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Church v. General Motors Corporation

January 19, 1996

EDDIE D. CHURCH AND CHERRI CHURCH,

PLAINTIFFS,

v.

GENERAL MOTORS CORPORATION,

DEFENDANT-CROSS-PLAINTIFF-APPELLANT,

v.

POWER PRESS SALES COMPANY, INC.,

DEFENDANT-CROSS-DEFENDANT-APPELLEE.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division.

No. 90 C 368 -- John F. Grady, Judge.

Before POSNER, Chief Judge, COFFEY and FLAUM, Circuit Judges.

FLAUM, Circuit Judge.

ARGUED SEPTEMBER 22, 1995

DECIDED JANUARY 19, 1996

Plaintiff Eddie Church was injured while dismantling a large "fishbelly" crane at a closed General Motors production plant. He brought Structural Work Act and negligence claims against the new owner of the crane, American Metal Industries, the company that brokered the sale of the crane, Power Press Sales Co., Inc. ("Power Press"), and the previous owner and plant tenant, General Motors Corp. ("GM"). Subsequently, Church's claims were all dismissed on summary judgment or settled.

Before us on appeal is GM's cross-claim against Power Press seeking indemnification for attorney's fees and costs expended in defending Church's suit. GM seeks reimbursement pursuant to an indemnity provision in a November 18, 1988 contract entered into by Power Press and GM. Initially, the district court granted judgment on the pleadings in favor of GM. Upon a motion for reconsideration, however, the court reversed itself and held that the indemnity clause did not require Power Press to reimburse GM. It then granted Power Press judgment on the pleadings. GM now appeals this decision. We agree with the district court's interpretation of the indemnity provision and affirm its decision.

I.

In 1986, GM decided to close its Willow Springs, Illinois production plant. In March 1989, GM sold the facility to United Parcel Service, but leased the building back for the remainder of the year in order to sell off certain equipment and take care of closing details. To that end, GM and Power Press had entered into a written agreement ("GM Agreement"), whereby Power Press, as a non-exclusive broker, was to find potential buyers for GM's salvageable equipment. The GM Agreement will be discussed in some detail, as it forms the basis of GM's claim.

The first section of the Agreement provided:

Under the terms and conditions set forth in this agreement, [Power Press] agrees to sell surplus equipment for General Motors for the period commencing December 1, 1988 through January 31, 1990.

Additional terms of the contract granted GM the power to decide which equipment would be sold, to dispose of surplus equipment in "any manner it deem[ed] best," and to retain ownership and title of all equipment prior to the conclusion of a sale. All sales were subject to GM's approval, and Power Press was required to obtain written authorization for each sale, specifying the equipment to be sold and the date by which the equipment was to be removed from the plant.

The Agreement also provided that:

[Power Press] shall be obligated to transport . . . selected equipment from General Motors premises within the time designated in the disposal authorization.

Power Press was required to carry workmen's compensation insurance on its employees, and further:

If [Power Press] shall sublet any portion of the work contemplated in the agreement, [Power Press] shall require each subcontractor to accept the provisions of this article and the provisions of said workmen's compensation act or law, and shall require such subcontractors to ...


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