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OAK STATE PRODUCTS, INC. v. ECOLAB

February 1, 1991

OAK STATE PRODUCTS, INC., PLAINTIFF,
v.
ECOLAB, INC., DEFENDANT.



The opinion of the court was delivered by: Mihm, District Judge.

ORDER

Before the Court is the Defendant Ecolab's Motion to Dismiss (# 5). The Magistrate recommended that the Motion to Dismiss be denied. This Court affirms the recommendation of the Magistrate and denies the Motion to Dismiss.

BACKGROUND

Before the Court is an action for damages filed pursuant to Illinois tort and contract law. This Court has jurisdiction pursuant to 28 U.S.C. § 1332 because there is complete diversity of citizenship between the parties. Ecolab is a Delaware corporation with its principal place of business in St. Paul, Minnesota. Oak State Products, Inc. is an Illinois corporation with its principal place of business in Illinois.

The Complaint alleges that Oak State Products (hereinafter referred to as Oak State), which is in the business of manufacturing and distributing foodstuffs, made an oral contract with Ecolab to provide pest fumigation at Oak State's place of business, including the flour storage bins. Ecolab allegedly represented that it would not be necessary to empty the storage bins in order to perform the fumigation because the chemicals used would not harm the flour in the bins. The fumigation took place on September 5, 1988. Allegedly, within a few days thereafter, the flour smelled tainted and the products made from the flour were not fit for sale. Oak State alleges that the fumigation was the cause of the tainted flour.

The Complaint is in four counts. Count I alleges a breach of an express warranty. Count II alleges that Ecolab negligently chose the wrong solution to fumigate the flour bins and negligently applied the solution to the flour bins. Count III alleges a negligence action based upon res ipsa loquitur. And, Count IV alleges a breach of an oral contract. Oak State seeks damages for the loss of the flour, the replacement of the tainted food products, the loss of good will, and the lost profits. The Defendant has moved to dismiss the entire Complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure because it contends that the Complaint fails to state any claim for which relief may be granted.

COUNT I

Ecolab asserts that Count I should be dismissed because the transaction in question was predominated by the sale of services, rendering the provisions of Article 2 of the Illinois Commercial Code inapplicable. However, Oak State concedes that the contract in question was a service contract, and it concedes that the Uniform Commercial Code does not apply. Oak State asserts that it is seeking relief for an express warranty under general contractual law.

Ecolab contends that there is no common law warranty outside the Uniform Commercial Code on which Oak State may rely and that warranties are limited to the sales of goods and do not attach to the performance of services. Rosos Litho Supply Corp. v. Hansen, 123 Ill. App.3d 290, 296, 462 N.E.2d 566, 571-572, 78 Ill.Dec. 447, 452-453 (1st Dist.Ill. 1984). Further, Ecolab asserts that, as a service, no warranties can be made or implied as a matter of law because the specific rights and remedies addressed by the Uniform Commercial Code preempt any common law remedy. See, Bickett v. Buffalo Bills, Inc., 122 Misc.2d 880, 472 N.Y.S.2d 245, 248 (1983); Alaska Airlines, Inc. v. Lockheed Aircraft Corp., 430 F. Supp. 134 (D.Ala. 1977). Thus, Ecolab asserts that Count I must be dismissed because express warranties are limited to the sales of goods.

Oak State contends that the Rosos case is distinguishable. This Court agrees. The plaintiff in the Rosos case was asserting that an architect's contractual duties (or warranties) encompass not only those expressed in the contract but also other duties implied by the contract. Rosos, 462 N.E.2d at 571, 78 Ill.Dec. at 452. The court simply concluded that the Uniform Commercial Code was inapplicable to the provision of professional services; therefore, it could not allow the Plaintiff to assert a cause of action for an implied warranty. Id. The court went on to explain:

  Nor is there any other implied common law or
  statutory warranty applicable to an architect's
  services. (Citation omitted). In Illinois "in the
  absence of a special agreement . . . [the
  architect] does not imply or guaranty a perfect
  plan or a satisfactory result." (Citation
  omitted). The absence of implied warranties in
  architect's services makes it possible for an
  architect to effectively insulate himself from
  liability by omitting certain express warranty
  terms from his contract.

Id. 462 N.E.2d at 571-572, 78 Ill.Dec. at 452-453.

This quotation from the Rosos case makes it clear that the court was talking about implied warranties. This Court simply cannot agree with the proposition that express warranties cannot exist in service contracts. If this were the case, this would severely limit a party's ability to freely contract. The argument that Article 2 of the Uniform Commercial Code, which applies to transactions in goods (see, Ill.Rev.Stat. ch. 26, § 2-102), preempts all express warranties in service contracts is simply too broad for this Court to accept.

With regard to the out of state cases cited by Ecolab, this Court adopts the reasoning of the Magistrate and finds that these cases are not persuasive and are distinguishable on their facts. Further, even if the cases are not distinguishable, they do not apply because this Court is obligated to apply Illinois law. Based upon Illinois case law, this Court believes that Oak State can state a cause of action for the breach of an express warranty in a service contract as several Illinois cases have implicitly recognized that such a cause of action exists. See, Rogala v. Silva, 16 Ill. App.3d 63, 305 N.E.2d 571 (1st Dist.Ill. 1973); Carroll v. Grabavoy, 77 Ill. App.3d 895, 396 N.E.2d 836, 33 Ill.Dec. 309 (3rd Dist. Ill. 1979); ...


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