United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Robert Blakey Judge
Landale Signs and Neon, Ltd. (“Plaintiff”)
contracted to purchase a truck-mounted crane from Defendant
Runnion Equipment Company (“Defendant” or
“Runnion”). During the pendency of that sale, an
unknown third party (Defendant John Doe) intercepted
information related to the transaction, utilized that
information to pose as Runnion, and convinced Plaintiff to
wire the vehicle's purchase price to him. Plaintiff
alleges that Runnion, by allowing Defendant John Doe to
intercept its information, is liable under theories of
negligence, negligent misrepresentation, breach of fiduciary
duty, and breach of contract (both express and implied). 
at 5-14. Runnion has moved to dismiss all five claims. 
(moving to dismiss claims for negligence, negligent
misrepresentation, and breach of fiduciary duty); 
(moving to dismiss claims for breach of express contract and
breach of implied contract). For the reasons explained below,
Runnion's motions are granted.
April of 2016, Plaintiff and Runnion executed a sales
contract for a truck-mounted crane worth $87, 625.  at 3.
During the preceding negotiations, Plaintiff and Runnion
communicated, at least in part, via e-mail. Id. On
May 12, 2016, Plaintiff received an e-mail, ostensibly from
Runnion, with instructions on how to wire the payment to
Runnion pursuant to the terms of the agreement. Id.
Plaintiff followed these instructions and remitted payment
for the agreed amount of $87, 625. Id.
subsequently informed Plaintiff that it never received the
payment. Id. In response, Plaintiff showed Runnion
the string of e-mails wherein an entity purporting to be
Runnion instructed Plaintiff on how to make payment for the
vehicle. Id. Plaintiff now alleges that
Runnion's computer network, database, and servers were
accessed by Defendant John Doe, who utilized the information
he or she intercepted from Runnion in order to pose as
Runnion and fraudulently instruct Plaintiff to wire him or
her $87, 625. Id.
further alleges that Runnion was aware or should have been
aware that its computer network, database, and servers were
being improperly accessed by Defendant John Doe. Id.
at 4. During the parties' negotiations, Plaintiff's
President, Mr. Darrell Brown, noticed that there was a delay
in receiving e-mails from Runnion's President, Mr.
Patrick Runnion. Id. Mr. Brown inquired as to the
cause of this delay, and Mr. Runnion indicated that he was
aware of potential interference with his e-mail account.
Id. Mr. Runnion further represented that an unknown
party had previously been intercepting his e-mails during a
prior transaction (though Runnion in that instance was able
to avert any potential theft). Id.
upon the foregoing, Plaintiff brought claims against Runnion
(for negligence, negligent misrepresentation, breach of
fiduciary duty, breach of express contract, and breach of
implied contract) and Defendant John Doe (for conversion and
fraud). Id. at 5-11. Defendant John Doe has not yet
been identified or served, while Runnion has moved to dismiss
the claims pending against it.
survive Defendant's motion under Federal Rule of Civil
Procedure 12(b)(6), the Second Amended Complaint must
“state a claim to relief that is plausible on its
face.” Yeftich v. Navistar, Inc., 722 F.3d
911, 915 (7th Cir. 2013). A “claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Id. This Court must construe the Complaint in the
light most favorable to Plaintiff, accept as true all
well-pleaded facts, and draw all reasonable inferences in its
favor. Id.; Long v. Shorebank Dev. Corp.,
182 F.3d 548, 554 (7th Cir. 1999). Statements of law,
however, need not be accepted as true. Yeftich, 722
F.3d at 915. Rule 12(b)(6) limits this Court's
consideration to “allegations set forth in the
complaint itself, documents that are attached to the
complaint, documents that are central to the complaint and
are referred to in it, and information that is properly
subject to judicial notice.” Williamson v.
Curran, 714 F.3d 432, 436 (7th Cir. 2013).
claims against Runnion sound in: (1) negligence; (2)
negligent misrepresentation; (3) breach of fiduciary duty;
(4) breach of express contract; and (5) breach of implied
contract. The Court will address each in turn.
adequately state a claim for negligence under Illinois law, a
party must allege that “the defendant owed him a duty,
that the defendant breached this duty, and that he suffered
an injury that was proximately caused by the defendant's
breach.” Lewis v. CITGO Petroleum Corp., 561
F.3d 698, 702 (7th Cir. 2009).
Economic Loss Doctrine
initially argues that Plaintiff's negligence claim fails
pursuant to Moorman Manufacturing Company v. National
Tank Company, 435 N.E.2d 443 (Ill. 1982).
Moorman brought the “economic loss”
doctrine to Illinois, such that plaintiffs could no longer
sue in tort for certain claims seeking the “recovery of
solely economic loss.” Id. at 448.
Moorman defined “economic loss” 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 449 (internal citation
omitted). By its own terms, the Moorman economic
loss doctrine does not apply where “a duty arises
outside of a contract.” Nixon v. United
States, 916 F.Supp.2d 855, 861-62 (N.D. Ill. 2013)
(internal quotations omitted); see also R.J. O'Brien
& Assocs., Inc. v. Forman, 298 F.3d 653, 656 (7th
Cir. 2002) (“Moorman dictates that, when a
contract sets out the duties between the parties, recovery
should be limited to contract damages, even though recovery
in tort would otherwise be available.”); Golf v.
Henderson, 876 N.E.2d 105, 113 (Ill.App.Ct. 2007)
(“The Moorman doctrine, however, does not
apply when a duty arises that is extracontractual.”).
In the end, when attempting to determine whether the economic
loss doctrine applies, “the key question is whether the
defendant's duty arose by operation of contract or
existed independent of the contract.” Wigod v.
Wells Fargo Bank, 673 F.3d 547, 567-568 (7th Cir. 2012)
purposes of its negligence claim here, Plaintiff explicitly
characterizes Runnion's duty as arising outside of the
parties' contract.  at 8 (“In this instance,
Runnion's duty to protect Landale's sensitive
information was independent from the parties' contractual
agreement.”). Because the putative duty at issue here
is grounded in Illinois common law, as opposed to the
parties' contract, the economic loss doctrine fails to
apply. Wigod, 673 F.3d at 658 (economic loss
doctrine does not apply when the defendant's duty
“existed independent of the contract”).
Common Law Duty
attempt to invoke a common law duty to safeguard another
party's information implicates an obvious question;
namely, whether such a duty actually exists as a matter of
Illinois law. This “is a question of law for the court
to decide.” Simpkins v. CSX Transp., Inc., 965
N.E.2d 1092, 1096 (Ill. 2012) (internal quotations omitted).
The rulings of the Illinois Supreme Court are controlling on
this issue. See ADT Sec. Servs. v. Lisle-Woodridge Fire
Prot. Dist., 672 F.3d 492, 498 (7th Cir. 2012). Absent a
definitive ruling from the Illinois Supreme Court, this Court
will also look to decisions from the Illinois Appellate
Court. See Pisciotta v. Old Nat. Bancorp, 499 F.3d
629, 635 (7th Cir. 2007) (“[W]hen the intermediate
appellate courts of the state have spoken to the issue, we
shall give great weight to their determination about the
content of state law, absent some indication that the highest
court of the state is likely to deviate from those
Illinois Supreme Court has not yet determined whether there
is a common law duty to safeguard another party's
confidential information. The Illinois Appellate Court,
however, had occasion to consider this theory in Cooney
v. Chicago Public Schools, 943 N.E.2d 23 (Ill.App.Ct.
2010), appeal denied, 949 N.E.2d 657 (Ill. 2011)
(table decision). Cooney was initiated after the
Chicago Board of Education enlisted a contractor to print and
mail more than 1, 700 packets of health insurance information
to former Chicago public school employees. Id. at
27. The contractor packaged and mailed the materials in such
a way that each recipient received information about every
other recipient, including their names, addresses, marital
status, and social security numbers. Id. A number of
individual and class-action lawsuits were brought against the
Board of Education and the ...