Tolona Pizza Products Corp. v. Davy McKee Corp.

543 N.E.2d 225, 187 Ill. App. 3d 365, 134 Ill. Dec. 942, 1989 Ill. App. LEXIS 1197
CourtAppellate Court of Illinois
DecidedAugust 10, 1989
Docket1-88-0327
StatusPublished
Cited by5 cases

This text of 543 N.E.2d 225 (Tolona Pizza Products Corp. v. Davy McKee Corp.) 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
Tolona Pizza Products Corp. v. Davy McKee Corp., 543 N.E.2d 225, 187 Ill. App. 3d 365, 134 Ill. Dec. 942, 1989 Ill. App. LEXIS 1197 (Ill. Ct. App. 1989).

Opinion

JUSTICE JOHNSON

delivered the opinion of the court:

Plaintiff, Tolona Pizza Products Corporation, an Illinois corporation, appeals from an order of the circuit court of Cook County dismissing two counts of its complaint against defendants, Davy McKee Corporation, a Delaware corporation, and James Edgar, its employee, for failure to state a claim for which relief could be granted. (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 615.) The sole issue presented for review is whether the trial court erred, as a matter of law, in ruling that a professional malpractice action cannot be sustained under Illinois law if plaintiff seeks damages for economic loss due to defeated commercial expectations.

We affirm.

For purposes of review, we will accept plaintiff’s allegations as true. (Anderson Electric, Inc. v. Ledbetter Erection Corp. (1986), 115 Ill. 2d 146, 148.) Plaintiff is engaged in the business of manufacturing and selling pizza crusts and related products and supplies. Defendant Davy McKee Corporation (hereinafter McKee) is an international concern engaged in furnishing engineering and architectural services to industry. Defendant Edgar, a registered professional engineer, was an employee of McKee.

Plaintiff retained McKee to conduct a preliminary study into the feasibility of automating its pizza crust line. Plaintiff speculated that automation of its manufacturing system would reduce costs and increase output, thereby improving its position in the marketplace. Edgar was assigned by McKee to conduct the study. Based upon Edgar’s recommendations, McKee was hired to design, procure, and supervise the installation of an automated pizza crust line that would achieve plaintiff’s objectives.

The line was installed in August 1985. Plaintiff alleged that the system failed to function at the outset due to numerous deficiencies in design by defendants. Plaintiff alleges that damages were sustained in the amount of $1.7 million as a result of defendants’ negligence.

On April 6, 1987, plaintiff filed a complaint against defendants. AMF Union Machinery, Inc., and Dunbar Systems, Inc., were also named as defendants, but they are not parties in this appeal. Counts I through IV were directed against defendants. Counts I and IV sought damages for professional malpractice against McKee and Edgar, respectively. Count II was directed against McKee for breach of contract. Count III was directed against McKee for negligent misrepresentation.

Defendants moved pursuant to the Illinois Code of Civil Procedure, section 2 — 615, to dismiss plaintiff’s complaint. (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 615.) Plaintiffs counts against McKee for breach of contract and for negligent misrepresentation are currently pending. The court found that economic loss occasioned by negligent misrepresentation states a possible cause of action in tort as an exception to the bar against recovery for economic losses as set forth in Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, 88-89, and reaffirmed in Anderson Electric, Inc. v. Ledbetter Erection Corp. (1986), 115 Ill. 2d 146, 153-54.

The trial court granted defendants’ motion to dismiss counts I and IV relying on Anderson Electric, Inc. v. Ledbetter Erection Corp. (1986), 115 Ill. 2d 146, which held that there can be no recovery in tort for economic loss due to defeated commercial expectations regardless of plaintiff’s inability to recover under an action in contract. No just reason was found to delay appeal from the rulings on these counts. (107 Ill. 2d R 304.) This appeal followed.

Plaintiff contends the trial court erred in finding that, pursuant to Anderson, a cause of action could not be maintained in tort for economic loss due to defeated commercial expectations. Plaintiff argues that the case at bar is distinguishable on three grounds: (1) Anderson did not involve an action for malpractice; (2) defendants supplied professional services while defendant in Anderson was the manufacturer of the product in question; and (3) plaintiff’s economic loss was occasioned by defendants’ professional malpractice which, pursuant to Rosos Litho Supply Corp. v. Hansen (1984), 123 Ill. App. 3d 290, is still a viable cause of action in Illinois when services are rendered pursuant to a contract. We disagree.

The Illinois Supreme Court in Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, held that there can be no recovery for economic loss in either negligence or strict liability to recover solely economic losses unless the tort involves either negligent or intentional misrepresentation. The Moorman court adopted the definition of economic loss as set forth in the Columbia Law Review note entitled Economic Loss in Products Liability Jurisprudence, 66 Colum. L. Rev. 917, 918 (1966). Economic loss was defined as “ ‘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 *** [citation].” Moorman, 91 Ill. 2d at 82.

In Anderson the Illinois Supreme Court reaffirmed the Moor-man bar against recovery for economic loss and expanded the definition so as to include damages resulting from defeated commercial bargains. (Anderson Electric, Inc. v. Ledbetter Erection Corp. (1986), 115 Ill. 2d 146, 153.) The plaintiff in Anderson had entered into a contract with defendant Ledbetter to perform electrical work on two precipitator units manufactured by defendant Walther. Ledbetter and Walther then entered into a contract which set forth Walther’s functions and responsibilities as construction superintendent. There was no allegation of a contractual relationship between plaintiff and defendant. Plaintiff sued Walther in negligence, alleging that Walther had failed to perform a service which resulted in the plaintiff having to have the work redone, thereby incurring additional expense or economic loss. Plaintiff sued Ledbetter for breach of contract. The court held that “[a] plaintiff seeking to recover purely economic losses due to defeated expectations of a commercial bargain cannot recover in tort, regardless of the plaintiff’s inability to recover under an action in contract.” Anderson, 115 Ill. 2d at 153.

Plaintiff first asserts that Anderson may be distinguished from the instant case, since Anderson was not a professional malpractice action and plaintiff and defendant in Anderson were not in privity of contract, as the parties here. We find this to be a distinction without a difference. The relevant inquiry is the type of loss sustained, not the nature of the relationship between the parties which resulted in the alleged damage. (People ex rel. Skinner v. Graham (1988), 170 Ill. App. 3d 417, 435.) The focus of the inquiry in Anderson was the type of damages sustained, not the relationship between the parties. In fact, a review of the appellate court decision in Anderson reveals that the complaint was vague as to the nature of Walther’s company and its exact responsibilities. Anderson Electric, Inc. v. Ledbetter Erection Corp. (1985), 133 Ill. App. 3d 844, 850, aff’d (1986), 115 Ill. 2d 146.

Plaintiff in the instant case is alleging economic loss due to defendants’ failure in the design, procurement, and supervision of the installation of the automated pizza crust line which would achieve plaintiff’s objectives.

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543 N.E.2d 225, 187 Ill. App. 3d 365, 134 Ill. Dec. 942, 1989 Ill. App. LEXIS 1197, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tolona-pizza-products-corp-v-davy-mckee-corp-illappct-1989.