Board of Education v. A, C & S, INC.

525 N.E.2d 950, 171 Ill. App. 3d 737, 121 Ill. Dec. 643, 1988 Ill. App. LEXIS 782
CourtAppellate Court of Illinois
DecidedJune 1, 1988
Docket86-817
StatusPublished
Cited by10 cases

This text of 525 N.E.2d 950 (Board of Education v. A, C & S, INC.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Board of Education v. A, C & S, INC., 525 N.E.2d 950, 171 Ill. App. 3d 737, 121 Ill. Dec. 643, 1988 Ill. App. LEXIS 782 (Ill. Ct. App. 1988).

Opinion

JUSTICE McNAMARA

delivered the opinion of the court:

Plaintiffs, 34 Illinois public school districts are required by the Asbestos Abatement Act (Act) (111. Rev. Stat. 1985, ch. 122, par. 1401 et seq.) to replace all asbestos-containing products in their buildings, for which they may receive some reimbursement from the State. Plaintiffs seek full reimbursement and additional damages from the 78 named defendants, which either mined, manufactured, installed or sold the product.

In a consolidated action, the trial court dismissed plaintiffs’ complaints with prejudice and without leave to amend. Plaintiffs appeal from the dismissal of the complaints which, with some duplication, stated numerous causes of action, including various allegations regarding strict liability, .negligence, restitution, a private right of action under the Asbestos Abatement Act, consumer fraud, breach of warranty, negligent misrepresentation, fraudulent misrepresentation, and concert of action. Plaintiffs also contend that the trial court erred in finding the action was barred by the statute of limitations and erred in denying their motion to amend the pleadings.

When reviewing a motion to dismiss, all well-pleaded facts must be taken as true and all reasonable inferences are drawn in favor of the opponent. (United Air Lines, Inc. v. CEI Industries of Illinois, Inc. (1986), 148 Ill. App. 3d 332, 499 N.E.2d 558.) A complaint should not be dismissed for failure to state a cause of action unless it clearly appears that no set of facts could be proved which would entitle plaintiffs to relief. Bagel v. American Honda Motor Co. (1985), 132 Ill. App. 3d 82, 477 N.E.2d 54.

We believe that the trial court misconceived the nature of the action. The error reveals itself most clearly in the strict liability and negligence counts, but also undermines the other dismissal of the actions. Plaintiffs allege both strict liability and negligence in tort. In Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, 435 N.E.2d 443, the court held that the policy considerations addressed in strict liability eases also apply to negligence actions. Thus, we treat these two counts together.

The trial court dismissed these causes of action on the basis that plaintiffs failed to allege any actual property damage or personal injury, and thus alleged only economic loss, which is not recoverable in tort, and that the buildings in question were not considered “products” under a products liability theory.

In Moorman, the court held that under a strict liability in tort theory recovery must be denied for solely economic losses. (Accord East River Steamship Corp. v. Transamerican Delavel Inc. (1986), 476 U.S. 858, 90 L. Ed. 2d 865, 106 S. Ct. 2295.) The remedy for economic loss lies in contract, and not in tort law.

Economic loss is defined as damages for inadequate value, costs of repair and replacement of the product, or consequent loss of profits. The diminution in value occurs because the product is inferior in quality and does not work for the general purpose for which it was manufactured and sold. Moorman, 91 Ill. 2d at 82, quoting Note, Economic Loss in Products Liability Jurisprudence, 66 Colum. L. Rev. 917, 918 (1966).

Generally, economic losses alone, with no allegation of other damage, cannot support a tort cause of action. A safety-insurance policy underlines tort law. (Pennsylvania Glass Sand Corp. v. Caterpillar Tractor Co. (3d Cir. 1981), 652 F.2d 1165, cited in Moorman, 91 Ill. 2d 69, 435 N.E.2d 443.) Tort law traditionally protects individuals and property from physical harm. The strict liability in tort theory focuses on the unreasonably dangerous nature of the product. (Moorman, 91 Ill. 2d 69, 435 N.E.2d 443; Suvada v. White Motor Co. (1965), 32 Ill. 2d 612, 210 N.E.2d 182.) “[T]he essence of a product liability tort case is not that the plaintiff failed to receive the quality of product he expected, but that the plaintiff has been exposed, through a hazardous product, to an unreasonable risk of injury to his person or property.” (Moorman, 91 Ill. 2d at 81.) In contrast, the dangerous nature of a product has no particular relevance to economic loss. (Redarowicz v. Ohlendorf (1982), 92 Ill. 2d 171, 441 N.E.2d 324; Moorman, 91 Ill. 2d 69, 435 N.E.2d 443.) The manufacturer bears the responsibility of producing goods which match a standard of safety defined in terms of conditions that create unreasonable risks of harm. Moorman, 91 Ill. 2d 69, 435 N.E.2d 443.

No single test has been developed to easily identify in any given tort case the demarcation between nonrecoverable economic loss and recoverable personal injury or property damages. (See Kishwaukee Community Health Services Center v. Hospital Building & Equipment Co. (N.D. Ill. 1986), 638 F. Supp. 1492.) The court in Moorman noted that the demarcation usually depends on several factors, including the nature of the defect, the type of risk, and the manner in which the injury arose. Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d at 82, citing Pennsylvania Glass Sand Corp. v. Caterpillar Tractor Co., (3d Cir. 1981), 652 F.2d 1165; see also Redarowicz v. Ohlendorf, 92 Ill. 2d 171, 441 N.E.2d 324.

The nature of the defect focuses on the product’s condition before the actual injury occurred. The defect alleged here concerns the dangerous nature of the product. It is not alleged that the asbestos products failed to perform their function, but rather that they posed a grave risk of personal injury. (City of Manchester v. National Gypsum Co. (D.R.I. 1986), 637 F. Supp. 646 (nature of defect concerns replacement of product because of grave personal safety risk, not because of a defect in its performance; complaint in asbestos product liability case contains sufficient allegation of property damage so as to state tort claim and withstand motion to dismiss).) Tort law generally provides a sounder analytical basis for dealing with hazardous, as opposed to qualitative, defects. (Pennsylvania Glass Sand Corp. v. Caterpillar Tractor Co. (3d Cir. 1981), 652 F.2d 1165.) The legislative history of the Asbestos Abatement Act contains numerous descriptions of the nature of the risk as a health hazard, but not one reference to the quality or performance of the asbestos products. See, e.g., 83d Ill. Gen. Assem., House Proceedings, June 22, 1984, at 129-30 (statements of Representative Satterwaite) (“The Bill as it now stands shows concern for school children throughout the State of Illinois in regard to the health and safety of those children”).

The complaints in the present case allege that the school buildings contain asbestos products manufactured, mined, installed, or sold by defendants. In regard to the nature of the defect, they allege further:

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525 N.E.2d 950, 171 Ill. App. 3d 737, 121 Ill. Dec. 643, 1988 Ill. App. LEXIS 782, Counsel Stack Legal Research, https://law.counselstack.com/opinion/board-of-education-v-a-c-s-inc-illappct-1988.