890 F.2d 24 (7th Cir. 1989), 89-1271, Rardin v. T & D Mach. Handling, Inc.

Docket Nº:89-1271.
Citation:890 F.2d 24
Party Name:Jack RARDIN, doing business as Rardin Graphics, Plaintiff-Appellant, v. T & D MACHINE HANDLING, INC., Defendant-Appellee, and Whitacre Sunbelt, Inc., et al., Defendants.
Case Date:November 21, 1989
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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890 F.2d 24 (7th Cir. 1989)

Jack RARDIN, doing business as Rardin Graphics, Plaintiff-Appellant,


T & D MACHINE HANDLING, INC., Defendant-Appellee,


Whitacre Sunbelt, Inc., et al., Defendants.

No. 89-1271.

United States Court of Appeals, Seventh Circuit

November 21, 1989

Argued Sept. 14, 1989.

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Vincenzo Chimera, Chicago, Ill., for plaintiff-appellant.

Thomas H. Fegan, William V. Johnson, Johnson, Cusack & Bell, Chicago, Ill., for defendant-appellee.

Before POSNER, COFFEY, and KANNE, Circuit Judges.

POSNER, Circuit Judge.

Jack Rardin, the plaintiff, bought for use in his printing business a used printing press from Whitacre-Sunbelt, Inc. for $47,700. The price included an allowance of $1,200 to cover the cost of dismantling the press for shipment and loading it on a truck at Whitacre's premises in Georgia for transportation to Rardin in Illinois. The contract of sale provided that the press was to be "Sold As Is, Where Is," that payment was to be made before the removal of the press from Whitacre's premises, and that Whitacre was to be responsible only for such damage to the press as might be "incurred by reason of the fault or negligence of [Whitacre's] employees, agents, contractors or representatives." To dismantle and load the press, Whitacre hired T & D Machine Handling, Inc., which performed these tasks carelessly; as a result the press was damaged. Not only did Rardin incur costs to repair the press; he also lost profits in his printing business during the time it took to put the press into operating order. He brought this suit against Whitacre, T & D, and others; settled with Whitacre; dismissed all the other defendants except T & D; and now appeals from the dismissal of his case against T & D for failure to state a claim. (The facts we recited are all taken from the complaint.) The only issue is whether Rardin stated a claim against T & D under Illinois law, which the parties agree controls this diversity suit.

The contract indemnified Rardin against physical damage to the press caused by the negligence of Whitacre's contractor, T & D, and the settlement with Whitacre extinguished Rardin's claim for the cost of repairing the damage. The damages that Rardin seeks from T & D are the profits that he lost as a result of the delay in putting the press into operation in his business, a delay caused by T & D's negligence in damaging the press. Rardin could not have sought these damages from Whitacre under the warranty, because consequential damages (of which a loss of profits that is due to delay is the classic example) are not recoverable in a breach of contract suit, with exceptions not applicable here. Rardin had no contract with T & D, and his claim against T & D is a tort claim; consequential damages are the norm in tort law.

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We agree with the district judge that Illinois law does not provide a tort remedy in a case such as this. We may put a simpler version of the case, as follows: A takes his watch to a retail store, B, for repair. B sends it out to a watchmaker, C. Through negligence, C damages the watch, and when it is returned to A via B it does not tell time accurately. As a result, A misses an important meeting with his creditors. They petition him into bankruptcy. He loses everything. Can he obtain damages from C, the watchmaker, for the consequences of C's negligence? There is no issue of causation in our hypothetical case; there is none in Rardin's. We may assume that but for C's negligence A would have made the meeting and averted the bankruptcy, just as but for T & D's negligence the press would have arrived in working condition. The issue is not causation; it is duty.

The basic reason why no court (we believe) would impose liability on C in a suit by A is that C could not estimate the consequences of his carelessness, ignorant as he was of the circumstances of A, who is B's customer. In principle, it is true, merely to conclude that C was negligent is to affirm that the costs of care to him were less than the costs of his carelessness to all who might be hurt by it; that, essentially, is what negligence means, in Illinois as elsewhere. See McCarty v. Pheasant Run, Inc., 826 F.2d 1554, 1556-57 (7th Cir.1987). So in a perfect world of rational actors and complete information, and with damages set equal to the plaintiff's injury, there would be no negligence: the costs of negligence would be greater to the defendant than the costs of care and therefore it would never pay to be negligent. And if there were no negligence, the scope of liability for negligence would have no practical significance. But all this is a matter of abstract principle, and it is not realistic to assume that every responsible citizen can and will avoid ever being negligent. In fact, all that taking care does is make it less likely that one will commit a careless act. In deciding how much effort to expend on being careful--and therefore how far to reduce the probability of a careless accident--the potential injurer must have at least a rough...

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