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SECOND DIVISION

September 24, 2002

PRESIDING JUSTICE McBRIDE delivered the opinion of thecourt:

The primary issue on appeal is whether the negligentmisrepresentation exception to the economic loss doctrine statedin Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69,435 N.E.2d 443 (1982), applies to an employment agency, defendantRobert Half International, Inc. (Robert Half), for lossessuffered 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, amagazine advertising agency, contacted the "accountemps" divisionof Robert Half, seeking a temporary bookkeeper.

In March 1998, bookkeeper T'Challa Ross (Ross) completed an"accountemps" employment application form which included thequestion, "Have you ever been convicted of a felony, convicted ofa misdemeanor involving dishonesty or moral turpitude or beenconvicted in a military court martial?" Ross answered "No,"despite having been convicted of embezzling $190,000 from anemployer. It is unclear from the record where this convictionoccurred; however, in Illinois, theft of property exceeding $100,000 in value is a Class 1 felony. 720 ILCS 5/16-1 (West1998). 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 accountantbetween 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 atemporary bookkeeping assignment and indicated that herreferences 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 inrelevant part:

"Our employee is being assigned to youunder the following Conditions of Agreement:

The person assigned is an employee ofaccountemps and shall not be deemed to beyour employee. ***

***

An accountemps employee may not handlecash, negotiables or other valuables withoutthe written consent of accountemps and thenonly under your direct supervision.

***

After you evaluate the performance andpotential of our employee, you may wish toemploy this person directly. Our employeesrepresent our inventory of skilledprofessionals and in the event you wish[Ross] converted to your employ ***, youagree 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 paidRobert Half $3,031 for Ross's temporary help and the $6,600conversion fee described above.

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

Fox then filed the instant suit, asserting theories ofnegligence and negligent misrepresentation. Fox sought recoveryof the fees it had paid Robert Half, consisting of $3,031 for thebookkeeper's temporary services and the $6,660 permanentplacement fee, and the balance of the embezzled funds, $62,965. The trial court granted Robert Half's motion to dismiss undersection 2-619 of the Code of Civil Procedure (735 ILCS 6/2-619(a)(9) (West 1998)), with prejudice, on the ground that theeconomic loss doctrine does not permit recovery of purelyeconomic losses in a tort action (Moorman, 91 Ill. 2d 69, 435N.E.2d 443). The trial court also indicated that Fox had notfactually pled a duty to investigate Ross's background. Foxappeals, arguing that the trial court's conclusions areerroneous. According to its notice of appeal, Fox is seekingreinstatement of its negligent misrepresentation claim only andis not appealing the dismissal of its negligence claim.

A motion to dismiss under section 2-619 is a means ofdisposing of issues of law and easily proved issues of fact atthe outset of a case. Tolan & Son, Inc. v. KLLM Architects,Inc., 308 Ill. App. 3d 18, 24, 719 N.E.2d 288 (1999). The trialcourt must construe the motion and supporting documents in thelight most favorable to the plaintiff. Tolan & Son, 308 Ill.App. 3d at 24. Well-pled facts in the complaint are admitted,but conclusions of law and fact unsupported by specificallegations are not. Tolan & Son, 308 Ill. App. 3d at 24. Onappeal, the question is whether the existence of a genuine issueof material fact should have precluded the dismissal or, absentsuch an issue of fact, whether dismissal was proper as a matterof law. Tolan & Son, 308 Ill. App. 3d at 24. We review thetrial court's decision de novo. Tolan & Son, 308 Ill. App. 3d at24.

In Moorman, the supreme court adopted the economic lossdoctrine, indicating that when a defect in a product isqualitative in nature and relates to a consumer's expectationthat the product is of a particular quality, resulting ineconomic loss but no personal injury or property damage, theconsumer's remedy lies in contract, not in tort. Moorman, 91Ill. 2d at 88. The Moorman doctrine bars tort recovery forpurely economic losses even when the plaintiff has no contractremedy. Anderson Electric, Inc. v. Ledbetter Erection Corp., 115Ill. 2d 146, 153, 503 N.E.2d 246 (1986). The Moorman doctrineapplies to products and services. See, e.g., Tolan & Son, 308Ill. App. 3d 18 (applying Moorman doctrine to services ofarchitect and engineer).

Economic loss is recoverable, however, "where one who is inthe business of supplying information for the guidance of othersin their business transactions makes negligent representations."Moorman, 91 Ill. 2d at 88-89. A negligent misrepresentationconsists of: (1) a false statement of material fact, (2)carelessness or negligence in ascertaining the truth of thestatement by the party making it, (3) an intention to induce theother party to act, (4) action by the other party in reliance onthe truth of the statement, and (5) damage to the other partyresulting from such reliance, (6) when the party making thestatement is under a duty to communicate accurate information. (See M. Polelle & B. Ottley, Illinois Tort Law