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Ketcham v. Consolidated Rail Corp.

OPINION FILED JULY 18, 1986.

HOWARD E. KETCHAM, PLAINTIFF,

v.

CONSOLIDATED RAIL CORPORATION, DEFENDANT AND THIRD-PARTY PLAINTIFF-APPELLANT (REPUBLIC STEEL CORPORATION, THIRD-PARTY DEFENDANT-APPELLEE).



Appeal from the Circuit Court of Cook County; the Hon. Myron T. Gomberg, Judge, presiding.

JUSTICE MURRAY DELIVERED THE OPINION OF THE COURT:

This is an appeal by defendant, third-party plaintiff Consolidated Rail Corporation (Conrail) from the trial court's order dismissing its third-party amended complaint against third-party defendant, Republic Steel Corporation (Republic). On appeal, Conrail contends that: (1) the trial court erroneously dismissed its property damage and indemnification claims; (2) the court should have permitted Conrail to file an "amended complaint" to convert its amended third-party complaint into a first-party action after dismissal of the amended third-party complaint; and (3) Republic waived any right it may have had to object to Conrail's property-damage claim. For the reasons set forth below, we affirm.

The record discloses that on September 29, 1980, a freight train derailment occurred in Porter, Indiana. One of the derailed gondola cars, operated by Conrail, had been loaded and secured with rolls of steel cylinders by Republic. Two Conrail employees, plaintiff Howard E. Ketcham and Harvey Chandonia, were injured as a result of the derailment. Conrail also sustained damages to its train and other equipment (its property).

On March 1, 1982, Ketcham filed an action pursuant to the Federal Employers' Liability Act (FELA) (45 U.S.C. § 51) against Conrail seeking damages for the personal injuries he sustained. Conrail filed an answer, and, on September 29, 1982, it filed a three-count third-party complaint against Republic. Counts I and II sought indemnification and contribution, respectively, for any damages Conrail was required to pay Ketcham, and count III sought recovery for damages to its property as a result of the derailment. In response, Republic filed a motion to dismiss counts I and II. The trial court subsequently dismissed Conrail's contribution count, but denied Republic's motion to dismiss the indemnification count.

Thereafter, Conrail filed an amended three-count third-party complaint against Republic. Count I sought from Republic indemnification for any damages Conrail might be obligated to pay Ketcham, count II sought damages to its property and count III sought indemnification for $5,000 which Conrail paid to Chandonia in settlement of his claim against it filed in a separate FELA action. Republic then filed a motion to dismiss counts II and III of Conrail's amended third-party complaint, asserting that those counts, seeking recovery for Conrail's property damage and indemnification for the Chandonia settlement, were independent claims and, therefore, improperly brought as third-party claims under section 2-406(b) of the Code of Civil Procedure (the Code) (Ill. Rev. Stat. 1985, ch. 110, par. 2-406(b)). During the pendency of Republic's motion to dismiss Conrail's amended third-party complaint, Conrail and Republic settled Ketcham's claim. Accordingly, count I of Conrail's amended third-party complaint, seeking indemnification from Republic for any damages it might be obligated to pay to Ketcham, was voluntarily dismissed.

On December 19, 1984, the trial court dismissed counts II and III of Conrail's amended third-party complaint, without leave to refile, based on its determination that section 2-406(b) of the Code did not permit the filing of claims for Conrail's property damages and indemnification for monies Conrail paid in settlement of Chandonia's claim. Conrail then filed a motion for reconsideration of this dismissal order or, in the alternative, for leave to file an "amended complaint" to convert its amended third-party complaint into a first-party action containing the same property-damage and indemnity claims which the court had previously dismissed. The court denied the motion, and this appeal followed.

I

Conrail contends, and Republic does not contest, that count I of its amended third-party complaint, seeking indemnification for any money damages it was obligated to pay to Ketcham, was properly filed under section 2-406(b) of the Code. Conrail argues, however, that the trial court erroneously dismissed its property-damage and Chandonia indemnification claims, counts II and III, because those claims were properly joined pursuant to section 2-614 of the Code (Ill. Rev. Stat. 1985, ch. 110, par. 2-614) after its compliance with section 2-406(b) as to count I. Section 2-614, entitled "Joinder of causes of action and use of counterclaims," provides, in pertinent part:

"(a) Any plaintiff or plaintiffs may join any causes of action, against any defendant or defendants; and the defendant may set up in his or her answer any and all cross claims whatever, whether in the nature of recoupment, setoff or otherwise, which shall be designated counterclaims." (Ill. Rev. Stat. 1985, ch. 110, par. 2-614(a).)

Based on section 2-401(d) of the Code (Ill. Rev. Stat. 1985, ch. 110, par. 2-401(d)), which provides that wherever the term "plaintiff" is used in the Code includes "third-party plaintiffs" unless the contrary is indicated, Conrail contends that its claims under counts II and III, therefore, were properly joined pursuant to section 2-614(a).

On the other hand, Republic argues that section 2-406(b) of the Code (Ill. Rev. Stat. 1985, ch. 110, par. 2-406(b)) is controlling, and that section 2-614 is, therefore, inapplicable. Section 2-406(b), entitled "Bringing in new parties — Third-party proceedings," provides, in pertinent part, as follows:

"Within the time for filing his or her answer or thereafter by leave of court, a defendant may by third-party complaint bring in as a defendant a person not a party to the action who is or may be liable to him or her for all or part of the plaintiff's claim against him or her." (Emphasis added.) (Ill. Rev. Stat. 1985, ch. 110, par. 2-406(b).)

Republic alleges that Conrail's property-damage and Chandonia claims are not derivative of, and are independent of, Ketcham's FELA action and, accordingly, it could not bring these claims in under section 2-406(b) because they were different from Ketcham's suit for damages. Therefore, Republic argues that the trial court properly dismissed counts II and III pursuant to section 2-406(b).

In light of the parties arguments, the issue presented, therefore, is not only which section of the Code governs, but also the separate issue of whether section 2-614 should be read in conjunction with section 2-406(b) to permit the filing of independent claims by a third-party plaintiff against a third-party defendant once a defendant has asserted a proper third-party claim under section 2-406(b). Conrail maintains that these sections are similar to Rules 14 and 18 of the Federal Code of Civil Procedure (Fed. R. Civ. P. 14, 18), and relies solely on Schwab v. Erie Lackawanna R.R. Co. (3rd Cir. 1971), 438 F.2d 62, in which the court held that Rule 14 was to be read in conjunction with Rule 18(a), as amended, once a third-party plaintiff had successfully asserted a proper third-party claim under Rule 14. ...


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