exercise reasonable skill and diligence in the transaction of the business entrusted to him and will be responsible to his principal for any loss resulting from his failure to do so" (citations omitted)); International Amphitheatre Co. v. Vanguard Underwriters, 166 Ill. App. 3d 369, 372, 519 N.E.2d 1015 (1st Dist. 1988); Economy Fire & Casualty Co. v. Bassett, 170 Ill. App. 3d 765, 525 N.E.2d 539 (5th Dist. 1988).
A & A argues that because St. Paul is not seeking monetary damages from Great Lakes in its declaratory judgment action, there is nothing for which A & A can indemnify Great Lakes. This argument, however, is fatally flawed, although it illustrates an issue which does concern this court. St. Paul is suing in this court for a declaration that it is not liable for Great Lakes' defense or indemnification in the action pending in the Southern District of New York. If St. Paul is successful, Great Lakes will be left unprotected. However, Great Lakes claims that, should St. Paul succeed, it would do so only because of A & A's fault. Thus, Great Lakes has brought its counterclaim in this action, rather than in the New York action. It seems to this court that the most reasonable course would have been to bring both actions in the same district as the underlying case is pending, but neither of the parties has argued the question, and this court certainly does have jurisdiction to decide the matters pending before it. Matters of judicial economy and convenience aside, it is perfectly reasonable for Great Lakes to bring its counterclaim in this action since, unless St. Paul is successful, Great Lakes will have no need for indemnification.
2. Breach of Fiduciary Duty
Finally, A & A has moved to dismiss Great Lakes' claims for breach of fiduciary duty -- Counts 1 and 3 of the complaint. A & A argues that Great Lakes failed to plead that A & A acted in bad faith and has therefore failed to state a cognizable claim for breach of fiduciary duty. A & A relies upon a single sentence in a Seventh Circuit opinion for its claim that bad faith is a necessary element of a breach of fiduciary claim in Illinois. See Lazzara v. Howard A. Esser, Inc., 802 F.2d 260, 266 (7th Cir. 1986) ("The [insurance] broker is obligated to act in good faith and with reasonable care, skill and diligence in transacting the business of the principal.") A more accurate statement of Illinois law, however, is not that bad faith is an element of a breach of fiduciary duty claim, but rather that good faith is a defense. See, for example, Chicago City Bank & Trust Co. v. Lesman, 186 Ill. App. 3d 697, 701, 542 N.E.2d 824 (1st Dist. 1989), app. den. Chicago City Bank & Trust Co. v. Lesman, Ill.2d , 548 N.E.2d 1067 (1990) ("[a] cause of action for breach of fiduciary duty must set forth allegations . . . that a fiduciary relationship existed between the parties, that the trustee owed certain specific duties to the plaintiff, that the trustee breached those duties, and that there were resulting damages." (Citations omitted)); Scarsdale Villas Associates, Ltd. v. Korman Associates Insurance Agency, Inc., 178 Ill. App. 3d 261, 127 Ill. Dec. 463, 533 N.E.2d 81 (1st Dist. 1988) ("an insurance broker has a duty to exercise reasonable skill and diligence in the transaction of business entrusted to him, and a broker who fails to procure insurance when obligated to do so, or who causes damage to his principal, whether by omission or commission, is liable for any loss the principal may sustain by virtue of his failure to procure insurance." (Citing Omni Overseas Freighting Co. v. Cardell Insurance Agency, 78 Ill. App. 3d 639, 642-43, 33 Ill. Dec. 779, 397 N.E.2d 112. Compare Economy Fire & Cas. Co. v. Bassett, 170 Ill. App. 3d 765, 772, 525 N.E.2d 539 (1st Dist. 1988) ("[a] broker is not liable if he acts in good faith and with reasonable care, skill, and diligence to place the insurance in compliance with his principal's instructions." (Citations omitted).
The principle this court gleans from the above cases is that all Great Lakes need allege is that it had a fiduciary relationship with A & A, that A & A owed Great Lakes certain specific duties, that A & A breached those duties, and that the breach damaged Great Lakes. Great Lakes has alleged each of these elements. A & A is free to assert its good faith as a defense to Great Lakes' legitimate claim.
3. Moorman Doctrine
Finally, A & A maintains that Great Lakes' fiduciary duty claims are barred by the Moorman doctrine. See Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69, 61 Ill. Dec. 746, 435 N.E.2d 443 (1982). The Moorman doctrine bars recovery of purely economic losses in negligence actions. Great Lakes' claims, as this court has noted throughout this opinion, are based upon contract and agency theories. The Moorman doctrine does not apply.
A & A's motion to dismiss is denied.