Judicial Rulings                                

CTA not liable
for third party injuries

When one passenger of the Chicago Transit Authority (CTA) injures another the CTA may not be liable for damages, according to the Illinois Supreme Court's April 21 decision. In this case a passenger was slashed when he tried to defend another against a pickpocket.

The Metropolitan Transit Authority Act says that the CTA is not liable "if a security or police force is provided ... for ... failure to prevent the commission of crimes..." ( see Illinois Revised Statutes 1987, ch. Ill 2/3, par. 327). The appellate court agreed with the plaintiff on a narrow interpretation — that the CTA would not be liable if transit police were provided but unable to prevent the injury. The high court said, "The plain language in section 27 provides the CVTA with immunity from negligence claims which allege that a CTA employee failed to prevent the commission of a crime against a passenger."

Chief Justice Michael A. Bilandic wrote the opinion in Eagen v The Chicago Transit Authority (Docket No. 75176); Justice Mary Ann McMorrow did not participate.

Judge to decide
informant's credibility

When asked for a search warrant on the basis of an informant's tip a judge has some latitude in disclosing the informant's identity, but only under certain specific procedures, the Illinois Supreme Court ruled on April 21.

In this case the police asked for a search warrant based on the informant's statement that he had bought cocaine from the defendant. The defendant sought and obtained an evidentiary hearing on the affidavit for the search warrant. He sought to quash evidence of the cocaine seized in the search, claiming not only that the evidence of the purchase was false but even questioning the existence of the informant. He submitted evidence rebutting the basis of the police affidavit and moved to have the informant's identity and his police file reavealed. The police claimed that the informant had been accurate in previous instances and that they were reluctant to reveal the identity of a useful source. The trial judge ordered police to produce his file for in camera examination.

From U.S. Supreme Court decisions it is established that "at the hearing, the defendant must establish that the affiant engaged in intentional perjury or acted with reckless disregard for the truth by the preponderance of the evidence." If he does, "The search warrant must be voided and the fruits of the search excluded from the trial..." The Illinois court has not previously ruled on production of an informant or his file. The court here ruled: "The trial court may in its discretion require production of the informant and/or the police files on the informant for an in camera examination or inspection, if under all the circumstances the trial court doubts the credibility of the police officer/affiant with respect to the existence of the informant."

Here the court found that the record did not indicate whether the trial judge had examined the police file on the informant and ordered him to clarify the matter within 60 days. Chief Justice Michael A. Bilandic wrote the opinion in People v Vauzanges (Docket No. 74852); Justice Mary Ann McMorrow did not participate. Justice James D. Heiple, with Justice Moses W. Harrison II, concurred in part, but disagreed with the majority's application to the facts here, arguing that the defendant raised sufficient doubt to require production of the informant.

Moorman doctrine revisited

"Once again, this court has plunged into the quagmire known as the Moorman Doctrine and dredged up yet another ill-conceived exception to add to the current confusion," said Justice James D. Heiple's dissent to an April 21 decision of the Illinois Supreme Court.

The doctrine generally holds that action for purely economic loss must be pursued under contract law rather than tort law. Originally stated in 1982 for cases of product liability, it was extended in 1990 to cover professional malpractice (in 2314 Lincoln Park West Condominium Association v Mann, Gin, Ebel & Frazier, 136 111. 2d 302; see Illinois Issues, July 1990, p. 41). At that point an uproar arose in legal circles about the viability of the premise. Indeed, two years later the court had to create an exception for attorney malpractice At first a split decision said that the doctrine applied to lawyers (Collins v Reynard, 154 111. 2d 48; see Illinois Issues , December 1991, p. 30), but on rehearing the court created an exception, based on historic precedent, for lawyer malpractice (see Illinois Issues, March 1993, p. 28).

The current case was brought by a monastery. It employed a professional advisor to manage its investments and an auditor to make annual reports. The advisor made highly risky arbitrage deals on margin. The auditor used a method of reporting the value of the holdings that tended to exaggerate their worth — supposedly with the understanding of the owners. After several years it appeared that a $2 million initial investment was now in the red by about $3.9 million. After unsuccessful action in federal courts, the monastery sued in state courts, naming the auditor as defendant. In finding for the plaintiff the court had to create another exception to the Moorman doctrine.

The court said that "the doctrine is applicable to the service industry only where the duty of the party performing the service is defined by the contract that he executes with his client." Accountants, like lawyers, make decisions as they perform their duties, using their expertise and "this knowledge and expertise cannot be memorialized in contract, but is expected independent of the accountant's contractual obligations." The value of an accountant's services lies in the ideas behind the report, and these are intangible. "Application of the Moorman doctrine ... is inappropriate where a relationship results in something intangible."

The majority opinion in Congregation of the Passion, Holy Cross Province v Touche Ross & Co. (Docket No. 73224) was written by Justice Benjamin K. Miller. Justice John L. Nickels did not participate. Justice Charles E. Freeman's special concurrence saw broad implications in the majority's reliance on a client's right to expect reasonable professional competence. He said, "Acceptance of the extracontractual-duties rationale clears the way for tort claims in professional malpractice cases in general" and disagrees with the tangible/intangible distinction. The majority created a need for case-by-case analysis. Heiple, who wrote the revised opinion in Collins, was joined by Justice Moses W. Harrison II in his lengthy dissent. He said, "The majority opinion puts litigants and trial judges in a position of having to guess what the exception of the month is. Yesterday it was attorneys. Today, it is accountants. Tomorrow, who can say?" He concluded, "Extension of Moorman into the arena of professional malpractice should be written off as a failed experiment, and the economic loss doctrine should be reconfined to cases involving products liability." F. Mark Siebert

Next month in Illinois Issues Special Summer Book Section An essay by Nancy Stevenson about children in Illinois AFSCME: A new contract for state employees Scattered-site housing — is it working in Illinois?

June 1994/Illinois Issues/35