Business & Insurance Litigation Newsletter for Indiana

Scope of Damages

In Hammock v. Red Gold, Inc., 784 N.E.2d 495 (Ind. Ct. App. 2003), the Indiana Court of Appeals was faced with the ancient tort issue of determining at what point to limit the liability of a tortfeasor as a matter of public policy. A motorist negligently struck a utility pole causing Red Gold to lose electrical power at its food processing plant for approximately five hours. Red Gold filed a claim for the value of lost product and for lost profits. The court held that, as a matter of law, the defendant did not owe Red Gold a duty because the plant was located two miles from the accident scene and, therefore, was "outside of the zone of danger." However, the court emphasized that motorists may be liable for these types of damages if the zone of danger requirement is satisfied.