Opinion ID: 2995218
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Heading: Ill Comp. Stat. 5/3-103(7) (defining

Text: ordinary care); Bullitt, 684 S.W.2d at 291-92; Robertson’s Crab House, 389 A.2d at 392-93. Indeed, although the Code per mits contracting parties to vary the effect of those provisions by agreement, it expressly disallows any term which purports to disclaim a bank’s responsibility for its lack of good faith or failure to exercise ordinary care or limit the measure of damages for the lack or failure. 810 Ill. Comp. Stat. 5/4- 103(a); see Robertson’s Crab House, 389
Maryland Nat’l Bank, 333 A.2d 329, 333 (Md. 1975); Inkrott, 563 N.E.2d at 28. Accordingly, courts throughout the country have continued to apply the common-law rule on which Mutual’s claim is founded notwithstanding the advent of the UCC. See, e.g., Govoni & Sons Constr. Co. v. Mechanics Bank, 742 N.E.2d 1094, 1100 n. 15 (Mass. App. 2001) (The cases following this rule, both before and after the emergence of the code, are legion.); see also Federal Ins. Co. v. NCNB Nat’l Bank of North Carolina, 958 F.2d 1544, 1550 (11th Cir. 1992); Dalton & Marberry, 982 S.W.2d at 234; Bullitt, 684 S.W.2d at 292; Robertson’s Crab House, 389 A.2d at 393; Transamerica Ins. Co., 558 P.2d at 333. No court that we are aware of has found the rule to be inconsistent with any provision of the Code. C. The bank’s next argument rests on the Illinois Supreme Court’s decision in Moorman Mfg. Co. v. National Tank Co., 435 N.E.2d 443 (Ill. 1982). Moorman held that recovery for a loss that is solely economic in nature must be had in contract rather than in tort. Moorman itself was a products liability case, of course, but its ruling has since been ex tended to the provision of services as well. See Congregation of the Passion, Holy Cross Province v. Touche Ross & Co., 636 N.E.2d 503, 513-14 (Ill.), cert. denied, 513 U.S. 947, 115 S. Ct. 358 (1994); Collins v. Reynard, 607 N.E.2d 1185, 1187-88 (Ill. 1992) (Miller, J., concurring). In essence, the economic loss, or commercial loss, doctrine denies a remedy in tort to a party whose complaint is rooted in disappointed contractual or commercial expectations. Id. at 1188 (Miller, J., concurring). As we have noted, Mutual conceded below that Moorman barred its negligence claim against the bank (R. 12 at 2-3) and proceeded with its claim for breach of contract. The bank, however, insists that no matter what label one affixes to it, Mutual’s claim is at bottom a negligence claim; and, indeed, the cases usually refer to the claim as one for negligence rather than for breach of contract. E.g., Milano, 242 Ill. App. at 367, 370, 1926 WL 3944, at , ; see also Dalton & Marberry, 982 S.W.2d at 237; Sun ’n Sand, 148 Cal. Rptr. at 344. The fact that Mutual nominally sought and obtained relief for breach of contract consequently does not obviate the Moorman problem, in the bank’s view. We shall assume for the sake of argument that Mutual’s claim is indeed one for economic losses within the scope of Moorman and its progeny. Even so, we discern no barrier in Moorman to the relief that Mutual obtained. Because Mutual’s claim is founded on a duty that was implied in the contract between the bank and Jo Daviess, we believe that Mutual was free to seek relief for its loss either in contract or in tort. The bank’s liability in this case rests on the duty of care that it owed to Jo Daviess by virtue of the contract between the two of them. The deposit agreement, as we have noted, did not expressly define the parties’ obligations with respect to checks drawn to the order of the bank. But the common law imposed on the bank a duty of care to its depositor, and that implied duty included the obligation to see that the proceeds of checks payable to the bank (and not in satisfaction of any debt to the bank) were not misapplied. Founded as it is upon the breach of a duty of care imposed by law, Mutual’s claim sounds very much like one for negligence; and thus it is no surprise to see the claim often described as a tort claim. But the duty of care is one implied into the agreement between bank and depositor; it is a duty, in other words, that depends upon the existence of a contract. Illinois courts have long recognized that such implied contractual duties will support recovery in either contract or tort. As the Illinois Supreme Court explained more than 100 years ago: [N]othing is better settled than that in many contracts, especially those which establish peculiar relations between the parties, as, those of confidence and trust, the law silently annexes certain conditions, and imposes mutual obligations and duties, which are not all, in express terms, provided for in the contract, yet in contemplation of law, they are nevertheless regarded as part of the contract, and the non- performance of them may, in an action on the contract, be assigned as a breach thereof. But while assumpsit [i.e., a contract claim] will certainly lie for a breach of these duties, it is equally well settled that case [i.e., a tort claim] will lie also. Strictly speaking, these duties arise ex lege out of the relation created by the contract. As familiar illustrations of this class of contracts, which give rise to an almost infinite variety of implied duties and obligations, may be mentioned those between client and attorney, physician and patient, carrier and shipper, and, in short, every species of bailment. In all these and analogous cases it is conceded case is a concurrent remedy with assumpsit for a breach of the implied duties growing out of any of these relations. Nevin v. Pullman Palace Car Co., 106 Ill. 222, 233, 1883 WL 10204, at  (Ill. 1883); see also Ledingham v. Blue Cross Plan for Hospital Care of Hospital Serv. Corp., 330 N.E.2d 540, 544 (Ill. App. 1975) (It is clear in Illinois that where both a tort and a contract cause of action arise out of the same fact situation, the plaintiff is free to proceed with the theory of his choice.), rev’d on other grounds, 356 N.E.2d 75 (Ill. 1976); cf. Selcke v. New England Ins. Co., 995 F.2d 688, 689 (7th Cir. 1993) ([a] suit to enforce an implied term is a suit that arises under the contract; hence, pursuant to clause in parties’ agreement calling for arbitration of disputes as to proper interpretation of contract, dispute over contractual term implied by Illinois statute was subject to arbitration); Merrill Tenant Council v. U.S. Dep’t of Housing & Urban Dev., 638 F.2d 1086, 1089-90 (7th Cir. 1981) (duty imposed upon landlord by Illinois statute to pay interest on tenant’s security deposit became implied term of lease agreement, and tenants could sue in contract rather than tort for breach of that term). Thus, even if Moorman did preclude Mutual from suing the bank in tort, nothing prevented Mutual from alternatively pursuing relief in contract for breach of the bank’s implied duty of care. See Calcagno v. Personalcare Health Mgmnt., Inc., 565 N.E.2d 1330, 1339 (Ill. App. 1991) (although Moorman barred insureds’ common-law claims against insurer to extent such claims were premised on negligence or wilful or wanton breach of contract, insureds were nonetheless free to pursue contract action based on breach of implied covenant of good faith and fair dealing); see also Gillen v. Maryland Nat’l Bank, supra, 333 A.2d at 333 (a depositor may sue in an action for breach of contract to enforce the bank’s contractual obligation to use ordinary care). Yet, we are not so sure that Moorman would have barred a tort claim against the bank in any event. In confining recovery for economic losses to the realm of contract law, the Illinois Supreme Court in Moorman sought to maintain the integrity of a carefully articulated body of rules in the UCC governing the sale of goods. 435 N.E.2d at 447. The rules included a number of provisions regarding express and implied warranties, disclaimers, the extent of a manufacturer’s liability, and the period of time during which a manufacturer might be sued. See id. These rules determine the quality of the product the manufacturer promises and thereby determine the quality he must deliver. Id., citing Seely v. White Motor Co., 403 P.2d 145, 150 (Cal. 1965) (Traynor, C.J.). Significantly, the UCC also allowed the contracting parties either to limit warranties or to eliminate them altogether. Id. Thus, in the court’s view, subjecting a manufacturer to tort liability on theories of strict liability or negligence, threatened to disturb the law of sales by eliminating the ability of the parties to contractually limit a manufacturer’s liability, by subjecting a manufacturer to suit by parties with whom it was not in privity, and exposing it to liability for damages of unknown and unlimited scope. Id. The duty of care underlying Mutual’s claim, on the other hand, is not a duty that is foreign to the UCC. It is not only a duty that is embraced in several UCC provisions, as we noted above, but it is a duty that the UCC expressly forbids the parties from disavowing. 810 Ill. Comp. Stat. 5/4-103(a). As we have noted, the UCC also embraces common-law principles to the extent that they do not conflict with the express terms of the Code. 810