well as substituting its judgment for those who are better able to assess their positions. See generally Comment, What's So Good About Good Faith? The Good Faith Performance Obligation in Commercial Lending, 55 U.Chi.L.Rev. 1335 (1988).
This court thus returns to the Plan, the contract which Bane claims the defendants breached. There is only one relevant clause that grants Isham and its partners discretion as to payment of benefits under the Plan: Section 8.1. This clause grants Isham and its partners the discretion to dissolve the firm and thereby terminate payment of benefits. Under Illinois law, Isham and its partners must exercise their discretion to dissolve Isham "reasonably and with proper motive, and may not do so arbitrarily, capriciously, or in a manner inconsistent with the reasonable expectations of the parties" to the Retirement Plan. Dayan, 125 Ill. App. 3d at 972. If Isham and its partners exercised their power to dissolve the firm reasonably and with proper motive, Bane cannot sue for breach of Isham and its partners' duty of good faith and fair dealing under the Retirement Plan.
Bane's complaint does not allege that the defendants acted unreasonably, improperly, arbitrarily, capriciously, or in a manner inconsistent with the reasonable expectations of the parties to Isham's retirement plan in dissolving Isham on April 30, 1988. In fact, the Complaint alleges that the departure of key partners, the loss of important clients, and the failed merger with Reuben & Proctor caused the firm to fall on hard times, and that is why Isham dissolved. There is nothing unreasonable, improper, arbitrary, or capricious about the decision of a partnership to dissolve for these reasons. Moreover, this court cannot reasonably infer from the facts alleged in Bane's complaint that the parties to the Retirement Plan expected Isham not to dissolve when faced with hardships such as those alleged.
It may have been "unreasonable" for the defendants to do the things which Bane alleges led to Isham's financial ruin. This court cannot construe the Retirement Plan, however, to cover those activities. Rather, the Plan as alleged restricted Isham's decisions only with respect to the Plan itself. Bane's right to challenge Isham's decisions extends only to those decisions made with respect to the Plan. As Bane himself has alleged, Isham dissolved for reasons wholly unrelated to the Plan. For this reason, Bane has not stated a claim in Count 2 upon which this court can grant relief.
Breach of Fiduciary Duty
The court now turns to Count 3, where Bane alleges that the defendants, "as members of the Managing Council [of Isham] and draftsmen and promulgators of the Retirement Plan, and as senior members of [Isham], were fiduciaries with respect to the management of said Retirement Plan for those entitled to benefits thereunder." Bane contends that he dealt with the defendants "knowing them to be fiduciaries with respect to his interests under the Retirement Plan," but that the defendants "wantonly breached their fiduciary duties to [him] by causing [Isham] to dissolve, thereby causing pension payments to [him] to terminate." Complaint at paras. 16-18.
Bane contends that by reason of these actions, the defendants acted contrary to the Illinois Uniform Fiduciaries Act, Ill.Rev.Stat. ch. 17, paras. 2001 et seq. Bane has not indicated in his complaint which provision of the Act the defendants have violated, and nearly admits that the Act does not pertain to the defendants' conduct in his brief in opposition to the defendants' motion. In that brief he moves away from the language of the complaint to allege that the defendants breached their obligation to him under the Uniform Fiduciaries Act, the Uniform Partnership Act, and the common law. Normally the court would not recognize a party's attempt to amend his or her complaint in this manner, as it is contrary to the Federal Rules of Civil Procedure. See Rule 15(a), Fed.R.Civ.P. (describing proper method of amendment). But by presenting a claim under the Illinois Uniform Fiduciaries Act, Bane may have automatically stated claims under the common law of Illinois. See Ill.Rev.Stat. ch. 17, para. 2011 ("In any case not provided for in this Act the rules of law and equity, including the law merchant and those rules of law and equity relating to trusts, agency, negotiable instruments and banking, shall continue to apply."). Since the defendants have fully briefed the issue of fiduciary relations, including those arising under Illinois common law, this court will construe the complaint as alleging a common law claim of breach of fiduciary duty and consider whether Bane has stated a claim upon which this court can grant relief.
The initial problem that this court encounters when addressing Bane's common law claim for breach of fiduciary duty is deciding exactly what type of relief he seeks. There are many possibilities. He could be asserting an action for an accounting and enforcement of a trust. See, for example, Ill.Rev.Stat. ch. 106-1/2, para. 21 (suggesting accounting and trust enforcement as remedies for breach of partner's obligation to another partner). He could be asserting an action for enforcement of a constructive trust or restitution. See, for example, Bremer v. Bremer, 411 Ill. 454, 104 N.E.2d 299 (1952) (breach of fiduciary relation gives rise to action for constructive trust); Graham v. Mimms, 111 Ill. App. 3d 751, 444 N.E.2d 549, 67 Ill. Dec. 313 (1982) (breach also can give rise to action for restitution). In some instances a party also can sue in tort for a breach of fiduciary relation. See id. at 769.
The court could try to parse Mr. Bane's complaint and his briefs on this motion to determine which remedies he seeks. The court can avoid this task, however. This is because before Mr. Bane can bring any of these actions, he must properly allege that a fiduciary relation existed between himself and the defendants. This he has not done. Bane argues that partners are fiduciaries. It is true that all partners are fiduciaries for one another. See Couri v. Couri, 95 Ill. 2d 91, 98, 447 N.E.2d 334, 337, 69 Ill. Dec. 117 (1983). It is further true that some people who are partners have fiduciary obligations to some persons who are not in the partnership. See, for example, In re Crane, 96 Ill. 2d 40, 449 N.E.2d 94, 70 Ill. Dec. 220 (1983) (partner in law firm mishandled funds from client's settlement; attorney disciplined for breach of fiduciary duty owed to client). But it is not true that all partners owe general fiduciary obligations to everyone. As with any obligation, a fiduciary obligation is particular. It is owed to someone when particular conditions are met.
Bane's complaint states that Bane retired as an Isham partner in December 1985. See Complaint at para. 3.
According to Illinois law, retirement of a partner from a partnership results in the dissolution of the partnership. See Ill.Rev.Stat. ch. 106-1/2, paras. 29, 31(1)(b). Dissolution works to end the fiduciary relationship, see Bluestein v. Davis, 86 Ill. App. 2d 61, 67, 230 N.E.2d 61, 64 (1967); Babray v. Carlino, 2 Ill. App. 3d 241, 250-51, 276 N.E.2d 435, 442 (1971), except for purposes of an accounting or the winding up of the partnership's affairs, see Jackson v. Jackson, 343 Ill. App. 31, 45-46, 98 N.E.2d 169, 176 (1951). Bane cites three cases from jurisdictions other than Illinois in an effort to suggest that a partner's fiduciary duties persist indefinitely, but the holding of each of these cases is entirely consistent with the rule and its narrow exception stated above. See Rosenfeld, Meyer & Susman v. Cohen, 146 Cal. App. 3d 200, 194 Cal. Rptr. 180 (1983) (action of winding-up partners against co-partner); Oliker v. Gershunoff, 195 Cal. App. 3d 1288, 241 Cal. Rptr. 415 (1987) (winding-up partners owe fiduciary duties to one another); Resnick v. Kaplan, 49 Md. App. 499, 434 A.2d 582 (1981) (partners upon dissolution owe fiduciary duties toward one another in accounting and in winding up partnership's affairs).
Since Bane has stated that he is no longer a partner, and since he was not a partner at the time Isham wound up its affairs in April 1988, the defendants did not owe him a fiduciary duty under Illinois partnership law. Bane alludes in his briefs to another way that a fiduciary duty can arise, see, for example, Wold v. Wold, 43 Ill. App. 3d 773, 777, 357 N.E.2d 627, 630, 2 Ill. Dec. 460 (1976) ("Where a fiduciary . . . relationship does not exist as a matter of law, . . . it may nonetheless exist where trust and confidence, by reason of friendship, agency and experience, are reposed by one person in another who, as a result, gains an influence or superiority over him"), but his complaint does not posit that he reposed trust and confidence in the defendants, or that they gained influence or superiority over him as a result. This court thus must dismiss Count 3 for failure to state a claim upon which this court can grant relief.
All of this leaves Mr. Bane only with Count 4, his claim under a theory of gross negligence. The defendants contend that the doctrine of Moorman Mfg. Co. v. National Tank Co., 91 Ill. 2d 69, 435 N.E.2d 443, 61 Ill. Dec. 746 (1982), prevents Bane from recovering the damages he seeks under a theory of tort liability. Bane contends that the defendants misconstrue Moorman and its progeny, and that he can seek to recover what he would have received under Isham's Retirement Plan.
The Illinois Supreme Court held in Moorman that a company that purchased a defective storage tank could not recover "solely economic loss[es]" under a theory of strict liability. Moorman, 91 Ill. 2d at 81. The court defined "economic loss" in part 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. . . . '" Id. at 82, quoting Note, Economic Loss in Products Liablity Jurisprudence, 66 Colum.L.Rev. 917, 918 (1966). The court rested its holding on the principle that the law of contracts, and not tort, was better suited to analysis of claims relating to "disappointed expectations." Moorman, 91 Ill. 2d at 81-86.
Bane first contends that this court should confine the Moorman doctrine to cases involving defeated commercial expectations, relying on the Illinois Supreme Court's later construction of Moorman in Anderson Elec. v. Ledbetter Erec. Corp., 115 Ill. 2d 146, 503 N.E.2d 246, 104 Ill. Dec. 689 (1986). In Anderson the court pointed out that Moorman left the plaintiff in that case with his remedies under the Uniform Commercial Code. The Anderson court noted, however, that the availability of alternative contractual remedies was not pertinent to whether a plaintiff could recover economic losses under a theory of tort liability. Id. at 152-53. While it is true that all of the cases in which the Illinois Supreme Court has barred recovery of economic losses have involved commercial contracts, see Moorman, 91 Ill. 2d at 69; Morrow v. L.A. Goldschmidt Assoc., Inc., 112 Ill. 2d 87, 492 N.E.2d 181, 96 Ill. Dec. 939 (1986); Anderson, 115 Ill. 2d at 146, Bane has made no arguments as to why this court should narrow the broad rule barring recovery of economic losses to commercial contracts only. The inability of Illinois' law of torts to account for the expectations of parties, and the perceived superiority of its law of contracts in handlng the same, remains regardless of the context. See Wait v. First Midwest Bank/Danville, 142 Ill. App. 3d 703, 710-11, 491 N.E.2d 795, 802, 96 Ill. Dec. 516 (1986) (applying Moorman doctrine to negligence counts in case involving alleged breach of oral promise to loan money). Further, it would be difficult to draw a logical line between "commercial" and "noncommercial" cases. As indicated above, the Illinois Supreme Court has rejected a plausible division between those cases covered by the Uniform Commercial Code and those that are not. Mr. Bane has not suggested an alternative distinction, and so this court will not ruminate on the issue further: the Moorman doctrine applies to this case for purposes of this motion.
Bane then contends that he is not seeking recovery for economic loss, but rather damages for injuries to his "property rights" in payments under Isham's retirement plan. Just what is property for purposes of the Moorman doctrine is admittedly unclear. In Moorman the court was able to employ the phrase "damage to other property" because the case involved a defective device that could cause damage to property apart from the device itself. Later the court seemed to suggest that a party could recover for damage to the property itself when the damage was the result of a "'sudden and dangerous occurrence best served by the policy of tort law.'" Foxcroft Townhome Own. v. Hof. Rosner Corp., 96 Ill. 2d 150, 156, 449 N.E.2d 125, 128, 70 Ill. Dec. 251 (1983), quoting Moorman, 91 Ill. 2d at 85.
This court need not probe the outer limits of the concept of property under the Moorman doctrine to resolve the issues in this case. While Bane may have a property right in payments under the Isham Retirement Plan, the complaint concedes that Bane is claiming "the amount that [Bane and his wife] were entitled to receive under the Isham Lincoln & Beale Retirement Plan." As such, Bane is seeking recovery of what he bargained for, and the Illinois courts are unanimous in holding the Moorman bars such recovery under a theory of negligence. See Redarowicz v. Ohlendorf, 92 Ill. 2d 171, 177, 441 N.E.2d 324, 327, 65 Ill. Dec. 411 (1982) ("To recover in negligence there must be a showing of harm above and beyond disappointed expectations. A buyer's desire to enjoy the benefit of his bargain is not an interest that tort law traditionally protects."); Morrow, 112 Ill. 2d at 98 ("Simply characterizing a breach of contract as 'wilful and wanton' does not change the fact that plaintiffs are only seeking recovery for harm to a contract-like interest."); Scott & Fetzer v. Montgomery Ward, 112 Ill. 2d 378, 493 N.E.2d 1022, 98 Ill. Dec. 1 (1986) (reaffirming Moorman, and distinguishing it from case where property was consequentially damaged as a result of defective product; property owners were not purchasers of defective product, but were by-standers).
Bane thus has not stated a claim in Count 4 upon which this court can grant relief. Because liability under one of the theories stated in Counts 2-4 was necessary before Bane could state a claim under a theory of partner liability, this court must dismiss Count 1 also. The motion of the defendants to dismiss Bane's complaint under Rule 12(b)(6) is thus granted.
JUDGMENT IN A CIVIL CASE
Decision by Court. This action came to trial or hearing before the Court. The issues have been tried or heard and a decision has been rendered.
IT IS ORDERED AND ADJUDGED
that judgment by dismissal is entered in favor of the defendants and against the plaintiff. Enter judgment.