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ILLINOIS CONSTRUCTORS CORP. v. MORENCY & ASSOCS.

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION


November 23, 1992

ILLINOIS CONSTRUCTORS CORPORATION, a corporation, Plaintiff,
v.
MORENCY & ASSOCIATES, INC., a corporation, d/b/a MORENCY, WEIBLE & SAPA, Defendant.

The opinion of the court was delivered by: CHARLES RONALD NORGLE, SR.

HONORABLE CHARLES R. NORGLE

 ORDER

 Before the court is the motion of defendant Morency & Associates, Inc. d/b/a Morency, Weible & Sapa ("Morency") for reconsideration of this court's September 29, 1992 order denying its motion to dismiss for failure to state a claim. Morency focuses its motion on this court's conclusion that Illinois law would allow an action sounding in negligence against an insurance broker to recover for purely economic loss. For reasons stated below, the motion to reconsider is denied.

 Motions for reconsideration serve a limited function. They are ordinarily used to correct clear errors of law or fact or to present newly discovered evidence which could not have been adduced during the pendency of the motion. Kohl v. Murphy, 767 F. Supp. 895, 904 (N.D. Ill. 1991). Morency argues that this court's interpretation of and reliance upon Lake County Grading Co. v. Great Lakes Agency, Inc., 226 Ill. App. 3d 697, 589 N.E.2d 1128 (1992) was erroneous. Defense counsel zealously argues that this court should distinguish this case from Lake County Grading because that case involved a claim of negligent misrepresentation and was not a straight claim of negligence in the procurement of insurance.

 Notwithstanding counsel's earnest advancement, the Illinois Appellate Court's reasoning in Lake County Grading, even if it were mere dicta, supports this court's conclusion. If Lake County Grading stood only for the proposition that insurance brokers can be held liable for economic damages when an action is brought for negligent misrepresentation, then the appellate court was merely restating a settled proposition. That a claim of negligent misrepresentation survives Moorman was decided in Moorman itself. See Moorman Mfg. Co. v. National Tank Co., 91 Ill. 2d 69, 435 N.E.2d 443, 452 (1982) (two exceptions are intentional misrepresentation claims and where one who is in the business of supplying information for the guidance of others in their business makes negligent representations).

 Moreover, in 2314 Lincoln Park West Condominium Ass'n v. Mann, Gin. Ebel & Frazier, Ltd., 136 Ill. 2d 302, 555 N.E.2d 346 (1990), the Illinois Supreme Court altered the inquiry somewhat. Instead of merely trying to fit a claim into some neat exception enumerated in the Moorman case itself, the court made evident that it is the nature of the particular duty upon which a court must rely when deciding whether a negligence claim falls within the Moorman doctrine. See 2314 Lincoln Park West, 555 N.E.2d at 352-53 (noting that an exception exists where defendant owes duty to prevent precisely the type of harm, economic or not, that occurred). Hence, the Illinois Appellate Court in Lake County Grading relied heavily on the strong extra-contractual duty of insurance brokers in making what this court believes is a broader decision than that' which Morency advocates. Lake County, 589 N.E.2d at 1132.

 The history of negligence claims against insurance brokers in Illinois before Moorman and even after Moorman further exemplifies the important duties of insurance brokers. See Scarsdale Villas Assoc. Ltd. v. Korman Assoc. Ins. Agency, Inc., 178 Ill. App. 3d 261, 533 N.E.2d 81, 83 (1988); Economy Fire & Casualty Co. v. Bassett, 170 Ill. App. 3d 765, 525 N.E.2d 539, 544 (1988); Pickett v. First Am. Sav. & Loan Ass'n, 90 Ill. App. 3d 245, 412 N.E.2d 1113 (1980).

 Therefore, in light of the important duty Illinois law places on insurance brokers to procure insurance adequate for their principals, and the broader language and reasoning of the Lake County Grading case, the court's prior decision is correct.

 Accordingly, Morency's motion for reconsideration is denied.

 IT IS SO ORDERED.

 ENTER:

 CHARLES RONALD NORGLE, SR., Judge

 United States District Court

 DATED: November 23, 1992

19921123

© 1992-2004 VersusLaw Inc.



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