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McNiff v. Millard Maintenance Service Co.

March 31, 1999


The opinion of the court was delivered by: Justice Zwick

91 L 19804

Appeal from the Circuit Court of Cook County Honorable Susan Zwick, Judge Presiding.

In the underlying action, plaintiff, Joseph McNiff, was injured when he slipped on debris and fell in a stairwell at a commercial building located in Chicago at 900 N. Michigan Avenue. He filed a personal injury action seeking to recover damages against the property's manager, JMB Properties Urban Company (JMB), and its janitorial service, Millard Maintenance Service Co. (Millard). At the time of his fall, plaintiff was working as an electrical contractor in the building which was partially under construction. He, along with the other construction workers, were required to use the stairway to get to and from the job site. A jury made a finding of approximately $750,000 in damages and apportioned fault 34% against JMB, 33% against Millard, and 33% against plaintiff.

Subsequently, JMB pursued a counterclaim against Millard, seeking indemnity under the written agreement which existed between them. On motion for summary judgment, the trial court found that JMB was entitled to be indemnified from Millard for its 34% share of the net verdict. Accordingly, the court entered judgment on the counterclaim for JMB and against Millard in the amount of $255,399.50, but found that JMB was not entitled to recover from Millard the attorney's fees and costs which JMB incurred in its defense of the action. Millard appealed the indemnity award and JMB cross-appealed from the court's refusal to order Millard to pay its attorney's fees and costs.

The issue presented is whether the agreement between Millard and JMB required Millard to indemnify JMB for payments it made to satisfy its proportionate share of the plaintiff's judgment. In addition, we are asked to determine whether the same agreement required Millard to engage an attorney to defend JMB at trial and pay associated litigation costs. We need not reach the other issues raised by the parties on appeal in light of our resolution of these central questions.

Plaintiff's specific allegation was that while performing his duties as an employee of MGM Electric Company, an unrelated entity, he was required to enter and exit the building through an employee entrance called "stairway H." While in that stairway, he tripped over a discarded beverage can and sustained injuries. He alleged, inter alia, that Millard had been negligent in failing to remove the can and that JMB was negligent in failing to provide sufficient light in the stairwell.

In its first amended counterclaim against Millard, JMB alleged that it and Millard had entered into a contract wherein Millard agreed to perform general cleaning services at 900 N. Michigan Avenue and indemnify JMB for any liability arising from the work. The agreement contained the following relevant provision: "INDEMNIFICATION. Contractor [Millard] hereby agrees and covenants to protect, defend, indemnify and hold harmless [the] Owner, [its] Agent [JMB], and their representatives, officers, employees, and directors from and against any and all claims, actions, liabilities, losses, damages, costs and expenses relating to any and all claims (including, without limiting the foregoing, claims for injury to or death of persons or damage to property) allegedly or actually arising out of or incidental to the Work, including, without limiting the foregoing, all acts and omissions of the officers, employees and agents of Contractor or any of its subcontractors."

Millard moved for summary judgment on JMB's counterclaim for contractual indemnity, in part, on grounds that the agreement, although sufficiently clear to require indemnity for damages incurred due to Millard's negligence in performing work under the agreement, was insufficient to require Millard to indemnify JMB for its own negligence. The court denied the motion, ruling that the indemnity agreement was sufficiently specific to require Millard to indemnify JMB. JMB then brought its own motion for summary judgment, contending that the agreement not only included indemnification for payments made by JMB to the plaintiff, but also for its attorney's fees and costs incurred in defending itself at trial. As we have noted, the trial court denied this motion.

By filing cross-motions for summary judgment, the parties invite the circuit court to decide the issues presented in the action as questions of law. Allen v. Meyer, 14 Ill. 2d 284, 152 N.E.2d 576 (1958). Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 1996); Carruthers v. B.C. Christopher & Co., 57 Ill. 2d 376, 313 N.E.2d 457 (1974). In reviewing summary judgment, we apply a de novo standard of review. In re Estate of Hoover, 155 Ill. 2d 402, 615 N.E.2d 736 (1993).

Turning to the merits, we first address JMB's assertion that the words included in the agreement "allegedly or actually arising out of or incidental to the Work" include claims such as those brought by the plaintiff against JMB.

It is well settled in Illinois that indemnity contracts are strictly construed. In this regard, Illinois courts have consistently held that indemnification contracts will not be construed as indemnifying against a party's own negligence unless such construction is required by clear and explicit language of the contract, or such an intention is expressed in unequivocal terms. This has been the rule in Illinois since Westinghouse Electric Elevator Co. v. La Salle Monroe Building Corp., 395 Ill. 429, 70 N.E.2d 604 (1946).

In Westinghouse, the parties were involved in the reconstruction of certain elevators. One of the appellee's employees, an elevator repairman, was fatally injured by falling material created by the negligence of one of the appellant's employees. The question at issue was whether the contract language between the repair company and the building owner who had employed the negligent employee covered the worker's compensation claims which arose from the accident. The indemnity agreement contained the following language: "The contractor further agrees to indemnify and hold the owner, the owner's employees and agents, the Architects and Engineers, and the City of Chicago, wholly harmless from any damages, claims, demands, or suit by any person or persons arising out of any acts or omissions by the Contractor, his agents, servants or employes [sic] in the course of any work done in connection with any of the matters set out in these specifications." Westinghouse, 395 Ill. at 432. The court, in resolving the issue, indicated that an agreement to indemnify a party for his own negligence would be so unusual and extraordinary as to require that the contract put the intent to indemnify "beyond doubt by express stipulation." Westinghouse, 395 Ill. at 434, citing Perry v. Payne, 217 Pa. 252, 66 A. 553 (1907). Because the above-quoted language failed to meet this test, the court rejected the building owner's indemnification claim.

The rationale of the Westinghouse decision has been consistently followed by the supreme court. In Tatar v. Maxon Construction Co., 54 Ill. 2d 64, 294 N.E.2d 272 (1973), for example, the court considered the case of a plaintiff who was an employee of a third-party defendant, Freesen Brothers Inc. (Freesen). The plaintiff was injured and filed suit against Maxon Construction Co., the general contractor in charge of the construction project. Maxon filed its third-party complaint against Freesen seeking indemnity pursuant to the following agreement: "The Subcontractor [Freesen] agrees to indemnify the General Contractor [Maxon] and the Principal and to hold each of them forever harmless from and against all expenses, claims, suits, or judgments of every kind whatsoever, by or on behalf of any person, firm or corporation, by reason of, arising out of, or connected with, accidents, injuries, or damages, which may occur upon or about the Subcontractor's work." Tatar, 54 Ill. 2d at 66. Freesen's motion to dismiss the third party complaint was granted and the appellate and supreme courts affirmed.

In Zadak v. Cannon, 59 Ill. 2d 118, 319 N.E.2d 469 (1974), Sunbeam filed its third-party complaint against Cyclone based upon indemnification language in a purchase order. The trial court ruled that the language was broad enough to indemnify Cyclone for its own negligence ...

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