Court of Appeals of Illinois, First District, Sixth Division
In an action arising from the injuries suffered by an employee of a subsubcontractor on a construction project, the doctrine of res judicata did not bar the general contractor’s counterclaim in the injured employee’s tort action alleging that the subcontractor failed to enforce the contract’s provision requiring the sub-subcontractor to maintain insurance covering the general contractor, since neither the declaratory judgment action filed by the sub-subcontractor’s insurer that resulted in a judgment that it was not required to insure the general contractor, nor the summary judgment in the tort action denying the general contractor’s counterclaim for contribution claims against the subcontractor and sub-subcontractor, involved the general contractor’s breach of contract claim.
Appeal from the Circuit Court of Cook County, No. 06-L-13001; the Hon. James N. O’Hara, Judge, presiding.
Prusik Selby Daley & Kezelis, P.C., of Chicago (John P. Prusik and Frank C. Gradishar, of counsel), for appellant.
Lindsay, Rappaport & Postel, LLC, of Chicago (Joseph P. Postel and Christopher J. Pickett, of counsel), for appellee.
Justices Gordon and Reyes concurred in the judgment and opinion.
LAMPKIN, PRESIDING JUSTICE
¶ 1 Defendant and counterplaintiff FCL Builders, Inc. (FCL), appeals from the circuit court's order dismissing FCL's counterclaim against defendant and counterdefendant Suburban Iron Works, Inc. (Suburban), based on the doctrine of res judicata. On appeal, FCL contends that the final judgment in the declaratory judgment action concerning an insurer's obligation to defend or indemnify FCL in the underlying tort action did not bar FCL's breach of contract counterclaim against Suburban in the tort action because neither the parties nor their privies were identical in both actions and there was no identity of cause of action.
¶ 2 For the reasons that follow, we reverse the judgment of the circuit court.
¶ 3 I. BACKGROUND
¶ 4 FCL was a general contractor that was hired on a construction project. FCL subcontracted out the steel fabrication and erection for the project to Suburban, which in turn further subcontracted out the steel erection to JAK Iron Works, Inc. (JAK). JAK employed plaintiff Anwar Oshana as an ironworker. After Oshana was injured at the construction site, he filed a negligence lawsuit (the tort case) against FCL and Suburban, alleging breach of various duties of care regarding jobsite safety that they allegedly owed to Oshana. After Oshana filed a second amended complaint in 2008, FCL, in 2009, filed a third-party complaint for contribution against JAK and a counterclaim for contribution against Suburban.
¶ 5 Provisions in FCL's subcontract with Suburban addressed Suburban's obligation to obtain a certain amount of commercial general liability (CGL) insurance, which would cover not only Suburban and its employees but also FCL as the general contractor. Moreover, any subcontractors that Suburban might further subcontract with also were required to maintain the same level of CGL insurance and include FCL as an insured under the policy. Relying on those and other contract provisions, FCL turned to Westfield Insurance Company (Westfield), which insured JAK under a CGL policy, for defense and indemnification in the tort case. Westfield, however, refused to either defend or indemnify FCL, asserting that FCL did not qualify as an additional insured under Westfield's policy with JAK.
¶ 6 Westfield filed a declaratory judgment action against FCL, seeking a declaration that it was not obligated to defend or indemnify FCL in the tort case. Suburban was not a party to the declaratory judgment action. In January 2010, the circuit court held that FCL was not an additional insured on the Westfield policy issued to JAK and granted summary judgment in Westfield's favor. FCL appealed.
¶ 7 Meanwhile, in the tort case, Suburban moved for summary judgment, contending there was no evidence that Suburban had sufficient supervisory, operational or contractual control over JAK's work to give rise to a duty to Oshana. In May 2010, the circuit court granted Suburban's motion for summary judgment against Oshana and FCL on the issues of negligence and contribution. Oshana and FCL appealed.
¶ 8 In March 2011, in the declaratory judgment action, this court affirmed the award of summary judgment in Westfield's favor, holding that FCL was not an additional insured under the policy that Westfield had issued to JAK. Westfield Insurance Co. v. FCL Builders, Inc., 407 Ill.App.3d 730, 731 (2011). Specifically, this court determined that the plain language of the insurance policy required that, in order for an entity to qualify as an additional insured, JAK and that entity must have agreed in writing in a contract that the entity be added to the policy as an additional insured. Id. at 733. This court concluded that there was no evidence in the record that JAK had agreed in writing with FCL for FCL to be an additional insured. Id. at 734. FCL argued that it should be deemed an additional insured based, inter alia, on the Suburban/JAK contract that incorporated the FCL/Suburban contract. Id. at 736. This court, however, stated that the terms of the Suburban/JAK and FCL/Suburban contracts were irrelevant to whether Westfield was obligated to cover FCL as an additional insured under the policy issued to JAK. Id. at 735. Rather, the dispositive issue was Westfield's contractual obligations to its insured, and those obligations were controlled by the insurance policy itself. Id.
¶ 9 In September 2011, in the tort case, FCL amended with leave of court its counterclaim against Suburban to add a claim of breach of contract. Specifically, FCL alleged that Suburban breached its contract with FCL when Suburban failed to require its subcontractor, JAK, to maintain insurance covering FCL for the construction project at issue in the tort case.
¶ 10 In November 2011, Suburban moved to dismiss, pursuant to section 2-619(a)(4) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(4) (West 2010)), FCL's amended counterclaim on the basis of res judicata. Suburban argued that two prior judgments barred FCL's cause of action: (1) the appellate court's 2011 opinion affirming summary judgment in favor of Westfield in the declaratory judgment action, which held that FCL was not an additional insured under Westfield's CGL policy issued to JAK; and (2) the trial court's 2010 summary judgment in the tort case, which was pending on appeal and disposed of Oshana's tort claims and FCL's contribution claim against Suburban.
¶ 11 In January 2012, this court affirmed in the tort case the award of summary judgment in favor of Suburban and against Oshana and FCL. Oshana v. FCL Builders, Inc., 2012 IL App (1st) 101628. Thereafter, in February 2012, the circuit court granted Suburban's motion to dismiss FCL's amended counterclaim on the basis of res judicata; the circuit court, however, did not specify which prior judgment barred FCL's counterclaim. Pursuant to Illinois Supreme Court Rule 304(a) (eff. Feb. 26, ...