Dual-Temp of Illinois, Inc. v. Hench Control Corporation et al

Filing 149

MEMORANDUM Opinion and Order Signed by the Honorable Sharon Johnson Coleman on 5/2/2011:Mailed notice(keg, )

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

DUAL-TEMP OF ILLINOIS, INC., an
Illinois corporation,
Plaintiff,

Case No. 09-cv-595
Judge Sharon Johnson Coleman
Magistrate Judge Nan R. Nolan

v.
HENCH CONTROL CORPORATION, a
California corporation; HENCH
CONTROL, INC., a California
corporation; CAESAR-VERONA, INC., a
Washington corporation; and JOHN
HENCH, an individual,
Defendants.

MEMORANDUM OPINION AND ORDER
This matter is before the Court on Plaintiff Dual-Temp of Illinois, Inc.’s (“Dual-Temp”)
motion for leave to file an amended complaint to add seven new claims and to rename as a
defendant an individual that this Court previously dismissed. Defendants John Hench (“Hench”)
and Hench Consulting, Inc. (“Hench I”) filed their opposition arguing, inter alia, that DualTemp’s proposed negligence claims are barred by operation of the economic loss rule and that its
proposed fraud claim fails to meet the particularity requirement under Fed. R. Civ. P. 9(b).
Separately, Defendants Caesar-Verona, Inc. (“Caesar”), Hench Control, Inc. (“Hench II”), and
Alex Daneman (“Daneman”) opposed the motion on similar grounds and further argued that the
Court lacks personal jurisdiction over Daneman. For the reasons that follow, the Court grants
Dual-Temp’s motion in part and denies it in part.

BACKGROUND
The following relevant facts are undisputed, unless specified otherwise. Dual-Temp
builds, modifies, and repairs low temperature industrial refrigeration systems. (Dkt. No. 1 ¶ 9.)
In 2006, the Milford Company (“Milford”), a general contractor, asked Dual-Temp to provide a
bid for the modification and installation of a refrigeration system for the pizza manufacturing
plant of Home Run Inn (“Home Run”). (Id. at ¶ 10.) The refrigeration project was to include an
improved refrigeration control system to replace Home Run’s existing refrigeration control
system. (Id.) The new control system was to automatically control the refrigeration equipment
and sound alarms when equipment malfunctioned or rose above safe levels. (Id.) Since DualTemp does not design refrigeration control systems, it contacted Hench, President of Hench I, to
provide a bid to act as a subcontractor for Dual-Temp on the Home Run project. (Id. at ¶¶ 7,
11.) Hench I was a supplier of energy management control systems for industrial refrigeration.
(Id.)
Prior to preparing a proposal for Dual-Temp, Hench and Ron Ariano (“Ariano”), Hench
I’s manufacturing representative, met with the maintenance manager at Home Run’s processing
plant to examine the existing system and to discuss the criteria for the new control system. (Id.
at ¶ 12.) On October 11, 2006, Hench submitted a proposal on behalf of Hench I setting forth a
design for the new refrigeration control system. (Id. at ¶ 13.) After receiving Hench I’s
proposal, Dual-Temp included the proposal in the bid that it submitted to Milford. (Id. at ¶ 14.)
On October 20, 2006 Milford awarded Dual-Temp the subcontract to furnish all of the work
related to the modification and installation of the Home Run refrigeration project. (Id. at ¶ 15.)
After being awarded the subcontract, Dual-Temp issued a purchase order to Hench I in
the amount of $45,078.00 for the work set forth in Hench I’s proposal. (Id. at ¶ 16.) The terms

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of the purchase order required Hench I to provide a current certificate of insurance listing DualTemp as an additional insured. (Id. at ¶ 17.) The terms also required that the materials and
equipment furnished by Hench I be in compliance with the requirements of the contract between
Dual-Temp and Milford. (Id.) In November 2006, Hench I accepted the purchase order by
issuing an invoice requesting 40% of the purchase price as a down payment and by submitting a
certificate of insurance naming Dual-Temp as an additional insured under Hench I’s insurance
policy. (Id. at ¶¶ 18-19.) In December 2006, Dual-Temp issued Hench I a check in the amount
specified in Hench I’s invoice. Hench I issued Dual-Temp a second invoice in January 2007
requesting 50% of the purchase price pursuant to its proposal of October 11, 2006. (Id. at ¶ 21.)
On March 30, 2007, Dual-Temp received a control panel board for the Home Run project and
issued Hench I a check for the amount set forth in the second invoice that same day. (Id. at ¶¶
24-25.)
Unbeknownst to Dual-Temp, the business of Hench I was acquired by Caesar in March
2007. (Id. at ¶ 22.) Dual-Temp was not informed that its subcontract with Hench I was now
being performed by Hench II. (Id. at ¶ 23.) In late March 2007, Hench I allowed its certificate
of insurance in which Dual-Temp was named as an additional insured to lapse without written
notice to Dual-Temp as required by the purchase order terms. (Id. at ¶ 26.) Neither Caesar nor
Hench II provided Dual-Temp with a replacement or continuation certificate of insurance. (Id.)
In May 2007, Hench changed the name of the company from Hench Control Corporation to
Hench Consulting, Inc. (Id. at ¶ 27.) Dual-Temp was not informed of the name change. (Id.)
In June 2007, Milford notified Dual-Temp that Home Run refused to accept the
refrigeration control system and would not approve final payment because the refrigeration
control system was not operating according to Home Run’s requirements. (Id. at 29.) Dual-

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Temp informed Hench I of the problem and requested the company take the steps necessary to
make the control system operate as required. (Id. at ¶ 30.) On July 5, 2007, Dual-Temp received
an invoice from Hench II requesting the final 10% payment for the control system. Dual-Temp
was unaware that Hench I was dissolved as a corporation on or about July 9, 2007. (Id. at ¶ 32.)
In July 2007, Hench conducted an on-site inspection of the Home Run refrigeration
control system but was unable to resolve the defects found in the system. (Id. at ¶ 33.) Between
June 2007 and December 2007, the refrigeration control system failed to operate and caused
daily shut downs of the refrigeration system. (Id. at ¶ 34.) During this same time frame, Hench
II provided telephone support, an on site inspection, and numerous replacement parts but could
not make the refrigeration control system operate properly. (Id. at ¶ 35.) Dual-Temp was forced
to provide personnel to physically monitor the refrigeration system to prevent a catastrophic shut
down and to attempt to determine the cause of the malfunctions. (Id.) Although the control
system did not properly operate, Hench II issued Dual-Temp an invoice for the final 10%
balance due plus additional charges for remedial work. (Id. at ¶ 39.)
In January 2008, Dual-Temp conducted an investigation of Hench I’s corporate status
and learned that the company had changed its name and subsequently dissolved. (Id. at ¶ 43.)
Dual-Temp also discovered that Hench II was not incorporated until January 28, 2008. (Id.)
Armed with this knowledge, Dual-Temp issued letters to Hench I and Hench II demanding they
make the necessary repairs to the refrigeration control system. (Id. at ¶ 44.) Hench I and Hench
II failed to make the necessary repairs and in April 2008, Home Run demanded Milford remove
the Hench I control system and replace it with a functioning refrigeration control system. (Id. at
¶¶ 45-46.) In May 2008, Dual-Temp hired Select Technologies, Inc. (“Select”) to remove the
Hench I control system and to design and install a new refrigeration control system to be

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operated at Home Run’s plant. (Id. at ¶ 47.) Select completed the removal and installation in
August 2008 and was paid $123,300.00 by Dual-Temp for the work performed. (Id. at ¶ 48.)
The new refrigeration control system installed by Select is operating in accordance with Home
Run’s specifications. (Id.)
On January 30, 2009, Dual-Temp filed a six-count complaint asserting: (1) breach of
contract against Hench I; (2) breach of contract against Hench II; (3) breach of contract against
Caesar in the alternative to count II; (4) breach of contract against Daneman in the alternative to
count III; (5) breach of contract against Hench; and (6) tortious interference with contract against
Hench II and Daneman. (Dkt. No. 1.) On May 22, 2009, Daneman filed a motion to dismiss
alleging the Court lacked personal jurisdiction over him and that the claim against him was
barred by the fiduciary shield doctrine. (Dkt. No. 49.) The Court allowed the parties to engage
in discovery related to the jurisdictional allegations raised by Daneman and the other defendants.
(Dkt. No. 65.) On December 4, 2009, the Court found it lacked personal jurisdiction over
Daneman and granted his motion to dismiss. (Dkt. No. 81.) Prior to the Court’s ruling, DualTemp voluntarily dismissed the tortious interference with contract claim. (Dkt. No. 74.)
Discovery in this action commenced on January 15, 2010 on the remaining breach of
contract claims and the claim for violations of the California Corporation Code.1 On August 9,
2010, the parties jointly moved to stay the completion of discovery until 120 days after the
parties engaged in mediation. (Dkt. No. 104.) On October 21, 2010, the parties participated in a
settlement conference before the Magistrate Judge but were unable to reach agreement. (Dkt.
No. 125.) Shortly thereafter on November 12, 2010, the Court ordered the parties to complete
oral discovery by May 31, 2011. (Dkt. No. 127.)

1 Although count V against Hench is labeled breach of contract, the Court found that the allegations assert claims for
violations of Sections 2001 and 2009 of the California Corporation Code. (Dkt. No. 78 pp. 7-8.)

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On January 4, 2011, Dual-Temp filed the instant motion seeking leave to file an amended
complaint to rename Daneman as a defendant and to assert seven additional claims. (Dkt. No.
130.) Dual-Temp alleges that it has learned facts through discovery that give rise to additional
theories of liability. (Id. at ¶ 1.) In the proposed amended complaint, Dual-Temp asserts eleven
claims as follows: (1) negligence against Hench and Hench I; (2) breach of contract against
Hench I; (3) breach of contract against Hench II; (4) breach of contract against Caesar in the
alternative to count III; (5) breach of contract against Daneman in the alternative to count IV; (6)
breach of contract against Hench; (8)2 fraudulent misrepresentation against Hench and Hench I;
(9) negligent misrepresentation against Hench and Hench I in the alternative to count VIII; (10)
negligent misrepresentation against Daneman, Hench II, and Caesar; (11) fraudulent
misrepresentation against Daneman, Hench II, and Caesar; and (12) breach of the implied
warranty of fitness for a particular purpose against Hench and Hench I.
LEGAL STANDARD
Federal Rule of Civil Procedure 15(a) instructs that leave to amend shall be freely given
“when justice so requires.” Sound of Music v. Minn. Mining and Mfg. Co., 477 F.3d 910, 922
(7th Cir. 2007); FED. R. CIV. P. 15(a). Although leave to amend should be freely given, “that
does not mean it must always be given.” Hukic v. Aurora Loan Servs., 588 F.3d 420, 432 (7th
Cir. 2009) (denying leave where proposed complaint contained new allegations which would
require additional discovery for the defendant to rebut). A district court has the discretion to
deny a motion for leave to amend if there is undue delay, bad faith, dilatory motive, undue
prejudice to the opposing party by virtue of allowing the amendment, or futility of amendment.
Sound of Music, 477 F.3d at 922. A proposed amendment is considered futile if it will not
survive a motion to dismiss. Crestview Vill. Apts. v. U.S. HUD, 383 F.3d 552, 558 (7th Cir.
2 Dual-Temp did not assert a count VII in the proposed amended complaint. (Dkt. No. 130-1 pp. 27-30.)

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2004). A district may also deny a motion for leave to amend where the reason given for the
amendment does not justify granting leave. Hukic, 588 F.3d at 432.
DISCUSSION
1.

Proposed Claims Against Hench and Hench I
The proposed complaint asserts three new claims against Hench and Hench I

(collectively “Hench I Defendants”) sounding in tort: negligence, fraudulent misrepresentation,
and negligent misrepresentation. Dual-Temp also seeks to assert a claim for breach of the
implied warranty of fitness for a particular purpose against these defendants. In opposition, the
Hench I Defendants argue, inter alia, that the amendments relating to the tort claims are futile
because these claims are barred by operation of the economic loss rule. The Hench I Defendants
further argue that Dual-Temp’s motion to amend should be denied for reasons of undue delay
and prejudice. Dual-Temp counters that its tort claims fall outside of the economic loss rule or
fit within one of its exceptions as set forth in Moorman Mfg. Co. v. Nat’l Tank Co., 91 Ill.2d 69
(Ill. 1982). Dual-Temp also contends that it has not unduly delayed seeking the amendment.
A.

Economic Loss Rule

The economic loss doctrine denies a remedy in tort for product defects when the
plaintiff’s loss is rooted in disappointed contractual or commercial expectations. Id. at 88; Am.
United Logistics, Inc. v. Central Am. Warehousing Co., Inc., 319 F.3d 921, 926 (7th Cir. 2003).
Moorman held that contract law provides the proper remedy for disappointed commercial
expectations, such as when a product is unfit for its intended use. Moorman, 91 Ill.2d at 85-86.
There are three exceptions to the Moorman economic loss rule where: (1) the plaintiff’s
damages are proximately caused by a defendant’s intentional or false representation; (2) the
plaintiff’s damages are proximately caused by a negligent misrepresentation by a defendant in

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the business of supplying information for the guidance of others in their business transactions;
and (3) a sudden and calamitous occurrence causes personal injury or other property damage.
Trans State Airlines v. Pratt & Whitney Can., Inc., 177 Ill.2d 21, 26-27 & 31 (Ill. 1997).
B.

“Other Property” Exception

In its reply brief, Dual-Temp argues that its tort claims are not barred by the economic
loss rule because Dual-Temp claimed damage to “other property” rather than to any “bargained
for” item. (Dkt. No. 144 pp. 6-8.) Dual-Temp argues that it bargained with the Hench I
Defendants for a refrigeration control system and thus any damage to the refrigeration system is
damage to “other property” outside of the bargained for agreement. (Id.) There are two flaws in
this argument. First, the proposed complaint does not allege or seek relief for any damage to the
refrigeration system. Second, and more importantly, the Illinois Supreme Court has emphasized
that recovery for damage to “other property” is only available where that damage is coupled with
a sudden and calamitous occurrence. Trans State, 177 Ill.2d at 41. In an attempt to fit within the
“other property” exception, Dual-Temp alleges in the proposed complaint that it had to provide
its own personnel “to physically monitor the refrigeration control system continuously to keep it
in safe and continuous operation and to prevent possible sudden and calamitous damage.” (Dkt.
No. 130-1 ¶ 37.) A possible sudden and calamitous occurrence is insufficient to satisfy the
“other property” exception. The Court finds that the “other property” exception to the Moorman
doctrine does not apply to Dual-Temp’s tort claims.
C.

Negligence Claim

Dual-Temp argues that its negligence claim is not precluded by the economic loss rule.
(Dkt. No. 144 pp. 6-8.) Moorman specifically denies negligence claims unless the plaintiff can
show harm above and beyond a party’s contractual or commercial expectations. In re Chicago

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Flood Litigation, 176 Ill.2d 179 (Ill. 1997). In its proposed negligence claim, Dual-Temp asserts
that it suffered damages of $486,625.96 because the Hench I Defendants were negligent in
providing a safe and functional refrigeration control system. (Dkt. No. 130-1 pp. 14-18.) The
damages included $212,175.24 in costs incurred by Dual-Temp in monitoring the
malfunctioning control system, $150,150.72 Dual-Temp paid to its electrical subcontractor to
assist with the monitoring effort, and $123,000 Dual-Temp paid Select to provide a functional
refrigeration control system. (Id. at ¶¶ 70-72.) Yet Dual-Temp specifically bargained for a
functional refrigeration control system and for protection in the event that the control system did
not meet specifications. The purchase order that became the bargain between Dual-Temp and
Hench I provided in relevant part:
Seller shall guarantee work covered under this purchase order to produce
capacities to meet design specifications and function (1) as called for in the
plans, specification, or addenda…In the event of Seller’s default hereunder,
Seller shall pay all special, incidental or consequential damages incurred by
Purchaser. (Dkt. No. 1-4 p. 2.)
Dual-Temp bargained for the very damages it now attempts to seek in its negligence claim and
thus in accordance with Moorman, Dual-Temp is limited to recovering these damages under
contract law.
D.

Fraudulent Misrepresentation Claim

Although Dual-Temp correctly notes that its fraudulent misrepresentation claim falls
within a Moorman exception, the claim fails to meet the particularity requirement for pleading
fraud under Fed. R. Civ. P. 9(b). The heightened pleading standard set forth in Rule 9(b)
requires that in all allegations of fraud, “a party must state with particularity the circumstances
constituting fraud.” FED. R. CIV. P. 9(b). This means a party must plead “the who, what, when
where, and how: the first paragraph of any newspaper story.” U.S. ex rel. Lusby v. Rolls-Royce

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Corp., 570 F.3d 849, 853 (7th Cir. 2009). The Seventh Circuit has ruled that a plaintiff cannot
generally satisfy the particularity requirement of Rule 9(b) with a complaint that is filed on
information and belief. Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen
Co., 631 F.3d 436, 442 (7th Cir. 2011).
The parties agree that Illinois law applies to Dual-Temp’s proposed fraudulent
misrepresentation claim. (Dkt. No. 138 ¶ 10; Dkt. No. 144 p. 11.) To state a claim for
fraudulent misrepresentation under Illinois law, a plaintiff must allege: (1) a false statement of
material fact; (2) known or believed to be false by the person making it; (3) an intent to induce
the plaintiff to act; (4) action by the plaintiff in justifiable reliance on the truth of the statement;
and (5) damage to the plaintiff resulting from such reliance. Doe v. Dilling, 228 Ill.2d 324, 343
(Ill. 2008).
The proposed complaint appears to allege that the Hench I Defendants made false
representations concerning the extent of Ariano’s knowledge of refrigeration control systems.
(Dkt. No. 130-1 ¶¶ 16, 136.) Dual-Temp argues that it met the particularity requirements of 9(b)
by clearly identifying the individuals who made fraudulent statements and providing supporting
documentary exhibits. (Dkt. No. 144 p. 9.) Yet the proposed complaint does neither. There is
no allegation identifying a specific false statement made by anyone concerning Ariano’s
expertise. The exhibit Dual-Temp relies upon shows only that Ariano acknowledged that he was
not an expert and thus he relied upon Hench to prepare a quote. (Dkt. No. 130-2.) Without an
accompanying allegation asserting that the Hench I Defendants represented Ariano as being an
expert, this document does not suggest a false statement, let alone a materially false one. At
best, the proposed complaint alleges only that “upon information and belief” the Hench I
Defendants “knew, or should have known, that ARIANO did not have enough experience with

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Hench control systems to provide sufficient data for adapting the Hench system to control the
type of system used at HOME RUN.” (Id. at ¶ 136.) Not only does this allegation fail to meet
the particularity requirement but it implies negligence rather than fraud, and as previously
discussed, Dual-Temp’s negligent claim is barred under Moorman. Dual-Temp’s fraudulent
misrepresentation claim cannot survive a motion to dismiss and thus an amendment to include
this claim would be futile.
E.

Negligent Misrepresentation Claim

Dual-Temp’s negligent misrepresentation claim is also barred by Moorman. While a
claim for negligent misrepresentation is a recognized exception under Moorman, the exception
applies only where the defendant is in the business of supplying information for the guidance of
others. According to the Complaint, the Hench I Defendants consist of Hench I, “a supplier of
energy management control systems for industrial refrigeration” (Dkt. No. 1 ¶ 11), and Hench,
the president and founder of Hench I (Id. at ¶ 7). Dual-Temp fails to allege that the Hench I
Defendants are information providers in either the Complaint or in its reply brief. Such an
allegation would not salvage Dual-Temp’s negligent misrepresentation claim because in
determining whether the exception applies, courts look to the ultimate results of the defendant’s
work. Fireman’s Fund Ins. Co. v. SEC Donohue, Inc., 176 Ill.2d 160, 169 (Ill. 1997). Where the
ultimate result is a tangible product, the negligent misrepresentation exception does not apply.
Id. Here, Dual-Temp has alleged that the Hench I Defendants proposed to act as a subcontractor
to supply a tangible product, i.e., a refrigeration control system. Any information supplied by
the Hench I Defendants was merely provided in connection with the delivery and installation of
the control system. The Court finds that Moorman’s negligent misrepresentation exception does
not apply to the facts in this case.

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F.

Breach of the Implied Warranty of Fitness for a Particular Purpose Claim

The Hench I Defendants make no specific argument against the proposed claim for
breach of the implied warranty of fitness for a particular purpose. Rather, they generally argue
that since the proposed amended comes nearly two years after this action was filed that they
would suffer undue prejudice because of the need to re-open discovery. (Dkt. No. 138 pp. 1011.) This argument lacks merit as much of the discovery relating to the breach of contract claim
is relevant to the implied warranty claim. Furthermore, Dual-Temp argues in its opening brief
that “no additional discovery will be required as a result of amending the Complaint.” (Dkt. No.
130 ¶ 3.) The Court will hold Dual-Temp to its assertion that all discovery related to the implied
warranty claim can be completed within the discovery schedule set forth by this Court. The
Court will allow Dual-Temp to amend its Complaint to add the implied warranty claim.
2.

Proposed Claims Against Daneman, Hench II, and Caesar
The proposed complaint seeks to rename Daneman as a defendant and assert claims for

negligent and fraudulent misrepresentation against Daneman, Hench II, and Caesar (collectively
“Hench II Defendants”). The Hench II Defendants argue that the Court has already determined
that it lacks personal jurisdiction over Daneman and that the exercise of personal jurisdiction
over him is barred from by the law-of-the-case doctrine. (Dkt. No. 139 p. 1.) These defendants
further argue that the negligent misrepresentation claim is barred by the economic loss rule and
that the fraudulent misrepresentation claim fails to meet the particularity requirement under Rule
9(b).
A.

Personal Jurisdiction Over Daneman

The Hench II Defendants argue that Dual-Temp has failed to provide the Court with a
valid basis to reconsider its ruling that it lacks personal jurisdiction over Daneman. (Id. at pp. 5-

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8.) Under the law-of-the-case doctrine, a district court may revisit a prior ruling in the same
litigation if there is a compelling reason that makes clear that the earlier ruling was erroneous.
Santamarina v. Sears, 466 F.3d 570, 572 (7th Cir. 2006). Dual-Temp has failed to provide a
compelling reason here. Dual-Temp claims that it did not receive the documents that support the
exercise of personal jurisdiction over Daneman until after the Court’s ruling on Daneman’s
motion to dismiss. (Dkt. No. 144 p. 13.) This claim is contradicted by defense counsel’s
affidavit stating that the documents were produced on or about July 9, 2009 well before this
Court’s December 4, 2009. (Dkt. No. 139-1.) In its reply, Dual-Temp failed to offer an affidavit
or any other evidence to refute this statement. Consequently, this Court lacks a compelling
reason to disturb the earlier ruling that the Court lacks personal jurisdiction over Daneman.
B.

Negligent Misrepresentation Claim

The Court finds that Dual-Temp’s negligent misrepresentation claim against the Hench II
Defendants is barred by the Moorman doctrine. As discussed above, the negligent
misrepresentation exception applies only where the defendant is an information provider. The
Hench II Defendants provided, or attempted to provide, a tangible product and thus they were
not engaged in the business of providing information for Dual-Temp’s guidance. The Court
denies Dual-Temp’s request for leave to amend to add this negligent misrepresentation claim.
C.

Fraudulent Misrepresentation Claim

The Hench II Defendants contend that the proposed fraudulent misrepresentation claim
against them fails to meet the particularity requirement under Fed. R. Civ. P. 9(b). (Dkt. No. 139
pp. 9-14.) In the proposed complaint, Dual-Temp alleges that the Hench II Defendants
knowingly misled Dual-Temp through the use of letterhead and company names that were
“confusingly similar” to those used by Hench I. (Dkt. No. 130-1 ¶¶ 166-67, 169.) Dual-Temp

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relies upon an unpublished decision to support its argument that providing an incorrect name can
amount to fraud. (Dkt. No. 144.) The proposed complaint, however, alleges only that these
defendants used a “deceptively similar” name and not a false one. (Id. at ¶ 169.) Dual-Temp
also alleges that these defendants provided assurances of a perfect record and that the defects in
the control system could be cured. (Id. at ¶ 170.) Dual-Temp does not allege that these
assurances were knowingly false or that these defendants made a knowingly false statement of
any kind. (Id. at ¶¶ 166-171.) These assurances were statements of opinion relating to future
events, which do not constitute an actionable misrepresentation under Illinois law. See, e.g.,
Chatham Surgicore, Ltd. v. Health Care Serv., Corp., 356 Ill. App. 3d 795, 805 (Ill. App. Ct.
2005). Moreover, Dual-Temp alleges in the fraudulent misrepresentation count that “[b]y reason
of Daneman’s and HENCH CONTROL II’s negligent misrepresentation as to the cause of the
system failure…Dual-Temp has been damaged in the amount of $485,625.96.” (Id. at ¶ 171.)
Once again, Dual-Temp’s allegation suggests conduct that is negligent rather than fraudulent and
liability for negligence is foreclosed by Moorman. The proposed fraudulent misrepresentation
claim lacks the requisite specificity required by Rule 9(b). As a result, an amendment to add this
claim is futile.

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CONCLUSION
For the foregoing reasons, the Court grants Dual-Temp’s motion for leave to amend its
complaint to add a claim for breach of the implied warranty of fitness for a particular purpose
against Hench and Hench I. Dual-Temp’s motion is denied as to all other amendments.

IT IS SO ORDERED.

Dated: May 2, 2011

Honorable Sharon Johnson Coleman
United States District Court

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