877 F. Supp. 2d 614
N.D. Ill.2012Background
- Dispute arises from Glenbrook South High School project in Illinois; District owns project and HBC provided construction management services under CM Contract.
- HBC had duties to review and process payment applications, investigate work, and certify that payees were entitled to payment under contract documents.
- Grace Electrical performed electrical work for Grace Contract; Hartford issued a performance and payment bond for Grace and secured indemnity.
- Hartford paid vendors and remedied Grace’s defective work after Grace defaulted; Hartford asserts losses totaling over $833,104.21.
- Hartford, subrogee to Grace and project vendors, sues HBC for negligent misrepresentation and breach of contract; Count II is the negligent misrepresentation claim.
- Court grants motion to dismiss Count II, finding HBC not in the business of supplying information and Moorman doctrine bars purely economic negligent misrepresentation claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Moorman bars negligent misrepresentation claim here | Hartford asserts damages from misrepresentations affecting contract funds | Moorman bars purely economic claims unless defendant is in the business of supplying information | Yes, Moorman bars the claim. |
| Whether HBC is in the business of supplying information | Hartford contends HBC supplied information as construction manager | HBC’s role was construction supervision; not a pure information business | No; HBC not in information-supply business; claim fails. |
Key Cases Cited
- Moorman Mfg. Co. v. National Tank Co., 91 Ill.2d 69 (Ill. Supreme Court 1982) (Moorman doctrine barring economic-tort claims absent information-supply duty)
- First Midwest Bank v. Stewart Title Guar. Co., 218 Ill.2d 326 (Ill. Supreme Court 2006) (duty to avoid negligently conveying false information in information-supply context)
- Brogan v. Mitchell International, Inc., 181 Ill.2d 178 (Ill. Supreme Court 1998) (tests whether defendant is in business of supplying information)
- Congregation of the Passion v. Touche Ross & Co., 159 Ill.2d 137 ( Ill.2d 1994) (information-supply analysis in professional services context)
- 2 31 4 Lincoln Park West Condominium Assn. v. Mann, Gin, Ebel & Frazier, 136 Ill.2d 302 (Ill. Supreme Court 1990) (tangible end product vs. information in professional services)
- Fireman’s Fund Insurance Co. v. SEC Donohue, Inc., 176 Ill.2d 160 (Ill. Supreme Court 1997) (recognizes information-supply exception to Moorman in certain contexts)
- Doe v. Dilling, 228 Ill.2d 324 (Ill. Supreme Court 2008) (elements of negligent misrepresentation under Illinois law)
- Orix Credit Alliance, Inc. v. Taylor Machine Works, Inc., 125 F.3d 468 (7th Cir. 1997) (informed consideration of information in business transactions)