Rush, C.J.
At the pleading stage, the viability of a plaintiff’s claim is measured by its sufficiency, not its likelihood of success. Thus, to survive dismissal of a claim at this stage, a plaintiff’s complaint need only contain facts that support the possibility of relief.
Here, the plaintiff—a homeowners’ association—discovered defects at a condominium complex and sued several defendants for both breach of the implied warranty of habitability and negligence. The trial court granted dismissal of the claims against four of the defendants, finding that the implied warranty of habitability did not apply and that the economic loss doctrine barred recovery on the negligence claim.
We affirm in part and reverse in part. As is frequently the case at this early stage, the facts that might support dismissal are not developed. But the plaintiff has alleged sufficient facts to support relief against two of the four defendants on the implied-warranty-of-habitability claim. And though the economic loss doctrine may preclude recovery on the negligence claim as the facts mature, dismissal at this stage is premature.
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The Matthews Defendants maintain that the trial court properly dismissed both claims. As to the implied-warranty-of-habitability claim, the Matthews Defendants argue that they are not subject to the warranty because they are not builder-vendors, a requirement for liability under Indiana law. See Callander v. Sheridan, 546 N.E.2d 850, 852 (Ind. Ct. App. 1989). As to the negligence claim, the Matthews Defendants maintain that the economic loss doctrine bars recovery. This rule, as explained in more detail below, generally precludes recovery for “purely economic loss” caused by negligence in the performance of a contract between parties. See Indianapolis-Marion Cnty. Pub. Libr. v. Charlier Clark & Linard, P.C., 929 N.E.2d 722, 729 (Ind. 2010).
On the implied-warranty claim, we partially agree with the Matthews Defendants; but we disagree with them on the negligence claim. The HOA alleged facts supporting a “builder-vendor” status for two of the Matthews Defendants—David Matthews and Velvet Canada. Thus, dismissal of the implied-warranty claim as to those two defendants is premature. So too is dismissal of the HOA’s negligence claim. Not all the alleged damages are “purely economic,” and it is not apparent from the complaint that there is any contractual connection between the HOA and the Matthews Defendants.
I. The HOA alleged facts capable of supporting relief on its implied-warranty-of-habitability claims against David Matthews and Velvet Canada.
Embedded in the sale of every newly built home is the implied warranty of habitability: a promise that the dwelling is “free from defects which substantially impair [its] use and enjoyment.”…
Here, the HOA sued each of the Matthews Defendants—David Matthews; Velvet Canada; DMTM, Inc.; and Matthews, LLC—for breach of the implied warranty of habitability. Thus, the relevant inquiry is whether the HOA’s complaint contains facts sufficient to support a “builder-vendor” status for each defendant—that is, whether they were involved in both the construction and sale of Ivy Quad.
The complaint includes sufficient facts to support a showing that David Matthews and Velvet Canada are “builder-vendors” because the HOA alleged that both took part in “the design, construction, development and sale of Ivy Quad.” In other words, each defendant was purportedly involved in both building and selling residences at Ivy Quad for profit. However, the same is not true for the other two Matthews Defendants. Though the HOA alleged that DMTM, Inc. and Matthews, LLC were involved in the “design” and “construction” of Ivy Quad, it did not assert that either was involved in selling the residences. As a result, the face of the complaint reveals no set of circumstances under which DMTM, Inc. or Matthews, LLC could qualify as a builder-vendor, and thus neither can be held liable for breach of the implied warranty of habitability. Cf. Carroll’s Mobile Homes, 744 N.E.2d at 1051–52 (finding that a mobile-home company was not a builder-vendor because it was only in the business of selling). Thus, we affirm dismissal of the implied-warranty claim against DMTM, Inc. and Matthews, LLC.
We turn now to the HOA’s negligence claim and determine whether— at this early stage in the proceedings—it is barred by the economic loss doctrine.
II. The HOA alleged facts capable of supporting relief on its negligence claim.
Under Indiana’s economic loss doctrine, a defendant is not liable in tort “for any purely economic loss caused by its negligence.” Indianapolis-Marion Cnty. Pub. Libr., 929 N.E.2d at 729. At the 12(B)(6) stage, however, application of this general rule invites heightened scrutiny. Put simply, the economic loss doctrine’s preclusive effect must yield if the plaintiff has set forth any set of circumstances under which it would be entitled to relief—a relatively low bar. And because the HOA has cleared that bar here, the economic loss rule does not warrant dismissal of the negligence claim. To explain why, we begin with an overview of Indiana’s economic loss doctrine.
When a plaintiff suffers damages caused by another’s negligence, remedies may be available under both contract and tort law. Yet, these bodies of law have distinct remedial purposes, and our economic loss doctrine preserves this distinction. ….
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Thus, when determining whether our economic loss doctrine precludes tort recovery, two considerations guide our review: the type of damages sought and the contractual relationship between the parties. Here, in light of our standard of review, we cannot conclude that the doctrine bars the HOA’s negligence claim. We reach this conclusion for two interrelated reasons: (1) the alleged damages are not exclusively “purely economic”; and (2) the complaint does not reveal if, or to what extent, the parties were connected contractually. We address each in turn.
First, at this juncture, the HOA’s alleged damages do not trigger application of the economic loss doctrine. The complaint seeks recovery not only for “expense incurred in hiring experts, redesigning of Ivy Quad to correct the deficiencies, and reconstructing, repairing, and restoring Ivy Quad”—which would, indeed, be “purely economic”—but also for “damage to other property, including property inside individual units and property other than the building itself.” Because the complaint contains allegations of “other property” damage—namely, damage to something other than Ivy Quad itself—the economic loss doctrine does not bar recovery. See Gunkel, 822 N.E.2d at 155–57. As a result, foreclosing the negligence claim on this ground is premature.
Second, even if the HOA alleged only purely economic damages, dismissal of the negligence claim is premature for an additional reason. As noted above, the economic loss doctrine precludes tort recovery when participants in a construction project are connected through a chain of contracts. But here, the HOA’s complaint includes nothing about if, or to what extent, the parties were connected contractually. Accordingly, we cannot conclude that the parties ever had the opportunity to “allocate their respective risks, duties, and remedies.” Indianapolis-Marion Cnty. Pub. Libr., 929 N.E.2d at 736. And without a factual basis demonstrating any contractual relationship between the HOA and the Matthews Defendants, it would be unjust to foreclose a tort theory of relief based on the economic loss doctrine. Cf. Greg Allen Constr. Co. v. Estelle, 798 N.E.2d 171, 173 (Ind. 2003) (“To the extent that a plaintiff’s interests have been invaded beyond mere failure to fulfill contractual obligations, a tort remedy should be available.”).
Conclusion
The HOA’s complaint includes facts capable of supporting relief on its implied-warranty-of-habitability claims against David Matthews and Velvet Canada, but not against DMTM, Inc. and Matthews, LLC. And the complaint also contains facts capable of supporting relief on its negligence claim. We therefore reverse in part, affirm in part, and remand for proceedings consistent with this opinion. [Footnote omitted.]
David, Massa, Slaughter, and Goff, JJ., concur.