Loman v. Freeman
314 Ill. Dec. 446, 375 Ill. App. 3d 445, 874 N.E.2d 542 (2006)
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Rule of Law:
The economic loss doctrine (Moorman doctrine) does not bar tort claims for professional negligence or conversion when the duty breached arises independently of a contract or state employment, and when physical damage to property, beyond mere economic expectation, occurs from a sudden and dangerous act. State-employed professionals are not immune from suit for breaching common-law professional duties.
Facts:
- Brian Loman and Jack Dodd owned a racehorse.
- David E. Freeman, a veterinarian, was entrusted with the horse for care and treatment.
- Loman and Dodd granted Freeman permission to perform surgery on the left carpal bone and drain fluid from the right stifle.
- Loman and Dodd explicitly forbade Freeman from performing surgery on the horse's right stifle, warning that such surgery was very risky and should not be performed unless the horse was lame.
- In violation of the express prohibition, Freeman performed surgery on the horse's right stifle.
- The unauthorized surgery ruined the horse for future racing, permanently incapacitating it and reducing its value to "salvage value."
- At the time, David E. Freeman was a professor at the College of Veterinary Medicine of the University of Illinois, performing research and training students by operating on animals.
Procedural Posture:
- Brian Loman and Jack Dodd (plaintiffs) sued David E. Freeman (defendant) in trial court (court of first instance) for negligence and conversion.
- David E. Freeman filed a hybrid motion to dismiss the amended complaint, arguing that the Moorman doctrine barred the negligence count and that the conversion count failed to state a cause of action.
- The trial court granted David E. Freeman's motion, dismissing the amended complaint with prejudice and striking the case.
- Brian Loman and Jack Dodd appealed the trial court's dismissal to the Appellate Court of Illinois, Fourth District.
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Issue:
1. Is a state court barred by sovereign immunity from hearing a professional negligence claim against a state-employed veterinarian whose alleged breach of duty arises from common-law professional standards rather than solely from state employment? 2. Does the economic loss doctrine (Moorman doctrine) bar a professional negligence claim and a conversion claim against a veterinarian who performed an unauthorized surgery that permanently incapacitated a racehorse, causing diminution in its value?
Opinions:
Majority - Justice Appleton
No, a state court is not barred by sovereign immunity from hearing a professional negligence claim against a state-employed veterinarian for breach of a common-law professional duty, and no, the economic loss doctrine (Moorman doctrine) does not bar claims for professional negligence and conversion when the unauthorized surgery caused physical damage to the horse. The court determined that the circuit court had subject-matter jurisdiction because the defendant's duty arose independently of his state employment. Following Jinkins v. Lee, an action is not against the state if the duty alleged was owed to the public generally, independent of state employment. The common law imposes a duty on anyone rendering veterinary services to exercise the skill and knowledge normally possessed by veterinarians in good standing in similar communities. The act of performing unauthorized surgery violates this independent professional standard, which applies to all veterinarians regardless of public or private employment. The defendant's state employment merely provided the occasion for incurring this duty, rather than being its sole source. Furthermore, a judgment against the defendant would not control the actions of the state, and the state's indemnification of its employee does not convert the suit into an action against the state itself. The court also found that the Moorman doctrine did not bar the tort claims. While the Moorman doctrine generally precludes tort recovery for purely economic losses arising from disappointed commercial expectations, it has exceptions for claims alleging physical injury or property damage caused by a 'sudden or dangerous occurrence.' The defendant's duty to refrain from altering the horse without consent arose from a pre-existing common-law duty against trespass or conversion, independent of any contract. The unauthorized surgery, described as a 'laceration with a scalpel,' was a 'sudden' and 'dangerous' physical occurrence that directly damaged the horse, reducing its value. This constitutes physical property damage, not merely a qualitative defect or unfulfilled expectation. Finally, the court concluded that the plaintiffs' claim for conversion was valid. Citing Restatement (Second) of Torts §226 and comment d, the court explained that intentionally destroying or materially altering a chattel's physical condition so as to change its identity or character, or rendering a horse 'useless for the ordinary purposes' for which it was intended (racing), constitutes conversion, even if the owner retains possession and the item has salvage value. The horse's permanent incapacitation for racing due to the surgery fits this definition.
Analysis:
This case significantly clarifies the boundaries of both sovereign immunity and the economic loss doctrine in Illinois, particularly concerning professionals in public service. It reinforces the principle that professional duties, rooted in common law, exist independently of employment status or contractual agreements, ensuring accountability even for state-employed professionals. The ruling also narrows the application of the Moorman doctrine, emphasizing that direct physical damage to property, even if arising in a service context and leading to diminished value, is a tortious injury distinguishable from purely economic losses tied to contract performance. This distinction protects owners' rights against unauthorized alterations to their property and underscores the importance of informed consent in professional-client relationships.
