMPANY AND UNION TANK CAR COMPANY, DEFENDANTS-RESPONDENTS



On appeal from Superior Court, Law Division, Essex County.

Antell, Joelson and McElroy. The Opinion of the Court was Delivered by, Antell, P.J.A.D.

Antell

Plaintiff takes this interlocutory appeal, by leave granted February 22, 1984, from an order for summary judgment in favor of defendants. The factual context is drawn from the allegations of the complaint and pre-trial order which we consider most favorably to the plaintiff. Ruvolo v. American Cas. Co., 39 N.J. 490, 499 (1963). No affidavits, certifications or any other form of testimonial evidence are before us.

On July 27, 1981 fire broke out in a railroad tank car at the freight yard of defendant Consolidated Rail Corporation ("Conrail") in Port Newark, New Jersey. According to the complaint, a tank car manufactured and owned by defendant Union Tank Car Company and leased to defendant BASF Wyandotte Company was punctured during a negligently performed coupling operation, causing its contents, ethylene oxide manufactured by BASF, to escape and ignite. An order was then issued to evacuate the surrounding area, which included plaintiff's principal business operation in the North Terminal building at Newark Airport.

Plaintiff, an airline transportation company, does not contend that it suffered any property damage as a result of the incident, but seeks recovery of losses caused by the interruption of its business. It claims that most of its flights were cancelled and that it could not receive telephone calls, its major source of passenger reservations, during the 12 hours the evacuation order was in effect.

On January 18, 1984 the Law Division granted defendants' motion for summary judgment on the ground that, absent property damage, economic loss was not recoverable, relying for legal authority on Restatement, Torts 2d, § 766C (1979). That provision states:

One is not liable to another for pecuniary harm not deriving from physical harm to the other, if that harm results from the actor's negligently

(a) causing a third person not to perform a contract with the other, or

(b) interfering with the other's performance of his contract or making the performance more expensive or burdensome, or

(c) interfering with the other's acquiring a contractual relation with a third person.

The comment pertinent to the foregoing section reads as follows:

b. Physical harm to the other. The rule stated in this Section applies when the plaintiff suffers only pecuniary loss, such as the loss of the financial benefits of a contract or of prospective trade or financial loss through being put to additional expense. If there is physical harm to the person or land or chattels of the plaintiff, the rule stated in this Section does not apply and there may be recovery for negligence that results in physical harm because of the nonperformance of a contract with the plaintiff. (Cf. §§ 435B, 499). This recovery is of course subject to the usual rules governing liability for ...


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