United States District Court, N.D. Illinois, Eastern Division
June 10, 2004.
MENARD, INC. d/b/a MENARDS Plaintiff,
COUNTRYSIDE INDUSTRIES, INC.; DAVID L. JACOBSON & ASSOCIATES, LTD.; COWHEY GUDMONDSON LEDER, LTD.; and SERVICE KONSTRUCTION SUPPLY, INC., Defendants.
The opinion of the court was delivered by: JOHN W. DARRAH, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff, Menard, Inc., filed suit against Countryside
Industries, Inc. ("Countryside"); David L. Jacobson & Associates,
Ltd. ("Jacobson"); Cowhey Gudmondson Leder, Ltd. ("Cowhey"); and
Service Konstruction Supply, Inc. ("Service Konstruction"), for
problems that arose with a development of real estate. Plaintiff
alleges, in Counts VII, IX, and XI of its Third-Amended
Complaint, respectively, that Cowhey, Service Konstruction, and
Jacobson negligently engineered, designed, or constructed a
retaining wall that eventually was replaced. Plaintiff, in Count
XIII, also alleges that Jacobson, Cowhey, and Service
Konstruction had exclusive control of the retaining wall and
should be liable under the theory of res ipsa loquitur for
their alleged negligent conduct.
Cowhey, Service Konstruction, and Jacobson move for summary
judgment as to Counts VII, IX, and XI, claiming that the
"economic loss doctrine" of Moorman Manufacturing Co. v. National Tank Co., 435 N.E.2d 443 (1982), prohibits Plaintiff
from recovering loss from negligence; and they had insufficient
control of the wall to be liable on Count XIII.
Summary judgment is appropriate when no genuine issue of
material fact exists and the moving party is entitled to judgment
as a matter of law. Fed.R.Civ.P. 56(c); Cincinnati Ins. Co. v.
Flanders Elec. Motor Serv., Inc., 40 F.3d 146, 150 (7th Cir.
1994). "One of the principal purposes of the summary judgment
rule is to isolate and dispose of factually unsupported claims or
defenses. . . ." Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986). Thus, although the moving party on a motion for summary
judgment is responsible for demonstrating to the court why there
is no genuine issue of material fact, the non-moving party must
go beyond the face of the pleadings, affidavits, depositions,
answers to interrogatories, and admissions on file to
demonstrate, through specific evidence, that a genuine issue of
material fact exists and to show that a rational jury could
return a verdict in the non-moving party's favor. Celotex, 477
U.S. at 322-27; Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
254-56 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586-87 (1986); Waldridge v. American
Hoechst Corp., 24 F.3d 918, 923 (7th Cir. 1994).
Disputed facts are material when they might affect the outcome
of the suit. First Ind. Bank v. Baker, 957 F.2d 506, 507-08
(7th Cir. 1992). When reviewing a motion for summary judgment, a
court must view all inferences to be drawn from the facts in the
light most favorable to the opposing party. Anderson, 477 U.S.
at 247-48; Popovits v. Circuit City Stores, Inc., 185 F.3d 726,
731 (7th Cir. 1999). However, a metaphysical doubt will not
suffice. Matsushita, 475 U.S. at 586. If the evidence is merely colorable or is not
significantly probative or is no more than a scintilla, summary
judgment may be granted. Anderson, 477 U.S. at 249-250.
The undisputed facts, for the purposes of this motion, taken
from the parties' Local Rule 56.1(a) & (b) statements of material
facts (referred to herein as "Pl.'s 56.1" and "Def's 56.1") and
exhibits, are as follows.
Plaintiff entered into a contract to purchase real property,
whereby Plaintiff would build a typical "Menards" retail
home-improvement center. Def.'s 56.1 ¶ 1; Third Am. Compl. ¶ 3.
Cowhey was hired to perform engineering services such as site
design, mass grading, earthwork estimates, storm sewer
structures, parking lot design, and grading design on the
property in question. Def.'s 56.1 ¶ 23. Cowhey's grading plans
provided for a retaining wall on the east side of the site and a
flat area for a building and associated parking. Def.'s 56.1 ¶
26. A retaining wall was required because there was a
considerable slope in the grade from west to east on the site.
Def.'s 56.1 ¶ 27.
Plaintiff's intended purpose for the retaining wall was to hold
the soil, gravel, and other materials existing on the incline of
the site secure enough to support the construction and weight of
a Menards home-improvement center, all the improvements, site
work, landscaping, and parking lot. Def.'s 56.1 ¶ 87; Def.'s Ex.
9, ¶ 8. Plaintiff required the retaining wall to be built prior
to taking possession of the site so that it could have enough
flat land to build its store. Def.'s 56.1 ¶ 86. Plaintiff's
development of the site included concrete slabs located adjacent
to the retaining wall. Def.'s 56.1 ¶ 85. Other contractors were
hired by Plaintiff to construct the Menards building and the parking lot and to perform the concrete
work at the site. Def.'s 56.1 ¶ 16-17.
Cowhey contacted Service Konstruction regarding the retaining
wall and provided them with the grading plans and soil
information. Def.'s 56.1 ¶¶ 30, 31. Service Konstruction then
asked Jacobson to prepare the final engineering design for the
retaining wall. Def.'s 56.1 ¶ 47. Service Konstruction provided
Jacobson with the preliminary sections that Service Konstruction
prepared, along with Cowhey's revised grading plans. Def.'s 56.1
¶¶ 48, 56. The revised grading plans depict a parking set back
adjacent to the retaining wall but do not reference a Menards
store. Def.'s 56.1 ¶ 58.
Based upon this and other information received from Service
Konstruction, Jacobson completed the structural engineering
design for the retaining wall and supplied Service Konstruction
with structural plans and calculations of the retaining wall.
Pl.'s Resp. to Def.'s 56.1 ¶ 66. Jacobson was not involved in the
wall's assembly. Pl.'s Resp. to Def.'s 56.1 ¶ 82.
After Plaintiff acquired possession of the property, it allowed
access to companies who were to design and construct the
improvements. Pl.'s Resp. to Def.'s 56.1 ¶ 91. At that time, the
retaining wall was constructed and the site was graded for
Plaintiff to continue its planned development of the remaining
improvements to the site, including the pavement adjacent to the
retaining wall. Def.'s 56.1 ¶ 92. Plaintiff then began
construction of its store on the site. Def.'s 56.1 ¶ 94.
Subsequently, concrete slabs were poured along the retaining wall
according to the new concrete configuration. Def.'s 56.1 ¶ 95.
A year after Plaintiff took possession of the property, it
discovered that the concrete slabs located adjacent to the
retaining wall were cracking, separating, and settling. Def.'s
56.1 ¶ 98. As more cracks developed in the concrete slab, Cowhey surveyed
the wall on multiple occasions and determined that the wall was
settling near the dogleg in the wall and exhibited some movement
in certain areas. Def.'s 56.1 ¶¶ 101, 102. Plaintiff's personnel
also observed the retaining wall and noted that the wall had
moved. Def.'s 56.1 ¶ 103. No loads above the retaining wall's
maximum capacity were imposed on the wall. Def.'s 56.1 ¶¶ 55, 99.
After learning that the retaining wall was showing signs of
movement, Jacobson evaluated the retaining wall. Def.'s 56.1 ¶
104. Although Jacobson observed some movement in the retaining
wall, the wall did not collapse. Def.'s 56.1 ¶ 112. Based on
Jacobson's evaluation of the wall, Jacobson concluded that the
retaining wall was not built to specifications. Def.'s 56.1 ¶
107. The defect may have also been the result of a failure to
coordinate the design, surveying, staking, and construction of
the wall. Pl.'s Resp. to Def.'s 56.1 ¶ 108.
The existing retaining wall was disassembled block by block,
and a new wall was built in its place. Def.'s 56.1 ¶ 114. At no
time during the removal of the retaining wall did the wall
collapse. Def.'s 56.1 ¶¶ 120-122.
Plaintiff seeks $2.5 million from each Defendant as damages for
removing the defective retaining wall, remedy the property damage
caused by the wall's failure, and build a new retaining wall
suitable for its intended purpose. Moreover, Plaintiff seeks an
additional $1 million from each Defendant for incidental and
consequential damages, including, but not limited to, lost
profits, delays in opening the store, additional security costs,
loss of goodwill, and loss of reputation. ANALYSIS
In Illinois, the economic loss doctrine prevents a tort
recovery when liability for a product defect is based upon
contractual expectations. Am. United Logistics, Inc. v. Catellus
Dev. Corp., 319 F.3d 921, 926 (7th Cir. 2003) (Am. United).
Economic losses include damages for costs to repair or replace a
defective product and consequential damages such as lost profits.
In re Chicago Flood Litig., 680 N.E.2d 265, 274 (Ill. 1997).
The economic loss doctrine covers negligence claims against
design professionals, such as architects and engineers.
Fireman's Fund. Ins. Co. v. SEC Donohue, Inc., 679 N.E.2d 1197,
1200 (Ill. 1997); 2314 Lincoln Park West Condo. Ass'n v. Mann,
Gin, Ebel & Frazier, Ltd., 555 N.E.2d 346, 353 (Ill. 1990).
Plaintiff does not dispute that it seeks economic damages which
arise out of its diminished commercial expectations concerning
the retaining wall and would otherwise be barred by Moorman.
Plaintiff, though, contends that "the sudden, dangerous, or
calamitous" exception to the economic loss doctrine is
applicable, thus enabling Plaintiff to assert its claims for
these damages. For a claim to fall within the sudden, dangerous,
or calamitous exception, there must be (1) a sudden, dangerous,
or calamitous event that (2) causes personal injury or damage to
property other than the defective product itself. Am. United,
319 F.3d at 927; Trans States Airlines v. Pratt & Whitney
Canada, Inc., 682 N.E.2d 45, 54-55 (Ill. 1997) (Trans States).
Plaintiff argues that the shifting of the retaining wall at an
accelerating rate satisfies the sudden, dangerous, or calamitous
exception. Plaintiff asserts that because of this shifting, the
concrete slabs and pavement constructed adjacent to the retaining
wall buckled, cracked, shifted, and separated from the asphalt
paving suddenly and without warning. "In deciding whether the occurrence was sudden, dangerous, or
calamitous, the court must determine the nature of the defect and
the manner of the occurrence." Am. United, 319 F.3d at 927. The
length of time of the defect or cause of the occurrence itself
does not need to be sudden; but, rather, the point where the
occurrence causes injury to other property itself must be sudden.
United Air Lines, Inc. v. CEI Indus. of Illinois, Inc.,
499 N.E.2d 558, 562 (Ill.App. Ct. 1986).
Here, the claimed nature of the defect was a construction error
in building the retaining wall. Even if this defect did not
suddenly occur, a genuine issue of material fact exists as to
whether the manner of the occurrence the buckling, cracking,
and shifting of the concrete slabs and pavement from the asphalt
pavement happened suddenly. Defendants argue that there is no
evidence that the concrete slabs suddenly cracked. However,
Defendants have failed to present any affidavits, depositions,
answers to interrogatories, and admissions on file to
demonstrate, through specific evidence, that the concrete slabs
did not suddenly crack. Therefore, Defendants have failed to
demonstrate that no genuine issue of material fact exists as to
Defendants also contend that Plaintiff's claim is for a
qualitative defect in a structure, which is not recoverable under
a tort theory. According to Defendants, unless the retaining wall
fell down, caved in, or collapsed, any other claims Plaintiff
asserts only seek recovery for a structure not fit for its
intended use. Defendants rely on Redarowicz v. Ohlendorf,
441 N.E.2d 324, 326-27 (Ill. 1982) (Redarowicz), to support this
In Redarowicz, the plaintiff sought damages to repair and
replace a chimney, wall, and patio that were all rendered
defective because the house was not set deep enough in the soil.
Redarowicz, 441 N.E.2d at 325, 327. The Illinois Supreme Court
denied these claims because "the only danger to the plaintiff is that he would be forced to
incur additional expenses for . . . conditions that were less
than what was bargained for." Redarowicz, 441 N.E.2d at 327.
However, the court also distinguished other situations where
defective construction could be recoverable in tort, noting: "The
adjoining wall has not collapsed on and destroyed the plaintiff's
living room furniture." Redarowicz, 441 N.E.2d at 327.
Here, the shifting of the retaining wall that Plaintiff
contends caused the cracking of the concrete slabs is similar to
the situation the Illinois Supreme Court distinguished in
Redarowicz. Plaintiff is not just seeking a tort recovery for a
qualitative defect in the retaining wall. Instead, Plaintiff is
also seeking recovery for a defect which caused an injury to
Plaintiff's other property.
Defendants further contend that because the concrete slabs do
not constitute "other property," the exception is inapplicable.
In determining whether an item is other property, Illinois
applies the "product bargained for" approach. Trans States, 682
N.E.2d at 58. This requires a determination of the object of the
bargain that governs the rights of the parties. Trans States,
682 N.E.2d at 58.
Defendants assert that Plaintiff admitted it bargained for a
retaining wall capable of supporting all of the site improvements
located next to the retaining wall, including the concrete slabs,
pavement, and soils. Thus, according to Defendants, these
improvements are not "other property," for the purposes of the
economic loss doctrine. However, Plaintiff never admitted that it
bargained for these improvements; Plaintiff only admitted that
the site, as intended, would contain these improvements.
Moreover, other parties were responsible for building the store,
the parking lot, and the concrete slabs. Defendants have failed
to present any affidavits, depositions, answers to
interrogatories, and admissions on file to the contrary.
Accordingly, a genuine issue of material fact exists as to whether the concrete slabs,
pavement, and soils constitute other property.
Defendants also seek summary judgment on Plaintiff's claim for
negligence based on res ipsa loquitur, even if it was
determined that the wall failed because of negligent
construction. The doctrine of res ipsa loquitur is a type of
circumstantial evidence, not a separate legal theory, which
allows the inference of negligence when the plaintiff does not
know the exact cause of the injury. Shadley v. WWS Inns, 02 C
50138, 2002 U.S. Dist. LEXIS 13158, at *2 (N.D. Ill. Jul. 18,
2002) (Shadley). The res ipsa loquitur doctrine involves
situations when: (1) the occurrence is one that would not have
happened in the absence of negligence, and (2) the thing that
caused the injury was under the exclusive control of the person
or persons charged with negligence. Shadley, 2002 U.S. Dist
LEXIS 13158, at *2-3. Although an explanation is lacking for the
negligence, the injury itself provides reasonable evidence that
it arose from lack of due care. Metz v. C. Illinois Elec. & Gas
Co., 207 N.E.2d 305, 307 (Ill. 1965) (Metz).
The requisite degree of control needed to succeed on a theory
of res ipsa loquitur is not a rigid standard, and "the key
question is whether the probable cause is one which defendant was
under a duty to the plaintiff to anticipate or guard against."
Lynch v. Precision Mach. Shop, 443 N.E.2d 569, 573 (Ill. 1982)
(Lynch); see also Reed v. Ace Doran Hauling & Rigging Co.,
No. 95 C 4082, 1997 U.S. Dist. LEXIS, at * 21 (N.D. Ill. Apr. 4,
Defendant Jacobson argues there are two reasons why it lacked
the control needed to satisfy the res ipsa loquitur doctrine.
First, Jacobson argues that it was not retained to do anything
but design the retaining wall, and it had no control over how the
wall was constructed. Second, Jacobson argues that Plaintiff or
one of its contractors was in exclusive possession of the property for almost one year before the wall failed; thus, no
Defendant could be liable under a theory of res ipsa loquitur.
Jacobson contends that because other parties had control of the
construction of the retaining wall, it never had exclusive
control of the wall prior to its failure. However, claims
premised on a theory of res ipsa loquitur may be brought even
though multiple defendants exercise concurrent control. E.g., In
re Chicago Flood Litig., No. 93 C 1214, 1993 WL 239041, at *5 n.
4 (N.D. Ill. June 28, 1993).
Jacobson also contends that Plaintiff had access to the
property for almost a year before the wall failed, thus
demonstrating that no Defendant could possess the requisite
control needed for Plaintiff to prevail under a theory of res
ipsa loquitur. However, if a defendant had control of the
instrumentality at the time of the negligent act, it need not
have control of the instrumentality at the time of injury.
Darrough v. Glendale Heights Cmty. Hosp., 600 N.E.2d 1248, 1253
(Ill.App. Ct. 1992). Thus, while it may be undisputed that
Plaintiff had access to the property and allowed its contractors
to enter, Defendants have failed to present any affidavits,
depositions, answers to interrogatories, and admissions on file
to demonstrate that Plaintiff had exclusive control of the
retaining wall at the time it was built. Accordingly, a genuine
issue of material fact exists as to whether Defendants had the
necessary control under a theory of res ipsa loquitur.
Defendant Cowhey, in its reply, asserts that Plaintiff has
failed to present any evidence establishing the wall would not
have failed if Cowhey had exercised ordinary care in doing what
it agreed to do under the relevant contract. Cowhey further
contends that Plaintiff failed to present any evidence showing
that the probable cause of failure was one which Cowhey was on
duty to guard against. Cowhey joined Jacobson's motion for
summary judgment. These factual arguments were not raised in Jacobson's Motion for Summary
Judgment or supported in the parties' statement of facts.
Moreover, Cowhey, the movant for summary judgment, bears the
burden of demonstrating to the court why there is no genuine
issue of material fact. Accordingly, Cowhey's Motion for Summary
Judgment with respect to these issues is denied.
For the foregoing reasons, Defendants' Motion for Summary
Judgment is denied.
© 1992-2004 VersusLaw Inc.