Redarowicz v. Ohlendorf

• Decision Date: 18 June 1982
• Docket Number: No. 55100,55100
• Citation: 65 Ill.Dec. 411,92 Ill.2d 171,441 N.E.2d 324
• Parties: , 65 Ill.Dec. 411 Donald J. REDAROWICZ, Appellant, v. William H. OHLENDORF, Appellee.
• Court: Illinois Supreme Court

Page 324

441 N.E.2d 324

92 Ill.2d 171, 65 Ill.Dec. 411

Donald J. REDAROWICZ, Appellant, v. William H. OHLENDORF, Appellee.

No. 55100.

Supreme Court of Illinois.

June 18, 1982.

Heyl, Royster, Voelker & Allen, Peoria (Timothy L. Bertschy, Gary S. Schwab, Peoria, of counsel), for appellant.

Costigan & Wollrab, Bloomington (James P. Ginzkey, Bloomington, of counsel), for appellee.

CLARK, Justice:

Plaintiff, Donald J. Redarowicz, filed a four-count complaint against Ohlendorf Builders, Inc., on December 14, 1978, in the circuit court of McLean County. The complaint asserts that the defendant was responsible for faulty construction of the plaintiff's residence. The original complaint sought relief on contract, tort, fraud, and implied warranty of habitability theories.

The defendant moved to dismiss the complaint on March 23, 1979, stating that Ohlendorf Builders, Inc., a corporation, was not in the business of home construction, but was in the business of commercial construction. On June 18, 1979, the circuit court issued an order granting defendant's motion to dismiss and allowing the plaintiff to amend his complaint to substitute William H. Ohlendorf, doing business as Ohlendorf Builders, as the proper party defendant in the case. The complaint was amended on July 31, 1979.

The defendant again moved to dismiss the action on September 18, 1979. The plaintiff filed an amendment to the complaint on December 21, 1979; on February 14, 1980, another amendment to the complaint was filed. Defendant moved to dismiss for failure to state a cause of action on February 14, 1980. On May 9, 1980, the circuit court entered an order dismissing the cause with prejudice. The case was taken on appeal to the appellate court. On April 24, 1981, the appellate court entered judgment affirming the dismissal of counts I through V. The dismissal of count VI was reversed. (95 Ill.App.3d 444, 50 Ill.Dec. 892, 420 N.E.2d 209.) On October 19, 1981, we granted leave to appeal.

The complaint alleges that the defendant builder completed the house in early 1976. The plaintiff purchased the premises from the original owners in April of 1977. At the time the plaintiff purchased the house none of the defects complained of were apparent. Soon thereafter the plaintiff discovered that the chimney and adjoining brick wall were beginning to pull away from the rest of the house. Upon further inspection the plaintiff found that the wall and chimney were set in loose soil and that the supporting lintel was set only 24 inches deep. The plaintiff complains that the basement wall was cracked and there was water leakage in the basement as well as leakage in the roof area around the chimney.

Count I asks recovery for damages in tort for faulty construction of the plaintiff's residence. Count II sounds in contract, asserting the plaintiff to be a third-party beneficiary of the defendant's alleged agreement with the city of Bloomington to remedy certain defects in the construction in exchange for the city's foregoing prosecution for violation of city building codes. Count III is based upon an implied warranty of habitability and fitness of the residence. Count IV alleges fraud in the defendant's promise to remedy the defects in the construction. Count V is based in tort, alleging faulty construction of a patio. No appeal was taken from the appellate court's judgment reversing the dismissal of count VI; count VI therefore is not at issue.

Counts I and V of the plaintiff's complaint are based in negligence and seek recovery for the costs of repair or replacement of the defectively constructed chimney, wall and patio. The defendant concedes that privity is not a necessary element of a tort action brought in negligence. (See generally Suvada v. White Motor Co. (1965), 32 Ill.2d 612, 210 N.E.2d 182.) The measure of liability in a tort action is based rather on the scope of the duty owed to the plaintiff. Rozny v. Marnul (1969), 43 Ill.2d 54, 250 N.E.2d 656.

While it is foreseeable that a house will be sold more than once, and that substandard construction that results in structural defects could harm a subsequent purchaser, we need not discuss in detail the scope of the duty owed to this plaintiff. For it is now clear in view of our decision in Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill.2d 69, 61 Ill.Dec. 746, 435 N.E.2d 443, that a plaintiff cannot recover solely economic losses in tort. In Moorman the plaintiff had purchased a bolted-steel grain-storage tank from the defendant. The tank had developed a crack in one of its steel plates. The plaintiff brought an action alleging in count I that the tank was not reasonably safe due to defects in its design and manufacturing and in count III that the defendant had negligently designed the tank.

We affirmed the trial court's dismissal of both the strict liability and negligence counts in Moorman. We concluded that a complaint alleging qualitative defects in a product does not belong in tort. A disappointed consumer of a storage tank or a disgruntled purchaser of a certain house cannot assert that, due to inferior workmanship that led to eventual deterioration, he can recover under a negligence theory in tort. We find no sound reason to treat either of the aforementioned purchasers differently from one another.

We took note in Moorman that " '[e]conomic loss' has been defined as 'damages for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits * * * ' (Note, Economic Loss in Products Liability Jurisprudence, 66 Colum.L.Rev. 917, 918 (1966) (Economic Loss )) as well as 'the diminution in the value of the product because it is inferior in quality * * *.' (Comment, Manufacturers' Liability to Remote Purchasers for 'Economic Loss' Damages--Tort or Contract? 114 U.Pa.L.Rev. 539, 541 (1966).)" 91 Ill.2d 69, 82, 61 Ill.Dec. 746, 435 N.E.2d 443.

To recover in negligence there must be a showing of harm above and beyond disappointed expectations. A buyer's desire to enjoy the benefit of his bargain is not an interest that tort law traditionally protects. (See Prosser, Torts sec. 92, at 613 (4th ed. 1971).) In Crowder v. Vandendeale (Mo.1978), 564 S.W.2d 879, the front porch and steps of the plaintiff's home began to settle and proceeded to separate from the foundation of the house. While the Supreme Court of Missouri recognized an implied warranty of habitability in the new house, the court concluded that recovery for deterioration alone, caused by latent structural defects, was not actionable in negligence. We concur in our sister court's statement:

"A duty to use ordinary care and skill is not imposed in the abstract. It results from a conclusion that an interest entitled to protection will be damaged if such care is not exercised. Traditionally, interests which have been deemed entitled to protection in negligence have been related to safety or freedom from physical harm. Thus, where personal injury is threatened, a duty in negligence has been readily found. Property interests also have generally been found to merit protection from physical harm. However, where mere deterioration or loss of bargain is claimed, the concern is with a failure to meet some standard of quality. This standard of quality must be defined by reference to that which the parties have agreed upon." (564 S.W.2d 879, 882.)

This is not a case where defective construction created a hazard that resulted in a member of the plaintiff's family being struck by a falling brick from the chimney. The adjoining wall has not collapsed on and destroyed the plaintiff's living room furniture. The plaintiff is seeking damages for the costs of replacement and repair of the defective chimney, adjoining wall and patio. While the commercial expectations of this buyer have not been met by the builder, the only danger to the plaintiff is that he would be forced to incur additional expenses for living conditions that were less than what was bargained for. The complained-of economic losses are not recoverable under a negligence theory. The circuit court was correct in dismissing counts I and V of the plaintiff's complaint.

In count II of the complaint the plaintiff seeks relief as a third-party beneficiary of an agreement between the city of Bloomington and the defendant. It is alleged that the city agreed to forgo prosecution of the defendant for certain building code violations existing on the premises of the plaintiff in return for defendant's promise to make certain repairs to plaintiff's home. The defendant contends that the city cannot validly enter into such an agreement because it is tantamount to a decision not to enforce the building code. The defendant fails to recognize that the agreement sought to bring the construction into conformity with the city's building codes in specifying the defects to be remedied at the plaintiff's home. In entering into this agreement with the defendant the city was not attempting to undermine any municipal ordinance; the purpose was to see that the defendant complied with the regulations.

Both the plaintiff and defendant agree that forbearance is recognized in a civil action as valid consideration for a contract. (White v. Walker (1863), 31 Ill. 422; United Factors Division of United Merchants & Manufacturers, Inc. v. Murphy (N.D.Ill.1971), 345 F.Supp. 768.) Prosecution for a violation of a municipal ordinance, while quasi-criminal in character, has consistently been classified as a civil action in Illinois. Johnston v. City of Bloomington (1979), 77 Ill.2d 108, 112, 32 Ill.Dec. 319, 395 N.E.2d 549; City of Decatur v. Chasteen (1960), 19 Ill.2d 204, 216, 166 N.E.2d 29; City of Danville v. Hartshorn (1973), 53 Ill.2d 399, 402, 292 N.E.2d 382; City of Kewanee v. Puskar (1923), 308 Ill. 167, 174, 139 N.E. 60.

Recognizing, then, the city's forbearance as adequate consideration, the question remains as to whether the plaintiff is a direct...