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Newberg Const. Co. v. Fischbach

JANUARY 30, 1964.




Appeal from the Superior Court of Cook County; the Hon. DONALD S. McKINLAY, Judge, presiding. Reversed and remanded with directions.


Rehearing denied March 9, 1964.

Gust K. Newberg Construction Co. (hereafter referred to as Newberg) brought an action for declaratory judgment in the Superior Court of Cook County against Fischbach, Moore & Morrissey, Inc. (hereafter referred to as Fischbach), and its insurer, Indemnity Insurance Company of North America. The defendants appeared and filed a joint motion to strike and dismiss the amended complaint of Newberg on the grounds that it was insufficient in law and failed to state a cause of action. The court, after having heard the argument of counsel for the respective parties, allowed the motion and ordered the complaint stricken and dismissed with prejudice. Judgment was entered against Newberg. From this judgment of the court Newberg brings this appeal.

The case grew out of certain contracts entered into in January of 1959 for the construction of McCormick Place, a convention hall on the lake front in the City of Chicago. The owner, Metropolitan Fair and Exposition Authority (hereafter referred to as Metropolitan), entered into separate contracts with Newberg as general contractor and Fischbach as the electrical subcontractor. Included in both contracts were provisions for assignment. Pursuant to such provisions, Metropolitan assigned to Newberg all of its right, title and interest in the contract with Fischbach, and all the rights and obligations of the contractor to the owner. Fischbach accepted the assignment.

Subsequent to the execution of these agreements the construction of McCormick Place commenced and Fischbach entered into the performance of its work at the building site. In this work Fischbach employed one John C. Schroder. This employee subsequently filed an action against Newberg in the Superior Court of Cook County alleging that he had been injured at the McCormick Place jobsite when he fell off a plank scaffold. Schroder brought his action under the Structural Work Act (Ill Rev Stats 1963, c 48, §§ 60-69), commonly referred to as the Scaffold Act. Schroder in his complaint charged Newberg with a number of alleged violations of the Act relative to the maintenance, supervision and use of the scaffolding involved in the plaintiff's injury. Upon being presented with the claim of Schroder, Newberg demanded that Fischbach assume responsibility for and liability for such claim and that Fischbach protect and defend Newberg on the theory that Fischbach had obligated itself so to do by its agreement. Fischbach refused the demand.

Newberg then filed its Complaint for Declaratory Judgment praying that the court find that under the terms of the contract an obligation existed on the part of Fischbach to "indemnify" Newberg against the claim of Schroder; that there was an obligation on the part of Fischbach to defend plaintiff in the action brought by Schroder against Newberg; that the plaintiff is entitled to reimbursement from Fischbach for monies expended in the defense of the action filed by Schroder.

It was also prayed that the same findings be entered with reference to the defendant, Indemnity Insurance Company of North America. Whatever duty was imposed upon the insurance company was a duty arising out of Fischbach's contract, and so we will discuss the matter as though the suit were applicable only to Fischbach.

Newberg, in its complaint for declaratory judgment, set out certain provisions of the contract between Metropolitan and Fischbach, together with the assignments heretofore referred to. In the original General Conditions of the contract between Metropolitan and Fischbach we find the following provision:

"The Contractor hereby assumes entire responsibility and liability for any and all damage or injury of any kind or nature whatever (including death resulting therefrom) to all persons, whether employees of the Contractor or otherwise and to all property, caused by, resulting from, arising out of, or occurring in connection with the execution of the Work provided for in this Contract in excess of the limits and coverage set forth in paragraphs a. and b. of this Article 1-09."

Fischbach further agreed in its contract to furnish "all of the labor, materials, equipment, transportation, construction plant and facilities, required for, and shall perform all of the work for the completion of Electrical Work including Alternates 10-6, 10-10 and 10-11 shown on the drawings and described in the specifications. . . ."

That contract also provided that "The Contractor shall furnish, erect, maintain and move all scaffolding required for his work. All scaffolding shall be constructed and maintained in accordance with all applicable state and federal laws and local ordinances. Scaffolding shall be promptly removed after its purpose has been served."

In its complaint Newberg alleged that pursuant to the obligation imposed by its contract Fischbach entered into the performance of work at the location specified, and in the course of said work employed Schroder as its employee; that the work described in Schroder's complaint was work covered by the contract, and that Schroder, in the performance of his work, was performing work pursuant to the contract of Fischbach; that by virtue of the assignment of the contract Newberg stands in the shoes of Metropolitan; and that Fischbach is obliged to defend and protect Newberg from any and all liability arising out of the alleged injury to Schroder. It is further alleged in the complaint that under the provisions of the contract Fischbach agreed to secure insurance insuring it against liability arising out of a breach of the conditions of said contract, and that in accordance with that requirement Fischbach obtained from Indemnity Insurance Company of North America certain policies purporting to insure Fischbach in the amount of $1,000,000 covering the contract obligation as alleged; that Newberg has demanded that both Fischbach and the insurance company defend it in the action filed by Schroder, and that both of them refused.

In this court the plaintiff contends that the amended complaint for declaratory judgment states an adequate basis for relief, and that the trial court erred in dismissing the action.

Fischbach here contends that under the contract it is not obliged to defend or indemnify Newberg against the suit brought by Schroder since the contract provisions merely obligated Fischbach to provide its own insurance coverage. In his complaint against Newberg Schroder alleged, among other things, that Newberg was "in charge of work being performed on said construction." There is no clear allegation in that complaint ...

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