Travco Insurance Company v.DuPage Soft Water
1:24-cv-06742
N.D. Ill.Jun 11, 2025Background
- Travco Insurance Company insured a home owned by the Prueters, which was damaged by a fire allegedly caused by improper installation of water treatment equipment by DuPage Soft Water.
- The improper wiring of a chlorinator, well pump, and pressure switch by DuPage Water's employees led to a fire causing extensive property damage.
- Travco paid for the homeowners’ losses under its policy and then brought a subrogation action against DuPage Water.
- Travco asserted claims for negligence and breach of implied warranty of good workmanship under Illinois law.
- DuPage Water moved to dismiss the complaint, arguing the economic loss doctrine barred the negligence claim and that no implied warranty applied to their services.
- The Court issued an order addressing DuPage Water’s motion to dismiss both claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Negligence claim barred by economic loss doctrine | Fire damage falls within 'sudden or dangerous occurrence' exception permitting tort recovery | Damage is foreseeable and not to 'other property' under economic loss doctrine | Exception applies—claim for negligence survives |
| Application of 'sudden/dangerous occurrence' exception | Fire caused by defective installation damaged property other than the defective product | All damage was foreseeable and incidental due to nature of product's likely failure | Exception recognized; allegations here distinguishable so claim not barred |
| Breach of implied warranty of good workmanship | Illinois law sometimes recognizes warranty for service contracts | Implied warranty is limited to sales of goods or construction contracts, not service contracts | No implied warranty for these services; claim dismissed |
| Survival of implied warranty claim | Service contract can have implied warranty | Only construction/real property contracts have implied warranty, not ordinary service contracts | No implied warranty for DuPage’s services under Illinois law; claim dismissed |
Key Cases Cited
- Moorman Mfg. Co. v. Nat’l Tank Co., 435 N.E.2d 443 (Ill. 1982) (economic loss doctrine in Illinois prohibits tort recovery for economic losses not involving personal injury or damage to other property)
- Loman v. Freeman, 890 N.E.2d 446 (Ill. 2008) (identifying fires as classic examples of the 'sudden or dangerous occurrence' exception)
- Trans States Airlines v. Pratt & Whitney Can., Inc., 682 N.E.2d 45 (Ill. 1997) (losses from foreseeable product failures generally barred by economic loss doctrine)
- Altevogt v. Brinkoetter, 421 N.E.2d 182 (Ill. 1982) (Illinois recognizes implied warranties of workmanlike construction, limited to construction contracts)