Court Opinion

ID: 8956500
Source: CourtListenerOpinion
Date Created: 2022-11-27 09:21:18.203326+00
Date Added: 2024-06-11T17:10:06.358765
License: Public Domain

CUDAHY, Circuit Judge,
concurring:
I certainly do not object to a certification to the Illinois Supreme Court if the majority believes this procedure is necessary or desirable. That estimable tribunal very well may apply some esoteric or arcane analysis to sustain the conclusion of the district court. But under ordinary common-law contract rules, the Uniform Commercial Code and the Illinois decisions on warranty to date, it seems to me unfortunately clear that the district court should be reversed.
For one party to be “in privity” with another simply means that one is bound by a contract to the other; the claim of one against the other derives from the contract. A seller of goods, like a roofing system, has a contract with the buyer — a contract of sale. A seller does not as a rule have a contractual relationship with others affected by the goods, either “horizontally” or “vertically” along the chain of distribution. In the case before us, on the other hand, the buyers of the roofing system, Chicago Title and Wachovia, formally assigned their contract rights under the express warranty to Collins. There is thus a contract between Collins and Carboline, and Collins’ claim is based on that contract. What more “privity of contract” could one demand?
The Illinois Supreme Court, in Szajna v. General Motors Corp., relied on by the district court and cited by the majority, declined to abolish the privity requirement in a suit for breach of an implied warranty by a plaintiff seeking to recover for economic loss. In so doing, that court reaffirmed the principle that “recovery for economic loss must be had within the framework of contract law.” 115 Ill.2d 294, 304, 104 Ill.Dec. 898, 503 N.E.2d 760, 764 (1987) (citing Moorman Mfg. Co. v. National Tank Co., 91 Ill.2d 69, 86, 61 Ill.Dec. 746, 435 N.E.2d 443, 450 (1982)). Permitting assignee Collins to maintain an action against seller Carboline (with which it is in privity) for breach of an express warranty resulting in economic loss would not run afoul of the Illinois Supreme Court’s holding in Szajna and would be consistent with that Court’s view favoring reliance on contract principles in cases involving economic loss.
The policy of protecting manufacturers from liability for damages of unlimited scope would not be furthered by precluding Collins’ suit. Carboline warranted the roof against leakage for ten years and Collins has sued for damages resulting from the roof’s leaks during that period.
Manufacturers like Carboline are protected by the Illinois Uniform Commercial Code, which allows either a buyer or seller to assign any rights under the contract “except where the assignment would mate*304rially change the duty of the other party, or increase materially the burden or risk imposed on him by his contract.” Ill.Rev. Stat. ch. 26, para. 2-210(2). Moreover, Carboline could have prevented the assignment of the roofing warranty by so stipulating in its contract with Chicago Title and Wachovia, as is commonly done, but Carboline made no such stipulation and under contract principles is bound by the assignment.
The majority puts a gloss on the problem by referring to something called “original” privity of contract. Presumably, “original” privity is created by the contract of sale between the seller, Carboline, and the buyers, Chicago Title and Wachovia. Although there is still privity when the warranty rights under the contract are assigned to Collins, this privity is by implication no longer “original” but has become something else.
I am afraid that in this respect “privity” is a bit like “pregnancy.” Neither lends itself comfortably to the use of modifiers. Either one is or one is not. Here there is unquestionably privity of contract between Collins and Carboline. Whether we characterize it as “original” or “assigned” would make no difference under the authorities. I am not aware that the Illinois Supreme Court has said anything pointing to a different conclusion, but I am certainly open to the possibility that for some reason it might want to pursue a heretofore undisclosed mode of analysis.