The opinion of the court was delivered by: Crowley, District Judge.
MEMORANDUM OPINION AND ORDER
In this products liability case, plaintiff claims that a
quantity of allegedly defective lacquer thinner exploded while
in her possession, causing personal injury. The defendants in
this sixth amended complaint are Ashland Chemical Company
(Ashland), the manufacturer, and Century Industries, Inc.
(Century), a supplier of the thinner. Because of the parties'
citizenship and the amount in controversy, jurisdiction is
properly invoked under 28 U.S.C. § 1332. The matter is now
before the Court on Ashland's motion for summary judgment on
Count II of the sixth amended complaint.
Count II alleges that the defendants fraudulently induced
plaintiff to purchase and use the lacquer thinner. The basis
of this claim is information which appeared on the label of
the bottle of thinner plaintiff purchased. Plaintiff claims
that the label represented that the product was suitable for
household cleaning and that this statement was false.
Ashland claims that plaintiff has failed to allege that
Ashland prepared or affixed the labels and, further, that
depositions establish that Ashland had nothing to do with
preparation of the labels. The lack of this allegation is said
to preclude liability on Ashland's part, because Ashland
argues that one essential element of a cause of action for
fraud in Illinois is that the defendant make a
misrepresentation to the plaintiff.
In response, plaintiff does not contest the fact that
Ashland did not prepare or affix the label. However, plaintiff
claims that "[c]oncealment or silence may constitute fraud
where there is a duty to speak," citing Tcherepnin v. Franz,
393 F. Supp. 1197 (N.D.Ill. 1975). Further, plaintiff argues
that because a manufacturer has a duty to test and inspect a
product and to warn consumers of unreasonable risks, Ashland
had a duty to "speak" in regard to the labels on the thinner
bottles. Essentially, then, plaintiff argues Ashland had a duty
to know and determine whether the label contained a material
misrepresentation and, therefore, Ashland's silence as to the
label amounts to fraud.
Although it is clear that silence or concealment may
constitute fraud, it does so only when the silent party had an
opportunity and duty to speak. Crowell v. Bilandic,
77 Ill. App.3d 162, 395 N.E.2d 642 (1979); Allensworth v. Ben
Franklin Sav. & L. Ass'n, 71 Ill. App.3d 1041, 389 N.E.2d 684
(1979); Lagen v. Lagen, 14 Ill. App.3d 74, 302 N.E.2d 201
(1973). The relevant issue here, then, is whether Ashland had
an opportunity and duty to speak concerning the labels. Neither
the Court nor the parties has found a case directly on point,
but other cases help define the conditions under which silence
may constitute fraud. The case plaintiff relies on, Tcherepnin
v. Franz, 393 F. Supp. 1197 (N.D.Ill. 1975), reveals two
situations. First, "a person who, by his conduct, contributes
to the misapprehension of another as to a material matter, and
intentionally fails to correct the misapprehension, is guilty
of fraud." 393 F. Supp. at 1217. Second, a person with a
fiduciary duty of full and complete disclosure who fails to
correct a material misapprehension is guilty of fraud. 393
F. Supp. at 1217. Both of these principles were found as bases
of culpability in the case. In Crowell v. Bilandic,
77 Ill. App.3d 162,395 N.E.2d 1023 (1979), the court recognized
that a member of a police board had a duty to disclose his
relationship with a person who has brought charges before the
board. In Forest Preserve Dist. of Cook County v. Christopher,
321 Ill. App. 91, 52 N.E.2d 313 (1944), a lessor was held liable
for fraud for failing to disclose contemplated condemnation
proceedings to a lessee, knowing the lessee had planned and
begun substantial improvements.
The basis of liability in these cases is that special
circumstances existed concerning the specific false statement.
Either the party contributed to the misrepresentation, was
aware of information known to be material to a person dealt
with, or the party had special fiduciary obligations. None of
these circumstances is present here. Thus, although a
manufacturer has a duty to test and inspect its product and
warn consumers of unreasonable risks (see Jonescue v. Jewel
Home Shopping Service, 16 Ill. App.3d 339, 306 N.E.2d 312
(1974)), those duties do not create the type of special
circumstances triggering a duty to speak concerning a label
prepared by a remote party. The duties derive from the
product's condition and may be the basis of liability on other
theories of products liability, but they are not the basis of a
cause of action for fraud in this case. Since there is no
genuine issue of material fact concerning Ashland's total lack
of involvement in the preparation of the lacquer thinner
labels, Ashland's motion for summary judgment is granted.
Accordingly, Ashland's motion for summary judgment on Count
II of the sixth amended complaint is granted.
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