Illinois Federal Court Determines if Damages Are Too Remote

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Foreseeability is a tort concept that tends to permeate several aspects of legal analysis, often causing confusion in litigants’ interpretation of, and courts’ application of, foreseeability to their cases. In Cincinnati Ins. Co. v. Progress Rail Services. Corp., 2020 U.S. Dist. LEXIS 73967 (C.D. Ill.), the United States District Court for the Central District of Illinois took on the task of analyzing a case dealing with foreseeability issues to determine if the defendant owed the plaintiff a duty and if the damages were so remote as to violate public policy. The court held that since the defendant’s actions contributed to the risk of harm to the plaintiff and the facts satisfied the four-prong duty test, the defendant owed the plaintiff’s subrogor a duty of reasonable care. It also held that the plaintiff’s damage claim did not open the defendant up to liability that would violate public policy.

In the case, an employee of defendant Progress Rail Services Corporation (Progress Rail) was operating a crane at Progress Rail’s Galesburg location on May 7, 2018. The employee struck an overhead power line while working, causing a power disruption to nearby businesses. The plaintiff’s subrogor, Midstate Manufacturing Company (Midstate), was one of the affected businesses, reporting that its Amada hydraulic punch was damaged. Midstate submitted a property damage claim to its carrier, Cincinnati Insurance Company (Cincinnati), who reimbursed it under its policy. Subsequent to its payment, Cincinnati filed suit against Progress Rail in Illinois state court. Progress Rail then removed the case to federal court and filed a motion to dismiss.

The court first considered the defendant’s argument that it owed Midstate no duty of care and, thus, the plaintiff failed to state a claim. The court initially determined whether the defendant’s actions contributed to the risk of harm to the plaintiff. If it did, then the court would weigh the four factors courts consider to determine of whether a duty runs from the defendant to the plaintiff: 1) reasonable foreseeability of the injury; 2) likelihood of the injury; 3) the burden of guarding against the injury; and 4) the consequences of bearing that burden.

Because the actions of Progress Rail’s employee caused damage to Midstate’s equipment, the court determined that the defendant’s actions contributed to the risk of harm to Midstate. Thus, the court moved on to weighing the four relevant factors.

The court found that the weight of the factors balanced in favor of the plaintiff. Looking at the foreseeability of the general character of the event or harm and not the precise manner of occurrence, the court found that the first factor favored the plaintiff. The court also held that the likelihood of injury was present since disrupting power could damage nearby properties. Finally, the court found in favor of the plaintiff for the final two prongs; stating that the burden of guarding against such injuries should have been inherent in the defendant’s work and there were no onerous consequences of imposing such a burden.

The court next analyzed the defendant’s position that the doctrine of remoteness should preclude the plaintiff’s claims. This public-policy-based doctrine is founded on the principle that, regardless of foreseeability, certain plaintiffs should not be able to recover from the defendant because their claimed harm is too remote. The doctrine is typically applied in cases where a third-party plaintiff has no property damage, but claims harm as a result of injury to another. Because the wide spectrum of plaintiffs that could make such claims would lead to “a crushing burden of litigation,” courts apply the doctrine to prevent an unreasonable burden on companies’ activities. Since the type of damage claimed in this matter would not lead to such a burden, the court disregarded this argument as well, dismissing the motion to dismiss in its entirety.

The analyses and holdings of this case are important for subrogation professionals to keep in mind when defendants attempt to make arguments based on either the extent of their duty or the doctrine of remoteness. The Cincinnati Ins. Co. case illustrates the limits of those defenses. This case shows that courts are unlikely to limit the scope of a defendant’s tort duty or restrict litigants’ rights based on public policy without strong justification. In a larger sense, the case is a good reminder that courts may be willing to impose strict limits to tort defenses and plaintiffs should push for those as much as possible.

 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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