The opinion of the court was delivered by: Marovitz, District Judge.
Plaintiff R & L Grain Company brings this action against
defendant Chicago Eastern Corporation seeking recovery for
certain losses allegedly sustained by it as a result of its
purchase of a grain storage bin manufactured by defendant.
Plaintiff's amended complaint also contains class allegations
on behalf of all owners of bins manufactured by defendant of
the variety purchased by plaintiff. Plaintiff is a Wisconsin
corporation with its principal place of business in Wisconsin.
Defendant is an Illinois corporation with its principal place
of business in Illinois. The jurisdiction of the Court is
invoked pursuant to 28 U.S.C. § 1332.
Plaintiff's amended complaint alleges that in the fall of
1978, after consultations with Porter Grain Systems, Inc.
(Porter), an Indiana corporation, it decided to purchase a
grain storage bin (the "bin") manufactured by defendant. Porter
purchased the material components of the bin from defendant for
$311,738. Only plaintiff and Porter were parties to the
contract of sale.*fn1 Porter assembled the bin after defendant
made delivery at plaintiff's Monroe, Wisconsin facility.
Plaintiff alleges that the bin contains certain design
defects which cause it to be unsuitable for its intended
purpose and unsafe to persons working in and around the
bin.*fn2 On January 14, 1979, the roof of the bin collapsed
causing damage to the bin and related equipment. Repairs to the
bin were made at a cost of $57,394.76. Plaintiff also alleges
that the collapse of the roof of the bin cost plaintiff
$100,000 in lost profits from anticipated grain storage
In addition, plaintiff alleges that the bin is in need of
further repairs at an estimated cost of $210,000. These
repairs, plaintiff alleges, will occasion additional lost
rental revenues of $25,000.
Plaintiff seeks recovery of both its allegedly already
incurred and anticipated repair costs and lost rentals.
Plaintiff also seeks to recover the purchase price of the bin.
Lastly, plaintiff seeks recovery of those financing costs for
its purchase of the bin that accrued during the period the bin
was in disuse due to the collapse of the roof; i.e.,
$32,250. The total recovery sought by plaintiff is $700,000,
plus attorney's fees.
Plaintiff's theories of recovery are set forth in the four
counts of its amended complaint. Count I alleges defendant's
liability in strict tort. Count II alleges liability upon a
negligence theory. Count III seeks recovery pursuant to
defendant's alleged express warranties and implied warranties
of merchantability and fitness for a particular purpose.
See Ill.Rev.Stat. ch. 26, §§ 2-313, 2-314, and
2-315. Count IV contains plaintiff's class allegations made
pursuant to Rule 23 of the Federal Rules of Civil Procedure.
Pending before the Court is defendant's motion to dismiss
each count in plaintiff's amended complaint. Motions to dismiss
are not to be granted "unless it appears beyond doubt that the
plaintiff can prove no set of facts in support of his claim
which would entitle him to relief." Conley v. Gibson,
355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957).
When ruling upon a motion to dismiss a court shall accept as
true all well-plead factual allegations. Cruz v. Beto,
405 U.S. 319, 92 S.Ct. 1079, 31 L.Ed.2d 263 (1972). For the
reasons set forth below, the Court denies defendant's motion in
part and grants the motion in part.
Before addressing defendant's challenge to the sufficiency of
plaintiff's tort claims, the Court must ascertain what law
governs those claims.*fn3 This being an action founded upon
the Court's diversity jurisdiction, it is bound to apply state
substantive law, Erie Railroad Co. v. Tompkins,
304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and the
choice-of-law principles of Illinois in order to determine
which state's law shall govern. Klaxon Co. v. Stentor
Electric Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020,
85 L.Ed. 1477 (1941). With respect to tort law claims, Illinois
courts apply the substantive law of the place of injury unless
the application of those factors set forth in the Restatement
(Second) of Conflict of Laws §§ 6 and 145*fn4 (1971)
that another forum has a more significant relationship to the
claim. Ingersoll v. Klein, 46 Ill.2d 42, 48,
262 N.E.2d 593, 596 (1973).
In the instant case, only Illinois and Wisconsin bear any
significant relationship to plaintiff's tort claims. Between
the relevant tort law of those jurisdictions, a true conflict
exists. Because plaintiff alleges only injury related to the
bin itself and consequent lost income, plaintiff's claims are
for economic loss only.*fn5 See Alfred N. Koplin Co. v.
Chrysler Corp., 49 Ill. App.3d 194, 199, 7 Ill.Dec. 113,
116-17, 364 N.E.2d 100, 103-04 (1977). State jurisdictions are
divided as to whether purely economic loss is recoverable
pursuant to tort law theory.*fn6 See id. at 200, 7
Ill.Dec. at 118-19, 364 N.E.2d at 105-06, and cases cited
therein. Wisconsin is among the minority of jurisdictions which
permit the recovery in tort of economic loss. LaCrosse v.
Schubert, Schroeder & Associates, Inc., 72 Wis.2d 38,
44-45, 240 N.W.2d 124, 127 (1976). The issue is one which the
Illinois Supreme Court has yet to address and there is a
conflict between those Appellate Courts of Illinois that have
decided the issue. Compare Alfred N. Koplin Co. v. Chrysler
Corp., 49 Ill. App.3d 194, 7 Ill.Dec. 113, 364 N.E.2d 100