Buenz v. Frontline Transp. Co.

• Decision Date: 25 January 2008
• Docket Number: No. 103562.,103562.
• Citation: Buenz v. Frontline Transp. Co., 882 N.E.2d 525, 227 Ill.2d 302, 317 Ill.Dec. 645 (Ill. 2008)
• Parties: John BUENZ, as Special Adm'r of the Estate of Olga L. Buenz, Deceased, v. FRONTLINE TRANSPORTATION COMPANY, et al. (Frontline Transportation Company, Appellant; China Ocean Shipping Company Americas, Inc., Appellee).
• Court: Illinois Supreme Court

882 N.E.2d 525

227 Ill.2d 302

John BUENZ, as SpecialAdm'r of the Estate of Olga L. Buenz, Deceased, v.FRONTLINE TRANSPORTATION COMPANY, et al. (Frontline Transportation Company, Appellant; China Ocean Shipping Company Americas, Inc., Appellee).

No. 103562.

Supreme Court of Illinois.

January 25, 2008.

Russell W. Hartigan, Patrick H. O'Connor, Victoria R. Benson, of Hartigan & Cuisinier, P.C., Chicago, for appellant.

Thomas M. Crisham, Jean M. Prendergast, Kathleen J. Doyle, of Crisham & Kubes, Ltd., Chicago, for appellee.

OPINION

Justice GARMANdelivered the judgment of the court, with opinion:

On October 1, 2003, Olga Buenz was involved in a multiple-vehicle traffic accident that resulted in her death.Twelve separate actions were filed by various plaintiffs and later consolidated.Each action named China Ocean Shipping Company Americas, Inc.(COSCO), and Frontline Transportation Company(Frontline) as defendants.PlaintiffJohn Buenz, Olga's husband, filed a wrongful-death action alleging negligence on the part of defendants COSCO, Frontline, and Vincente A. Zepeda, Frontline's alleged employee and the driver of the tractor-trailer that Buenz alleges caused the accident.

In June 2004, COSCO filed a counterclaim against Frontline and Zepeda.Count IV of this counterclaim sought a declaration that Frontline be obligated, pursuant to express contractual terms set forth in an equipment interchange agreement, to indemnify COSCO for "any and all costs, expenses, damages, and liability * * * in the Buenz litigation."COSCO moved for and was granted summary judgment on this count by the circuit court of Cook County.

In addition to granting the motion for summary judgment, the court entered a written finding pursuant to Rule 304(a) that there was no just reason to delay appeal or enforcement of the judgment.210 Ill.2d R. 304(a).Subsequently, the court specified that its order applied to all pending consolidated cases.It is undisputed that the meaning and legal effect of the equipment interchange agreement is identical in each case.

After its motion to reconsider was denied, Frontline appealed.The appellate court affirmed and remanded.368 Ill. App.3d 10, 305 Ill.Dec. 712, 856 N.E.2d 517.Frontline then petitioned for and was allowed leave to appeal to this court pursuant to Rule 315(210 Ill.2d R. 315).

BACKGROUND

John Buenz's complaint alleged that a tractor-trailer operated by Zepeda, a Frontline employee, struck a minibus in which his wife Olga was a passenger, causing her death.The complaint further alleged that COSCO "owned and/or owned a leasehold on, maintained, and/or controlled the trailer and/or container which were part of the tractor trailer" driven by Zepeda.While the complaint alleged that Frontline committed various negligent acts which caused the accident and the death of Olga Buenz, it also alleged that COSCO committed several negligent acts that contributed to the accident.These acts and omissions included COSCO's permitting the tractor and/or container to be used and operated when it knew or should have known that it was not in safe operating condition; permitting the trailer to be used and operated when it knew or should have known that it was not equipped with proper brakes; and failing to inspect and repair the trailer.

To defend against these claims, COSCO relied on an equipment interchange agreement.This agreement dealt with the relationship between COSCO and Frontline regarding the use and/or interchange of equipment.In relevant part, the agreement provided:

"3.ACQUIRING CARRIER [defined as Frontline] Responsibility and Liability * * *

D.The ACQUIRING CARRIER shall be responsible to The Line [defined as COSCO] for the performance of this agreement whether such equipment may be in the possession of itself or others, until return of the equipment to The Line.

* * * F. INDEMNITY — The ACQUIRING CARRIER shall indemnify The Line against, and hold The Line harmless for any and all claims, demands, actions, suits, proceedings, costs, expenses, damages, and liability, including without limitation attorney's fees, arising out of, [in] connection with, or resulting from the possession, use, operation or returning of the equipment during all periods when the equipment shall be out of the possession of The Line."

The parties agree that the interchange agreement described above was in full force and effect at the time of the collision at issue in this case.Moreover, there is no dispute that Frontline is in the business of providing freight transportation by interstate trucks, including tractor-trailers.Additionally, Frontline has admitted that it had a contractual relationship with Zepeda, the driver of the tractor-trailer involved in the accident.

Frontline contends that COSCO is not entitled to indemnification based upon the interchange agreement.Specifically, Frontline asserts that the phrase "any and all," as used in the interchange agreement, is neither explicit nor clear enough to signify the parties' intention that Frontline indemnify COSCO for claims resulting from COSCO's own negligence.Additionally, Frontline argues that the negligence claims filed against COSCO do not fall within the scope of the indemnity provision because they relate to periods in which the equipment was in, rather than out, of the possession of COSCO.

COSCO responds that the facts, viewed in conjunction with the explicit language of the interchange agreement, establish as a matter of law that in the underlying litigation Frontline is obligated to indemnify and hold COSCO harmless for any and all costs, expenses, damages, and liability, including attorney fees.COSCO argues that the phrase "any and all" contained in the interchange agreement establishes the parties' intent that COSCO be indemnified even against claims arising out of its own negligence.COSCO asserts that Frontline's argument that the negligence claims filed against it do not fall within the scope of the indemnity provision has been forfeited, as it was not raised in Frontline's petition for leave to appeal.Barring forfeiture, COSCO asserts that the negligence claims against it do fall within the scope of the conduct described in the indemnity provision.

ANALYSIS

As noted, Frontline asserts that the appellate court improperly affirmed the circuit court's grant of COSCO's motion for summary judgment and subsequent denial of Frontline's motion to reconsider.This court reviews the grant of summary judgment de novo.Forsythe v. Clark USA, Inc.,224 Ill.2d 274, 280, 309 Ill.Dec. 361, 864 N.E.2d 227(2007).Reviewing a summary judgment disposition, this court construes all evidence strictly against the movant and liberally in favor of the nonmoving party.Forsythe,224 Ill.2d at 280, 309 Ill.Dec. 361, 864 N.E.2d 227.

An indemnity agreement is a contract and is subject to contract interpretation rules.Virginia Surety Co. v. Northern Insurance Co. of New York,224 Ill.2d 550, 556, 310 Ill.Dec. 338, 866 N.E.2d 149(2007).The cardinal rule of contract interpretation is to discern the parties' intent from the contract language.Virginia Surety,224 Ill.2d at 556, 310 Ill.Dec. 338, 866 N.E.2d 149.Where the contract language is unambiguous, it should be given its plain and ordinary meaning.Virginia Surety,224 Ill.2d at 556, 310 Ill.Dec. 338, 866 N.E.2d 149.

I.Construction of the Equipment Interchange Agreement

This court has previously considered whether an indemnity agreement provided indemnification for an indemnitee's own negligence.In Westinghouse Electric Elevator Co. v. LaSalle Monroe Building Corp.,395 Ill. 429, 430, 70 N.E.2d 604(1946), an elevator repair company employee was hit by a falling elevator and died.It was conceded that the injury and death were due to the negligence of the building owner's employee's negligence.The elevator repair company made payments pursuant to the Workers' Compensation Act and then sued the building owner to recover the amount paid based on the owner's negligence.The parties' indemnity contract provided:

"`The contractor [repair company/indemnitor] 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 employees in the course of any work done in connection with any of the matters set out in these specifications, and the contractor shall carry at his own expense insurance in a company satisfactory to the owner to cover the aforesaid liabilities.'"Westinghouse Electric,395 Ill. at 432, 70 N.E.2d 604.

Construing the above language, both the trial and appellate courts found in favor of the elevator repair company.This court affirmed, holding that the contract language was insufficient to indemnify the owner/indemnitee for the owner/indemnitee's own negligence.

The language of the contract at issue in Westinghouse supports this conclusion.The repair company/indemnitor "agrees to indemnify and hold the owners * * * wholly harmless from any damages * * * arising out of any acts or omissions by the Contractor [repair company/indemnitor]."Westinghouse Electric,395 Ill. at 432, 70 N.E.2d 604.This clearly refers to and provides indemnity for acts or omissions by the repair company/indemnitor.Because the negligence at issue in Westinghouse was that of the owner, then, it could not be considered an act or omission by the repair company and the indemnity contract could not apply.

This court recognized, however, that in certain circumstances a contract could indemnify a person for that person's own negligence.We stated that "[i]t is quite generally held that an indemnity contract will not be construed as indemnifying one against his own negligence, unless such a construction is required by clear and explicit language of the contract [cit...