Appellate Law, Business Litigation, Chicago, Client Results, Firm News, Product Liability

Appellate Court Clarifies and Affirms Economic Loss Doctrine in Dismissal of Tort Claims

September 3, 2012

The opinion, Westfield Insurance v. CNH America, No. 3-09-0501 (Ill.App.Ct. March 17, 2010), issued by Illinois' Third District Appellate Court, clarifies application of the economic loss doctrine where a plaintiff pleads incidental damages to "other" personal property. In this case, Johnson & Bell's client, CNH America, manufactured a tractor that was sold by Birkey's Farm Store to the plaintiff, Sandrock Farms. While employees of Sandrock Farms were operating the tractor, a fire occurred, which damaged the tractor and certain items of personal property left in the tractor, including tools, after market items added to the tractor including a CB radio, employee clothing, employee time, and employee injury. The Appellate Court held that the tort claims were properly dismissed. Westfield Insurance, as subrogee of Sandrock Farms, lacked standing to assert personal injury or property damage claims for Sandrock Farms' employees. Furthermore, the Appellate Court upheld prior precedent that lost employee time is an economic loss not recoverable in tort. Finally, the Appellate Court held that the loss of a fire extinguisher and equipment are the exact type of property one would expect to be damaged as a direct or incidental consequence of a tractor fire, and are therefore barred by the economic loss doctrine.

Dismissal of the tort claims was obtained by Johnson & Bell Shareholder, Charles P. Rantis. The appeal was successfully defended by Johnson & Bell Shareholder, Garrett L. Boehm, Jr.

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