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Breedlove v. Museum of Science and Industry

United States District Court, N.D. Illinois, Eastern Division

January 5, 2017

Norman Craig Breedlove, Plaintiff,
Museum of Science and Industry, Chicago, Defendant.


          Ronald A. Guzmán United States District Court

         For the reasons stated below, the motion to dismiss Counts II and III of the first amended complaint (“FAC”) [37] is denied.


         The Court assumes familiarity with the facts and procedural history of this case. Briefly, Norman Breedlove (“Plaintiff”) filed suit after the Spirit of America, a car he designed and built to break the world speed record, was loaned to the Museum of Science and Industry (“Museum”) for display for approximately 50 years. Plaintiff alleges that the car was seriously damaged while in the Museum's care, and in attempting to “hide its negligent care” of the automobile, the Museum further harmed the car. According to Plaintiff, the cost of repair is in excess of $395, 000.00. Plaintiff filed suit against the Museum for gross negligence, breach of fiduciary duty, breach of contract, and breach of the implied covenant of good faith and fair dealing. The Court granted the Museum's motion to dismiss Counts I, II, and IV for failure to state a claim and allowed Plaintiff to replead. Plaintiff's FAC alleges claims for breach of contract (Count I), breach of fiduciary duty (Count II) and negligence (Count III). The Museum again moves to dismiss the breach of fiduciary duty and negligence counts for failure to state a claim.

         To survive a Rule 12(b)(6) motion, the complaint must not only provide the Museum with fair notice of a claim's basis, but must also be “facially” plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). 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.” Iqbal, 556 U.S. at 678.

         Breach of Fiduciary Duty

         “To establish a breach of fiduciary duty in Illinois, a plaintiff . . . must show: (1) that a fiduciary duty exists; (2) that the duty was breached; and (3) injury proximately caused by the breach.” Lansing v. Carroll, No. 11 CV 4153, 2016 WL 4045410, at *15 (N.D. Ill. July 28, 2016). “To survive [the Museum's] motion to dismiss, [Plaintiff] only need[s] to plead facts that plausibly state[] a claim for relief arising out of [the Museum's] violation of a fiduciary duty.” Avila v. CitiMortgage, Inc., 801 F.3d 777, 785 (7th Cir. 2015).

         “A fiduciary duty may arise as a matter of law from the existence of a particular relationship, such as an attorney-client or principal-agent relationship.” Ogdon v. Hoyt, No. 04 C 2412, 2005 WL 66039, at *7 (N.D. Ill. Jan. 11, 2005). According to Plaintiff, the Museum's membership in the American Alliance of Museums (“AAM”) and the criteria set forth in the AAM's National Standards and Best Practices for U.S. Museums [“National Standards”], which refers to museums' fiduciary duties, establish a fiduciary relationship as a matter of law. Specifically, Plaintiff alleges that:

As set forth in the National Standards & Best Practices for U.S. Museums (Exhibit “A” hereto), the irrefutable fiduciary duties that Defendant agreed to adhere to include, but are not limited to: 1) ensuring “the careful, sound and responsible management of that which is entrusted to [its] care”; 2) “provid[ing] proper physical storage, management and care for its collections and associated documentation”; 3) knowing the current condition of its collections; 4) “preserving, caring for and providing access to collection objects for the benefit of the public”; and 5) “be[ing] knowledgeable concerning the legal compliance requirements and ethical standards that pertain to [its collections].” Defendant formally agreed that these fiduciary duties apply to objects in its care regardless of whether those objects are owned by it or in Defendant's possession, custody and control while on loan. Indeed, as evidenced by its membership in the AAM and by virtue of the National Standards & Best Practices for U.S. Museums, Defendant agreed that it would exercise the highest museological standards of care for all collection objects on loan to it.
Importantly, pursuant to the AAM Standards Regarding Collections Stewardship, attached hereto as Exhibit “B” and incorporated herein by this reference, all AAM members that own or manage collections belonging to others on an ongoing basis are required to have a written Collections Management Policy setting forth standards that, in turn, require, among other things, that: 1) “the museum regularly monitors environmental conditions and takes proactive measures to mitigate the effects of . . . damage . . . on collections”; 2) “regular assessment of, and planning for, collection needs (development, conservation, risk management, etc.) takes place and sufficient financial and human resources are allocated for collections stewardship”; and 3) “collections care policies and procedures for collections on exhibition, in storage, on loan and during travel are appropriate, adequate and documented.” As the AAM verifies on its website, Defendant has a Collections Management Policy in place that sets forth these fiduciary duties and standards. (FAC, Dkt. # 33, ¶¶ 28-29.)[1] Neither party cites caselaw addressing whether a museum owes a fiduciary duty to those who loan objects to it for display.

         The Museum argues that the National Standards did not exist in 1965 when Breedlove loaned the car to it, but points to no authority for the proposition that because the standards did not exist in written form at the time the loan was made, no fiduciary relationship existed at that time or could have been created over the course of the parties' 50-year relationship.

         The Museum next asserts that nothing in the National Standards indicates that the Museum owed any duty to Plaintiff as a donor or transferor of the car. The Museum notes that the National Standards indicate that “[m]useums hold collections in trust for the public, ” which does not translate into a basis for asserting that the Museum owed Plaintiff, an individual donor, a fiduciary duty. However, as Plaintiff observes, the National Standards include a section entitled “Collections Stewardship, ” which provides that:

Stewardship is the careful, sound, and responsible management of that which is entrusted to a museum's care. Possession of collections incurs legal, social and ethical obligations to provide proper physical storage, management and care for the collections and associated documentation, as well as proper intellectual control. Collections are held in trust for the public and made accessible for the public's benefit. Effective collections stewardship ensures that the objects the museum owns, borrows, holds in its custody and/or uses are available and accessible to present and future generations.

(FAC, Ex. A, Nat'l Standards, Dkt. # 33, at 44.) These statements, which the Court considers as they are contained in exhibits to the FAC, are sufficient to allege that the Museum owed a fiduciary duty to ...

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