APPEAL from the Circuit Court of Cook County; the Hon. NATHAN
B. ENGELSTEIN, Judge, presiding.
MR. JUSTICE MEJDA DELIVERED THE OPINION OF THE COURT:
Mr. JUSTICE MEJDA delivered the opinion of the court:
The third-party plaintiff, Northwestern Steel and Wire Co. (Northwestern), filed a third-party action seeking contractual indemnity and common law indemnity from third-party defendant, M & M Electric Company (M & M). M & M appeals from the entry of summary judgment against it on the contractual indemnity count, maintaining that summary judgment was improper in that (1) the indemnification agreement does not indemnify Northwestern against its own negligence, and (2) the trial court did not consider M & M's affirmative defense that the indemnification provision is unenforceable because of the disparity of bargaining positions between M & M and Northwestern.
We reverse and remand. The pertinent facts are as follows.
Northwestern owned, operated and maintained a plant in Sterling, Illinois. On September 26, 1967, it issued a purchase order, accepted by M & M, requesting that M & M furnish "labor, supervision, tools and equipment necessary to do general electrical construction and installations" for one of Northwestern's electric furnaces. Timothy McGinn (McGinn), plaintiff in the principal action, was employed by M & M in connection with performance pursuant to the purchase order. On May 29, 1969, while working on one of Northwestern's electrical substations, McGinn suffered an injury which left him permanently deformed and crippled.
McGinn brought a two-count complaint against Northwestern, alleging that his injuries were caused by an electrical shock which threw him from the substation to the ground some 30 feet below. McGinn claimed that Northwestern had violated the Structural Work Act (Ill. Rev. Stat. 1967, ch. 48, pars. 60-69), and that Northwestern was negligent in that it failed to shut off the electrical current, maintained the work area in an unsafe and dangerous condition, and failed to warn McGinn of the danger in the area in which he was working.
Northwestern denied any violation of the Structural Work Act and further denied any negligence on its part. In addition, Northwestern filed a third-party action against M & M, alleging that McGinn had been injured in the course of M & M's performance under the purchase order, and seeking complete indemnification in the event that judgment was entered in favor of McGinn. Count I of the amended third-party complaint sought indemnification under an indemnification clause in the purchase order. Count II was based on common law indemnity, claiming that the area where McGinn was working at the time he was injured was under the exclusive control of M & M, and that any violation of the Structural Work Act was primarily caused by M & M.
In answer to Northwestern's amended third-party complaint, M & M generally denied the allegations and raised as an affirmative defense the claim that the indemnification clause in the purchase order was unenforceable due to the disparate bargaining positions of the parties and because M & M was not aware of the clause or its implication.
Northwestern filed a motion for summary judgment on the issue of liability under its contractual indemnity claim. M & M replied that the indemnification clause was not broad enough to cover injuries resulting from the negligent acts of Northwestern, and that the affirmative defense pleaded in answer to Northwestern's third-party complaint raised a factual issue.
The trial court entered partial summary judgment, finding M & M bound to indemnify Northwestern for "any and all liability, costs and expenses" which may be incurred by Northwestern by virtue of McGinn's lawsuit. The court left the issue of damages for further proceedings.
Subsequently, Northwestern moved for entry of judgment on the damage issue. The motion set forth that M & M had refused to accept tenders of further defense of McGinn's case against Northwestern, that M & M refused to contribute to any settlement which Northwestern could make with McGinn, and that M & M rejected the offer of a settlement amount of $800,000. The motion further stated that, upon M & M's rejection of the settlement offer, Northwestern's insurance carrier paid McGinn $800,000. Northwestern's motion sought $800,000 as reimbursement for the settlement, plus $20,000 in costs and attorney's fees. M & M filed a reply to the motion, after which judgment was entered for Northwestern as requested in its motion. The judgment order further denied M & M's motion for rehearing of the summary judgment on liability.
1 The sole issue on appeal is whether the trial court properly entered summary judgment in Northwestern's favor, based on its claim of contractual indemnity.
M & M first contends that the indemnification clause in the purchase order is not broad enough to indemnify Northwestern against its own negligence. Paragraph 18 of the ...