Basler Electric Company v. Fortis Plastics, LLC et al

Filing 25

MEMORANDUM AND ORDER denying 12 MOTION to Dismiss filed by Fortis Plastics, LLC. Signed by Judge J. Phil Gilbert on 8/27/2012. (dka, )

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
BASLER ELECTRIC COMPANY,
Plaintiff,
vs.

Case No. 12-cv-713-JPG

FORTIS PLASTICS, LLC and
REALIZATION SERVICES, INC.,
Defendants.
MEMORANDUM AND ORDER
This matter comes before the Court on defendant Fortis Plastics, LLC’s (“Fortis”) motion
to dismiss plaintiff Basler Electric Company’s (“Basler”) complaint in part (Doc. 12). Basler
originally filed its four-count complaint in the Circuit Court for the Third Judicial Circuit,
Madison County, Illinois, alleging breach of contract, breach of warranty, tortious interference,
and conversion. Thereafter, defendants removed the case to this Court. Fortis filed a motion to
dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) alleging that Basler’s conversion
claim should be dismissed pursuant to Illinois’ economic loss doctrine, also known as the
Moorman doctrine. Basler filed a response (Doc. 16) stating that the economic loss doctrine
does not bar intentional torts.
When considering a Rule 12(b)(6) motion to dismiss, the Court must “construe [the
complaint] in the light most favorable to the nonmoving party, accept well-pleaded facts as true,
and draw all inferences in [the non-moving] party’s favor.” Reger Dev., LLC v. Nat’l City Bank,
592 F.3d 759, 763 (7th Cir. 2010). The complaint must “contain sufficient factual matter,
accepted as true to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

“‘Economic loss’ has been defined 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.’” Moorman Mfg. Co. v. Nat’l Tank Co., 435 N.E.2d
443, 449 (Ill. 1982) (citing Note, Economic Loss in Products Liability Jurisprudence, 66 Colum.
L. Rev. 917, 918 (1966)). In Moorman, the case from which Illinois’ economic loss doctrine
derives its name, the Illinois Supreme Court held that economic loss was not recoverable under
the tort theories of strict liability, negligence, and innocent misrepresentation. Moorman, 435
N.E.2d at 449, 451-53. The policy reason underlying the Moorman doctrine states that “[w]hen
the defect is of a qualitative nature and the harm relates to the consumer’s expectation that a
product is of a particular quality so that it is fit for ordinary use, contract, rather than tort, law
provides the appropriate set of rules for recovery.” Id. at 451.
Moorman recited the following three exceptions to the economic loss doctrine:
(1) where the plaintiff sustained damage, i.e., personal injury or property damage,
resulting from a sudden or dangerous occurrence; (2) where the plaintiff’s
damages are proximately caused by a defendant’s intentional, false representation,
i.e., fraud; and (3) where the plaintiff’s damages are proximately caused by a
negligent misrepresentation by a defendant in the business of supplying
information for the guidance of others in their business transactions.
In re Chi. Flood Litig., 680 N.E.2d 265, 275 (Ill. 1997). The Seventh Circuit has specifically
recognized intentional torts as an exception to the Moorman doctrine. Dundee Cement Co. v.
Chem. Labs., Inc., 712 F.2d 1166, 1170 (7th Cir. 1983); see also ABC Trans Nat’l Transp., Inc.
v. Aeronautics Forwarders, Inc., 413 N.E.2d 1299, 1312-14 (Ill. App. Ct. 1980) (allowing
recovery of lost profits where complaint alleged fraud, conspiracy, and breach of fiduciary duty);
Int’l Bhd. of Teamsters Local 734 Health and Welfare Trust Fund v. Phillip Morris, Inc., 34 F.
Supp. 2d 656, 661 (N.D. Ill. 1998) (acknowledging Moorman doctrine allows recovery where the
economic loss resulted from an intentional tort).

Here, Basler alleges not merely a negligence claim that would invoke the Moorman
doctrine. Rather, Basler has pleaded the intentional tort of conversion. As the Seventh Circuit
recognized in Dundee, the Moorman doctrine is inapplicable to intentional torts. Accordingly,
Basler’s conversion claim is not inconsistent with the Moorman doctrine and it should not be
dismissed. Thus, Fortis’ motion to dismiss (Doc. 12) Basler’s conversion claim is DENIED.
IT IS SO ORDERED.
DATE: August 27, 2012
s/ J. Phil Gilbert
J. PHIL GILBERT
DISTRICT JUDGE