Fox Associates, Inc. v. ROBERT HALF INTERN.

777 N.E.2d 603, 334 Ill. App. 3d 90, 267 Ill. Dec. 800
CourtAppellate Court of Illinois
DecidedSeptember 24, 2002
Docket1-01-2187
StatusPublished
Cited by22 cases

This text of 777 N.E.2d 603 (Fox Associates, Inc. v. ROBERT HALF INTERN.) 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.

Bluebook
Fox Associates, Inc. v. ROBERT HALF INTERN., 777 N.E.2d 603, 334 Ill. App. 3d 90, 267 Ill. Dec. 800 (Ill. Ct. App. 2002).

Opinion

777 N.E.2d 603 (2002)
334 Ill. App.3d 90
267 Ill.Dec. 800

FOX ASSOCIATES, INC., Plaintiff-Appellant,
v.
ROBERT HALF INTERNATIONAL, INC., Defendant-Appellee.

No. 1-01-2187.

Appellate Court of Illinois, First District, Second Division.

September 24, 2002.

*604 Kelly, Olson, Michod, DeHaan & Richter (Richard H. Ferri, of counsel), Chicago, for Plaintiff-Appellant.

*605 Fred A. Smith and Melanie M. Brown, Sedgwick, Detert, Moran & Arnold, Chicago, for Defendant-Appellee.

Presiding Justice McBRIDE delivered the opinion of the court:

The primary issue on appeal is whether the negligent misrepresentation exception to the economic loss doctrine stated in Moorman Manufacturing Co. v. National Tank Co., 91 Ill.2d 69, 61 Ill.Dec. 746, 435 N.E.2d 443 (1982), applies to an employment agency, defendant Robert Half International, Inc. (Robert Half), for losses suffered by its client, plaintiff Fox Associates, Inc. (Fox), resulting from acts of an employee Fox hired through Robert Half.

The relevant facts are as follows. In early 1998, Fox, a magazine advertising agency, contacted the "accountemps" division of Robert Half, seeking a temporary bookkeeper.

In March 1998, bookkeeper T'Challa Ross (Ross) completed an "accountemps" employment application form which included the question, "Have you ever been convicted of a felony, convicted of a misdemeanor involving dishonesty or moral turpitude or been convicted in a military court martial?" Ross answered "No," despite having been convicted of embezzling $190,000 from an employer. It is unclear from the record where this conviction occurred; however, in Illinois, theft of property exceeding $100,000 in value is a Class 1 felony. 720 ILCS 5/16-1 (West 1998). Ross also provided the names of two references.

Robert Half contacted both references. The first reference, who supervised Ross while Ross worked as a corporate accountant between December 1995 and February 1998, described her as an "honest, trustworthy employee who we may rehire in the future," and the second reference stated that Ross's "overall quality [was] very good, [she was] honest."

Robert Half informed Fox that Ross was available for a temporary bookkeeping assignment and indicated that her references had described her as honest and trustworthy.

Ross began her temporary assignment at Fox on March 27, 1998. A written agreement between the parties provided in relevant part:

"Our employee is being assigned to you under the following Conditions of Agreement:The person assigned is an employee of accountemps and shall not be deemed to be your employee. * * *
* * *
An accountemps employee may not handle cash, negotiables or other valuables without the written consent of accountemps and then only under your direct supervision.
* * *
After you evaluate the performance and potential of our employee, you may wish to employ this person directly. Our employees represent our inventory of skilled professionals and in the event you wish [Ross] converted to your employ * * *, you agree to pay a conversion fee [of $6,600]."

On April 27, 1998, Fox hired Ross as its primary bookkeeper. In accordance with the parties' written agreement, Fox paid Robert Half $3,031 for Ross's temporary help and the $6,600 conversion fee described above.

Between October 22, 1998, and September 27, 1999, Ross took blank Fox checks, forged the necessary signatures, and embezzled $70,688 before Fox discovered the losses. Fox fired Ross on October 1, 1999, *606 but Fox was able to recover only $7,723. Fox also learned of Ross's embezzlement conviction.

Fox then filed the instant suit, asserting theories of negligence and negligent misrepresentation. Fox sought recovery of the fees it had paid Robert Half, consisting of $3,031 for the bookkeeper's temporary services and the $6,660 permanent placement fee, and the balance of the embezzled funds, $62,965. The trial court granted Robert Half's motion to dismiss under section 2-619 of the Code of Civil Procedure (735 ILCS 6/2-619(a)(9) (West 1998)), with prejudice, on the ground that the economic loss doctrine does not permit recovery of purely economic losses in a tort action (Moorman, 91 Ill.2d 69, 61 Ill.Dec. 746, 435 N.E.2d 443). The trial court also indicated that Fox had not factually pled a duty to investigate Ross's background. Fox appeals, arguing that the trial court's conclusions are erroneous. According to its notice of appeal, Fox is seeking reinstatement of its negligent misrepresentation claim only and is not appealing the dismissal of its negligence claim.

A motion to dismiss under section 2-619 is a means of disposing of issues of law and easily proved issues of fact at the outset of a case. Tolan & Son, Inc. v. KLLM Architects, Inc., 308 Ill.App.3d 18, 24, 241 Ill.Dec. 427, 719 N.E.2d 288 (1999). The trial court must construe the motion and supporting documents in the light most favorable to the plaintiff. Tolan & Son, 308 Ill.App.3d at 24, 241 Ill.Dec. 427, 719 N.E.2d 288. Well-pled facts in the complaint are admitted, but conclusions of law and fact unsupported by specific allegations are not. Tolan & Son, 308 Ill.App.3d at 24, 241 Ill.Dec. 427, 719 N.E.2d 288. On appeal, the question is whether the existence of a genuine issue of material fact should have precluded the dismissal or, absent such an issue of fact, whether dismissal was proper as a matter of law. Tolan & Son, 308 Ill.App.3d at 24, 241 Ill.Dec. 427, 719 N.E.2d 288. We review the trial court's decision de novo. Tolan & Son, 308 Ill.App.3d at 24, 241 Ill.Dec. 427, 719 N.E.2d 288.

In Moorman, the supreme court adopted the economic loss doctrine, indicating that when a defect in a product is qualitative in nature and relates to a consumer's expectation that the product is of a particular quality, resulting in economic loss but no personal injury or property damage, the consumer's remedy lies in contract, not in tort. Moorman, 91 Ill.2d at 88, 61 Ill.Dec. 746, 435 N.E.2d 443. The Moorman doctrine bars tort recovery for purely economic losses even when the plaintiff has no contract remedy. Anderson Electric, Inc. v. Ledbetter Erection Corp., 115 Ill.2d 146, 153, 104 Ill.Dec. 689, 503 N.E.2d 246 (1986). The Moorman doctrine applies to products and services. See, e.g.,

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Bluebook (online)
777 N.E.2d 603, 334 Ill. App. 3d 90, 267 Ill. Dec. 800, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fox-associates-inc-v-robert-half-intern-illappct-2002.