GTE North, Inc. v. Henkels & McCoy, Inc., 4-92-0839

• Court: United States Appellate Court of Illinois
• Writing for the Court: GREEN
• Citation: 184 Ill.Dec. 215,612 N.E.2d 1375,245 Ill.App.3d 322
• Parties: , 184 Ill.Dec. 215 GTE NORTH, INCORPORATED, an Illinois Corporation, a/k/a General Telephone Company of Illinois, Plaintiff-Appellant, v. HENKELS & McCOY, INC., a Pennsylvania Corporation, Defendant-Appellee.
• Docket Number: No. 4-92-0839,4-92-0839
• Decision Date: 06 May 1993

Page 1375

612 N.E.2d 1375 245 Ill.App.3d 322, 184 Ill.Dec. 215 GTE NORTH, INCORPORATED, an Illinois Corporation, a/k/a
General Telephone Company of Illinois, Plaintiff-Appellant,
v.
HENKELS & McCOY, INC., a Pennsylvania Corporation, Defendant-Appellee. No. 4-92-0839. Appellate Court of Illinois,
Fourth District. Argued March 23, 1993.
Decided May 6, 1993.

Page 1376

[245 Ill.App.3d 323] [184 Ill.Dec. 216] Alfred B. LaBarre (argued), Heckenkamp, Simhauser & LaBarre, P.C., Springfield, for plaintiff-appellant.

Karen L. Kendall, Bradley S. McMillan (argued), Heyl, Royster, Voelker & Allen, Peoria, Frederick P. Velde, Kurt M. Koepke, Heyl, Royster, Voelker & Allen, Springfield, for defendant-appellee.

Justice GREEN delivered the opinion of the court:

This case involves the operation of the Construction Contract Indemnification for Negligence Act (Act) (see Ill.Rev.Stat.1991, ch. 29, par. 60.90 et seq.), sections 1 and 3 of which, respectively, state as follows:

"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." Ill.Rev.Stat.1991, ch. 29, par. 61.

"This Act does not apply to construction bonds or insurance contracts or agreements." Ill.Rev.Stat.1991, ch. 29, par. 63.

On December 9, 1991, plaintiff GTE North, Inc., a/k/a General Telephone Company of Illinois (Owner), filed suit in the circuit court of Morgan County against defendant Henkels & McCoy, Inc. (Contractor). Owner sought a declaration that an agreement under which Contractor was constructing a building for Owner required Contractor to defend Owner in a pending case. In that suit William H. Byus, an employee of Contractor, was suing Owner to recover damages for injuries Byus received while working on the project which was the subject matter of the agreement between Contractor and Owner. Negligence was charged. On September 11, 1992, the circuit court entered a summary judgment for Contractor, declaring that Contractor was required neither required to defend Owner in the foregoing suit nor to indemnify Owner for any liability incurred from the suit. Owner appeals. We affirm.

Summary judgment is properly granted when "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a

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[184 Ill.Dec. 217] matter of law." (Ill.Rev.Stat.1991, ch. 110, par. 2-1005(c); see also Purtill v. Hess[245 Ill.App.3d 324] (1986), 111 Ill.2d 229, 240, 95 Ill.Dec. 305, 309, 489 N.E.2d 867, 871; Wright v. St. John's Hospital of the Hospital Sisters of the Third Order of St. Francis (1992), 229 Ill.App.3d 680, 682, 171 Ill.Dec. 250, 252, 593 N.E.2d 1070, 1072.) As summary judgment is appropriate only when a party is shown to be entitled to the judgment as a matter of law, no deference can be given on review to the decision of the trial court. Outboard Marine Corp. v. Liberty Mutual Insurance Co. (1992), 154 Ill.2d 90, 102, 180 Ill.Dec. 691, 696, 607 N.E.2d 1204, 1209.

This case turns upon the effect the Act has upon the agreement between Owner and Contractor. The record shows Owner requested a defense and Contractor refused to provide it. The parties agree that their agreement is a construction contract within the meaning of section 1 of the Act.

The significant portions of the agreement are paragraphs 14 and 15, the pertinent provisions of which state as follows:

"14. INDEMNIFICATION

14.1. Contractor agrees to indemnify and save harmless [Owner], its agents or employees, from and against all damages, claims[,] or liabilities without limiting the generality of the foregoing arising out of or related to this Agreement and the performance of any work thereunder, and from all claims, liens, or suits for labor and materials furnished contractor or any subcontractor, and all claims and suits for damages to persons, including [Owner's] employees not specifically exempt herein except only such loss, claims or damage as shall have been proven, determined and found by a court of competent jurisdiction to have been proximately caused by the sole negligence of [Owner]. Contractor, with respect to this Indemnification, agrees to defend and will defend on behalf of [Owner] any suits brought jointly against [Owner] and Contractor or against [Owner] alone, for or arising out of any or all of the aforesaid causes, and will reimburse [Owner] for attorney's fees and other expenses incurred by [Owner] in defending any such suits.

15. INSURANCE

15.1 Contractor shall maintain in full force and effect during the performance of the work, the following insurance policies with insurance companies approved by [Owner].

15.1.1 Workmen's Compensation and Occupational Disease * * *. * * *

15.1.2 Comprehensive General Liability insurance * * *. * * * [Not covering liability of Owner.]

[245 Ill.App.3d 325] 15.1.3 Comprehensive Automobile Liability insurance * * *. * * *

15.1.4 The insurance provided pursuant to the foregoing shall include Contractual Liability coverage in accordance with Contractor's obligations under Paragraph 14 above and, if underground work, demolition, blasting, excavation or rigging is involved, the applicable insurance policy exclusions relating thereto shall be deleted." (Emphasis added.)

The most significant parts of the foregoing are the provisions which purport to require the Contractor to (1) indemnify Owner for liability for Owner's negligence in connection with the construction project, (2) defend Owner in a suit arising from the foregoing, and (3) provide contractual liability insurance covering Contractor's promises in regard to items (1) and (2).

Clearly, Contractor's purported obligation to indemnify Owner is voided by the provision of section 1 of the Act. Any agreement of Contractor to defend Owner here would have to arise from paragraph 14.1 of the agreement. That paragraph is entitled "INDEMNIFICATION." The purported agreement to defend is stated in these words: "Contractor, with respect to this Indemnification, agrees to defend * * *." Where a contract for indemnification provides for the indemnitor to defend the indemnitee, that duty is an aspect of the...