Court Opinion

ID: 9709944
Source: CourtListenerOpinion
Date Created: 2023-08-26 03:58:06.180158+00
Date Added: 2024-06-11T18:22:52.905352
License: Public Domain

PRESIDING JUSTICE REINHARD, concurring in part and dissenting in part: Because I agree that plaintiff (Northern Illinois) failed to prove the reasonableness of the rates it ascribed to the repair work at issue, I concur in the majority’s affirmance of the judgment in favor of defendants (collectively DiVito) on Northern Illinois’ complaint. I disagree, however, with the majority’s analysis of the applicability of Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, in the instant case, and so I dissent from the reversal of the award in favor of DiVito on their counterclaim. Moorman struggled with the question of whether and under what circumstances a tort action should be foreclosed in favor of limiting a plaintiff’s recourse to solely contractual remedies. Moorman established that, in a product liability action, recovery may not be had in tort for solely economic losses regardless of whether the action is brought under a theory of strict liability or negligence. (Moorman, 91 Ill. 2d at 81, 88.) The supreme court excepted only two varieties of tort actions from the sweep of this holding: (1) intentional misrepresentation; and (2) negligent misrepresentation by one who is in the business of supplying information for the guidance of others in their business transactions. Moorman, 91 Ill. 2d at 88-89. As the majority correctly notes, Moorman has been applied outside of the product liability setting. I do not believe, however, that the case law in this area supports the application of Moorman outside the sphere of product liability where the allegedly negligent actions of the defendant were not undertaken pursuant to a contractual agreement or relationship. Close examination of the supreme court’s recent decision in 2314 Lincoln Park West Condominium Association v. Mann, Gin, Ebel & Frazier, Ltd. (1990), 136 Ill. 2d 302, makes clear that Moorman’s economic loss rule is rooted in the question of whether a defendant’s duty will be defined as contractual in nature or based in tort. The plaintiff in Lincoln Park West was a condominium owners association which brought an action to recover for defects in the construction of the condominium complex against, inter alia, the architectural firm which designed the complex pursuant to a contract with the original owner. (Lincoln Park West, 136 Ill. 2d at 304-06.) The defendants, citing Moorman, filed a motion to dismiss the plaintiff’s complaint insofar as it sought to recover solely economic losses based on a negligence theory. The trial court granted the motion in part but refused to strike the negligence count directed against the architect. The trial court certified the question of whether there should be “an exception to the rule set forth in Moorman which would permit Plaintiffs seeking to recover purely economic losses due to defeated expectations of a commercial bargain to recover from an architect or engineer in tort.” Lincoln Park West, 136 Ill. 2d at 306. In analyzing Moorman’s economic loss rule, the supreme court in Lincoln Park West stated that “the concept of duty is at the heart of the distinction drawn by the economic loss rule” and that “the economic loss rule attempts to define the contours of duty.” (Lincoln Park West, 136 Ill. 2d at 314-15.) The court held that the association’s claim concerned the quality, rather than the safety, of the building and was thus more appropriately resolved under contract law. The following statement is of particular note: “The architect’s responsibility originated in its contract with the original owner, and in these circumstances its duties should be measured accordingly.” (Lincoln Park West, 136 Ill. 2d at 317.) Thus, the court determined that the association could not recover in tort because it was merely attempting to obtain the benefit of its bargain. The majority correctly notes that the supreme court has held that the applicability of the Moorman economic loss rule is not dependent upon whether there is a contract remedy available to the plaintiff. The supreme court’s most specific pronouncement on this point, however, does not suggest that Moorman applies even where the purportedly negligent conduct was not performed in the context of a contractual relationship. The court has stated: “A plaintiff seeking to recover purely economic losses due to defeated expectations of a commercial bargain cannot recover in tort, regardless of the plaintiff’s inability to recover under an action in contract.” (Emphasis added.) (Anderson Electric, Inc. v. Ledbetter Erection Corp. (1986), 115 Ill. 2d 146, 153.) Thus, while Moorman may apply where the plaintiff has no direct contractual relationship with the defendant (Anderson, 115 Ill. 2d at 148) or where the plaintiff’s contractual claim is barred by the statute of limitations (Moorman, 91 Ill. 2d at 92-94), the supreme court has not applied Moorman’s economic loss rule to a situation where, like here, the purported act of negligence was not undertaken in the context of a contractual relationship with any party. The majority cites three cases in support of its conclusion that Moorman has blanket application in any tort action. The first case, Lincoln Park West, as discussed above, clearly arises in a contractual setting. The second case, Collins v. Reynard (1990), 195 Ill. App. 3d 1067, applied Moorman to an action for legal malpractice, a result which is facially unacceptable because it would virtually eliminate legal malpractice as a cause of action. The supreme court has granted leave to appeal in Collins. (Collins v. Reynard (1990), 135 Ill. 2d 554 (No. 70325).) Moreover, the appellate court opinion in Collins appears to conflict with the supreme court’s statement in Lincoln Park West: “While we do not intend in the present case to determine the future application of Moorman in all areas of professional malpractice, we must reject the plaintiff’s theory that denial of the negligence claim against the present architect would signal in general the end of malpractice recovery in tort. *** [Sjince Moorman, malpractice actions against attorneys have gone forward, without any suggestion that the form of recovery traditionally recognized in such actions would no longer be allowed. [Citations.] Moreover, those cases recognize an extracontractual duty not only to the client but also to the group of persons the client intended to benefit.” (Emphasis added.) (Lincoln Park West, 136 Ill. 2d at 317-18.) The clear suggestion in this passage is that Moorman does not apply to certain professional malpractice actions because the duty owed by such professionals is not defined solely by reference to the contractual relationship. Finally, while I agree that the third case relied upon by the majority, Dundee Cement Co. v. Chemical Laboratories, Inc. (7th Cir. 1983), 712 F.2d 1166, holds that Moorman applies to every tort action, regardless of whether contractual duties are also involved, I feel the analysis in that case is not in accord with the Illinois Supreme Court’s most recent pronouncements regarding the underlying rationale for Moorman’s economic loss rule. As Federal decisions construing Illinois law are not binding on this court (People ex rel. Lignoul v. City of Chicago (1977), 67 Ill. 2d 480, 484), I would not follow Dundee Cement. In conclusion, I view the Moorman doctrine as simply an application of the general rule of tort law that, where a defendant’s actions are undertaken pursuant to contract and cause only economic losses to the plaintiff, the defendant’s duties are defined by the contract and are not imposed by tort law. (W. Keeton, Prosser & Keeton on Torts §92, at 655-67 (5th ed. 1984); see also Bertschy, Negligent Performance of Service Contracts and the Economic Loss Doctrine, 17 J. Marshall L. Rev. 249, 273 (1984) (“the economic loss doctrine should be held applicable to the negligence of any party who is performing a duty in which the plaintiff has a contractual expectation”).) Accordingly, I dissent from the majority’s application of Moorman to a negligence action where no contractual duties are involved.