contract and equity, rather than tort. See St. Paul Fire & Marine Ins. Co. v. Great Lakes
Turnings, Ltd., 774 F. Supp. 485, 488 (N.D. Ill. 1991), citing Kinzer v. City of Chicago, 128
Ill.2d 437, 445 (1989). Consequently, even if Counts III and IV were construed as claims for
breach of fiduciary duty, those counts would not be barred by the economic loss doctrine. See
Illinois Constr. Corp. v. Morency & Assocs., Inc., 802 F. Supp. 185, 188 (N.D. Ill. 1992)
(Moorman doctrine inapplicable to claims based on agency and contract theory); St. Paul Fire &
Marine Ins. Co., 774 F. Supp. at 490 (fiduciary duty claims not barred by Moorman doctrine).
Plaintiffs maintain that, even assuming Counts III and IV are not barred by the economic
loss doctrine, “Bekins cannot claim that either plaintiff's conduct amounts to a breach of
fiduciary duty without alleging specific facts other than a recitation in a contract of a fiduciary

duty. It must show by affirmative allegations that special circumstances are present.” As support

for this proposition, plaintiffs cite to Citicorp Sav. of Illinois v. Rucker, 295 Ill. App. 3d 801, 809

(1* Dist. 1998). The court finds that a close reading of Rucker defeats plaintiffs’ argument,

however.
In Rucker, the court recognized that once an agency relationship is found, a fiduciary
relationship arises as a matter of law. Id., citing Letsos v. Century 21-New West Realty, 285 Ill.

App. 3d 1056 (1996). See also Faith Freight Forwarding Corp. v. Ruiz, No. 95C7560, 1997 WL

159207, at *7 (N.D. ILL. March 24, 1997); Kohler y. Hindman, No. 93C6170, 1994 WL 233801,

at *4 (N.D. ILL. May 20, 1994). Moreover, the Rucker court noted that questions of agency are

not ordinarily matters of law to be determined from the pleadings; rather, “the existence and

scope of an agency relationship are factual questions under Illinois law and are to be determined

by the trier of fact.” Id. at 809.


may not generally be recovered in tort actions.” Moorman Mfg. Co. v. National Tank Co., 91
Tll.2d 69 (1982). In Congregation of the Passion, Holy Cross Province v. Touche Ross & Co.,
159 Ill.2d 137, 159-160 (1994), the Illinois Supreme Court articulated the rationale of the
economic loss doctrine:

Contract law serves a vital commercial function by providing sellers and buyers

with the ability to define the terms of their agreements with certainty prior to a

transaction. Where the duty of a seller has traditionally been defined by contract,

therefore, Moorman dictates that the theory of recovery should be limited to

contract although recovery in tort would be available under traditional tort

theories.
Looking at the plain language of defendant’s counterclaim in the instant case, the court concludes
that because Counts III and IV sound in contract, not tort, the economic loss doctrine does not bar
tecovery. Indeed, Counts III and IV explicitly reference numerous provisions of the “agency
agreement” that were purportedly breached by plaintiffs, indicating that defendant essentially is
seeking contract damages from plaintiffs in Counts III and IV?

Moreover, to the extent that defendant is asserting counterclaims on the basis of breach of
fiduciary duty, rather than contract, such claims would not be barred by the economic loss

doctrine. As noted above, the economic loss doctrine prohibits recovery on the basis of tort law

only. In Illinois, claims for breach of fiduciary duty are rooted in the substantive laws of agency,

Although there are three exceptions to the economic loss doctrine, none of them applies
to the instant dispute.

*It is worth noting that the court finds Counts III and IV to be somewhat duplicative of
Counts I and II, which seek the exact same amount of damages on essentially the same basis of
recovery, breach of contract. Indeed, aside from the recitation of particular contract provisions
that were breached by plaintiffs in Counts III and IV, including language in the contracts
describing the parties as being in a “fiduciary relationship,” the court is at a loss to distinguish
these counts from Counts I and II.



The Rucker court ultimately decided that the mortgagor in that case had failed to
adequately allege an agency relationship between itself and the mortgagee, such that a fiduciary
relationship did not exist. It is worth emphasizing, however, that the court’s conclusion in
Rucker was based in large part on the “generally held view that a mortgagee is not the agent of
the mortgagor, notwithstanding the mortgagee’s ability to affect the legal relations of the
mortgagor.” Id. at 810.

The relationship alleged in the instant suit, in contrast, is a prototypical agent/principal
agreement, in which the agent is acting on behalf of the principal and holding itself out as the

principal’s representative. Indeed, in contrast to Rucker, the agreement between the parties in the

instant case is titled “Agency Agreement,” provides that “the relationship created hereby is one
of principal/agent,” and is replete with references to “agent[s]” and “fiduciary relationship[s].”
Thus, the court concludes that defendant has adequately alleged the basis of a fiduciary
relationship sufficient to withstand a Rule 12(b)(6) motion.
CONCLUSION
For the reasons stated herein, plaintiffs’ motion to strike Counts III and IV of defendant’s

counterclaim is denied.

ENTER: November 8, 2002

elesh), Coltip—

Robert W. Gettleman
United States District Judge



Minute Order Form (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Jud; Sitting Judge if Other
orMagitratedudge | Robert W. Gettleman | “hantasigned sudge
CASE NUMBER 02 C 1836 DATE Nov. $, 2002
CASE Aaron Transfer v Bekins Van Lines, Inc.
TITLE

[ln the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented]

MOTION:

DOCKET ENTRY:

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

(2) oOo Brief in support of motion due

(3) Oo Answer brief to motion due. . Reply to answer briefdue___-

@ oO Ruling/Hearingon___setfor___—sat__—.

(5) ao Status hearing

(6) oOo Pretrial conference[held/continued to] [set for/re-set for]on__——ssetfor_ at.
(7) oO Trial[set for/re-set for]on___—_aat

(8) Oo [Bench/Jury trial] [Hearing] held/continued to__at

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

OOFRCP4(m) General Rule21 CIFRCP41(a)(1) C1 FRCP41(a)(2).

(0) ff [Other docket entry]

Memorandum opinion and order entered.
Accordingly, plaintiffs’ motion to strike counts III and IV of defendant’s
counterclaim is denied.

dal) @ [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required.

umber of notices

X | Notices mailed by judge’s staff,

Notified counsel by telephone.

Docketing to mail notices.

Mail AO 450 form, Ss
yyisia Sf
Copy to judge/magistrate judge. unos i 39

date mailed notice

courtroom . - it)
Gps deputy's aq 4 Hd 8- AON é
Date/tingipeetded im J 3

initials
contral Clerk’s Office mailing depuly initials



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION Do
o
AARON TRANSFER AND STORAGE, INC., ) io CKE I Ef
and AARON RELOCATION SYSTEMS, INC., __) Vv 12 2002
)
Plaintiffs, )
) No. 02C 1836
v. )
) Judge Robert W. Gettleman
BEKINS VAN LINES, INC., )
)
Defendant. )

MEMORANDUM OPINION AND ORDER

Plaintiffs Aaron Transfer & Storage, Inc. (“Aaron Transfer”) and Aaron Relocation
Systems, Inc. (“Aaron Relocation”), which are engaged in the moving and storage business, filed
the instant lawsuit against Bekins Van Lines, Inc., seeking accounting and breach of contract
damages arising from “agency” agreements entered into by the parties in September 1999,
According to these agreements, which are identical in all material respects, Aaron Transfer and
Aaron Relocation each agreed to act as a “full service agent” on behalf of defendant, an
authorized motor carrier engaged in the transportation of household goods. In addition, each of
the agreements recognizes a “fiduciary relationship” between the plaintiff and defendant and
includes provisions prohibiting plaintiffs from representing other carriers that are in competition
with defendant.

In its answer to plaintiffs’ recently amended complaint, defendant filed a four-count
counterclaim for breach of contract against plaintiffs. Plaintiffs have filed a motion to strike

Counts III and IV, arguing that those counts are (1) barred by the “economic loss” doctrine, and



(2) fail to state a claim for breach of fiduciary duty. For the reasons stated below, plaintiffs’
motion is denied.
DISCUSSION

At the outset, it is useful to outline the contours of defendant’s four-count counterclaim.
In Count I, titled “Breach of Contract Aaron Transfer,” defendant alleges that “{a]s a result of its
refusal to promptly remit all of the monies due Bekins pursuant to the Agency Agreement and
Addendum and as identified in Aaron Transfer’s Account Statement, Aaron Transfer has
breached its contracts with Bekins.” Count I seeks $95,217.13 in damages. In Count III, which
is similarly titled “Breach of Contract Aaron Transfer,” defendant alleges that:

By failing to promptly remit the funds due Bekins, by obtaining U.S.D.O.T.

operating authority without the express written consent of Bekins, and by

competing against Bekins in the transportation of household goods in interstate

commerce to divert business from Bekins, all in violation of its Agency

Agreement and its fiduciary duties to Bekins, Aaron Transfer has breached its

contracts with Bekins.
Like Count I, Count III seeks $95,217.13 in damages against Aaron Transfer. The substantive
allegations of Counts II and IV, both of which are titled “Breach of Contract Aaron Relocation,”
are essentially identical to Counts I and III, respectively. Moreover, defendant requests
$225,149.02 in damages from Aaron Relocation in both Counts If and IV.

In the instant motion, plaintiffs characterize Counts III and IV of defendant’s

counterclaim as claims for breach of fiduciary duty that are barred by the “economic loss”

doctrine under Illinois law.' The economic loss doctrine provides that purely economic losses

'The parties do not dispute that the contracts at issue in the instant dispute are governed
by Illinois law.