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06/23/88 the Hartford, As Subrogee v. Burns International

June 23, 1988

EXCHANGE, PLAINTIFF-APPELLANT

v.

BURNS INTERNATIONAL SECURITY SERVICES, INC., ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FOURTH DIVISION

THE HARTFORD, as Subrogee of the Chicago Board of Options

526 N.E.2d 463, 172 Ill. App. 3d 184, 122 Ill. Dec. 204 1988.IL.988

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

APPELLATE Judges:

JUSTICE JOHNSON delivered the opinion of the court. McMORROW and LINN, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE JOHNSON

Plaintiff, The Hartford, as insurer and subrogee of the Chicago Board of Options Exchange (hereinafter the Exchange), filed suit in the circuit court of Cook County against defendants, Burns International Security Services, Inc. (Burns), and its employee, Michael Word, to recover the proceeds paid to the Exchange for property damages. The trial court granted defendants' motions to dismiss all counts brought against them by The Hartford, as subrogee of the Exchange. The sole issue for review is whether the trial court properly found that the waiver of subrogation rights clause contained in the contract between Burns and the Exchange is enforceable and, therefore, a bar to this action.

We affirm.

The record shows that on May 4, 1979, Burns contracted with the Exchange to provide security services seven days a week, 24 hours a day, for the space it occupied in the Chicago Board of Trade Building at 141 West Jackson Boulevard, in Chicago.

On October 6, 1979, a fire occurred in the offices of the Exchange on the 22nd floor of the Board of Trade Building. On the day in question, Michael Word was assigned to the security detail provided by Burns on behalf of the Exchange. Plaintiff paid the Exchange for the property damage caused by the fire.

On February 5, 1986, plaintiff filed its second amended complaint, alleging that the fire occurred as a result of the negligence of defendants. Defendants moved to dismiss the second amended complaint. Originally, defendants' motions were denied without prejudice; however, the court granted their motion to vacate that order. On November 10, 1986, the court granted the motions to dismiss, with prejudice, counts IV through VII, the only counts pertaining to plaintiff as subrogee of

Plaintiff contends that the waiver of subrogation rights clause contained in the contract between Burns and the Exchange is not enforceable for the following reasons: (1) the trial court failed to rule on whether New York law or Illinois law governs; (2) the clause violates New York law and Illinois public policy; (3) the insurer's right of subrogation cannot be waived without giving it notice prior to the loss; and (4) the clause is ambiguous and inconsistent with the limits of liability section.

Plaintiff argues that the trial court failed to make a ruling on whether New York law or Illinois law governs this case. Plaintiff claims that New York law controls because the contract between Burns and the Exchange contained a choice of law provision stating that New York law should govern the terms of the contract.

Illinois has recognized the validity of an express choice of law provision contained in a contract. (Reighley v. Continental Illinois National Bank & Trust Co. (1945), 390 Ill. 242, 249; Potomac Leasing Co. v. Chuck's Pub, Inc. (1987), 156 Ill. App. 3d 755, 757-58; Sumner Realty Co. v. Willcott (1986), 148 Ill. App. 3d 497, 500.) However, the law will be given effect subject to certain limitations: whether the choice of law provision contravenes Illinois public policy and whether there is some relationship between the chosen forum and the parties or the transaction. (Potomac Leasing Co., 156 Ill. App. 3d at 758-59.) There is no issue raised on the latter. Nevertheless, conflict of law rules are resorted to only when a ...


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