brevity of statement which the rules contemplate.” So Count II,
with its breach of contract claim, survives.

That may well, however, prove to be a short-term defeat for
Guardsmark. With Mount Hawley’s tort claim having gone by the
boards, it would seem doubtful that the requisite amount in
controversy exists to permit the litigation’s proceeding in this
federal court--whether by reason of the type of damage limitation
that is often included in contracts for security services or
otherwise. This action is set for an initial status conference at
9 a.m. July 23, 2001 so that the parties may then apprise this
Court of the situation in that respect,? something that may require

a swift remand to the state court.

Clee OF, alia

Milton I. Shadur
Senior United States District Judge

Date: July 2, 2001

+ Guardsmark cites to a contrary decision by this Court’s

colleague Honorable David Coar in Miller-Calabrese v. Continental
Grain Co., No. 96 C 6626, 1997 WL 392340, at *7 (N.D. Ill. July 8).
With all deference to this Court’s respected colleague, he was sold
a bill of goods in that regard. While this case does present the
added wrinkle that the claim may have been defectively asserted in
its place of origin (the Cook County Circuit Court), Judge Coar’s
case originated in the federal court--and there the Hanna v. Plumer
principle that pleading matters come under federal law rather than
state law is unimpeachable.

? If the contract for security services does contain a
limitation on liability, or if caselaw precludes recovery under a
breach of contract rubric of the type of consequential damages that
is sought here, either or both parties shall make appropriate
informative filings in this Court’s chambers on or before July 16.

4


security company), that could subject the security company to the
identical threat via a subrogation claim brought by that insurance
company (as is sought to be done here).

So Count I--Mount Hawley’s subrogated negligence claim on
behalf of its insured--succumbs to the Rule 12(b) (6) motion. This
opinion turns then to Count II, Mount Hawley’s breach of contract
claim.

On that score Guardsmark complains only of Mount Hawley’s
failure to attach a copy of the contract to the Complaint, for
which purpose Guardsmark invokes the requirement to that effect in
735 ILCS 5/2-606. That omission would have permitted a legitimate
beef if Guardsmark had contented itself to stay with the Illinois
state court forum that had been chosen by Mount Hawley. But having
opted to do battle in this District Court instead, Guardsmark must
perforce look to federal rather than state law as to such purely
procedural things as pleading (Hanna v. Plumer, 380 U.S. 460
(1965)). In that regard 5 Charles Wright & Arthur Miller, Federal
Practice and Procedure: Civil 2d §1235, at 272-73 (2d ed. 1990)
summarizes the law succinctly:

In pleading the existence of an express written

contract, plaintiff, at his election, may set it forth

verbatim in the complaint, attach a copy as an exhibit,

or plead it according to its legal effect.

See also Forms 3 and 12 and their accompanying notes, part of the
Appendix of Forms that Rule 84 expressly provides “are sufficient

under the rules and are intended to indicate the simplicity and


Mipute Order Form (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge A Sitting Judge if Other
or Magistrate Judge Milton I. Shadur than Assigned Judge
CASE NUMBER 01 C 5088 DATE 7/2/2001
CASE Mount Hawley Insurance Co. vs. Guardsmark, Inc.
TITLE
[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

MOTION: of the motion being presented.]

DOCKET ENTRY:

qd) a Filed motion of [ use listing in “Motion” box above.]

(2) Oo Brief in support of motion due :

@) im Answer brief to motion due. . Reply to answer brief due. :

(4) oO Ruling/Hearing on set for at t

(5) Oo Status hearing[held/continued to] [set for/re-set for].on set for at _

(6) Oo Pretrial conference[held/continued to] [set for/re-set for] on __ set for at

(7) oOo Trial[set for/re-set for] on at :

(8) a [Bench/Jury trial] [Hearing] held/continued to at

(9) oO This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OFRCP4(m) OGeneral Rule21 OFRCP41(a)(1) OO FRCP41(a)(2).

(10) Ml (Otherdocketentry) Enter Memorandum Opinion and Order. This action is set for an initial status
conference at 9 a.m. July 23, 2001 so that the parties may then apprise this Court of the situation in that
respect, something that may require a swift remand to the state court.

ai ff [For further detail see order attached to the original minute order.]

No notices required, advised in open court,
No notices required. umber otvatces
v | Notices mailed by judge’s staff.
Notified counsel by telephone. a UL 0.5 2001
Docketing to mail notices. } |
Mail AO 450 form. ® ects hah hats
Copy to judge/magistrate judge. et YETING
7 Ano

date mailed notice

gL JUL -3. PH 2 43

courtroom
deputy’s
initials

SN SN

Date/time received in
central Clerk’s Office

‘mailing deputy initials



DOCKETED
JUL O 5 2001
IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

MOUNT HAWLEY INSURANCE COMPANY,
etc.,

Plaintiff,
v. No. 01 C 5088

GUARDSMARK, INC.,

Defendant.
MEMORANDUM OPINION AND ORDER

Guardsmark, Inc. (“Guardsmark”) has removed to this District
Court, invoking federal jurisdiction on diversity of citizenship
grounds, this action brought against it in the Circuit Court of
Cook County by Mount Hawley Insurance Company (“Mount Hawley”).
Guardsmark has coupled the removal with its Fed. R. Civ. P.

(*Rule”) 12(b) (6) motion to dismiss Mount Hawley’s Complaint,
together with a supporting memorandum. This memorandum opinion and
order hastens to address that motion without the need to order a
response from Mount Hawley--though it turns out that something more
is needed from Guardsmark.

Mount Hawley’s Complaint sounds both in negligence (Count I)
and in breach of contract (Count II) terms. Because Guardsmark
attacks those claims on separate grounds, they will be addressed
seriatim.

Guardsmark is a company that was hired to provide security
services for a warehouse whose contents were insured by Mount

Hawley (the latter sues as subrogor, having made good on its policy


coverage). As for Mount Hawley’s Count I negligence-based claim,

Guardsmark is correct in pointing to Illinois’ Moorman doctrine

(Moorman Mfg. Co. v. National Tank Co., 91 I11.2d 69, 435 N.E.2d
443 (1982)) as insulating it from tort liability and damages for
any asserted economic loss stemming from Guardsmark’s claimed
breach of its security services contract. Indeed, the Moorman
concept accords’ with caselaw elsewhere that similarly spares
security firms from such tort claims that are vastly
disproportionate to the price they charge for their services--by
sheer chance, just over two months ago this Court (sitting by
designation with the Court of Appeals for the Third Circuit, and
speaking for the panel) wrote to that same effect under

Pennsylvania law (Krueger Assocs., Inc. v. American Dist. Tel. Co.,

247 F.3d 61, 66 (3d Cir. 2001)).

It is worth adding just a word in that last respect. In part
this Court’s Krueger opinion pointed out that there is nothing to
prevent the commercial tenant, which had suffered damages that it
then sought to foist off on the security company, from having taken
its own steps to protect against risk. And of course buying
insurance (the classic risk-spreading vehicle) is the most common
means adopted by businesspeople for doing just that. With that in
mind, it would be extraordinarily ironic if, with the business that
was at risk in this case having taken precisely that step by
purchasing insurance coverage (and thus averting its having to

flout the Moorman principle itself by seeking recompense from the

2