Appeal from the Circuit Court of Cook County; the Hon. Thomas
J. O'Brien, Judge, presiding.
JUSTICE LORENZ DELIVERED THE OPINION OF THE COURT:
Rehearing denied February 28, 1984.
Plaintiffs appeal from an order granting defendant's motion to dismiss their complaint under section 2-619(a)(9) of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2-619(a)(9)) in which they sought to enforce a written indemnification agreement for brokerage commission and fees.
In their appeal plaintiffs argue that the trial court erred in granting defendant's motion because (1) the claims upon which indemnification was sought were specifically provided for by the indemnity clause of the contract, and (2) the court erred in considering defendant's affirmative defense, which had been stricken in the primary lawsuit brought against plaintiffs by third-party real estate brokers claiming fraud and breach of contract, and in which plaintiffs had expended $17,028 in attorney fees and defense costs.
The facts material to our decision are as follows: On February 6, 1980, defendant entered into a contract to purchase certain real estate known as River Forest Garden Apartments in River Forest, Illinois, from a seller for whom plaintiffs were brokers. Paragraph 4C of this contract contained the following indemnity provision:
"Purchaser agrees to indemnify and hold Seller, Preston A. Higgins & Co., Inc. and John R. Higgins, free and harmless from and against:
(1) all claims for brokerage commissions or fees and/or finder's fees made by any person or entity (including but not limited to Salk, Ward & Salk, Henry Gendell, Irving Spector, Herman Kole and Irving Rosenfeld) claiming (a) to have been retained by Purchaser or his agent or affiliates in connection with this transaction or the Property, or (b) to be the procuring cause of this transaction, provided that such person or entity was not retained by Seller;
(2) any damage, loss, cost or expense (including, but not limited to, attorney's fees and costs) incurred in connection with or arising out of any claim for brokerage commissions or fees and/or finder's fees, as set forth in subparagraph 4(c)(1) hereof or any inaccuracy in or breach of any representation of Purchaser set forth in this Contract.
Purchaser's obligations under this paragraph 4C shall survive the Closing."
On October 20, 1980, following consummation of the real estate transaction, two third-party real estate brokers, Henry Gendell and Irving Spector filed an action against plaintiffs and four other named defendants, including the defendant in the case at bar. Count VI of their complaint alleged that the third-party brokers' "extensive and valuable brokerage services were procured from them on the part of [plaintiffs], in that [plaintiffs] continued to represent that there were no other brokers involved in pending offers * * * [and that plaintiff] * * * failed to disclose his interest as a broker in the sale and failed to disclose his ownership interest in the subject property." An amended complaint added a breach of contract claim based on an alleged oral brokerage commission contract between Gendell, Spector and plaintiffs. A second amended complaint again charged the plaintiffs with fraud. Subsequently, the trial court granted plaintiffs' motions to dismiss the complaint for failure to state a cause of action, and plaintiffs unsuccessfully sought indemnification from defendant for the $17,028 attorney fees and costs incurred in their defense in the primary suit.
On July 9, 1982, plaintiffs brought suit to enforce the indemnification agreement. Defendant moved to dismiss the complaint under section 2-619(a)(9) of the Illinois Code of Civil Procedure, arguing that the indemnity provision did not include coverage against a claim of fraud or a claim based on any contract between plaintiffs and the third-party brokers, and further argued that even assuming, arguendo, that the provision was applicable, it was unenforceable as against public policy.
In granting defendant's motion, the trial court stated as the reasons for its ruling:
"I would hold that the language, all claims for brokerage commissions or fees and/or finder's fees, et cetera, does not intend to indemnify against fraudulent acts. There is no specific inclusion of that intent in the agreement; and even if there was, it would be contrary to public ...