## Facts

- Fabbis Enterprises, Inc. owned a 32-foot cabin cruiser that needed repainting.
- In October 2010, a Fabbis employee went to a Sherwin-Williams store and told store personnel he was repainting the boat’s exterior and wanted a durable, high-gloss exterior paint.
- Based on the store manager’s recommendation, the employee purchased a water-based epoxy marked “protective & marine coatings.”
- Fabbis applied the product in accordance with the label instructions, but the paint dried with a dull finish rather than a high-gloss finish.
- Fabbis contacted Sherwin-Williams again. Sherwin-Williams recommended and sold Fabbis a clear-coat polycrylic to apply as a topcoat over the first coating.
- Fabbis alleged the topcoat still did not produce a glossy finish and that it turned yellow when exposed to gasoline, soft drinks, and other substances common on recreational boats.
- The paint did not cause physical damage to the boat itself, but Fabbis alleged the coating had to be removed so the boat could be sanded and repainted.
- Fabbis paid approximately $750 for the paint products but alleged about $14,000 in out-of-pocket costs for paint removal, sanding, and repainting.
- Fabbis sued Sherwin-Williams asserting, among other claims, negligent misrepresentation, alleging Sherwin-Williams had a duty to provide correct information and negligently recommended paint unsuitable for the disclosed marine use.
- Sherwin-Williams moved to dismiss the negligent misrepresentation claim, arguing New York’s economic-loss doctrine barred tort recovery for purely economic damages.

## Issues

1. Does New York’s economic-loss doctrine require dismissal of a negligent misrepresentation claim seeking only economic damages where the plaintiff alleges the defendant negligently supplied incorrect information about product suitability?

## Decision

- The court denied Sherwin-Williams’s motion to dismiss the negligent misrepresentation cause of action.
- At the pleading stage, the court concluded the economic-loss doctrine did not mandate dismissal where the complaint framed the wrong as negligent provision of information about suitability for a known purpose, rather than a product-defect tort claim.
- The motion addressed only the first cause of action for negligent misrepresentation; the court did not decide the remaining claims.

## Legal Principles

- New York’s economic-loss doctrine generally bars tort recovery for purely economic losses stemming from a product that fails to meet expectations, absent personal injury or damage to other property; contract and warranty remedies ordinarily govern those losses.
- A negligent misrepresentation claim may proceed for economic loss when the defendant is alleged to have owed a duty to provide correct information, the information was supplied for a known purpose, and the plaintiff reasonably relied on it.
- On a motion to dismiss, the court treats the complaint’s factual allegations as true and asks whether the claim is barred as a matter of law on the face of the pleading.

## Conclusion

Because Fabbis alleged that Sherwin-Williams, through its store manager, undertook to provide product-selection information for a disclosed marine repainting project and negligently recommended unsuitable coatings, the court held the negligent misrepresentation claim was not barred at the pleading stage by the economic-loss doctrine and allowed that tort claim to proceed.


Fabbis Enterprises, Inc. v. Sherwin-Williams Co., 40 Misc. 3d 1203(A) (2013)