United States District Court, Northern District of Illinois, E.D
February 12, 1985
INTAMIN, INC., PLAINTIFF,
FIGLEY-WRIGHT CONTRACTORS, INC., ET AL., DEFENDANTS. FIGLEY-WRIGHT CONTRACTORS, INC., THIRD PARTY PLAINTIFFS, V. CURTIS D. SUMMERS, INC., ET AL., THIRD PARTY DEFENDANTS.
The opinion of the court was delivered by: Shadur, District Judge.
Intamin, Inc. ("Intamin") has filed what is now a six-count Amended
Complaint (the "Complaint")*fn1 against Figley-Wright Contractors, Inc.
("Figley-Wright") and related parties, charging defendants' breach of
contract, breach of express and implied warranties, breach of contractual
indemnity and negligence—all arising out of the construction of a
roller coaster at Marriott's Great America Theme Park ("Great America")
in Gurnee, Illinois. Figley-Wright has in turn filed a two-count Third
Party Complaint (the "F—W Complaint") against Curtis D. Summers,
Inc. ("Summers"), seeking recovery via contribution and contractual
indemnity. Summers now moves to dismiss the F—W Complaint under
Fed.R.Civ.P. ("Rule") 12(b)(6). For the reasons stated in this
memorandum opinion and order, the motion is granted in part and denied in
On June 2, 1980 Intamin contracted with Marriott Corporation
("Marriott") to provide a roller coaster for Marriott at Great America
(Complaint Ex. A). Intamin in turn contracted with Summers to provide all
professional engineering design services (Complaint Ex. C, Art. 2) and
with Figley-Wright to construct the roller coaster (Complaint Ex. B,
Art. 2). No contractual relationship existed between Figley-Wright and
After the roller coaster had been constructed and put into operation,
Marriott discovered design and construction defects and required Intamin
to make repairs under the warranty terms of the Marriott-Intamin
contract. Intamin in turn sought compensation from Summers and
Figley-Wright. On July 10, 1984 Intamin entered into a settlement
agreement with Summers by which Intamin released all present and future
claims against Summers in return for the payment of $203,820.49 (Mo.
Dismiss Ex. C). In the meantime, Intamin and Figley-Wright continue to do
battle here. Now Figley-Wright seeks contribution and indemnity from
Summers for any liability of Figley-Wright to Intamin as determined in
Section 302(a) of the Illinois Contribution Among Joint Tortfeasors
Act (the "Act," Ill.Rev.Stat. ch. 70, ¶¶ 301-305)*fn2 provides:
Except as otherwise provided in this Act, where 2 or
more persons are subject to liability in tort arising
out of the same injury to person or property, or the
same wrongful death, there is a right of contribution
among them, even though judgment has not been entered
against any or all of them.
Thus the Act expressly requires each party to the contribution action to
be "subject to liability in tort" to the injured party. Figley-Wright's
claim fails to meet that threshold requirement as to itself—and
very possibly as to Summers as well.
1. Summers' Potential Tort Liability To Intamin
There is serious doubt whether Summers is liable in tort to Intamin.
Summers argues it is not so liable because Moorman Manufacturing Co. v.
National Tank Co., 91 Ill.2d 69, 86, 61 Ill.Dec. 746, 753, 435 N.E.2d 443,
450 (1982) prohibits recovery in tort for purely economic losses that
result from a breach of contract. Figley-Wright counters with Ferentckak
v. Village of Frankfort, 121 Ill.App.8d 599, 76 Ill.Dec. 950,
459 N.E.2d 1085 (3d Dist. 1984) and Rosos Litho Supply Corp. v. Hansen,
123 Ill. App.3d 290, 78 Ill.Dec. 447, 462 N.E.2d 566 (1st Dist. 1984),
which it contends create a general exception to Moorman for architects
and engineers such as Summers.*fn3
Ferentchak does not stand for that proposition. It permitted tort
recovery against an architect for economic losses where (and because)
plaintiff had no recourse to contract remedies. 121 Ill.App.3d at
607— 08, 76 Ill.Dec. at 956—57, 459 N.E.2d at 1091—92.
Rosos Litho, although it contains more sweeping language than
Ferentehak, also involved a situation in which no contract remedies
comparable to those in a negligence action were available against the
architect. 123 Ill.App.3d at 295—96, 78 Ill.Dec. at 452—53,
462 N.E.2d at 571—72.
In contrast to the plaintiffs in Ferentchak and Rosos Litho, Intamin
was specifically entitled to invoke contract remedies against Summers,
and the scope of those remedies appears no narrower than those available
in a tort action. That renders the Appellate Court limitations on
Moorman questionable in terms of their applicability here. And if
Moorman applies in undiluted form here, it precludes Intamin's tort
recovery against Summers.
2. Figley-Wright's Potential Tort Liability To Intamin
But the just-completed discussion is really academic, for in any event
Intamin has no tort cause of action against Figley-Wright. Figley-Wright
apparently believes (F—W Mem. 2) Intamin's mere assertion of its
Count VI negligence claim against Figley-Wright is sufficient to render
the latter a joint-tortfeasor with Summers for purposes of the Act. But
the Act expressly requires that each party be "subject to liability in
tort, " not just accused of one.
On that score, Moorman flatly dictates Figley-Wright's nonliability in
tort to Intamin. Nor has Figley-Wright identified any exception to
Moorman to change that result. Indeed, Ferentchak, 121 Ill.App.3d at
605-07, 76 Ill.Dec. at 955-56, 459 N.E.2d at 1090—91 specifically
applied Moorman and Redarowicz v. Ohlendorf, 92 Ill.2d 171, 65 Ill.Dec.
411, 441 N.E.2d 324 (1982) (following Moorman) to reject a cause of
action against a contractor (akin to Figley-Wright) while upholding one
against the architect.
One final point should be made. Figley-Wright cannot simply lie down
and play dead to Count VI, failing to contest its negligence claim in
order to pass liability by way of contribution to Summers. That could not
3. Intamin's Settlement With Summers
Under the Act the absence of joint tortfeasors is fatal to the
contribution claim. However, in light of the parties' extensive briefing
on the effect of the Intamin-Summers settlement (and because of the
possibility mentioned in a. 4), some brief comments on that issue are
Act § 302(c) permits one tortfeasor to enter into a "good faith"
settlement with the injured party. Act § 302(d) says the tortfeasor
who enters into such a settlement "is discharged from all liability for
any contribution to any other tortfeasor." Summers contends its
settlement with Intamin thus insulates it from liability for contribution
Figley-Wright claims the settlement was not entered into in good faith
because it lacked consideration, arguing:
1. Intamin had no present claim against Summers
because the statute of limitations had run.
2. Although denominated a "settlement," the
agreement was a sham because Intamin and Summers were
insured by the same company.
Those arguments will be dealt with in turn.
(a) Statute of Limitations. Ill.Rev.Stat. ch. 110, 11 18—214
establishes a limitations period of two years from the date Intamin "knew
or should reasonably have known" of the defects constituting a breach of
its contract with Summers. On the current pleading motion, of course,
this Court cannot determine when Intamin knew or should have known of the
For that purpose, although there is apparently no Illinois case on
point, the burden would seem to be on Figley-Wright to show a lack of good
faith.*fn5 Fisher v. Superior Court, 103 Cal.App.3d 434, 447— 49,
163 Cal.Rptr. 47, 56—57 (1980). And neither LeMaster v. Amsted
Industries, Inc., 110 Ill. App.3d 729, 66 Ill.Dec. 454, 442 N.E.2d 1367
(5th Dist. 1982) nor Ballweg v. City of Springfield, 130 Ill.App.8d 241,
84 Ill.Dec. 941, 473 N.E.2d 342 (4th Dist. 1984) is on point, for in each
instance the settled claim was "entirely without foundation" when the
parties entered into their settlement agreement (in LeMaster because of a
statutory bar against suit; in Ballweg because the limitations period had
concededly run). That conclusively demonstrated the absence of
In that respect Figley-Wright has mischaracterized the real issue.
Because the legal question is that of consideration or the lack of it,
the issue is not whether in hindsight (as the result of a judicial
determination about what Intamin "should reasonably have known") the
statute of limitations had lapsed by the settlement date. Instead it
would be enough if at the time of settlement Summers believed in good
faith it was vulnerable to a claim by Intamin. That is consideration
enough to support a settlement. In the best contract-law tradition under
which courts do not measure the adequacy of consideration, this Court may
not second-guess Summers as to whether the possibility of Intamin's
recovery was great enough to justify the size of the settlement payment.
Summers also has another string to its bow. It urges even if there were
arguably no consideration for settling the current dispute, it
nevertheless received consideration in being released from potential
future claims under the 25-year warranty clause of Paragraph I.B.7 of the
Marriott-Intamin contract.*fn6 For current purposes that possibility
need not be fully explored, but at least on the surface it appears such a
release would independently
be sufficient consideration to establish a good faith settlement.
(b) Bona Fides. Whatever the validity of the settlement on the grounds
already discussed, Figley-Wright attacks its bonafides because Intamin
and Summers are insured by the same company. That raises the possibility
the claimed settlement has no real-world significance, involving nothing
more than a transfer from one insurance-company pocket rather than
another. Summers represents (First Supp.Mem. 7—8) it paid a $15,000
deductible to its insurer as a result of the settlement. Again the full
implications of the subject are inappropriate for determination now,
given the nonviability of the contribution claim in all events. No ruling
on the issue is therefore implied by this opinion.
Count II of the F—W Complaint seeks contractual indemnification
from Summers for any liability of Figley-Wright to Intamin. That claim is
based on Article 6 of the "Design Agreement" between Intamin and Summers
(F—W Complaint Ex. B):
The Engineer [Summers] shall be responsible for and
shall indemnify and save harmless Intamin, Marriott
Corporation, and all other contractors and
subcontractors of Intamin for all damage to life and
property arising out of the negligent conduct of the
Engineer, its subcontractors, agents or employees in
connection with the services rendered by Engineer
under this Agreement. The Engineer's indemnity shall
not be limited to the amount of insurance coverage
required to be maintained pursuant to Article 7 of
Summers challenges Count II as seeking to hold Summers liable for
Figley-Wright's negligence. Summers correctly points out such a reading
of Article 6 would violate both:
1. Ill.Rev.Stat. ch. 29, ¶ 61, which invalidates
contractual indemnification of a party against his or
her own negligence; and
2. the rule of construction that a contractual
indemnification provision will not be construed as
indemnifying a party against his or her own negligence
absent very clear language to that effect. Davis v.
Marathon Oil Co., 64 Ill.2d 380, 396—97, 1
Ill.Dec. 93, 100—101, 356 N.E.2d 93,
100—101 (1976) and cases there cited.
That however is really a strawman. Figley-Wright itself acknowledges
Article 6 cannot validly be construed to embrace indemnification for its
own negligence. And this opinion has already held Figley-Wright cannot be
held liable to Intamin on negligence grounds anyway. Accordingly
F—W Complaint Count II withstands dismissal to the extent (if any)
Figley-Wright is adjudicated liable to Intamin (but not for its own
negligence, whatever the rubric under which liability is established
proves to be) and such liability is adjudicated to have been occasioned by
Figley-Wright has stated a potential claim against Summers in indemnity
but not contribution. F—W Complaint Count I (but not Count II) is
dismissed. Summers is ordered to answer Count II on or before February