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Champagnie v. W.e. O'neil Construction





APPEAL from the Circuit Court of Cook County; the Hon. ALLEN A. FREEMAN, Judge, presiding.


Third-party plaintiff W.E. O'Neil Construction Company (hereinafter O'Neil) appeals from the dismissal of count I of its third-party complaint seeking indemnity from third-party defendant Caisson Corporation (hereinafter Caisson). The circuit court of Cook County found the indemnity agreement upon which count I was based to be void and unenforceable as against public policy in Illinois pursuant to section 1 of "An Act in relation to indemnity in certain contracts" (hereinafter indemnity statute). Ill. Rev. Stat. 1977, ch. 29, par. 61.

O'Neil appeals contending that the trial court erred in finding the public policy of Illinois so repugnant to contractual indemnity that its Wisconsin right of contractual indemnity against Caisson could not be enforced by Illinois courts>.

On July 8, 1973, Vincent Champagnie was employed as a caisson digger by Caisson, a subcontractor of O'Neil. He was injured when debris and timbers fell from ground level on top of him while he was working in a caisson 100 feet below the surface at a construction site in Oak Creek, Wisconsin. Champagnie filed an amended two-count complaint in the circuit court of Cook County against the general contractor O'Neil.

Count I of the amended complaint alleged that O'Neil violated a Wisconsin statute regarding an employer's duty to furnish a safe place of employment (Wis. Stat. § 101.11 (1973).) Count II alleged that O'Neil failed to comply with certain regulations under the Occupational Safety and Health Act (29 C.F.R. §§ 1926.650 to 1926.652).

O'Neil's third party complaint, in count I, sought indemnity from Caisson in the event any settlement, judgment, or verdict was rendered against O'Neil. Attached to the complaint was the subcontract entered into between O'Neil and Caisson which contained an indemnity provision that obligated Caisson to defend, indemnify, and save harmless O'Neil against all loss, damage, and expense for injuries to persons arising directly or indirectly or connected with or incidental to the work performed by Caisson, and that Caisson could have no claim against O'Neil for the acts, failure to act, or the negligence of O'Neil.

Caisson filed a motion to strike and dismiss count I on the basis that the indemnification agreement was void as against public policy under the Illinois indemnity statute. Section 1 of the statute provides:

"With respect to contracts or agreements, either public or private, for the construction, alteration, repair or maintenance of a building, structure, highway bridge, viaducts or other work dealing with construction, or for any moving, demolition or excavation connected therewith, every covenant, promise or agreement to indemnify or hold harmless another person from that person's own negligence is void as against public policy and wholly unenforceable." Ill. Rev. Stat. 1977, ch. 29, par. 61.

On July 1, 1976, the circuit court granted Caisson's motion and found that although Wisconsin law applied to the instant complaint, Illinois' public policy against indemnification agreements in construction contracts would not allow Wisconsin's law permitting such assignments of indemnity to be enforced in the Illinois courts>. The court stated that its order involved a question of law as to which there is substantial ground for difference of opinion, and an immediate appeal may materially advance the ultimate termination of the litigation. The circuit court framed the issue as "whether the law of the forum state, Illinois, specifically its statute barring indemnity agreements in construction contracts, shall be given extraterritorial effect in an action which is based upon an occurrence in the state of Wisconsin and which has been brought pursuant to the law of that state."

On November 18, 1977, the circuit court vacated its order of July 1, 1976, on O'Neil's motion and reinstated count I of the third-party complaint.

On February 28, 1978, on Caisson's motion, the November 18, 1977, order was vacated and count I was stricken. The court found as a matter of law that the public policy of Illinois prohibited enforcement of a contractual indemnity cause valid in another State.

On March 3, 1978, O'Neil's motion to vacate the February 28, 1978, order was denied.

A court order of March 7, 1978, indicated that the controversy between O'Neil and Champagnie had been settled without prejudice to the third-party rights, indemnity rights, and contribution rights against Caisson in contract and ...

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