United States District Court, Northern District of Illinois, E.D
July 27, 1983
LEASEWAY WAREHOUSES, INC., A CORPORATION, PLAINTIFF,
J. ROBERT CARLTON, ET AL., DEFENDANTS. J. ROBERT CARLTON, DEFENDANT AND THIRD-PARTY PLAINTIFF, V. J.J.L. INCORPORATED, D/B/A AMERICAN ROOFING & REPAIR CO., THIRD-PARTY DEFENDANT.
The opinion of the court was delivered by: Aspen, District Judge:
MEMORANDUM OPINION AND ORDER
Third-party defendant J.J.L. Incorporated, d/b/a American
Roofing & Repair Co. ("American"), seeks leave of this Court
to withdraw its previously filed answer to J. Robert Carlton's
third-party complaint and moves to dismiss the third-party
complaint pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure. For reasons set forth below, American's
motion is denied.
Leaseway Warehouses, Inc. ("Leaseway") brought the original
action against Carlton in March of 1982.*fn1 Leaseway alleged
in Count I of its complaint that it had entered into a lease
with Carlton for a warehouse whereby Carlton, as Lessor,
agreed to repair the warehouse roof prior to the start of the
lease term. In order to comply with the agreement, Carlton
employed American to perform the roofing repairs. Leaseway
contended it suffered damages since the repair work was not
done in a good and workmanlike manner and that, as a result,
Carlton was in breach of the lease.
On April 19, 1982, Carlton filed a third-party complaint
against American contending that American breached both an
implied and express warranty to perform the repairs in a
proper and workmanlike manner and that if Carlton had to
respond to Leaseway with damages due to the allegedly improper
repair work, Carlton would then be entitled to recover damages
against American. American's grounds for its motion to dismiss
the third-party complaint are that Carlton is not entitled to
indemnity from American under the substantive law of Illinois.
For purposes of a motion to dismiss, we must take the
allegations of Carlton's complaint as true, viewing them and
any reasonable inferences to be drawn from them in the light
most favorable to him. Powe v. City of Chicago,
664 F.2d 639, 642 (7th Cir. 1981). Carlton's complaint should be
dismissed, moreover, only if it appears beyond doubt that he
can prove "no set of facts in support of his claim which would
entitle him to relief." Conley v. Gibson,
355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957).
Third-party practice in the federal courts is regulated by
Rule 14(a) of the Federal Rules of Civil Procedure. This rule
permits a defendant to bring a third party into an action,
provided the third party is liable to the defendant for the
claim made against him. The rule reads, in pertinent part, as
At any time after commencement of the action a
defending party, as a third-party plaintiff, may
cause a summons and complaint
to be served upon a person not a party to the
action who is or may be liable to him for all or
part of the plaintiff's claim against him.
The purposes of Rule 14 are to avoid circuity of action and
multiplicity of suits, to prevent the necessity of trying
several related claims in different lawsuits and to enable all
related claims to be disposed of in one action, thereby
simplifying and expediting litigation, eliminating unnecessary
expense and saving the time of the courts. Colton v.
Swain, 527 F.2d 296 (7th Cir. 1975). Hence, the rule is
liberally construed to effectuate its intended purpose, and
the decision to grant leave to bring in a third-party
defendant is left within the sound discretion of the court.
As stated in the rule, it must appear that the third party
is one who is, or may be, liable to the defendant for all or
part of the plaintiff's claim against such defendant. However,
the possible liability of the prospective third party must be
based on a theory of recovery recognized under the controlling
state substantive law. 527 F.2d at 300.
American contends that Carlton's third-party complaint must
be dismissed since Illinois law does not recognize the
Ryan Doctrine of implied contractual indemnification
in building contractor actions. See Ryan Stevedoring Co.
v. Pan-Atlantic Steamship Corp., 350 U.S. 124, 76 S.Ct.
232, 100 L.Ed. 133 (1956). In Ryan, the court found
an implied indemnity agreement between a stevedoring company
and a shipowner. The shipowner had contracted with Ryan to
load the owner's ship. The stevedoring operations were not
performed in a good and workmanlike manner, and, as a result,
one of the stevedore's employees was injured. The injured
employee brought an action against the shipowner to recover
for the injuries he sustained. The stevedoring company was
impleaded as a third-party defendant and ordered to indemnify
the shipowner for the liability caused by the stevedore's
breach of an implied warranty to perform its operations in a
proper and safe manner. 350 U.S. 133, 76 S.Ct. 237.
While American correctly states that Illinois courts have
refused to apply the Ryan Doctrine to building
contractor indemnity actions, citing as authority Wrobel
v. Trapani, 129 Ill. App.2d 306, 264 N.E.2d 240 (1st Dist.
1970); J.L. Simmons Co., Inc. v. Fidelity and Casualty
Co., 511 F.2d 87 (7th Cir. 1975), and Gadd v. John
Hancock Mutual Life Insurance Co., 5 Ill. App.3d 152,
275 N.E.2d 285 (1st Dist. 1971), its reliance on this argument is
Wrobel and Gadd were building
contractor-subcontractor indemnity actions, and
Simmons was a contractor-insurer indemnity action. In
each case, a worker brought an action under the Illinois
Structural Work Act, Ill.Rev.Stat. 1961, ch. 48, §§ 60-69,
against their respective contractors for personal injuries
suffered on the job site. The building contractors, in turn,
sought indemnification for liability imposed through the Act
by asserting the existence of an implied indemnity contract
under Ryan; however, the Illinois courts were limited
to the provisions of the Structural Work Act in their
determination of whether, under the facts of each case, a duty
to indemnify existed. Thus, the courts refused to apply the
Ryan Doctrine to actions governed by the Structural
The instant action, on the other hand, is not brought under
the context of the Structural Work Act, but concerns the
potential liability of Carlton due to his alleged breach of
the lease agreement with Leaseway. If, as Carlton contends,
American failed to perform the roofing repairs in a good
workmanlike manner, Illinois law would permit Carlton to
maintain a separate action against American under a theory of
breach of implied warranty. Economy Fuse and Manufacturing
Co. v. Raymond Concrete Pile Co., 111 F.2d 875 (7th Cir.
1940). Moreover, this Court recognizes the strong policy
underlying Rule 14 ". . . to avoid circuity of actions and to
expedite the resolution of secondary actions arising out of or
in consequence of the action originally instituted."
Colton v. Swain, 527 F.2d 296, 299 (7th Cir. 1975).
American argues further that Carlton is not entitled to
indemnity since American was a stranger to the
Carlton-Leaseway agreement and had not contractually
undertaken to indemnify Carlton. American cites as authority
Maxfield v. Simmons, 107 Ill. App.3d 341, 63 Ill.Dec.
190, 437 N.E.2d 839 (5th Dist. 1982). In Maxwell, a
homeowner brought an action for damages against a building
contractor after the roof of the owner's house had buckled.
The contractor brought a third-party complaint against the
manufacturer and seller of allegedly defective trusses used by
the contractor in the construction of the house. The trial
court dismissed the third-party complaint with prejudice on
the ground that it was barred by the statute of limitations in
the Uniform Commercial Code.
On appeal, the dismissal was affirmed, although the
appellate court did not address the limitations issue.
Instead, the court focused on the allegation in the
third-party complaint contending that the third-party
defendants had breached an implied indemnity contract. The
court held that since the third-party defendants were
strangers to the original home construction contract and had
not expressly agreed to indemnify the contractor, the
contractor's third-party claim failed to state a cause of
action and was therefore properly dismissed. 437 N.E.2d at
In the instant action, Carlton, unlike the third-party
plaintiff in Maxfield, does not contend that American
breached an implied indemnity contract, but rather that
American failed to perform roofing repairs in a skillful and
workmanlike manner. According to Carlton, American's alleged
failure to use reasonable skill caused damage not only to the
warehouse roof but also to property belonging to the lessee,
Under Illinois law, therefore, American may be liable to
Carlton for damages to the extent necessary to put Carlton in
the position he would have been in had the contract been
properly performed. Anderson v. Long Grove Country Club
Estates, Inc., 111 Ill. App.2d 127, 141, 249 N.E.2d 343,
351 (1969). The measure of damages would necessarily include
any amount recovered by Leaseway from Carlton due to Carlton's
alleged breach of the Leaseway-Carlton lease. American's
characterization of this portion of damages as part of an
implied indemnity contract in order to defeat Carlton's
third-party complaint controverts the strong policy
underpinnings of Rule 14. Thus, the third-party complaint
states a cause of action.*fn2
Accordingly, American's motion to dismiss Carlton's
third-party complaint is denied. It is so ordered.