The opinion of the court was delivered by: McLAREN, District Judge.
MEMORANDUM OPINION AND ORDER
This matter arises on defendant's motions to dismiss Count V of
the third amended complaint and to substitute the Sun Insurance
Company of New York ("Sun") as plaintiff. The motion to dismiss
Count V is granted and the motion to substitute Sun is denied.
Count V alleges that defendant breached an implied warranty to
guard the building in a workmanlike manner and with adequate and
fit personnel. Plaintiff faces two obstacles to stating a cause
of action in this count: (1) implied warranties generally apply
only to sales of goods, not services; and (2) unless public
policy demands otherwise (e.g., dangerous products, sale of food
or drink for human consumption), a breach of warranty action may
only be maintained by a party to the contract.
Plaintiff opposes the motion to dismiss, arguing that the Court
should expand the doctrine of implied warranties to cover sales
of services. The Court can find no authority in Illinois law for
such action. The cases cited by plaintiff in support of its
argument are unpersuasive since they deal with strict liability
and/or sales of goods. E.g., Cunningham v. MacNeal Memorial
Hospital, 47 Ill.2d 443, 446-48, 266 N.E.2d 897, 900-01 (1970).
Plaintiff's admiralty authority also is unpersuasive in light of
the Illinois' courts expressed refusal to expand the doctrine of
implied warranty for services in that unique area of the law to
cover the building contractor area. Wrobel v. Trapani,
129 Ill. App.2d 306, 316-17, 264 N.E.2d 240, 245-46 (1970).
Even assuming that implied warranties did apply to sales of
services, plaintiff, not being a party to the contract between
defendant and the lessor of the building where the fire took
place, could not maintain such an action. Paul Harris Furniture
Co. v. Morse, 10 Ill.2d 28, 39, 139 N.E.2d 275, 282 (1956).
Although products liability is a fast-changing area of the law,
Illinois courts, with certain exceptions not applicable here,
still require privity of contract to maintain actions on implied
warranties. Suvada v. White Motor Co., 32 Ill.2d 612,
210 N.E.2d 182, 184 (1965).
Plaintiff also argues that Count V states a claim for relief
because plaintiff conceivably can recover on strict liability in
tort. The Court need not consider the merits of the argument
since Count V does not allege the elements of strict liability in
tort. Id. at 621, 210 N.E.2d at 187. But even if it did, the
doctrine of strict liability in tort has not been extended to
cover services. Cunningham, supra.
Defendant moves to substitute Sun as plaintiff on the ground
that plaintiff Stewart Warner Corporation ("Stewart Warner")
received payment for its fire losses from Sun and executed a
subrogation receipt, thereby making Sun the real party in
interest under Fed.R.Civ.P. 17.
Stewart Warner contends that its transaction with Sun is in the
form of a loan, as evidenced by the printed loan receipt found on
the reverse side of Sun's draft payment for Stewart Warner's
loss, executed almost a month later than the subrogation receipt.
The effect of substituting Sun as plaintiff would be to destroy
diversity jurisdiction. However, since Stewart Warner has alleged
damages exceeding Sun's loan or payment by $50,500, there are two
real parties in interest here — even if the transaction between
Sun and Stewart Warner were to be regarded as a payment rather
than a loan. United States v. Aetna Casualty & Surety Co.,
338 U.S. 366, 381-82, 70 S.Ct. 207, 94 L.Ed. 171 (1949). Even if
there were partial subrogation as a result of a payment by Sun,
Sun would still remain a necessary party, but not an
indispensable one. Id.
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