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02/02/88 Holly Whalen, v. K Mart Corporation Et Al.

February 2, 1988

HOLLY WHALEN, PLAINTIFF

v.

K MART CORPORATION ET AL., DEFENDANTS-APPELLEES (SCHOSTAK BROTHERS, INC., ET AL., THIRD-PARTY PLAINTIFFS AND COUNTERPLAINTIFFS-APPELLANTS; MARTIN CEMENT, INC., ET AL., THIRD-PARTY, DEFENDANTS-APPELLEES)



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SECOND DIVISION

519 N.E.2d 991, 166 Ill. App. 3d 339, 116 Ill. Dec. 776 1988.IL.113

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

APPELLATE Judges:

JUSTICE BILANDIC delivered the opinion of the court. STAMOS and SCARIANO, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE BILANDIC

The plaintiff, Holly Whalen, brought an action under the Structural Work Act against the general contractor, Schostak Brothers, Inc., K mart and the landowners. (Ill. Rev. Stat. 1985, ch. 48, par. 60 et seq.) The general contractor and the landowners, as third-party plaintiffs (hereinafter collectively referred to as Schostak), filed a third-party complaint against A. W. Christianson & Sons, Inc., the painting subcontractor, for contribution and indemnity based on Christianson's agreement to procure insurance naming third-party plaintiffs as an insured. They also filed a counterclaim against Martin Cement Company, the cement subcontractor, for contribution and indemnity based on Martin's agreement to procure insurance naming the general contractor and landowners as an insured. The subcontractors moved to dismiss the third-party complaint and counterclaim pursuant to section 2-619 of the Code of Civil Procedure, alleging that the general contractor and landowners waived the contractual insurance requirement. (Ill. Rev. Stat. 1985, ch. 110, par. 2-619.) The trial court sustained the motion and dismissed the third-party complaint and counterclaim with prejudice. This timely appeal followed.

The subcontracts with Christianson and Martin were drafted by Schostak, the general contractor. The "Supplemental Subcontract Conditions," involved in this appeal, are identical. They state:

"SECTION 10. The Subcontractor shall not commence work under this Subcontract until he has obtained all insurances required by the General Conditions and as hereinafter set forth and certificates of insurance delivered to the Contractor. All policies or certifications of insurance to be furnished by Subcontractor shall provide that the insurance cannot be cancelled or modified until the expiration of twenty (20) days after receipt of written notice thereof by the Contractor."

"SECTION 12. The subcontractor agrees to indemnify, save harmless and defend the contractor and owner from any liability for damages to any person or property upon, or at, or about the development that may arise as a result of or in connection with the work hereunder and the Subcontractor agrees to procure at his own expense, before the commencement of the work comprehensive general liability including Contractors protective liability insurance, completed operations and contractual liability insurance and automobile liability insurance including the ownership, maintenance and operation of any automotive equipment owned, hired and non-owned for the benefit of the contractor and owner, in the sum of Two Hundred Fifty Thousand ($250,000) Dollars for damages resulting to one person and Five Hundred Thousand ($500,000) Dollars for damage to persons resulting from one occurrence and One Hundred Thousand ($100,000) Dollars for damages to property arising out of each occurrence, and to keep such insurance in force until the construction of development is fully completed, and to immediately and before commencing work deliver such policy or policies or certificates of insurance to the Contractor."

"SECTION 15. The Subcontractor agrees to indemnify and hold the Contractor harmless from all claims, losses, expenses or liability from the payment of:

. . . [All] the insurance required to be furnished by Subcontractor under this agreement shall be in a company or companies which are satisfactory to the Contractor and/or Owner. Subcontractor agrees to obtain and maintain the above-described insurance during the entire period of this agreement. Evidence of all insurance indicated within this Paragraph 12 shall be furnished to Contractor and/or Owner in writing and shall indicate that Contractor and/or Owner are additional or co-insured parties. No payments will be made until necessary proof of insurance has been made." (Emphasis added.)

In substance, the affidavits in support of Martin's and Christianson's section 2 -- 619 motions to dismiss state that the general contractor did not insist upon the respective subcontractor's compliance with the contractual insurance requirements of their respective subcontracts. Both subcontractors performed under their contracts and were paid in full after the date of plaintiff's accident. Schostak and the landowners did not submit any counteraffidavits.

The trial court dismissed the general contractor's and landowners' third-party complaints, and counterclaims with prejudice on the grounds that they waived their rights to enforce the insurance provisions of their subcontracts with Martin and Christianson. The orders were made final and appealable pursuant to Illinois Supreme Court Rule 304. 87 Ill. 2d R. 304. I

The first issue on appeal is whether the trial court properly found that Schostak waived any breach of contract ...


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