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Moorman Mfg. Co. v. National Tank Co.

Supreme Court of Illinois

February 19, 1982, Filed

No. 54440

Opinion

 [*72]   [**444]   [****747]  On November 1, 1979, the circuit court of Adams County held that plaintiff, Moorman Manufacturing Company (Moorman), could not recover from defendant National Tank Company under the theories of (1) strict liability in tort, (2) misrepresentation and (3) negligence for purely economic losses resulting from an alleged crack in a grain-storage tank. The circuit court dismissed counts I, II and III of plaintiff's complaint (based upon the above tort theories) but found that count IV, based upon breach of express warranty,  [***2]  was not barred by the statute of limitations (section 2 -- 725 of the Uniform Commercial Code (UCC) (Ill. Rev. Stat. 1977, ch. 26, par. 2 -- 725)). On  [*73]  appeal pursuant to Supreme Court Rules 304(a) and 308(a) (73 Ill. 2d Rules 304(a), 308(a)), the appellate court held that plaintiff could recover for economic loss under the tort theories of strict liability, misrepresentation and negligence. The court also found that plaintiff's tort actions were not barred by the statute of limitations (section 15 of the Limitations Act (Ill. Rev. Stat. 1977, ch. 83, par. 16)) and that the storage tank was a product. It reversed the trial court's dismissal of counts I, II and III, but did not rule on the sufficiency of plaintiff's express-warranty allegations under count IV. 92 Ill. App. 3d 136.

The issues raised on appeal before us are whether plaintiff can recover for the cost of repairs and loss of use of the tank under the above-named tort theories, and, if so, whether the actions based upon those theories are barred by the applicable statute of limitations, whether the storage tank is a  [**445]   [****748]  product (a requisite to application of strict liability in tort), and [***3]  whether count IV, based upon express warranty, was barred by the statute of limitations.

On July 26, 1978, plaintiff filed a three-count complaint containing the following allegations. Defendant designed, manufactured and sold storage tanks. In 1966, plaintiff purchased a bolted-steel grain-storage tank from defendant for use at its feed-processing plant in Alpha, Illinois. In the last few months of 1976 or the first months of 1977, a crack developed in one of the steel plates on the second ring of the tank. Count I alleged that the tank was not reasonably safe due to certain design and manufacturing defects. Count II asserted that defendant had made certain representations, which were in fact untrue, in connection with the sale of the tank. Count III accused defendant of negligently designing the tank. On April 9, 1979, plaintiff filed an amendment to the complaint, adding count IV, claiming it had relied upon an express warranty made by the defendant at the time of the sale. In all four counts, plaintiff sought damages representing  [*74]  the cost of repairs and reinforcement as well as loss of use of the tank. The trial court granted defendant's motion to dismiss the [***4]  first three counts, concluding that the cost of repair and loss of profits or income were economic losses which could not be recovered under the tort theories named in the complaint. The trial court also held that count IV was not barred by the statute of limitations because an express warranty existed which extended to future performance of the tank.

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91 Ill. 2d 69 *; 435 N.E.2d 443 **; 1982 Ill. LEXIS 266 ***; 61 Ill. Dec. 746 ****; CCH Prod. Liab. Rep. P9187; 33 U.C.C. Rep. Serv. (Callaghan) 510

MOORMAN MANUFACTURING COMPANY, Appellee, v. NATIONAL TANK COMPANY et al., Appellants

Prior History:  [***1]  Appeal from the Appellate Court for the Fourth District; heard in that court on appeal from the Circuit Court of Adams County, the Hon. Richard F. Scholz, Jr., Judge, presiding.

Disposition: Appellate court affirmed in part and reversed in part; circuit court affirmed in part and reversed in part.

CORE TERMS

economic loss, warranty, manufacturer, damages, tank, physical harm, strict liability, personal injury, strict liability in tort, recoverable, consumer, products, cases, future performance, tort theory, courts, Sales, Steel, statute of limitations, physical injury, losses, innocent misrepresentation, unreasonable danger, express warranty, expectations, privity, repair, defective product, product liability, appellate court

Torts, Products Liability, Theories of Liability, Strict Liability, Contracts Law, Breach, Breach of Contract Actions, General Overview, Types of Damages, Property Damages, Measurements, Remedies, Damages, Compensatory Damages, Commercial Law (UCC), Standards of Performance & Liability, Breach, Excuse & Repudiation, Governments, Legislation, Statute of Limitations, Time Limitations, Sales of Goods, Warranties, Business & Corporate Compliance, Accrual, Accrual of Cause of Action, Contract Provisions