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12/16/87 Electronics Group, Inc., v. Central Roofing Company

December 16, 1987





518 N.E.2d 369, 164 Ill. App. 3d 915, 115 Ill. Dec. 844 1987.IL.1853

Appeal from the Circuit Court of Cook County; the Hon. John M. Breen and the Hon. Edwin M. Berman, Judges, presiding.


JUSTICE WHITE delivered the opinion of the court. RIZZI and FREEMAN, JJ., concur.


Plaintiffs Electronics Group, Inc., and Nathan Yorke, as trustee in bankruptcy on behalf of Electronics Group, Inc., sued 11 defendants, seeking to recover for damages to Electronics Group's inventory, equipment and fixtures. The trial court granted motions to dismiss filed by four of the defendants, Central Roofing Co. (Central), Toth Industrial Sales Corp. (Toth), Schmidt Iron Works Inc., and the Schmidt Iron Works division of S. R. Industries Corp. (The last two defendants will be referred to hereinafter as "Schmidt.") Plaintiffs appeal from the orders dismissing the complaint as to these four defendants. The seven remaining defendants are not involved in this appeal.

Plaintiffs alleged in their second amended complaint that in 1973 and 1974 Central, Toth and Schmidt were all independent subcontractors who worked on the construction of the roof of a building in Wheeling, Illinois. In 1974, Electronics Group leased the building for manufacturing, assembling and storing its products. Plaintiffs alleged that Central negligently constructed the roof so that "the metal roof deck was improperly secured to the steel joists [and] the roof deck was improperly welded." Plaintiffs alleged that because of these defects, "substantial amounts of water entered said premises on or about March 7, 1975, through the roof thereof, causing severe water damage to plaintiff's inventory, equipment and fixtures." More water came through leaks and holes in the roof over the following 11 months. Plaintiffs similarly alleged that Toth negligently constructed the roof deck and Schmidt performed the structural steel work in a defective manner, allowing water to enter the building.

Central, Toth and Schmidt filed motions to dismiss on grounds that plaintiff alleged only economic losses and such losses are not recoverable in tort. The trial court granted the motions.

On appeal plaintiffs contend that they sought recovery for property damage, not for economic loss. In Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, 435 N.E.2d 443, our supreme court decided "to reject imposition of a strict liability in tort theory for recovery of solely economic loss" (91 Ill. 2d at 81), and it further held that those losses were not recoverable in negligence actions (91 Ill. 2d at 88). The court reasoned that recovery for economic loss is best governed by contract law and the Uniform Commercial Code. (91 Ill. 2d at 79-80.) Contract law protects the expectation interests which are involved when one purchases a product which is unfit for its intended use; tort law compensates persons who have suffered personal injury or property damage due to a dangerous product or occurrence. 91 Ill. 2d at 81.

The court defined "economic loss" as

"'damages for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits -- without any claim of personal injury or damage to other property . . .' (Note, Economic Loss in Products Liability Jurisprudence, 66 Colum. L. Rev. 917, 918 (1966) . . .) as well as 'the diminution in the value of the product because it is inferior in quality and does not work for the general purposes for which it was manufactured and sold.' (Comment, Manufacturers' Liability to Remote Purchasers for 'Economic Loss' Damages -- Tort or Contract ? 114 U. Pa. L. Rev. 539, 541 (1966).)" Moorman, 91 Ill. 2d at 82.

Under this definition plaintiffs in the case at bar do not seek to recover an economic loss because they do not ask for the cost of replacement or repair of the roof, nor do they seek to recover for diminution of the roof's value. Instead, they seek to recover for damage to their other property -- their inventory and equipment -- caused by the negligent construction of the roof. However, the court in Moorman also required tort plaintiffs to allege a "sudden or dangerous occurrence." (91 Ill. 2d at 86.) The plaintiff in Moorman failed to state a cause of action in negligence both because it sought to recover for repair of the defective product, an "economic loss," and because the occurrence that plaintiff alleged "was not the type of sudden and dangerous occurrence best served by the policy of tort law that the manufacturer should bear the risk of hazardous products." 91 Ill. 2d at 85.

The appellate court considered this requirement in United Air Lines, Inc. v. CEI Industries of Illinois, Inc. (1986), 148 Ill. App. 3d 332, 499 N.E.2d 558. United alleged that CEI constructed United's roof, and water leaked through the roof regularly both during and after its installation. Ten months after CEI completed work on the roof, the water leaks caused an interior roof to collapse, damaging United's equipment. (148 Ill. App. 3d at 335.) The appellate court held that United stated a cause of action for negligence under Moorman because the occurrence was sufficiently sudden despite the fact that it was the result of a gradual accumulation of water over a period of time. (148 Ill. App. 3d at 339-40.) Similarly, in Redarowicz v. Ohlendorf (1982), 92 Ill. 2d 171, 441 N.E.2d 324, our supreme court indicated that a homeowner who purchased a chimney could sue in tort if the chimney collapsed and damaged the homeowner's furniture. (92 Ill. 2d at 178.) In the case at bar plaintiffs alleged that a substantial amount of water leaked through the roof on March 5, 1975, and damaged their property. We find that the sudden water leak is the kind of occurrence for which the tort law can provide compensation.

Defendants contend that we should affirm the dismissal of the complaint because plaintiffs have not alleged facts which could support a finding that defendants had a duty of care toward plaintiffs. In every negligence action the plaintiff must allege that defendant had a duty of care to the plaintiff, defendant breached that duty, and the breach proximately caused plaintiff's injury. (Duhl v. Nash Realty Inc. (1981), 102 Ill. App. 3d 483, 493, 429 N.E.2d 1267.) In determining the existence and extent of a defendant's legal duty to a plaintiff, the court must consider the foreseeability and likelihood of the harm, the burden on defendant of protecting against the harm, and the consequences of placing that burden on defendant. (Scott & Fetzer Co. v. Montgomery Ward & Co. (1986), 112 Ill. 2d 378, 388, 493 N.E.2d 1022.) If defendants in the case at bar made the roof negligently so that it leaked, some water damage to the property of the building's tenant was clearly foreseeable and very likely. The burden of guarding against the harm was only the burden of exercising ...

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