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09/25/97 ARDIS LICCARDI ET AL. v. STOLT TERMINALS

September 25, 1997

ARDIS LICCARDI ET AL.
v.
STOLT TERMINALS, INC., ET AL. (STOLT TERMINALS, INC., APPELLEE, V. GUNDERSEN/VIKING, INC., APPELLANT).



The Honorable Justice Harrison delivered the opinion of the court.

The opinion of the court was delivered by: Harrison

The Honorable Justice HARRISON delivered the opinion of the court:

This appeal is before the court on a certificate of importance from the First District of the Appellate Court. 155 Ill. 2d R. 316. Two questions are presented for our consideration: (1) whether an employer may contractually waive the cap on contribution liability recognized by this court in Kotecki v. Cyclops Welding Corp., 146 Ill. 2d 155, 166 Ill. Dec. 1, 585 N.E.2d 1023 (1991), and (2) whether the contractual provisions in this case do waive the Kotecki cap or are, instead, void and unenforceable under the Construction Contract Indemnification for Negligence Act (740 ILCS 35/0.01 et seq. (West 1994)) on the grounds that they require the employer to indemnify a third party for the third party's own negligence. For the reasons that follow, we continue to hold, as we did in Braye v. Archer-Daniels-Midland Co., 175 Ill. 2d 201, 222 Ill. Dec. 91, 676 N.E.2d 1295 (1997), that an employer may enter into a valid and enforceable contractual agreement to waive the Kotecki limitation on an employer's contribution liability. We further conclude that one of the contractual provisions in this case is valid and does operate to waive the Kotecki cap.

These are the facts. Stolt Terminals (Stolt) hired Gundersen/Viking, Inc. (Gundersen), to clean the interior of one of its storage tanks. During the course of the cleaning operation, Arthur Farmer, a Gundersen employee, was knocked from the scaffolding where he was working. Farmer died from his injuries, and his family sued Stolt under the Structural Work Act (740 ILCS 150/0.01 et seq. (West 1994)).

Stolt subsequently brought a third-party action against Gundersen. Stolt's complaint was in three counts. Counts I and II were based on the provisions of the written contract between Gundersen and Stolt for the cleaning work. Count I invoked paragraph seven of the contract, which states:

"If Vendor performs services *** hereunder, Vendor agrees to indemnify and hold harmless Stolt Terminals (Chicago) Inc. from all loss or the payment of all sums of money by reason of all accidents, injuries, or damages to persons or property that may happen or occur in connection therewith."

According to Stolt, this paragraph obligated Gundersen to indemnify Stolt for all costs, fees losses or payments incurred by or awarded against Stolt in the underlying proceeding "to the extent said costs, fees losses or payments are the proximate result of the wrongful acts or omissions of [Gundersen]."

Count II sought damages based on Gundersen's alleged breach of paragraph eight of the complaint, which provides:

"Vendor represents and warrants that no Federal or State Statute or regulation, or Municipal Ordinance, has been or will be violated in the manufacturing, sale, and delivery of any article or service sold and delivered hereunder, and if such violation has or does occur, Vendor shall indemnify and hold harmless Stolt Terminals (Chicago) Inc. from all loss, penalties, or the payment of all sums of money on account of such violation."

Unlike counts I and II, count III of Stolt's third-party complaint was not premised on the parties' contract. It asserted a contribution claim against Gundersen for that portion of any damage award received by plaintiffs attributable to Gundersen's acts or omissions.

Gundersen moved to strike certain portions of count III, asserting that under this court's decision in Kotecki v. Cyclops Welding Co., 146 Ill. 2d 155, 166 Ill. Dec. 1, 585 N.E.2d 1023 (1991), Gundersen's contribution liability could not exceed the amount of workers' compensation benefits paid in connection with Farmer's injury and death. The circuit court granted Gundersen's motion in part, agreeing that Kotecki limited the company's contribution liability to the amount of its workers' compensation liability.

Stolt moved for reconsideration, arguing that through its contract with Stolt, Gundersen had waived the Kotecki limitations on its contribution liability. Gundersen, in turn, moved for summary judgment as to counts I and II of Stolt's third-party complaint, asserting that the contractual provisions on which those counts were based violated the Construction Contract Indemnification for Negligence Act (740 ILCS 35/0.01 et seq. (West 1994)), which provides:

"With respect to contracts or agreements, either public or private, for the construction, alteration, repair or maintenance of a building, structure, highway bridge, viaducts or other work dealing with construction, or for any moving, demolition or excavation connected therewith, every covenant, promise or agreement to indemnify or hold harmless another person from that person's own negligence is void as against public policy and wholly unenforceable." 740 ILCS 35/1 (West 1994).

The circuit court agreed with Gundersen's argument and granted its motion for summary judgment as to counts I and II. In the same order, the court denied Stolt's motion for reconsideration, adhering to its previous determination that Kotecki limited the company's contribution liability to the amount of its workers' compensation liability. Because Gundersen had tendered its workers' compensation lien to the court, the ...


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