St. Joseph Hospital v. Corbetta Const. Co., Inc.

• Decision Date: 03 June 1974
• Docket Number: 56761,Nos. 56452,s. 56452
• Citation: 316 N.E.2d 51,21 Ill.App.3d 925
• Parties: ST. JOSEPH HOSPITAL, Plaintiff-Appellee, v. CORBETTA CONSTRUCTION CO., INC., et al., Defendants-Appellants.
• Court: United States Appellate Court of Illinois

Page 51

316 N.E.2d 51

21 Ill.App.3d 925

ST. JOSEPH HOSPITAL, Plaintiff-Appellee, v. CORBETTA CONSTRUCTION CO., INC., et al., Defendants-Appellants.

Nos. 56452, 56761.

Appellate Court of Illinois, First District, First Division.

June 3, 1974.

As Modified on Denial of Rehearing Aug. 19, 1974.

Winston & Strawn, Mayer, Brown & Platt, Tom L. Yates, Chicago, for defendants-appellants.

O'Keefe, Ashenden, O'Brien & Hanson, Finn & LeSueur, Chicago, for plaintiff-appellee.

HALLETT, Justice.

This involves consolidated appeals from two actions in the circuit court of Cook County. Both arose primarily out of problems flowing from the installation of Textolite plastic laminate wall paneling on the walls of the new St. Joseph Hospital during its construction, which paneling proved to have a 'flame spread' rating some 17 times the maximum permitted under the Chicago Building Code and had to be replaced with paneling complying with said Code.

The first was a declaratory judgment action brought by the Hospital against its architect, the contractor and the manufacturer-supplier of said wall paneling. The second was an action at law brought by the manufacturer-supplier against the contractor for the price of said original paneling. Further discussion of the litigation, its outcome and the various appeals will be deferred for the present.

While this is an extremely long (hundreds of documents, 5000 pages of transcript, and 444 pages of appellate briefs) consolidated appeal, involving two lawsuits, four adverse parties and two jury trials (taking six and one-half weeks), the 'bare bones' of the controversy are relatively simple.

The St. Joseph Hospital (the Hospital) in 1958 entered into a contract with architect Belli & Belli of Missouri (Belli) for the erection of a hospital on a new site in Chicago to replace one erected before the Great Chicago Fire of 1871, and the general construction of the hospital was undertaken by the Corbetta Construction Company (Corbetta). In April of 1965, when the building had been substantially completed, the Hospital was advised by the City Collector that its application for a license to operate the Hospital had been disapproved because the wall paneling (General Electric's 'Textolite') which covered its rooms and corridors, and had been manufactured and furnished by the General Electric Company (General Electric), did not comply with a Chicago Code requirement that such paneling have a 'flame spread' rating of not to exceed 15. Actually it had a rating of 255, 17 times the maximum. The city also threatened criminal action against the Hospital for operating without said license.

At this juncture, the Hospital called upon all of the parties involved to remedy the situation and withheld from Corbetta final payment of some $453,000. Although all of the parties deplored the situation, each took the position that it was not itself at fault and that only others were to blame. At about this time Corbetta advised the Hospital that it was their intention to file suit for the $453,000 so withheld by the Hospital.

Faced with the threat of two lawsuits and a complete shutdown of its operation, the Hospital, on May 14, 1965, filed a complaint for declaratory judgment against Corbetta, Belli and General Electric, setting forth the above described controversy between the parties, and attaching copies of the various contracts, subcontracts and applicable municipal ordinances. As the result of a petition for immediate relief, an order was entered in this action, permitting the Hospital to take immediate steps to remove the Textolite wall paneling and to replace it with paneling approved by the city of Chicago, all without prejudice to the rights of any of the parties.

Under this order, the Textolite wall paneling was removed and replaced with Westinghouse Micarta paneling, an asbestos plastic laminate installed on an asbestos panel, meeting the 15 flame spread rating of the Chicago Building Code, at a total cost of some $300,000.

Meanwhile, the Hospital amended its complaint; various motions to dismiss by Belli and General Electric were filed and denied; Corbetta counterclaimed against the Hospital, Belli and General Electric; Belli cross-claimed against Corbetta and General Electric; and, eventually, appropriate answers were filed to the complaints, counterclaims and cross-claims and the case was at issue. The trial court, on the motion of the Hospital, segregated the various counterclaims and cross-claims from the question of liability and this is not here challenged. It also deferred the question of damages until after liability had been determined and this is here challenged only by Belli.

The jury in the trial with respect to liability to the Hospital rendered a verdict against all three defendants. At the close of all the evidence in said trial, the court directed a verdict for the Hospital and against Corbetta on its counterclaim. A subsequent jury then determined that the costs of reconstructing the corridors of the Hospital with a wall paneling which complied with the Chicago Building Code, plus attorneys' fees, were $431,770.55. In addition, Corbetta and General Electric were found jointly and severally liable to the Hospital for attorneys' litigation expenses of $112,251.21.

The various defendants had filed cross-claims against each other, each contending that any recovery by the Hospital against it should be passed on to other defendants. At the conclusion of the jury trial on the question of liability, all defendants waived jury and submitted their cross-claims to the court, which denied all such indemnity claims. The Hospital having retained amounts awarded it, Corbetta was given a separate judgment against Belli and General Electric for one-third of the damages and against General Electric for one-half of the litigation expense. The result is that, under the present judgment, each of the three defendants will bear one-third of the general damages and that Corbetta and General Electric will each bear one-half of the Hospital's litigation expense.

Under a second count of its complaint, the Hospital sought to recover from all three defendants for the cost of reconstructing portions of the corridor walls behind which were located pipe or access spaces, to meet the city's one hour fire resistance requirements. Judgment was entered on this count for the Hospital against Belli, for $17,178.31.

The second lawsuit, Case No. 56761, is an action by General Electric against Corbetta, seeking to recover payment for the Textolite plastic laminate wall paneling originally affixed to the walls of the hospital. The trial court dismissed this action on Corbetta's motion on the ground that the material facts determined in the case brought by the Hospital against all three defendants precluded General Electric from recovery.

All three defendants have appealed, raising many issues. Rather than to note each party's various contentions here, we shall discuss the issues under Nine general heardings, noting the several parties' positions with respect thereto as seems appropriate.

I.

As we see it, the First question to be resolved is whether the trial court erred in refusing to dismiss the Hospital's complaint for declaratory judgment. Only defendant Belli here challenges this ruling.

Section 57.1 of the Civil Practice Act, Ill.Rev.Stat.1969, ch. 110, par. 57.1, provides as follows:

'57.1 § 57.1 Declaratory judgments. (1) No action or proceeding is open to objection on the ground that a merely declaratory judgment, decree or order is sought thereby. The court may, in cases of actual controversy, make binding declarations of rights, having the force of final judgments, whether or not any consequential relief is or could be claimed, including the determination, at the instance of anyone interested in the controversy, of the construction of any statute, municipal ordinance, or other governmental regulation, or of any deed, will, contract or other written instrument, and a declaration of the rights of the parties interested. The foregoing enumeration does not exclude other cases of actual controversy.'

The Hospital's filing its declaratory action when it did, without waiting for an even more complete disaster, certainly was proper.

In Trossman v. Trossman (1960), 24 Ill.App.2d 521, 165 N.E.2d 368, this court, in reversing the dismissal of a declaratory judgment action and remanding the cause for further proceedings, at page 531, 165 N.E.2d at page 373, quoted as follows from 26 C.J.S. Declaratory Judgments § 28:

"It is not essential to a proceeding for a declaratory judgment that there be a violation of a right, a breach of duty or a wrong committed by one party against the other. The mere existence of a cloud, the denial of a right, the assertion of an unfounded claim, the existence of conflicting claims, or the uncertainty or insecurity occasioned by new events may constitute the operative facts entitling a party to declaratory relief."

In Walton Playboy Clubs, Inc. v. City of Chicago (1962), 37 Ill.App.2d 425, 185 N.E.2d 719, in affirming (with some modifications) a declaratory judgment involving a threatened revocation of the plaintiff's license to do business, this court, at pages 428--429, 185 N.E.2d at page 720, said:

'Apart from this, the situation confronting the plaintiff at the time this suit was started made it singularly fitting to seek relief by way of declaratory judgment. The plaintiff had made a large investment in a business which, in its general outline, was in conformity with several others, long-conducted without interference by the City. It had received from the Department of Police an official opinion of the City's Department of Law stating this its method of doing business was illegal. It had every reason to believe that the City would proceed against it in accordance with the opinion. The success of its business depended upon the sale of memberships and the threat of...