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10/30/87 American Pharmaseal, v. Tec Systems

October 30, 1987

AMERICAN PHARMASEAL, PLAINTIFF-APPELLEE

v.

TEC SYSTEMS, DEFENDANT-APPELLANT



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

515 N.E.2d 432, 162 Ill. App. 3d 351, 113 Ill. Dec. 623 1987.IL.1616

Appeal from the Circuit Court of Lake County; the Hon. John L. Hughes, Judge, presiding.

APPELLATE Judges:

JUSTICE UNVERZAGT delivered the opinion of the court. DUNN and WOODWARD, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE UNVERZAGT

Plaintiff, American Pharmaseal, brought a products liability action against defendant-appellant, TEC Systems , and three other defendants for property damages resulting from an explosion and fire at plaintiff's plant in March 1982. The fire began when fumes passing through a pollution control device (called an afterburner) manufactured by TEC ignited, causing a flashback fire and explosion. The afterburner was designed to dispose of volatile fumes generated by a laminating machine used in plaintiff's business, and the two machines were connected by a series of ducts. The other defendants were: GFG Corporation , manufacturer of the laminator; Fredriksen & Sons Fire Equipment Company (Fredriksen), the supplier of plaintiff's fire suppression system; and Greg Thomas Heating and Cooling (Greg Thomas), which installed the ductwork.

On March 3, 1986, the first day of trial, plaintiff settled with Greg Thomas and Fredriksen and filed its third amended complaint against the remaining defendants, TEC and GFG, over TEC's objection. The court gave the defendants until March 10 to file their answers. The parties stipulated orally to the amount of plaintiff's damages, from which they agreed they would deduct any damages attributed by the jury to plaintiff's conduct, and then the settlement amounts. The following day, plaintiff settled with GFG and filed a written version of the stipulation, signed by plaintiff and TEC, which plaintiff had corrected to include the amount of its settlement with GFG.

On March 10, after the close of plaintiff's case, TEC filed its answer, including new affirmative defenses to plaintiff's breach of warranty counts. The court struck the affirmative defenses on plaintiff's motion, finding that TEC should have raised the issues in its earlier pleadings and that the new defenses unfairly surprised the plaintiff. Plaintiff then withdrew two of its four claims against TEC and requested that only count I, alleging strict liability in tort, and count IV, alleging breach of an implied warranty of fitness for a particular purpose, be submitted to the jury. The jury found for plaintiff on both claims, but, on the strict liability count, it found plaintiff responsible for 28% of its damages based on TEC's assumption of the risk defense. The court entered judgment against TEC in the amount of $155,234 on the strict liability claim, and in the amount of $215,603 on the breach of warranty claim.

TEC raises the following arguments on appeal: (1) the court erred in determining the amount of TEC's liability on count I by reversing the agreed order of deductions from plaintiff's damages, i.e., by deducting the settlement amounts before deducting plaintiff's 28% comparative liability; (2) the court erred in striking TEC's affirmative defenses; (3) the court erred in deleting TEC's warranty disclaimer before submitting the parties' purchase contract to the jury; and (4) TEC's assumption of the risk defense should have applied equally to plaintiff's breach of warranty claim. I

We turn first to TEC's argument that the parties had stipulated not only to the amount of plaintiff's damages, but to the manner in which the ultimate judgment was to be calculated. The text of the stipulation filed by plaintiff is as follows:

"The parties have agreed that as a result of the explosion and fire in the coater-laminator/afterburner system, American Pharmaseal sustained damages in the amount of $395,603. In the event that judgment is entered against the defendants, the parties agree that the court shall enter judgment in the amount of $395,603 minus any amounts assessed against American Pharmaseal for comparative negligence, then minus $180,000 previously received by American Pharmaseal as settlement of its claim against defendants." (Corrections made in original.)

The judgment entered by the court on count I of the complaint (to which the plaintiff's comparative liability applied) was apparently calculated by deducting the settlement amounts before deducting plaintiff's comparative liability, as follows:

$395,603.00 stipulated ...


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