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Hanlon v. Airco Industrial Gases

OPINION FILED OCTOBER 17, 1986.

HUGH J. HANLON, JR., ADM'R OF THE ESTATE OF HUGH J. HANLON III, DECEASED, PLAINTIFF,

v.

AIRCO INDUSTRIAL GASES ET AL., DEFENDANTS (KANWELD, INC., COUNTERPLAINTIFF-APPELLEE; AIRCO INDUSTRIAL GASES, COUNTER-DEFENDANT-APPELLANT).



Appeal from the Circuit Court of Cook County; the Hon. Alan E. Morrill, Judge, presiding.

PRESIDING JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT:

This appeal is from summary judgment in favor of Kanweld, Inc. (Kanweld), on its counterclaim against Airco Industrial Gases (Airco) for indemnification in an underlying wrongful-death action based on product liability.

The record reveals that on August 23, 1978, Hugh J. Hanlon III, an employee of P.T. Ferro Construction Co. (Ferro), died as a result of injuries he sustained when a pressurized nitrogen-gas container exploded during use on a construction site. The administrator of Hanlon's estate (plaintiff) filed a complaint against Airco and Kanweld as manufacturer and distributor, respectively, of the nitrogen-gas equipment alleging that it was defective because (a) the container and valves were of inadequate strength and thickness to withstand the pressure of the gas and (b) it lacked warnings of the dangers inherent in the use of pressurized gas. In their answers Airco and Kanweld both denied liability and raised, as affirmative defenses, assumption of risk and contributory negligence by Hanlon, and each thereafter filed a third-party complaint for indemnification or, in the alternative, contribution from Ferro on the ground that it had failed to warn Hanlon of the proper use of and precautions to be taken in operating the pressurized gas equipment.

Kanweld then filed its three-count countercomplaint against Airco claiming contractual and implied indemnity or, alternatively, a right to contribution, and subsequently moved for summary judgment asserting that it was entitled to indemnity as a matter of law based upon (1) the "Authorized Distributorship Agreement" between its predecessor-in-interest and Airco, paragraph 19 of which provides:

"The Company [Airco] shall indemnify and hold harmless the Distributor [Kanweld] from and against all loss, cost, damage or expense, including reasonable attorney's fees, incurred by the distributor as a result of its operations as an authorized Distributor of the Company, if caused solely by the negligent acts or omissions of the Company, its employees, agents or representatives"

and (2) "the theory of active-passive negligence."

Kanweld stated, with respect to contractual indemnity, that the gas cylinder, gauges, and valves involved in the explosion were sold to it by Airco pursuant to the distributorship agreement and that the injuries resulting from the explosion were "caused by the negligent acts or omissions of Airco and not by the [s]ole negligence of [it] or any other acts on its part; and, regarding the implied indemnity claimed in Count II, that it did not design, manufacture, or sell the gas cylinder or the gauges, valves or fittings used in conjunction [therewith]" but "merely acted as a distributor or seller of the pressurized nitrogen gas using cannisters or containers supplied or rented to it by Airco," which were not reasonably safe for their intended use and did not provide adequate warnings of the dangers inherent therein; and that, therefore, the injuries were not caused by it but by the "major fault" of Airco. Attached to its motion was the affidavit of Kanweld's president, Kenneth Unger, who stated that (a) its business was "purchasing and reselling pressurized industrial gases already contained in pressurized gas cylinders and in purchasing liquid nitrogen for vaporization, repackaging and sale of pressurized nitrogen gas contained in pressurized gas cylinders" and (b) according to company records, Kanweld had never supplied to Ferro any regulators, valves, fittings or other appurtenances for use in conjunction with pressurized nitrogen-gas cylinders.

Airco filed a responsive memorandum in which it asserted that the indemnity provision of the distributorship agreement was applicable only where the loss or injury at issue was caused solely by its negligent acts or omissions and that material questions of fact existed as to whether Kanweld was negligent in repairing the regulator involved in the explosion and/or failing to attach adequate warning labels to the equipment which rendered summary judgment premature and improper. Airco also submitted excerpts from the depositions of plaintiff's expert witness. Robert Stannis, a safety consultant engineer, and Leonard Link, Ferro's master mechanic. Stannis testified that as a distributor of compressed gas, Kanweld should have been aware of its hazardous propensities and had a duty to insure that appropriate warning labels were affixed to the nitrogen-gas cylinder but, from his review of the relevant documents and photographs, had failed to do so. Link testified that Kanweld routinely maintained and repaired the regulators and pressure gauges used by Ferro and that it owned only one nitrogen regulator. He identified an invoice received from Kanweld, dated August 18, 1978, indicating the repair and return to Ferro of an "8427" Airco nitrogen regulator which, to his recollection, was next used the date of the occurrence.

In response and in further support of its motion, Kanweld filed a memorandum in which it argued (1) that because the basis upon which plaintiff brought suit against it was strict liability for distributing an allegedly defective compressed-gas container — the defect being, according to plaintiff's expert, the absence of appropriate warnings — and because it did not add or delete any warnings or otherwise alter the product from its original condition as manufactured by Airco, its liability was derivative from that of Airco and of the type contemplated by (a) the express indemnification provision of the distributorship agreement as well as (b) the doctrine of active-passive indemnity which, despite the general extinction of that doctrine by the Contribution Act (Ill. Rev. Stat. 1979, ch. 70, par. 301 et seq.) remains applicable "in cases involving * * * upstream claims in a strict liability action;" and (2) that it was neither alleged by plaintiff nor shown by the evidence that it (Kanweld) had repaired the regulator on the apparatus involved in the occurrence or that any alleged repairs were performed negligently so as to have been a contributing factor in the explosion. In support of (2) above, it attached an excerpt from the deposition of its vice-president in which he testified that the "8427" regulator referred to in the invoice identified by Link had "a different configuration of the gauges and bonnet" and therefore was not the same one as that appearing in photographs of the subject apparatus.

After a hearing, the transcript of which is not included in the record, the trial court entered summary judgment for Kanweld on counts I and II for indemnity. *fn1 A subsequent motion for rehearing was denied, and this appeal followed.

OPINION

• 1 We recognize that summary judgment is an important tool in the administration of justice (Kimbrough v. Jewel Cos. (1981), 92 Ill. App.3d 813, 416 N.E.2d 328), and that it is proper and appropriate where the pleadings, depositions, admissions, and affidavits on file establish that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law (Carruthers v. B.C. Christopher & Co. (1974), 57 Ill.2d 376, 313 N.E.2d 457). However, because it is a drastic remedy, it should be granted only where the evidence, when construed most strictly against the moving party and most liberally in favor of the motion's opponent, establishes that the right to it is clear and free from doubt (Zanzig v. H.P.M. Corp. (1985), 134 Ill. App.3d 617, 480 N.E.2d 1204; Venus v. O'Hara (1984), 127 Ill. App.3d 19, 468 N.E.2d 405), and an order granting summary judgment must be reversed if it is determined by the reviewing court that a material question of fact does exist (Connelly v. Uniroyal, Inc. (1979), 75 Ill.2d 393, 389 N.E.2d 155), or that fair-minded persons could draw differing inferences from the undisputed material facts (Zanzig v. H.P.M. Corp. (1985), 134 Ill. App.3d 617, 480 N.E.2d 1204).

With these principles in mind, we first consider the propriety of summary judgment as to count I for contractual indemnity. Airco contends that material questions of fact exist as to whether Kanweld was negligent in (a) failing to affix warning and/or instructional labels to the cannister at issue, and (b) repairing the regulator used in conjunction therewith.

Regarding the warnings, the record discloses that, when deposed by the parties, plaintiff's expert witness testified that Kanweld owned the cannister and that Ferro merely purchased from Kanweld the nitrogen gas contained therein. He also stated that, as a distributor of highly pressurized gas, Kanweld had a duty to insure that labels were affixed to the cannisters it delivered to Ferro warning of the nature and hazards thereof and that any equipment used in conjunction therewith should be rated for the cylinder pressure, and also to provide instructional information concerning the safe handling, ...


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