Court Opinion

ID: 9718790
Source: CourtListenerOpinion
Date Created: 2023-08-26 07:33:53.587356+00
Date Added: 2024-06-11T18:24:02.518197
License: Public Domain

JUSTICE SIMON, specially concurring: While I concur with the majority opinion that Anderson did not suffer injury to an “interest that tort law traditionally protects” (Redarowicz v. Ohlendorf (1982), 92 Ill. 2d 171, 177), I concur specially to voice my concern over the majority’s formalistic definition of economic loss. The majority opinion finds Anderson’s injury to be “purely economic loss” because it “arose solely from disappointed commercial expectations in that Anderson lost the anticipated profits of its contract with Ledbetter.” (115 Ill. 2d at 153.) To conclude that an injury amounts to economic loss simply because it reduces or wipes out anticipated profits is too broad a sweep, and if applied mechanistically, such a rule could exclude from the definition of tortious conduct a wide array of negligent behavior. An example would be if a trespasser negligently started a fire on the precipitator worksite involved in this case, destroying all of Anderson’s installation work but none of its personal property. Should the cost of that calamity be borne by Anderson and not the trespasser merely because Anderson’s injury was confined to lost profits? As the example illustrates, the fact that the injury in the case before us is observable in the form of lost profits — when it might equally well have been claimed that Walther’s negligence caused the physical destruction of installation preparations — is not the legally significant factor. Judges should “look to the policies behind the regimes of torts and contracts to see which is more appropriate” for assigning the loss in the case at hand (Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, 96 (Simon, J., specially concurring)), and the court should be less concerned with the metaphysical distinction between injuries to property versus profits than with the circumstances by which an interest in either has been injured. Under these circumstances, Anderson’s lost profits are properly labeled “economic loss” (denoting only that they are losses for which the regime of contract law provides any appropriate rights and remedies) because they were caused by allegedly deficient services provided in accordance with Anderson’s contract with Ledbetter. At the very least, Anderson entered into its arrangement with Ledbetter knowing that Walther would perform inspections and might require work to be redone. In that case, Walther has simply failed to perform its function according to the Anderson-Ledbetter contract with the diligence and care Anderson contemplated. On the other hand, by providing for Walther’s assistance in the installation process, Ledbetter may have obviated the necessity for Anderson to hire outside experts or educate its own employees so that it could install the equipment without incurring unnecessary expense. If that were the case, Walther’s faulty inspections and advice have only failed to deliver the cost-efficient installation Anderson anticipated. See Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, 96 (Simon, J., specially concurring) (“if a product simply fails to live up to its promise, if it does not accomplish what it was supposed to the way it was supposed to, that is only an invasion of a contract-like interest”). In either case, any expectations Anderson may have had with regard to Walther’s inspections are rooted in its contract with Ledbetter, and it follows that both the scope of legally protected expectations and any remedies for the disappointment of those expectations must also find their roots in Anderson’s commercial agreement or in additional contractual terms supplied by law. Moreover, allowing Anderson to proceed in tort might subject Walther to a higher standard of care and greater potential liability than Walther had intended to undertake when it entered into its contractual relationship with Ledbetter. (Stein, Cottrell and Friedlander, A Blueprint for the Duties & Liabilities of Design Professionals After Moorman, 60 Chi.-Kent L. Rev. 163, 176 (1984).) Since Anderson’s commercial interests are defined by its relationship with Ledbetter, its proper course of recovery — if any is due — is to prosecute its action in contract against Ledbetter. Whether Anderson is entitled to recover from Ledbetter will depend upon the extent to which Anderson protected itself from Walther’s negligent performances; Anderson had the opportunity to negotiate for such protection in its contract with Ledbetter, as well as by separate agreement which Anderson could have insisted on negotiating with Walther. If Anderson is successful, Ledbetter may be able to pass along the cost to Walther depending upon the extent of Walther’s undertaking, and the cost will ultimately fall upon the party that agreed (whether explicitly or implicitly in fact or law) to bear it. See Lloyd v. Murphy (1944), 25 Cal. 2d 48, 54, 153 P.2d 47, 50 (“[i]f it was foreseeable there should have been provision for it in the contract, and the absence of such a provision gives rise to the inference that the risk was assumed”); cf. J’Aire Corp. v. Gregory (1979), 24 Cal. 3d 799, 598 P.2d 60, 157 Cal. Rptr. 407 (lessor’s contractor liable in tort to commercial lessee where construction delays foreseeably cause loss of profits). See generally C. Fried, Contract As Promise 66 (1981). The law of torts intervenes to protect individuals from the conduct of others. In cases such as this, however, the court does not seek to protect a party from wrongful conduct, but only to ascertain binding promises and intentions in such a way as will promote the certainty of contracts and the benefits of commerce. Because the question involved in this case is one of dividing risks and responsibilities among the participants in a commercial transaction according to their intentions, rather than one of protecting persons and property (including profits) from injury with rules that promote safety and reasonable conduct, we are correct in looking to contract law for the scale on which to weigh the merits of Anderson’s complaint.