Atlantic Mutual Insurance Company, as subrogee of TENSOR GROUP, INC. v. Jardis Industries, Inc.

United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued August 6, 2008
Decided August 27, 2008
Before
FRANK H. EASTERBROOK, Chief Judge
MICHAEL S. KANNE, Circuit Judge
DIANE P. WOOD, Circuit Judge
No. 08‐1495
ATLANTIC MUTUAL INSURANCE
COMPANY, as subrogee of TENSOR
GROUP, INC.,
Plaintiff‐Appellant,
v.
JARDIS INDUSTRIES, INC.,
Defendant‐Appellee.
Appeal from the United States District
Court for the Northern District
of Illinois, Eastern Division
No. 06 C 6300
Ronald A. Guzmán,
Judge.
O R D E R
Atlantic Mutual Insurance Company, as subrogee of Tensor Group, is seeking to
recover for damages that employees of Jardis Industries, Inc., caused to a newly purchased
machine when they negligently loaded another machine into the truck that was carrying
Tensor’s machine. The district court dismissed Atlantic’s claim against Jardis for failure to
state a claim, see FED . R. C IV . P. 12(b)(6), on the theory that Jardis had no duty to put the
second machine into the truck and thus it could not be liable to Tensor. On appeal, Atlantic
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1

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No. 08‐1495 Page 2
stresses the fact that its case did not rest on any supposed contractual duty. Instead,
Atlantic’s theory is that once Jardis voluntarily undertook to load the truck, it assumed a
noncontractual duty to act with ordinary care. We agree with Atlantic that the district court
read the complaint too narrowly, and we therefore vacate the district court’s judgment and
remand for further proceedings.
Tensor manufactures equipment used by newspapers and commercial printers. In early
2002, it purchased a printing press from Jardis, which has facilities in Itasca and
Woodridge, Illinois. Tensor hired Solace Transfer Co., a commercial carrier, to transport
its machine from Jardis’s plant to Tensor’s client (Press Enterprise, Inc.) in Bloomsburg,
Pennsylvania. The contract for carriage specified that it was to be “F.O.B. Itasca, Il.” Solace
picked up the press in Woodridge, Illinois, but the truck then proceeded to Itasca, where
a second printing press that Tensor had purchased from Jardis was waiting for pickup and
was to be delivered in Pennsylvania along with the first one. Jardis employees loaded the
second press onto the truck behind the first one, and the truck drove on to Pennsylvania.
Upon arrival in Pennsylvania, Tensor discovered that the first press had been damaged
in transit from shifting or movement of the second machine. It turns out that, in order to
load this type of machine properly, it is necessary not only to place it into the truck, but
also to secure the box by nailing the wooden pallet on which the machine was packed to
the floor of the trailer. The first press had been secured in this way, but the press that Jardis
had loaded in Itasca had not – hence the banging around and damage to the first press.
Tensor promptly reported the damage and submitted a claim to Atlantic, its insurer. The
customer, Press Enterprise, refused to accept the damaged press, and thus a replacement
valued at $54,324.44 had to be ordered. In addition, there was damage to the truck
requiring the eventual replacement of three panels. Atlantic paid Tensor $23,793 in
settlement of its insurance claim, in exchange for subrogation rights.
Atlantic then sued both Solace and Jardis, raising a claim under the Carmack
Amendment, 49 U.S.C. § 14706, against Solace, and common‐law negligence claims against
both Solace and Jardis under the court’s supplemental jurisdiction, 28 U.S.C. § 1367. The
district court entered a default judgment against Solace, which had failed to appear, and
it then turned to Jardis’s motion to dismiss under Rule 12(b)(6). In granting that motion,
the district court reasoned that Atlantic had failed to state claim against Jardis because,
under the Illinois Uniform Commercial Code, 810 ILCS § 5/2‐319(1)(a), an F.O.B. “point of
shipment” contract does not obligate the shipper to load the goods. This contract was
“F.O.B. Itasca,” and so Jardis had no duty to load the second press. From that, it jumped
to the conclusion that Atlantic could not recover for negligence even if Jardis’s employees
had caused the damage to the first press.

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No. 08‐1495 Page 3
It was at that last step in the analysis that the district court went astray. Atlantic’s
complaint set forth the critical events of the underlying occurrence on which its case rested:
Jardis’s loading of the machine into the truck on a particular date, for a particular
shipment, and the resulting damage to the other cargo on the truck (the first machine). The
plaintiff has no obligation, in the complaint, to set forth the various legal theories under
which it hopes to recover. See, e.g., McDonald v. Household Intern., Inc., 425 F.3d 424, 427 (7th
Cir. 2005) (“This court has repeatedly held that pleaders in a notice system do not have any
obligation to plead legal theories.”) (citing cases). Nothing in Bell Atlantic Corp. v. Twombly,
127 S.Ct. 1955 (2007), changes that. See, e.g., Windy City Metal Fabricators & Supply, Inc. v.
CIT Technology Financing Servs., Inc., No. 07‐1567, 2008 WL 2941171, at *2 (7th Cir. Aug. 1,
2008).
Here, although the district court was correct about the fact that Jardis had no duty to
load the machine under the terms of an “F.O.B. place of shipment” contract, that does not
exhaust the legal theories available to Atlantic. As Atlantic has argued, there is another
theory under which it would be entitled to recover, assuming that it could prove the
necessary facts. Illinois courts follow the “Good Samaritan” rules outlined in the
Restatement (Second) of Torts, § 324A, which provides as follows:
Liability to Third Person for Negligent Performance of Undertaking.
One who undertakes, gratuitously or for consideration, to render services to another
which he should recognize as necessary for the protection of a third person or his
things, is subject to liability to the third person for physical harm resulting from his
failure to exercise reasonable care to protect his undertaking, if
(a) his failure to exercise reasonable care increases the risk of such harm, or
(b) he has undertaken to perform a duty owed by the other to the third person,
or
(c) the harm is suffered because of reliance of the other or the third person upon
the undertaking.”
See Redmon v. Stone, 667 N.E.2d 526, 528 (Ill. App. Ct. 1996); Triolo v. Frisella, 121 N.E.2d 49,
52 (Ill. App. Ct. 1954). See also Gaines v. Ill. Cent. R.R. Co., 23 F.3d 1170, 1172 (7th Cir. 1994);
Cincinnati Ins. Co. v. City of Taylorville, 818 F.2d 1345, 1348 (7th Cir. 1987).
Here, according to Atlantic’s allegations (which we accept for this purpose only), Jardis
gratuitously undertook to load the second printing press into Solace’s truck. Jardis should
have recognized that the press had to be secured so that it would not damage the other

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contents of the trailer. Even though Jardis had no contractual duty to load the press, once
it decided to do so, it was required to exercise reasonable care.
Because Atlantic’s complaint, so understood, stated a claim upon which relief can be
granted, we VACATE the district court’s judgment and R EMAND for further proceedings
consistent with this order.

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