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Walker v. Ridgeview Construction Co.

September 22, 2000

BENJAMIN GARY WALKER,
PLAINTIFF,
V.
RIDGEVIEW CONSTRUCTION COMPANY, INC., A CORPORATION, PEPPER CONSTRUCTION COMPANY, A CORPORATION, LOEBL, SCHLOSSMAN AND HACKL, A PARTNERSHIP AND ADVANCE MECHANICAL SYSTEMS, INC., A CORPORATION,
DEFENDANTS,
(RIDGEVIEW CONSTRUCTION COMPANY,
THIRD-PARTY PLAINTIFF-APPELLEE,
V.
GATEWAY CONCRETE FORMING SYSTEMS, INC.,
THIRD-PARTY DEFENDANT-APPELLANT).



Appeal from the Circuit Court of Cook County. No. 93 M 63906 The Honorable Patrick S. Grossi, Presiding Judge.

The opinion of the court was delivered by: Justice Buckley

This appeal arises out of a third-party action. Plaintiff Benjamin Walker brought an action against Ridgeview Construction Company (Ridgeview) and others for injuries sustained at a construction project. In turn, Ridgeview brought a third-party action against Walker's employer, Gateway Concrete Forming Systems, Inc. (Gateway), for contribution and breach of contract. Ridgeview settled with Walker in the principal action for $100,000. Then, on April 6, 1998, after a bench trial of the third-party action, the trial court found in favor of third-party plaintiff Ridgeview and against third-party defendant Gateway and entered judgment for $290,906.89 plus costs. On April 29, 1998, the trial court entered an order granting Ridgeview's motion to amend the complaint to change all references to Ridgeview to read "Ridgeview Construction Company, for the use of General Casualty Insurance Company." On June 1, 1998, Gateway filed a posttrial motion wherein it argued that (1) Ridgeview was not entitled to damages; (2) the trial court erred in allowing Ridgeview to make a postjudgment amendment to its complaint; (3) Ridgeview waived its right to seek insurance coverage pursuant to its contract with Gateway; (4) the trial court erred in excluding parol evidence; and (5) Ridgeview failed to prove the reasonableness of its legal fees. On August 27, 1998, the trial court denied Gateway's posttrial motion. Gateway now appeals from the order entered on April 6, 1998, finding in favor of Ridgeview and entering judgment for $290,906.89 plus costs; from the order entered on April 29, 1998, granting Ridgeview's motion to amend; and from the order entered on August 27, 1998, denying Gateway's posttrial motion. Gateway contends that the trial court erred: (1) in entering judgment for Ridgeview because Ridgeview suffered no damages; (2) in allowing Ridgeview to amend the complaint to name General Casualty Insurance Company as the real party in interest; (3) in excluding parol evidence of the parties' understanding of Gateway's alleged obligation to purchase insurance; (4) in failing to recognize that Ridgeview waived its right to enforce aspects of its contract against Gateway; and (5) in awarding Ridgeview legal fees because Ridgeview did not prove the fees incurred in its defense were reasonable. For the reasons that follow, we now reverse.

STATEMENT OF FACTS

Plaintiff Benjamin Gary Walker was injured in a 1992 construction accident while working on the South Chicago Community Hospital construction project. Walker sued Pepper Construction Company, the general contractor, and certain subcontractors, including Ridgeview, alleging negligence and violations of the Illinois Structural Work Act (740 ILCS 150/1 et seq. (West 1994)). On November 25, 1997, Pepper Construction Company, Advance Mechanical Systems, Inc., and Ridgeview filed a second amended third-party complaint against Walker's employer, Gateway, primarily alleging that Gateway had been negligent in supervising Walker and, thus, at least partly responsible for his injuries. The principal action went to trial, but Ridgeview settled with Walker for $100,000 prior to trial. Ridgeview's liability carrier, General Casualty Insurance Company (General Casualty), paid the settlement on Ridgeview's behalf and also fully financed Ridgeview's defense in the Walker lawsuit up to the settlement. Thereafter, on January 20, 1998, judgment was entered on the verdict for Walker and his wife and against Pepper Construction Company in the amounts of $2,450,000 and $25,000, respectively.

In addition to its claim for contribution, Ridgeview's third-party action against Gateway also alleged that Gateway had been contractually obligated to maintain liability insurance that would have covered Ridgeview for lawsuits such as Walker's. Ridgeview's second amended third-party complaint alleged that Gateway had allowed Ridgeview's coverage to lapse after the first year, in alleged violation of the contract. As a result of that breach, Ridgeview sought to recover from Gateway the costs and expenses of litigating the principal action.

The circuit court tried that aspect of the third-party action without a jury shortly after the conclusion of the trial of the main action. At the bench trial on February 2, 1998, Ridgeview presented the testimony of Scott Smeja, its vice-president, who confirmed that General Casualty paid the entire portion of the judgment attributable to Ridgeview, as well as the attorney fees and legal costs associated with the original trial.

Gateway moved for a directed finding on the basis of Smeja's testimony, arguing that Ridgeview could not set forth a prima facie case for breach of contract because Ridgeview had not suffered any damages. Gateway also argued that Ridgeview had not proved the reasonableness of the legal fees incurred. The trial judge denied the motion and, on April 6, 1998, ultimately entered judgment in favor of Ridgeview in the amount of $290,906.89, plus costs.

At a subsequent status hearing, Ridgeview orally moved for leave to amend its third-party complaint to reflect that the real party in interest was its liability insurer, General Casualty. The court granted the request and, on April 29, 1998, ordered that the pleading would be "amended on its face, instanter," to reflect General Casualty's interest. Gateway subsequently filed a posttrial motion which the trial court denied. Gateway now appeals.

DISCUSSION

A. BREACH OF CONTRACT

Gateway first contends that the trial court erred in entering judgment for Ridgeview because Ridgeview did not suffer any damages.

The standard of review we apply when a challenge is made to the trial court's ruling following a bench trial is whether the trial court's judgment is against the manifest weight of the evidence. See Bazydlo v. Volant, 164 Ill. 2d 207, 215 (1995); In re Gilman Community Fire Protection District, 303 Ill. App. 3d 246, 248 (1999). A reviewing court will not reverse a trial court's decision merely because different conclusions can be drawn; an opposite conclusion must be clearly evident. See In re Gilman Community Fire Protection District, 303 Ill. App. 3d at 246.

In order to show a breach of contract, a plaintiff must show that (a) a contract exists between plaintiff and defendant, (b) plaintiff performed her obligations under the contract, (c) defendant did not perform his obligations under the contract, and (d) damages resulted from the breach. See Wilkonson v. Yovetich, 249 Ill. App. 3d 439, 449 (1993). Here, the testimony of Smeja clearly established that Ridgeview paid neither the settlement with Walker nor any of the legal fees incurred in its defense. There was no testimony that Ridgeview paid any deductible amount or that its insurance premiums were affected. In the absence of testimony that Ridgeview suffered damages, Ridgeview cannot maintain a breach of contract action.

The purpose of damages is to put the non-breaching party into the position he or she would have been in had the contract been performed, but not in a better position. Compensation awarded in a breach of contract action should not provide plaintiff with a windfall. See Harden v. Playboy Enterprises, Inc., 261 Ill. App. 3d 443, 454 (1993). Because Ridgeview failed to prove that it suffered damages, an essential element of a breach of contract action, ...


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