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Nogacz v. Procter & Gamble Manufacturing Co.

OPINION FILED DECEMBER 4, 1975.

FILIMON NOGACZ, PLAINTIFF-APPELLEE,

v.

PROCTER & GAMBLE MANUFACTURING CO. ET AL., DEFENDANTS AND THIRD-PARTY PLAINTIFFS-APPELLEES. — (CEISEL & MCGUIRE, INC., THIRD-PARTY DEFENDANT-APPELLANT.)



APPEAL from the Circuit Court of Cook County; the Hon. JACQUES F. HEILINGOETTER, Judge, presiding.

MR. JUSTICE MEJDA DELIVERED THE OPINION OF THE COURT AS MODIFIED UPON DENIAL OF PETITION FOR REHEARING:

Plaintiff, Filimon Nogacz, commenced this action against defendants-third-party plaintiffs, Procter & Gamble Manufacturing Co. (Procter) and Teutsch & Associates (Teutsch), to recover damages for personal injuries sustained in a fall from a scaffold located on Procter's premises. Defendants each filed third-party actions for indemnity against the third-party defendant, Ceisel & McGuire, Inc. (Ceisel), the masonry contractor and employer of plaintiff. Summary judgments providing for indemnity were entered in favor of Procter and Teutsch, defendants-third-party plaintiffs, against Ceisel. A consent judgment was entered in favor of plaintiff against Procter and Teutsch for $181,089.70, their settlement agreement. On the following day the trial court entered judgment for Procter and Teutsch and against Ceisel for $191,089.70, and also $15,816.51 for fees and expenses. Ceisel appeals from the entry of the summary judgments, the consent judgment and the monetary judgment entered against it in the third-party proceeding. The pertinent facts follow.

Plaintiff was employed by Ceisel, the masonry contractor engaged to repair a wall on Procter's building. Teutsch was the architect employed by the owner. On the day of the accident plaintiff was working on a scaffold owned and erected by Ceisel. The planks of the scaffold overlapped and were not fastened to the supporting cross-arms. As plaintiff backed a wheelbarrow of mortar off a hoist and onto the scaffold the planks bent and slipped, causing him to fall 20 feet onto a concrete apron. He sustained severe physical injuries.

Plaintiff commenced this action by filing a two-count complaint against Procter and Teutsch, seeking damages predicated upon defendants' common law negligence and breach of the Illinois Structural Work Act (Ill. Rev. Stat. 1969, ch. 48, pars. 60-69). After an unsuccessful tender of defense of this suit to Ceisel's insurer and thereafter to Ceisel, Procter filed its answer to the complaint and also a two-count third-party complaint against Ceisel. Count I alleged a contractual duty of Ceisel to indemnify Procter upon an indemnity agreement between the parties which provided in substance that "Seller [Ceisel] agrees to indemnify and save buyer [Procter] harmless from any and all judgments, orders, decrees, awards, costs * * * which may be sustained * * * arising out of or in connection with the work done excepting only claims based solely on acts negligently committed by buyer * * *." In Count II Procter alleged that Ceisel was the active tort-feasor and was liable upon non-contractual implied indemnity or common law indemnity. Teutsch, in its third-party complaint against Ceisel also alleged that Ceisel's actions constituted active negligence, and sought to recover from Ceisel upon that theory. Ceisel's motion for summary judgment as to Count I of Procter's third-party complaint was denied. After a hearing, Procter's motion for summary judgment on Count I for contractual indemnity was granted on February 11, 1972. Ceisel had not filed any affidavit in opposition, and no objection is recited in the order granting summary judgment. The order, entered nunc pro tunc as of February 8, 1972, provided in relevant part:

"IT IS HEREBY ORDERED that Summary Judgment is granted to third-party plaintiff, THE PROCTER & GAMBLE MANUFACTURING COMPANY, with respect to Count I of the Third-Party Complaint against third-party defendant, CEISEL & McGUIRE, INC., and that should judgment be entered against THE PROCTER & GAMBLE MANUFACTURING COMPANY in favor of plaintiff, FILIMON NOGACZ, the third-party defendant, CEISEL & McGUIRE, INC., is ordered to indemnify and hold the third-party plaintiff harmless from any and all judgments in addition to any and all costs, attorneys' fees and expenses incurred by the third-party plaintiff in this action up to $250,000."

In a letter dated February 10, 1972, to counsel for Procter, Ceisel demanded control of the defense to the claims of the plaintiff, and further, a severance and delay of trial as to the third-party action until the initial action was completed. Ceisel further demanded that in the event Procter was unwilling to agree to a partial severance or total severance, the third-party complaint be dismissed without prejudice to refiling subsequently. On February 17, 1972, Procter again tendered the defense of the main action to Ceisel. In a letter of that date, Procter stated that Teutsch and Procter intended to proceed with their motions for summary judgment for non-contractual indemnity; that if granted, counsel could defend defendants without placing Ceisel before the jury and obviate the necessity and expense of a subsequent trial as to indemnity; and that if the motions were denied it would agree to a severance or a dismissal without prejudice to the third-party claims.

On May 19, 1972, the trial court granted summary judgment, nunc pro tunc as of May 18, 1972, for Procter as to Count II of its third-party complaint for non-contractual indemnity. Procter's motion was supported by affidavits and other documents. The order stated in part that Ceisel had waived the opportunity to file any pleading, exhibit or brief in opposition to the motion but objected to the entry of summary judgment for Procter upon the issue of indemnity. The order specifically provided, inter alia:

"* * * the Court finding that there is no material and genuine disputed question of fact, and that the negligence, if any, of THE PROCTER & GAMBLE MFG. CO. is technical or passive in nature as a matter of law, whereas the negligence, if any, of CEISEL & McGUIRE, INC., is active or primary in nature as a matter of law;

IT IS FURTHER ORDERED that should judgment be entered against THE PROCTER & GAMBLE MFG. CO. in favor of plaintiff, FILIMON NOGACZ, the third-party defendant, CEISEL & McGUIRE, INC. is ordered to indemnify and hold the third-party plaintiff, THE PROCTER & GAMBLE MFG. CO., harmless from any and all judgments so entered in addition to any and all costs, attorneys' fees and expenses incurred by the third-party plaintiff in defense of this action;

IT IS FURTHER ORDERED that the court finds there is no just reason to delay enforcement of or appeal from this order."

On May 24, 1972, summary judgment was entered on Teutsch's motion which similarly required Ceisel to indemnify and hold Teutsch harmless, and stated there was no just reason to delay enforcement or appeal. In addition, it provided that Ceisel need not file a notice of appeal until such time as one must be filed as to any judgment entered for plaintiff Nogacz.

On May 31, 1972, plaintiff filed his first amended complaint charging defendants only with violations of the Structural Work Act and omitting the negligence count. In a letter dated May 25, 1972, counsel for Ceisel demanded that Teutsch allow Ceisel to defend it against the claims of Nogacz in the initial action, and that Teutsch either so agree or rescind the order granting summary judgment and dismiss the third-party complaint without prejudice to refiling. The letter noted the summary judgment in favor of Teutsch found no just reason to delay enforcement or appeal but allowed time for notice of appeal to begin upon entry of a judgment for Nogacz. Counsel maintained that the court was without power to enter a final order on the third-party complaint in the instant case.

During the May 24, 1972, hearing on Procter's motion for summary judgment as to non-contractual implied indemnity the court heard argument of counsel concerning Procter's and Teutsch's potential liability in the initial action. Ceisel again argued that it had the right to defend both third-party plaintiffs and to raise the issue of indemnity both in the trial court and on appeal. Procter stated in response: "You want to control the defense without our participation and refuse to indemnify us. This we cannot agree to." Thus, in effect, Procter tendered the complete defense of the initial action and sought a waiver of Ceisel's right to contest the indemnity issue. On the other hand, Ceisel sought to control the defense of Procter and Teutsch as to Nogacz while at the same time denying any liability on its part.

In a letter of May 25, 1972, from Procter to Ceisel, counsel restated the position of Ceisel taken at the May 24, 1972, hearing wherein Ceisel agreed to be bound by the state of the record upon a future appeal as to the non-contractual implied indemnity but intended to contest the contractual indemnity. The letter again tendered Procter's defense and requested that Ceisel hold Procter completely harmless, and stated that upon refusal, Procter would maintain its own defense and look to Ceisel and its insurer for reimbursement of all costs and expenses.

On May 31, 1972, Ceisel made an oral motion to vacate and rescind all summary judgments previously entered against it. The letter of February 10, 1972, to Procter demanding tender of the defense to the original claim and the response of Procter thereto on February 17, 1972, were introduced in support of the motion. During oral argument, counsel for Procter stated:

"In addition thereto, we have indicated to Mr. Hatch [counsel for Ceisel] that if he would agree to appeal only on the state of the record as of the time both summary judgment orders were entered, it would permit him to defend Procter and Gamble.

We have not had a formal reply to the tender or your alternate proposal. At this time I am asking Mr. Hatch to formally reply for the record."

Counsel for Ceisel then stated that it had the right to appeal from any and all orders entered with respect to the third-party complaints and that Procter had previously made an unqualified tender of defense which had been accepted. Teutsch argued that Hatch, during a conversation, stated that if Ceisel and its insurer would agree that the summary judgment for Teutsch on its third-party claim was final and not appealable, Teutsch would agree to tender its defense to Ceisel. Ceisel advised that the insurer agreed to the terms but that Ceisel had refused. Teutsch then refused to tender its defense. The motion to set aside the summary judgments was denied.

Pretrial discussions concerning settlement of the claim of Nogacz were had in the presence and with the participation of the trial judge. Ceisel there stated that the insurer had authorized a settlement in the amount of $136,089.70, which represented an offer of $105,000 together with a waiver of lien for $31,089.70 for workmen's compensation paid. It was agreed that the offer was fair and that the insurer had indicated a willingness to pay $5,000 more if settlement could be achieved without an appeal. Plaintiff was then willing to accept $150,000 with a waiver of the $31,089.70 lien. The court was advised that Ceisel was willing to contribute an additional $10,000 if the matter could be settled prior to trial. Procter and Teutsch agreed to contribute $5,000 each toward a settlement.

On June 7, 1972, Procter and Teutsch filed separate answers to plaintiff's amended complaint and moved for summary judgment against Nogacz. After hearing, the court found a fact question existed as to who was "in charge of" the work, and denied the motion. On the same date, a consent order as to plaintiff, Procter and Teutsch was entered providing in substance (1) that judgment is entered against Procter and Teutsch in favor of plaintiff for $181,089.70, with costs and interest, subject to any Workmen's Compensation lien rights; (2) that execution, levy or enforcement of the judgment is stayed for 14 days after final judicial determination by appellate decision or otherwise of the liability of Ceisel or its insurer to Procter and Teutsch; (3) that upon final determination of responsibility or liability of Ceisel and/or its insurer, the judgment shall be fully enforceable, first against Ceisel's insurer, secondly against Ceisel, and finally against Procter and Teutsch equally; and (4) that plaintiff is required to refund or credit Procter and Teutsch with two-thirds of the $30,000 advanced by them to plaintiff as consideration for the execution of the consent judgment. On June 8, 1972, the court entered judgment in favor of Procter and Teutsch and against Ceisel for $191,089.70 and additionally for $15,816.51 fees and expenses.

On June 15, 1972, Ceisel moved to vacate the consent judgment. The motion was denied on June 23, 1972. On July 7, 1972, the trial court denied Ceisel's post-trial motion seeking reversal of the summary judgments entered against Ceisel, reversal of the consent judgment entered June 7, 1972, the entry of a judgment in favor of Ceisel and against Procter and Teutsch, a remittitur or, in the alternative, a new trial.

I.

On appeal Ceisel seeks reversal of the summary judgments entered against it and in favor of Procter and Teutsch, reversal of the consent judgment between Nogacz and Procter and Teutsch, reversal of the money judgment in favor of Procter and Teutsch and against Ceisel, and also, to remand the cause to the trial court for further proceedings. The primary issue raised here is whether or not judgment was properly entered in favor of Procter and Teutsch and against Ceisel on the third-party complaints. Other interrelated issues and arguments are raised by Ceisel which will be considered. We preliminarily note, however, that no argument is raised here as to the validity of the money judgment entered June 8, 1972, in favor of Procter and Teutsch and against Ceisel in the third-party proceedings. It appears that Ceisel inferentially attacks the money judgment on the ground that the prior summary judgments and the consent judgment are erroneous. Therefore, our discussion shall be limited to the arguments thus presented. We further note that Ceisel's "appeal" from the consent judgment, after careful examination of the argument in this court, is not truly an ...


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