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filed:  January 29, 2002

NO. 4-01-0352

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

JUSTICE KNECHT delivered the opinion of the court:

In early 1995, plaintiffs, Mars, Inc., and Kal KanFoods, Inc. (collectively Kal Kan), initiated a warehouseexpansion project. Kal Kan's general contractor engaged GFGeneral Contractors, Inc. (GF), to erect a steel-frame system(frame) that would eventually support the building. According toKal Kan, the frame was the property of Kal Kan when GF undertookto erect it. The frame collapsed in June 1995 in the earlystages of construction after a violent thunderstorm, and inFebruary 1998, Kal Kan brought suit against GF for negligence infailing to properly brace the frame. GF sought dismissal on thegrounds that the negligence claim was barred by the economic-lossdoctrine of Moorman Manufacturing Co. v. National Tank Co., 91Ill. 2d 69, 81, 435 N.E.2d 443, 448 (1982). In June 2000, thetrial court reconsidered an earlier ruling, agreed, and dismissedthe claim. Kal Kan appeals. We affirm.

I. BACKGROUND 

Kal Kan operates a dog and cat food manufacturingplant and warehouse in Mattoon. In early 1995, Kal Kan solicitedbids for construction of a 60,000-square-foot warehouseexpansion. Among the contractors submitting bids was defendantHeritage Builders of Effingham (Heritage), which was awarded thecontract on March 15, 1995.

In early April 1995, Heritage began construction andsubcontracting portions of the work to various subcontractors. Among these was defendant GF, engaged by Heritage to erect thesteel-frame system that would eventually support the warehousebuilding. Kal Kan was not a party to this subcontract.

According to Kal Kan, the steel-frame system GF was toerect already had been purchased from another entity and was, atthe time of erection, Kal Kan's property. Pursuant to itssubcontract with Heritage, GF was to "unload and erect" theframe. According to Kal Kan, "GF was hired simply to erect theframe that Kal Kan had independently purchased, and not to supplyany of the components."

Nevertheless, Kal Kan's initial purchase order toHeritage stated that Heritage was to "provide materials, labor,equipment, engineering, and supervision to construct awarehouse." Attached to this purchase order was an addendum thatprovided Heritage must "furnish all of the materials and performall the labor necessary" to construct the warehouse. Furtherincorporated into the purchase order was a project manual for thework, which included design and materials specifications for thestructural steel.

Regardless of the true owner of the frame, GF beganerecting the frame on May 30, 1995. As of June 9, 1995, GF haderected between 70% and 85% of the frame, bracing it withtemporary cable bracing. GF did not installed any permanentangle or cross-bracing. According to Kal Kan, the temporarybracing GF installed did not meet the applicable building codewind-load requirements and project specifications.

During the early morning of June 10, 1995, a severethunderstorm passed through Mattoon, causing the frame tosuddenly collapse. As result of this collapse, the frame wasirreparably damaged, necessitating the purchase of a new steel-frame system. This resulted in an eight-week delay in thecompletion of the warehouse.

In April and October 1997, Kal Kan filed complaintsagainst Heritage in Coles County circuit court, alleging a singlebreach of contract count. On February 19, 1998, Kal Kan amendedits complaint and added a negligence count against GF, allegingthat GF negligently failed to properly erect and brace the frame,thereby causing its collapse during the storm.

In May 1998, GF moved to dismiss this portion of thecomplaint, arguing such claims were barred by the economic-lossdoctrine set forth in Moorman. Holding that the economic-lossdoctrine did not bar the negligence claim, Judge Paul C. Komada,the judge then presiding, denied GF's motion. Specifically,Judge Komada held the frame that collapsed was not GF's "product"for purposes of the Moorman doctrine. Rather, GF's "product" wasthe service of erecting the frame. As such, Judge Komada held,the Moorman doctrine did not bar Kal Kan's complaint. Bothparties agreed Judge Komada's ruling from the bench denying GF'smotion would stand as a docket entry and no written order wouldissue.

On August 10, 1998, GF filed its answer to the then-pending third-amended complaint, including an affirmative defensethat the negligence claim was barred by Moorman. Fifteen monthslater, GF filed a third-party complaint against Allen EngineeringCorporation (Allen), the manufacturer of the frame, allegingAllen was negligent in its work on the design of the frame, aswell as its bracing and anchoring. Allen responded with a motionto dismiss the third-party complaint as being barred by Moorman,making the same substantive argument GF had made in its motion todismiss Kal Kan's negligence claim against GF.

With the Moorman issue again pending, GF filed amotion for reconsideration of Judge Komada's July 9, 1998, orderfinding Moorman inapplicable to Kal Kan's negligence claimagainst GF. According to GF, if the court granted Allen's motionas to Moorman, "it should likewise grant GF's motion forreconsideration of its motion to dismiss [Kal Kan's] complaint."

On June 22, 2000, Judge Gary Jacobs, the new judgepresiding, granted GF's motion to reconsider and considered bothAllen's motion to dismiss the third-party complaint and GF'smotion to dismiss Kal Kan's negligence claim at the same time,since both motions involved a similar application of the Moormandoctrine. In a June 24, 2000, docket entry, Judge Jacobs grantedboth Allen's and GF's motions, finding Kal Kan's negligenceclaims and GF's third-party negligence claim improperly soughtrecovery of economic loss under a tort theory, as stated inMoorman. Further, Judge Jacobs found both causes of action didnot fall within the recognized exceptions to the Moormandoctrine.

On February 22, 2001, Kal Kan filed a motion for entryof final judgment against GF pursuant to Supreme Court Rule304(a). 155 Ill. 2d R. 304(a). Judge Jacobs allowed the motionon March 28, 2001, finding no just reason for delaying appeal ofthe order granting GF's motion to reconsider. This appealfollowed. Neither Heritage nor Allen is a party to this appeal.

II. ANALYSIS

The issue before us is a simple one: did the trialcourt err in holding that the economic-loss doctrine of Moormanapplied to the case? However, the facts of the case make theissue one of apparent first impression in Illinois. The issue isbetter framed in more general terms: does the economic-lossdoctrine of Moorman apply to the loss of construction materialswhere a subcontractor's alleged negligence in construction isalleged to have caused the loss?

As a preliminary matter, we note GF's initial motionto dismiss Kal Kan's complaint was filed pursuant to section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West1996)). Thus, our review of the trial court's grant of themotion to dismiss is de novo. Neade v. Portes, 193 Ill. 2d 433,439, 739 N.E.2d 496, 500 (2000). When considering such anappeal, we interpret all well-pled allegations and supportingdocuments in the light most favorable to the nonmoving party. Inre Chicago Flood Litigation, 176 Ill. 2d 179, 189, 680 N.E.2d265, 270 (1997). Only where the plaintiffs fail to allege factssupporting a cause of action should the court grant the motion todismiss. Chicago Flood Litigation, 176 Ill. 2d at 189, 680N.E.2d at 270.

A. The Moorman Doctrine

The crux of the dispute between the parties involvesthe prospective application of a line of Illinois cases thatbegin with Moorman, 91 Ill. 2d 69, 435 N.E.2d 443. In Moorman,the plaintiff had purchased from the defendant a bolted-steelgrain-storage tank. The tank later developed a crack in one ofits steel plates. The plaintiff brought an action alleging, asone count, (1) the tank was not reasonably safe due to defects inits design and manufacturing and, in a separate count, (2) thedefendant had negligently designed the tank. The complaintalleged damage only to the tank itself. Moorman, 91 Ill. 2d at73-74, 435 N.E.2d at 445.

The supreme court affirmed the trial court's dismissalof both the strict liability and negligence counts, concluding acomplaint alleging qualitative defects in a product does notbelong in tort. According to the court, a disappointed consumercannot assert, based on inferior workmanship that led to eventualdeterioration, a recovery under a negligence. Moorman, 91 Ill.2d at 86, 435 N.E.2d at 450. Thus, Moorman was the first case tostand for the broader proposition that purely economic damagescannot be recovered in tort.

According to the court in Moorman, "economic loss" canbe defined as "'damages for inadequate value, costs of repair[,]and replacement of the defective product, or consequent loss ofprofits--without any claim of personal injury or damage to otherproperty.'" Moorman, 91 Ill. 2d at 82, 435 N.E.2d at 449,quoting Note, Economic Loss in Products Liability Jurisprudence,66 Colum. L. Rev. 917, 918 (1966). Further, economic loss canalso be expressed as "'the diminution in the value of the productbecause it is inferior in quality.'" Moorman, 91 Ill. 2d at 82,435 N.E.2d at 449, quoting Comment, Manufacturers' Liability toRemote Purchasers for 'Economic Loss' Damages--Tort or Contract?,114 U. Pa. L. Rev. 539, 541 (1966).

Thus, to recover pure economic loss under a negligencetheory, there must be a showing of harm above and beyonddisappointed expectations. Redarowicz v. Ohlendorf, 92 Ill. 2d171, 177, 441 N.E.2d 324, 327 (1982). A buyer's desire to enjoythe benefit of his bargain is not an interest that tort lawtraditionally protects. Redarowicz, 92 Ill. 2d at 177, 441N.E.2d at 327; see W. Prosser, Torts