Court Opinion

ID: 9741308
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:53:08.791787+00
Date Added: 2024-06-11T07:24:23.333473
License: Public Domain

JUSTICE HEIPLE, dissenting: I dissent from the majority opinion for three reasons. First, several material issues were decided in the Federal litigation which should have precluded their relitigation in State court. Second, the inconsistent jury verdicts cannot be glossed over. Finally, today’s opinion fails to provide guidance in an unnecessarily murky area of law. Once again, this court has plunged into the quagmire known as the Moorman doctrine and dredged up yet another ill-conceived exception to add to the current confusion. Standing alone, the earlier Federal litigation, giving rise to estoppel, should have resulted in a judgment for the defendant. Even if estoppel were not applied, the defendant deserves a new trial as a result of the inconsistent verdicts. Finally, the majority opinion is incoherent in its discussion of the Moorman doctrine. The majority opinion has further muddled rather than clarified Moor-man. FACTS In 1975, plaintiff, the Congregation, created a "retirement fund” for its members initially valued at $1 million. In 1976, the Congregation established a "permanent fund” also valued at $1 million. The purpose of the permanent fund was to provide for the ongoing needs of the religious and lay personnel who assisted the Congregation. Plaintiff’s Business Advisory Board (BAB), a lay advisory board of businessmen, accountants, and experienced securities and commodities traders provided investment and general business advice to the plaintiff. In the course of developing an investment strategy, the Congregation retained Cranford D. Newell Associates (Newell) as its investment manager. By written agreement, the Congregation’s retirement and permanent funds were committed to Newell’s full discretionary authority. In order to meet the Congregation’s high return expectations of 12% to 15%, Newell engaged in arbitrage transactions in government securities. These arbitrage investments were first made in the 1976 fiscal year. Arbitrage is the buying of stocks, or in this case, government securities having different maturity dates and interest rates in one market and simultaneously selling them in another market, in order to profit from a price discrepancy. Trades frequently involve more than $1 million and even minor fluctuations 07s2 or 1hi of a point) can mean large sums of money. It is an investment strategy that entails great risks. In other words, arbitrage is a fancy name for big time gambling. Newell’s trading strategy was highly leveraged in that the only cash required to establish an arbitrage position was the difference between the amount obtained from the sale and what was needed to pay for the buy. The reports that Newell submitted to the Congregation reflected the open arbitrage positions at what Newell called "margin,” in other words, net cash paid, not at the market value of the securities. The Congregation engaged Touche Ross to perform unaudited reviews of the Congregation’s financial statements for the fiscal years 1974 through 1980. The Congregation engaged Touche Ross prior to turning over its funds to Newell, and Touche Ross was not specifically engaged to consult with plaintiff regarding the arbitrage transactions. Each year through 1979 Touche Ross sent the Congregation an engagement letter, accepted by the plaintiff, which described the anticipated services that Touche Ross would provide to the Congregation. This form of letter was drafted before Newell’s arbitrage trading began. Unbeknown to Touche Ross, there were mounting problems with the arbitrage trading accounts managed by Newell in 1976 and 1977. In the fall of 1980, during the Touche Ross review of plaintiff’s June 30, 1980, unaudited financial statements, Philip Melchert, the Touche Ross engagement partner, raised a question concerning the assets supporting the $3.6 million year-end balance which Newell had reported to the Congregation. After numerous requests to the plaintiff and Newell for additional information concerning these accounts, Melchert was finally provided with the information he needed in January 1981. The information Melchert received from Newell and the dealers indicated that the market value of the Newell accounts as of June 30, 1980, was $1.2 million, or $2.4 million less than the investment value reported to the plaintiff by Newell. During a conference call on February 4, 1981, involving plaintiff’s investment officer, Melchert, and James Hart, a trader on the Chicago Board of Options Exchange and a member of the plaintiff’s BAB, Newell confirmed that the market value of these accounts on June 30, 1980, was $1.2 million and that the impairment in value appeared to be permanent. On February 11, 1981, at a Provincial Council meeting, Melchert advised members of the Provincial Council of the information he had obtained concerning the June 30, 1980, market value of the Newell managed accounts. Despite this information, the Congregation took no action to eliminate arbitrage trading, to close the accounts, or to transfer the management of these accounts to someone other than Newell. Instead of liquidating the accounts, on or about April 14, 1981, more than two months after the Congregation had been advised that the value of the Newell managed accounts on June 30, 1980, was $2.4 million less than the investment value reported by Newell, plaintiff decided to invest an additional $500,000 as requested by Newell. Only after the first week in May 1981, when the equity in the Newell accounts had been completely depleted and substantial debts to certain dealers had been incurred, did the plaintiff act to close its accounts. In June 1981, the Congregation sued its agent, New-ell, and four government securities dealers in the United States District Court for the Northern District of Illinois, alleging Federal securities law violations. The dealers counterclaimed for amounts allegedly owed after liquidation of the Congregation’s accounts managed by Newell. In May 1982, plaintiff amended its Federal complaint to join Touche Ross as an additional defendant, charging it with aiding and abetting the dealers and Newell’s alleged securities law violations and with breach of fiduciary duty and breach of contract. In September 1984, the district court granted the defendants’ motions for summary judgment, holding that neither Newell nor the dealers had violated the securities laws and that Touche Ross had not aided and abetted Newell or the dealers. The remaining counts were dismissed for want of Federal jurisdiction. In rendering its decision, the district court made specific findings that (1) Newell was plaintiff’s agent acting within the scope of his authority, (2) the plaintiff was able to "track” and understand the Newell transactions and (3) the plaintiff’s "reliance was on Newell.” Specifically, Judge Charles P. Kocoras stated: "Simply put, Newell had broad discretion and the plaintiff had knowledge of his activities which it cannot deny. During the years 1975 through 1981, plaintiff was able to track the investments through confirmation slips and accurate reports of the transactions which the dealers supplied. Plaintiff received the statements of its United California Bank account and also had before it those statements, the cash sheets and the ticket numbers assigned by Newell for each transaction. The cash transfers were not going into the agent’s hands while the principal remained unaware. * * * The documents and the transactions were complex, confusing and ultimately unwise, but the plaintiff had the ability to follow them and to have review of them for themselves or by another specialist other than Newell.” Congregation of the Passion, Holy Cross Province v. Kidder Peabody & Co. (N.D. Ill. April 30, 1985), No. 81 — C—3159 (transcript of proceedings). The Seventh Circuit Court of Appeals affirmed. 0Congregation of the Passion, Holy Cross Province v. Kidder Peabody & Co. (7th Cir. 1986), 800 F.2d 177, 184.) That court concluded that "[t]he record on summary judgment *** establishes, as a matter of law, that the Congregation authorized and was aware of the type of transactions which created the debts in the accounts maintained with the dealers.” After the adverse ruling in Federal district court, the plaintiff refiled its complaint against Touche Ross in the circuit court of Cook County. The complaint was based upon the same facts and transactions as were the subject of the Congregation’s Federal lawsuit. Plaintiff’s complaint consisted of three counts. Count I, a professional malpractice-negligence count, alleged, in essence, that defendant, inter alla, negligently "failed to report and describe accurately the market value of the Newell investments.” Count II alleged that defendant breached its fiduciary duty to the Congregation in "failing to report and describe accurately the market value of the Newell investments.” Count III, a breach of contract count, alleged that Touche Ross breached its express and implied contractual obligations to plaintiff by "failing to report and describe accurately the market value of the Newell investments.” In other words, while there were three legal theories for recovery, the underlying allegations were identical. Before trial, Touche Ross presented motions to dismiss and for summary judgment which contended that the Congregation’s claims were barred by collateral estoppel and that the negligence count was barred by the Moorman doctrine. These motions were denied. After plaintiff presented its evidence and rested its case, defendant moved for a directed verdict on all three counts of plaintiff’s complaint. The circuit court denied defendant’s motion as to each of the three counts. At the close of all evidence, defendant renewed its motion for a directed verdict on all three counts of plaintiff’s complaint. The circuit court denied the motion as to the negligence (count I) and breach of contract (count III) counts, but granted the motion as to the fiduciary duty count (count II). In its proof and closing argument, the plaintiff sought total damages of exactly $3,819,352. These damages consisted of $3,293,350.41 in amounts paid to the dealers in satisfaction of their claims against plaintiff and (b) $526,001.59 in other losses. These damages included the $500,000 invested by the Congregation after the February 11, 1980, meeting in which Newell’s losses were fully disclosed. The jury returned separate and inconsistent verdicts for plaintiff in the amount of $3.9 million on count I, the negligence count, and $1.5 million on count HI, the breach of contract count. The jury reached this result despite the fact that both the tort and the contract counts were based on the same facts and alleged the identical failures on the part of the defendant. The trial court ordered a remittitur to $3,819,352 on count I and to $0 on count III. The Congregation agreed to the remittitur on count I, but refused to consent to a remittitur on count III. The trial court then entered a "judgment” of liability on both verdicts, ignored the $1.5 million verdict on count III, and entered a "final judgment,” in tort alone, of $3,819,352. The appellate court affirmed the judgment of the trial court on the condition that plaintiff agree to a remittitur of count III, the contract claim to $0. APPEAL TO THIS COURT On appeal to this court, defendant argues that the doctrine of collateral estoppel precludes plaintiff from relitigating those issues decided in the Federal adjudication. Defendant claims that the Federal courts fully considered and decided: (1) that Newell was plaintiff’s agent; (2) that because Newell had total discretion to act as the Congregation’s agent in executing its arbitrage transactions and because plaintiff was aware of each transaction at the time of its execution, the Congregation was liable on the counterclaims of the dealers; (3) that defendants made no misrepresentations to plaintiff; (4) that the plaintiff was fully aware of the transactions and the type of risks involved; (5) that Newell acted within the scope of his authority; (6) that the Congregation relied only on Newell and its own advisory board in making its investment decisions; (7) that the Congregation was able to and did track the Newell arbitrage investments and was aware "as a matter of law” of the transactions in which Newell was engaged; (8) that the Congregation and Touche Ross agreed to report the arbitrage investments on a cost, not market, basis and Touche Ross included a footnote in the financial statements reflecting that agreement; and (9) that the Congregation itself, rather than Touche Ross or the dealers, was responsible for, and the cause of, the losses incurred. Touche Ross argues that the trial court’s failure to give effect to the Federal court findings allowed plaintiff to advance contentions directly contrary to those findings — leading to the adverse judgment. Without discussion, the majority states that the several findings that Touche Ross relies upon for its collateral estoppel claim are not relevant to plaintiff’s theory of recovery. Therefore, these findings could not have affected the judgment rendered in this case. Specifically, the majority finds it inconsequential: (1) that Newell was plaintiff’s agent, (2) that Newell had discretion to invest plaintiff’s funds and acted within his authority, (3) that plaintiff was aware of the risks involved in New-ell’s investment strategy, and (4) that plaintiff relied only on Newell and its own business advisory board in making plaintiff’s investment decision. 159 111. 2d at 153. The majority’s finding that none of these issues are relevant to the current theory of recovery is both erroneous and completely conclusory. The plaintiff’s theory in this case is that Touche Ross reported the Newell transactions in a negligent fashion, thereby causing plaintiff’s losses. As part of this claim, plaintiff must demonstrate that Touche Ross’s negligence proximately caused plaintiff’s losses. The Federal court finding that plaintiff relied only on Newell and its own business advisory board in making its investment decisions goes directly to the issue of proximate cause. There is no question that Newell and the Board understood the Newell transactions. If the Congregation relied solely on Newell and the Board for the Congregation’s investments, how Touche Ross recorded the Newell transactions is irrelevant because Newell and the Board did not base their investment decision on the Touche Ross year-end reports. Had the trial court given proper weight to the Federal court findings, this case should never have gone to trial. The majority further finds that the other issues Touche Ross claims to have been litigated previously were not necessary to the Federal court proceedings, thus collateral estoppel does not apply. In particular, the majority finds that the Federal courts did not need to decide whether or not the Congregation could track the Newell investments. (159 Ill. 2d at 154.) For support of this conclusion, the majority cites a footnote in the Seventh Circuit opinion in which that court stated: "While it is not necessary to our decision, we note that there is at least some evidence to indicate that the Congregation could follow the transactions. Sister Flaherty testified that she never made an entry on the ledger unless she was satisfied that confirmation tickets agreed with cash reports from the United California Bank. Dep. Tr. at 169-70. In addition, the Congregation’s Business Advisory Board and an outside firm carefully examined Mr. New-ell’s investments.” Congregation of the Passion, Holy Cross Province, 800 F.2d at 182 n.4. The majority, however, fails to mention that the Federal district court specifically determined that "the plaintiff had the ability to follow [the transactions] and to have review of them for themselves or by another specialist other than Newell.” That court also determined that the "[investment decisions were made by plaintiffs investment adviser Newell — in whom [the Congregation] had entrusted full discretion — and were tracked by plaintiffs officers and other advisers.” Congregation of the Passion, Holy Cross Province v. Kidder Peabody & Co. (N.D. Ill. April 30, 1985), No. 81 — C— 3159 (transcript of proceedings). The majority offers no reason why it ignored the Federal district court’s determinations for collateral estoppel purposes. The mere fact that the Seventh Circuit found the defendants not liable on a different basis than the Federal district court does not expunge the correctness of the district court’s finding. The State courts should have barred the relitigation of this issue and dismissed plaintiff’s case. THE INCONSISTENT JURY VERDICTS Apart from the collateral estoppel issues, I am also bewildered at the nonchalance with which the majority has trivialized the confused and inconsistent jury verdicts in this case. While it is understandable that a lay jury may be moved by a sympathetic plaintiff, it troubles me greatly to speculate that a majority of this court may have been similarly swayed. In count I of its complaint, plaintiff claimed that it was injured and that it sustained damages when Touche Ross negligently failed to, inter alia: "(a) report and describe accurately the market value of the Newell investments; (b) promptly advise [the Congregation] of any material change in the nature and/or balance of such investment ***• » (c) physically inspect or confirm by direct correspondence with independent custodians the Newell investments; (d) test the market value of the Newell investments by reference to published market quotations; (e) assure accurate Reports on the nature of the Newell investments; ***.” With respect to the contract count, count III, plaintiff incorporated verbatim the same allegations alleged in the negligence count. Under these circumstances, if plaintiff proved its case, the amount of recovery under either theory should have been the same. Indeed, plaintiff never claimed that its damages would be different depending on the theory of recovery. Plaintiff claimed the same damages, $3,819,352, for both the negligence malpractice and the contract count. Nonetheless, the jury managed to return two inconsistent verdicts. The jury awarded plaintiff $3.9 million on the malpractice count, and $1.5 million on the contract count. These verdicts should have been set aside. It is true that verdicts are to be liberally construed and may be amended to conform to the evidence. (Churchill v. Norfolk & Western Ry. Co. (1978), 73 Ill. 2d 127, 148.) In order for a court to amend a jury verdict, however, the intent of the jury must be clear. (Churchill, 73 Ill. 2d at 148.) In this case, it is impossible to discern the intent of the jury. Taken individually, neither verdict is so far removed from the actual loss claimed as to elicit concern. A court could reasonably interpret the $3.9 million malpractice award as the jury’s attempt to fully compensate the plaintiff for its entire claim. On the other hand, a court could conclude that the $1.5 million award logically represents the jury’s intent to deduct a given amount from plaintiff’s claimed losses due to contributory negligence or failure to mitigate damages. These two verdicts, however, are impossible to justify when taken together. As the majority points out, "[b]oth the tort and contract counts were based on the same facts and sought recovery for the same injury.” (159 Ill. 2d at 172.) Rather than remanding for a new trial, however, the majority finds that the jury’s intent regarding damages on the tort count is clear, thus the conflicting verdicts do not warrant a reversal. The fatal error in the majority’s opinion stems from its individualized and faulty analysis of the verdicts. The majority first finds that the $3.9 million award demonstrates that the "intent of the jury was to award plaintiff the full amount of its damages on the tort count.” (159 Ill. 2d at 172.) Next, without explanation, the majority finds that the "$1.5 million verdict returned by the jury on the contract count does not bear any ascertainable relationship to the loss suffered by plaintiff.” (159 Ill. 2d at 172.) This latter finding, however, completely overlooks the possibility that the jury may have found the plaintiff partly responsible for its losses. Indeed, the $1.5 million verdict bears no ascertainable relationship to the loss suffered by plaintiff only if the $3.9 million award is viewed as demonstrative of the jury’s intent. There is, however, no proof that this is so and the majority does not offer a rationale for its conclusion. It appears that the majority finds that the $3.9 million award bears a truer relationship to the amount lost only because it analyzed that verdict first. Had the majority decided to analyze the $1.5 million award first, perhaps it would have found that the $3.9 million award bears no relationship to the loss. In fact, this would make more sense as the plaintiff asked for $3,819,352, not $3.9 million. Even if we were to ignore the collateral estoppel problem, given the irreconcilable discrepancy in the verdicts arising from the same facts and issues, I would remand this cause for a new trial on that issue alone. MOORMAN DOCTRINE Finally, I dissent from the majority’s disposition of the Moorman doctrine issue. With today’s opinion, the majority has infused further confusion into an area of law already inundated with uncertainty. Rather than clearly defining the relationship between professional malpractice and Moorman, the majority opinion puts litigants and trial judges in a position of having to guess what the exception of the month is. Yesterday it was attorneys. Today, it is accountants but not architects. Tomorrow, who can say? At the heart of the economic loss doctrine is the proposition that contract law, and not tort law, provides the appropriate set of rules for the recovery of purely economic damages. As originally defined by this court, economic damages were those " 'damages for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits — without any claim of personal injury or damage to other property.’ ” (Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, 82, quoting Note, Economic Loss is Products Liability Jurisprudence, 66 Colum. L. Rev. 917, 918 (1966).) The rationale for this tort-contract dichotomy originally stemmed from a reluctance of courts to expose manufacturers to open-ended liability for unfore.seeable consequential damages. (See generally Way, Note, The Problem of Economic Damages: Reconceptualizing the Moorman Doctrine, 1991 U. Ill. L. Rev. 1169.) Thus, in the Moorman case, this court denied recovery in negligence for a defective grain storage tank. This court noted that the Uniform Commercial Code specifically allowed sellers to disclaim warranties for qualitative defects and that to allow for the recovery of such defects in tort law would eviscerate the UCC scheme. Moorman, 91 Ill. 2d at 79. While Moorman was decided with products liability and the UCC warranty provisions in mind, this court soon extended the reach of the economic loss doctrine to claims for services performed negligently. (Anderson Electric, Inc. v. Ledbetter Erection Corp. (1986), 115 Ill. 2d 146.) The subsequent extension of Moorman to professional malpractices was then predictable. In 2314 Lincoln Park West Condominium Association v. Mann, Gin, Ebel & Frazier, Ltd. (1990), 136 Ill. 2d 302, this court took the next step. In Lincoln Park, a condominium association sought damages from the architectural firm of Mann, Gin, Ebel & Frazier. The association alleged that the architects had negligently designed the condominiums that the association’s members had purchased from a third party. This court held that the claim was barred under the economic loss rule. This court found that the association’s claim concerned the owner’s expectation — a difference of quality — and determined that the architect had no duty in tort to protect the unit owners from that type of loss. Lincoln Park, 136 Ill. 2d at 317. Subsequent to Lincoln Park, this court was presented with the question of whether the economic loss rule applied to attorneys, thereby barring malpractice suits in tort for purely economic damages. In Collins v. Reynard (1992), 154 Ill. 2d 48, this court created an exception to the general rule and held that a complaint for malpractice may be couched in either contract or tort and that recovery may be sought in the alternative. The opinion, however, stated that this particular ruling was grounded more in historic precedent rather than logic — citing the fact that attorneys have always been sued in tort. The opinion specifically limited the ruling to attorney malpractice cases. Collins, 154 Ill. 2d at 52. The majority now seeks to create a new exception to the economic loss doctrine. While I do not find it overly disturbing that accountants can be sued in tort for purely economic damages, I am concerned by the fact that the majority has adopted a piecemeal approach for determining what services are not protected by Moor-man. The majority submits that the doctrine only applies to those service industries where the "duty of the party performing the service is defined by the contract that he executes with his client. Where a duty arises outside of the contract, the economic loss doctrine does not prohibit recovery in tort for the negligent breach of that duty.” (159 Ill. 2d at 162.) Applied to this case, the majority contends that the "issue is whether the duty an accountant owes to his client is defined by his contractual obligations, or is extracontractual.” (159 Ill. 2d at 162.) The majority suggests that because an accountant’s "knowledge and expertise cannot be memorialized in contract terms, but is expected independent of the accountant’s contractual obligations,” an accountant can be held liable in tort. 159 Ill. 2d at 163. Having concluded that accountants can be held liable in tort, the majority was still left with the impossible task of distinguishing this case from Lincoln Park. That is, why does the Moorman doctrine prevent recovery in tort for the professional malpractice of architects, but not the professional malpractice of accountants? The majority offers the suggestion that because the relationship between an architect and his client produces something tangible, the duties of an architect, unlike those of an accountant, can be memorialized in contract. The majority further suggests that, in the case where an intangible product is involved, "[i]t is not necessary or generally possible to memorialize all the elements of 'competent representation’ in a contract.” (159 Ill. 2d at 163.) This purported explanation, however, is not an aid to understanding. What are these extracontractual duties? If these duties cannot be articulated in a contract, how is it that the client is able to articulate that they have been breached in a complaint. Why is it that a client cannot require, in the contract, that the accountant exercise the knowledge and expertise of the reasonable certified public accountant? Indeed, it appears that in this case, the parties have done just that. The engagement letter from Touche Ross specifically states: "We will review the statements of assets and liabilities of the Congregation of the Passion *** and the related statements of support and revenue, expenses, capital additions and changes in fund balances for the years then ended, in accordance with standards established by the American Institute of Certified Public Accountants.” (Emphasis added.) It should be apparent that the parties have anticipated what would be deemed competent representation, prior to performance. As for the majority’s attempt to distinguish architects from accountants, I submit that the majority has set up the proverbial distinction without a difference. Whether the professional / client relationship creates a tangible or an intangible object is completely irrelevant with reference to whether a professional has competently performed his or her duties. Furthermore, to the extent an architect/client relationship can be memorialized with a general catchall clause requiring competent performance, so can an accountant /client relationship. I am not suggesting, however, that the plaintiff in this case should be barred from suing the accountants in tort. On the contrary, I feel that this court should take this opportunity to reevaluate the application of Moor-man and remove its protection for all types of professional services, rather than engage in a case-by-case determination of whether a given profession owes some undefinable extracontractual duty to clients or not. In mapping the future course of the economic loss doctrine, this court should consider the policy behind it. The purpose behind the doctrine, as embodied in Moor-man, was to protect manufacturers from unforeseen liabilities. To accomplish that result, jurists determined that when a plaintiff’s injury consists of disappointed expectations in a product, contract law and not tort law should apply. Unlike contract law, tort law does not ask whether the full extent of the injury was foreseeable, only whether some injury would occur. Thus, a tort remedy for defeated consumer expectations would expose the manufacturer to open-ended liability from all consequences that follow from a given incident. This open-ended liability seems particularly unjust in products cases where the purchasers communicated their needs only to dealers or retailers but not to the manufacturer. This line of analysis, however, does not pertain to professional services. In the professional / client relationship, the professional is aware, or should be aware, of any potential liability. For example, attorneys should be able to comprehend their client’s situation to the extent where they recognize their potential liabilities if they perform their services in a negligent fashion. The same could be said of accountants and architects. Thus, if a client asks an architect to design a building with specific characteristics and the architect negligently fails to do so, the architect should not be able to claim that the damages caused by his or her negligence were unforeseeable. If one agrees that damages in professional malpractice cases are foreseeable, what theory a plaintiff brings a suit under becomes irrelevant. The extent of damages should be the same in tort or contract. This is borne out in the case sub judice where the claimed loss for breach of contract is identical to that for accountant malpractice. One must also keep in mind that a suit in tort does not mean that a plaintiff suing for purely economic or commercial loss has automatically won. The plaintiff still has to establish the elements of a tort. That is, the burden of proving duty, breach of duty, causation, and damages remains a prerequisite to recovery. Indeed, if the economic loss doctrine were ignored for those cases outside the products liability context, the result in those cases leading up to the present state of the law would have been the same. The difference lies only in the fact that this court would not now have to determine whether a defendant owed a plaintiff an ex-tracontractual duty. For instance, recall that in Lincoln Park, a condominium association brought suit against the architects of the condominium. They alleged that the architects had negligently designed the condominiums that the association members had purchased from a third party, Equity Realty. Plaintiffs sought compensatory damages for repairs that the owners were forced to make. Rather than analyzing this case in terms of the economic loss doctrine, ask whether defendants owed plaintiffs a duty, whether that duty was breached, and whether that breach was the proximate cause of ascertainable damages. In that case, one would have to conclude that the architects did not owe the association members a duty to protect them from these losses. The scope of the architects’ duties cannot be interpreted to include disappointed expectation interests of third parties and subsequent buyers. While this language may sound hauntingly similar to Moorman, it is different in a significant manner. This analysis does not bar recovery for economic damages in tort in all cases — only in those cases where the liability is outside the scope of the duty defendant owes plaintiff. Thus, while architects cannot be held liable for the disappointed expectation of subsequent purchasers, they should be held liable for those of their clients. Had this court taken this path originally, this court would never have had to engage in its incoherent, indeed, impossible task of determining which professionals owe their clients an extracontractual duty and are thus outside the protection of Moorman. When viewed in this light, there appears to be no reason, other than the improvident extension of the Moorman case, to prevent professional malpractice suits for economic damages to go forward in either tort or contract. Extension of Moorman into the arena of professional malpractice should be written off as a failed experiment and the economic loss doctrine should be re-confined to cases involving products liability. For all the foregoing reasons, I respectfully dissent from the majority. JUSTICE HARRISON joins in this dissent.