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Schwieger v. Dean Van Lines

MAY 6, 1971.

BARNEY F. SCHWIEGER ET AL., PLAINTIFFS,

v.

DEAN VAN LINES, INC. ET AL., DEFENDANTS — (DEAN VAN LINES, INC., DEFENDANT AND COUNTER-PLAINTIFF-APPELLANT,

v.

MORGAN STORAGE & VAN COMPANY, INC., DEFENDANT AND COUNTER-DEFENDANT-APPELLEE.)



APPEAL from the Circuit Court of Lake County; the Hon. LLOYD A. VAN DEUSEN, Judge, presiding. MR. JUSTICE SEIDENFELD DELIVERED THE OPINION OF THE COURT:

Dean Van Lines, Inc. appeals from an adverse judgment on the pleadings entered upon its counterclaim for indemnity and the answer of Morgan Storage & Van Co., Inc. *fn1

Dean's counterclaim set forth a written motor vehicle lease under which it was the lessee, including the provisions:

"8. Lessor agrees to indemnify Lessee against any loss resulting from the death or injury of any driver or other employee of Lessor, and any loss resulting from the negligence, incompetence, or dishonesty of such driver or employee. It is further understood that property damage, occasioned by driver's negligence, shall be the obligation of Lessor. Cost thereof and adjustment expense may be, by Lessee, charged to Lessor's account.

13. Lessor agrees to furnish Lessee with a Certificate of Insurance specifying Lessee as additionally insured under policy of insurance written in the name of the Lessor for the following type and amounts of Automotive Public Liability coverage:

Bodily Injury $100,000. Each Person — $300,000. Each Accident. Property Damage $50,000 Each Accident.

Said Certificate of Insurance shall provide that the same shall not be cancelled without due notice to the Lessee."

Morgan's answer, as lessor, relied upon a subsequent amendment to the agreement, providing:

"1. Lessee waives the provision of Paragraph 13 of the Agreement requiring Lessor to provide certain Bodily Injury and Property Damage insurance for the benefit of Lessee as therein more specifically set forth.

2. Lessor agrees that the `Hauling Agents Earning Schedule' as provided in the Agreement shall be amended as follows:

Four percent (4%) of the gross applicable tariff transportation revenue collected by Lessee for any shipment transported on Lessor's vehicle under the terms of the Agreement shall represent the value of the insurance protection required to be furnished by Lessor, and Lessor's compensation shall be reduced by the said four percent (4%).

3. In lieu of the provisions of Paragraph 13 of the Agreement, Lessee shall assume its own liability for Bodily Injury and/or Property Damage arising out of the performance of this Agreement.

Except as hereinabove amended all of the terms and conditions of the Agreement shall be and remain in full force and effect."

The sole issue is whether the amendment nullified the agreement to indemnify in this third party action as a matter of law. The trial court found that the amendment nullified the entire agreement to indemnify stated in Paragraph 8.

Dean argues that the lease and the amendment must be read as a whole contract (Martindell v. Lake Shore Nat. Bank (1958), 15 Ill.2d 272, 283); that the lease contains provisions creating both a right to indemnification and the right to an insurance certificate, with each having incidents not common to the other. It contends that the amendment by its terms, expressly refers to Paragraph 13 of the lease, which creates the right to a certificate of insurance; and makes no reference to Paragraph 8, which creates the right to indemnity. It argues that the language used in the amendment, "Lessee shall assume its own liability for Bodily Injury and/or Property Damage" does not mean that Dean is relieving Morgan of the duty to indemnify, because the sentence as a whole is expressed to be "in lieu of Paragraph 13" which creates the right to a certificate of insurance. (It is suggested that, reading the agreement as a whole, the amendment was intended to state that Dean "shall assume its own liability (insurance) for Bodily Injury and/or ...


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