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11/22/88 Contact Lenses Unlimited, v. Carl R. Johnson Et Al.

November 22, 1988

CONTACT LENSES UNLIMITED, INC., PLAINTIFF

v.

CARL R. JOHNSON ET AL., DEFENDANTS (BELLE GOLDSTRICH ET AL., THIRD-PARTY PLAINTIFFS-APPELLANTS; HALLMARK &



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SECOND DIVISION

Johnson Properties, Ltd., Third-Party, Defendant-Appellee)

531 N.E.2d 928, 176 Ill. App. 3d 875, 126 Ill. Dec. 301 1988.IL.1688

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

APPELLATE Judges:

JUSTICE SCARIANO delivered the opinion of the court. HARTMAN, P.J., and BILANDIC, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE SCARIANO

Third-party plaintiffs appeal the dismissal of their complaint seeking indemnity based upon an express indemnity agreement and on an agent-principal relationship, arguing that the trial court erred in ruling that they were seeking tort rather than contract damages.

Third-party defendants Hallmark & Johnson (Hallmark) manage a building owned by third-party plaintiffs (the Owners). Plaintiff Contact Lenses Unlimited, Inc. (Contact), a tenant in the building, had a lease which granted it "[the] exclusive right to sell and service contact eye lenses in Lessor's building." Contact brought suit against both Hallmark and the Owners, alleging that the Owners, acting through Hallmark, breached this exclusivity provision in its lease by granting one to another tenant, For Eyes Optical Company, and by permitting For Eyes to sell and service contact eye lenses. The Owners then filed a third-party action against Hallmark, seeking relief from Hallmark in the event that the Owners were found liable to Contact in the underlying action, and alleging in their fourth amended third-party complaint the following:

Hallmark & Johnson has asserted that it performed its management duties to the Owners pursuant to a management agreement dated September 12, 1968.

The management agreement provides, in part, that "The Agent also shall not be liable for any error of judgment or for any mistake of fact of [ sic ] law, or for anything which it may do or refrain from doing hereinafter, except in cases of willful misconduct or gross negligence."

Hallmark & Johnson entered into the leases with Contact Lenses and For Eyes without consulting with or seeking the approval of the Owners, in violation of the management agreement.

Hallmark & Johnson knowingly ignored the exclusivity provision in Contact Lenses' lease, in conscious disregard for the rights of Contact Lenses.

Hallmark & Johnson's conduct constituted willful misconduct and gross negligence, thereby violating the express provisions of the management agreement.

The trial court dismissed the third-party complaint, holding that it was deficient because it attempted to assert tort liability in a ...


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