Mazanek v. Rockford Drop Forge Co.

• Decision Date: 04 August 1981
• Docket Number: No. 79-523,79-523
• Citation: 424 N.E.2d 1271,54 Ill.Dec. 368,98 Ill.App.3d 956
• Parties: , 54 Ill.Dec. 368 Mitchell J. MAZANEK, Plaintiff-Appellee, v. ROCKFORD DROP FORGE CO., an Illinois Corporation, Defendant, Third Party Plaintiff-Appellant, v. GENERAL ELECTRIC COMPANY, a Corporation and General Electric Supply Company, a division of General Electric Company, a Corporation, Third Party Defendant- Appellee.
• Court: United States Appellate Court of Illinois

Page 1271

424 N.E.2d 1271

98 Ill.App.3d 956, 54 Ill.Dec. 368

Mitchell J. MAZANEK, Plaintiff-Appellee, v. ROCKFORD DROP FORGE CO., an Illinois Corporation, Defendant, Third Party Plaintiff-Appellant, v. GENERAL ELECTRIC COMPANY, a Corporation and General Electric

Supply Company, a division of General Electric

Company, a Corporation, Third Party

Defendant- Appellee.

No. 79-523.

Appellate Court of Illinois, Second District.

Aug. 4, 1981.

Brassfield, Cowan & Howard, Alfred Cowan, Rockford, for defendant, third party plaintiff-appellant.

Miller, Hickey & DeBruyne, Peter DeBruyne, Rockford, Edward J. Egan, James J. Reidy, Chicago, for plaintiff-appellee.

LINDBERG, Justice:

Plaintiff, Mitchell Mazanek, commenced this action against defendant, third-party plaintiff, Rockford Drop Forge Co. (Rockford), to recover damages for injuries sustained on July 13, 1973, in an electrical fire at Rockford's plant. Rockford filed a third-party action for indemnity against the third-party defendants, General Electric Company and General Electric Supply Company. During the trial, plaintiff entered into an "indemnification" agreement with General Electric Supply Company (GE) for which he received $100,000. The Circuit Court of Winnebago County entered judgment upon a jury verdict in the amount of $540,000 against Rockford in favor of plaintiff. The jury also found that Rockford was entitled to reimbursement from GE, but limited the amount to $2,712.22. Rockford appeals from both judgments.

The relevant facts include events 10 years prior to the date of the occurrence. The instrumentality which caused plaintiff's injuries is an electrical switchboard which was purchased by defendant, third party plaintiff, Rockford Drop Forge Company from third party defendant, General Electric Company in 1962 and installed at Rockford in 1963. The accompanying product manual recommended annual cleaning of the machine and the National Electric Code provided that a switchboard should not be located where contamination by foreign particles, such as metal dust or corrosives, could accumulate in the switchboard. The evidence showed that neither safety precaution had been taken: the machine, located near storage for slag metal parts, had not been cleaned in 10 years at the time of the occurrence. The danger is that conductive contaminants will divert the electricity from its proper path and generate heat which could result in fire, an occurrence known as the creation of an arc. In 1973, Rockford requested that GE service and clean the switchboard. GE replied with its own form entitled "Customer Acknowledgement" which corresponded verbatim with Rockford's service request. At the bottom of the form was the statement that the agreement was subject to the terms printed on the back. At the top of the reverse side of the form was the heading: "STANDARD TERMS AND CONDITIONS APPLYING TO ALL SALES." Indented below the heading was a paragraph beginning "All sales of material or equipment by General Electric Supply Company are expressly conditioned upon the terms and conditions set forth below." One of the terms and conditions was labeled "LIMITATION OF LIABILITY " and it stated: "GESCO's liability on any claim for loss or damage arising out of this contract or from the performance or breach thereof or connected with the supplying of material or equipment hereunder, or its sale, resale, operation or use, whether based on warranty, contract, negligence or other grounds, shall not exceed the price allowable to such material or equipment or part thereof involved in the claim."

A GE crew arrived at Rockford on the requested date and was met by Rockford employees and directed to the switchboard. The switchboard was "energized" when the GE crew arrived and they were told that the machine would continue to operate so that it could only be partially cleaned by the GE crew. Plaintiff commenced brushing dust and contaminants off of the part of the machine furthest from the power source. There was an explosion and fire in which plaintiff suffered severe injuries. In January of 1974, GE presented and Rockford paid a bill of $2,721.22 for the services rendered. Plaintiff filed suit against Rockford, alleging that it negligently failed to take adequate safety precautions to prevent the creation of an arc. Rockford sued General Electric Company and General Electric Supply Company for design defects and negligence and demanded indemnification.

At the close of the evidence, the plaintiff and GE entered into what was termed an indemnity agreement wherein plaintiff received $100,000. That amount was apportioned as $35,000 in settlement of any Workmen's Compensation claim plaintiff had against GE and $65,000 for plaintiff's promise to indemnify GE and further not to execute upon any judgment against Rockford which Rockford might in turn enforce against GE. The case was submitted to the jury which returned a verdict of $540,000 against Rockford and found that Rockford was entitled to reimbursement from GE but only in the amount of $2,721.22. Rockford appeals.

I.

Rockford argues that the question of whether the "Limitation of Liability," included on the back of GE's Customer Acknowledgement form, applied to a service contract though its terms referred to contracts for the sale of goods was improperly submitted to the jury and should have been decided by the trial court as a matter of law. The plaintiff and GE, however, argue that Rockford waived review of this issue by reason of argument it made in opposition to GE's motion for a directed verdict. At that time Rockford's attorney stated that the issue of the effect of the limitation of liability should be decided by the jury. The general rule is that where a question of law is submitted to the jury at the request of a party that party cannot complain if the jury resolved the issue against it. (Ahlvers v. Terminal Railroad Ass'n. of St. Louis (1975), 31 Ill.App.3d 166, 334 N.E.2d 329.) Rockford's statement however did not constitute a waiver of the contract issue in this case for the reason that Rockford had made a motion to strike GE's affirmative defense which was based upon the limitation of liability clause, albeit several years before trial. Rockford pointed out in its motion that the limitation applied to sales of material or equipment not to sales of services. It is well established that a motion to strike or dismiss raises only a question of law. (Ill.Rev.Stat.1977, ch. 110, par. 45; Midwest Glass Co. v. Stanford Development Co. (1975), 34 Ill.App.3d 130, 339 N.E.2d 274.) Such a motion attacks the legal sufficiency of a pleading. (Hamer v. Village of Deerfield (1975), 33 Ill.App.3d 804, 338 N.E.2d 242.) Thus Rockford's motion to strike was sufficient to preserve for appeal the issue of whether the court should have decided the applicability of the limitation clause.

We hold that the trial court should have decided whether the limitation of liability applied to the contract for services between Rockford and GE. The interpretation, construction, or legal effect of a contract is a matter to be determined by the courts as a question of law. (Sherbrooke Homes, Ltd. v. Krawczyk (1980), 82 Ill.App.3d 990, 38 Ill.Dec. 391, 403 N.E.2d 622.) The meaning to be given to the plain words of a written contract is a question of law. (Ahlvers.) A reviewing court may make an independent determination of such a question. (Rymer v. Kendall College (1978), 64 Ill.App.3d 355, 20 Ill.Dec. 880, 380 N.E.2d 1089.) The plain meaning of the terms and conditions to which the agreement to service was allegedly subject is that such terms and conditions referred only to sales of goods. The introductory paragraph on the back of the form stated explicitly that the terms and conditions set forth below applied to "(a)ll sales of material or equipment." Thus, the trial court erred in denying Rockford's motion to strike the affirmative defense of GE and we reverse the judgment of $2712.22 in favor of Rockford and remand for a new trial on the third party complaint.

Both the plaintiff and GE have argued in this court that Rockford is barred from any indemnity from GE, as a matter of law, because Rockford was guilty of active negligence. ¹ Additionally, GE argues that its motion for a directed verdict in its favor should have been granted by the trial court. We decline, however, to pass on these issues because no cross-appeal has been brought and, therefore this court lacks jurisdiction to consider these arguments. Mid-West National Bank of Lake Forest v. Metcoff (1974), 23 Ill.App.3d 607, 319 N.E.2d 336.

II.

The next issue raised by Rockford is whether public policy was violated by an agreement between the injured plaintiff and his employer, GE, which provided that plaintiff receive $100,000, $35,000 of which was in consideration of plaintiff's waiver of any Workmen's Compensation payments owed to plaintiff by GE and $65,000 of which was in consideration of plaintiff's promise, inter alia, to indemnify GE and further not to execute upon any judgment plaintiff might obtain against Rockford which Rockford might in turn enforce against GE. Alternatively, the issue is whether Rockford is entitled to a partial satisfaction of the $540,000 judgment against it to the extent of that agreement between plaintiff and GE which does not relate to the Workmen's Compensation settlement, i. e., set-off in the amount of $65,000.

We decline to pass on the public policy issue as Rockford failed to present that argument to the trial court. The theory upon which a case is tried in the lower court cannot be changed on review and the points argued on appeal must be commensurate with the issues presented at trial. Kravis v. Smith Marine, Inc. (1975), 60 Ill.2d 141, 324 N.E.2d 417.

But we conclude that Rockford is entitled to a set-off of $65,000. The recent supreme court decision in Popovich v. Ram Pipe & Supply Company, Inc. (1980), 82 Ill.2d 203, 45 Ill.Dec. 167, ...