Wilson-Jump Co. v. McCarthy-Hundrieser and Associates, Inc.

• Decision Date: 29 May 1980
• Docket Number: No. 79-1014,WILSON-JUMP,CARTHY-HUNDRIESER,79-1014
• Citation: 405 N.E.2d 1322,40 Ill.Dec. 230,85 Ill.App.3d 179
• Court: United States Appellate Court of Illinois
• Parties: , 40 Ill.Dec. 230 COMPANY, an Illinois Corporation, Plaintiff, v. McAND ASSOCIATES, INC., Paschen Contractors, Inc., and P. Nacey Sprinkler Company, Defendants. PASCHEN CONTRACTORS, INC., Counterplaintiff-Appellant, v. P. NACEY SPRINKLER COMPANY, Counterdefendant-Appellee.

Page 1322

405 N.E.2d 1322

85 Ill.App.3d 179, 40 Ill.Dec. 230

WILSON-JUMP COMPANY, an Illinois Corporation, Plaintiff, v. McCARTHY-HUNDRIESER AND ASSOCIATES, INC., Paschen

Contractors, Inc., and P. Nacey Sprinkler Company,

Defendants.

PASCHEN CONTRACTORS, INC., Counterplaintiff-Appellant, v. P. NACEY SPRINKLER COMPANY, Counterdefendant-Appellee.

No. 79-1014.

Appellate Court of Illinois, First District, Fourth Division.

May 29, 1980.

Galliani & Kuzel, Ltd., Chicago (William R. Galliani, Michael W. Rathsack, Chicago, of counsel), for counterplaintiff-appellant.

Crooks & Gilligan, Ltd., Chicago (John W. Gilligan, Chicago, of counsel), for counterdefendant-appellee.

ROMITI, Justice:

The appellant in this action, Paschen Contractors, Inc. (Paschen), when sued by another party, Wilson-Jump Company (Wilson), counterclaimed against another defendant, P. Nacey Sprinkler Company (Nacey), the appellee in this action, on an indemnity agreement. An order was entered finding Nacey liable on the agreement but the amount of damages was not determined. Later the original action was dismissed as against Paschen. Because of this, Paschen refused to appear and prove up its damages on the counterclaim claiming the court had no jurisdiction over it. It appeals from a judgment finding no damages contending (1) the court had no jurisdiction over it; (2) if it did, it only had jurisdiction to enter an order dismissing the claim for want of prosecution; (3) it should have vacated the order upon appellant's motion filed within thirty days after the judgment was entered. We find no error and affirm.

On June 17, 1974 Wilson sued McCarthy-Hundrieser and Associates (McCarthy), Paschen and Nacey. Paschen counterclaimed against Nacey on an indemnity agreement. On June 12, 1975 summary judgment was entered holding Nacey liable to Paschen for all costs incurred or paid by Paschen in defense of Wilson's claims and for any judgment that might be entered. On July 27, 1978, Wilson's suit against McCarthy was dismissed with prejudice since the case had not been settled. On September 11, 1978, Wilson's suit was dismissed as to Paschen with prejudice, since all matters had been settled. It was further stated that the action should continue as to Nacey. The order was approved by counsel for Wilson and Paschen.

When the remaining parties were called for trial on January 25, 1979, the suit by Wilson against Nacey was dismissed, with prejudice, the parties having settled the action. Paschen, however, refused to appear contending that the court had no jurisdiction over it since it had been dismissed on September 11, 1978 and that the summary judgment order on the counterclaim could be used in a separate action for breach of contract between the parties. Paschen refused to appear even though the trial judge personally called Paschen's attorney, advised him the case was set for trial and advised him that if he was unable to appear on that day, the judge would extend the time, allowing him to come in the next day or some other time and present evidentiary proof of attorney's fees and costs. Counsel stated at that time that the court had no jurisdiction and that he did not intend to and would not appear before the court.

Since Nacey requested trial on the issue, and since there was no evidence as to the attorney's fees and costs, the court entered a judgment, also on January 25, 1979, finding no damages for and on behalf of Paschen on the counterclaim against Nacey.

On February 21, 1979, Paschen moved the court to vacate the January 25, 1979 judgment and to enter a judgment for Paschen against Nacey for $5,095.30. In its motion, Paschen repeated its contention that the court had no jurisdiction, but also argued that if the court had jurisdiction, Paschen's failure to appear was only grounds for dismissal for want of prosecution and not grounds for entry of a judgment of "no damage" on the merits. Its claim of damages in the amount of $5,095.30 was based solely on a sworn statement that the costs and attorney's fees amounted to $5,095.30. It did not ask for an opportunity to establish the amount of the reasonable attorney's fees incurred.

The trial court on March 29, 1979 denied the motion, stating at the hearing that he thought it was an affront for counsel to refuse to appear on January 25, 1979 or at a later date as offered by the judge.

I.

Paschen contends that the trial court had no jurisdiction over it (1) because the summary judgment order was final as it resolved all issues between it and Nacey and all that was left was the ministerial task of informing Nacey of the amount of attorney's fees and costs, which were fixed amounts upon which execution could issue and (2) because it was dismissed from the action by the order of September 11, 1978. We find no merit to these claims.

Where an indemnity contract provides that the indemnitor will reimburse the indemnitee for all loss, damages, expense and costs and attorney's fees incurred, the indemnitee is entitled to recover reasonable attorney's fees incurred by it (John J. Colnan Co. v. Talsma Builders, Inc. (1979), 77 Ill.App.3d 221, 395 N.E.2d 1076, 32 Ill.Dec. 695), and the court in granting summary judgment properly so ruled. But the key word is reasonable. The indemnitee is still required to establish what were reasonable attorney's fees and the indemnitor is not necessarily liable for the amount the indemnitee unilaterally agreed to pay or did pay its lawyer. (United States Fidelity and Guaranty Co. v. Love (1976), 260 Ark. 374, 538 S.W.2d 558, appeal after remand 263 Ark. 925, 568 S.W.2d 746; Sork v. United Benefit Fire Insurance Co. (Fla.App.1964), 161 So.2d 54; Fireman's Fund Insurance Co. v. Levy (Sup.1960), 21 Misc.2d 1027, 197 N.Y.S.2d 45.) In this cause reasonable fees had not been established. Accordingly, it is clear that the order was not a final one upon which execution could issue. Moreover, we note that this would be true even if the indemnitee did not have to prove that the amount incurred was reasonable. The indemnitor is not required to accept the mere statement that indemnitee incurred an alleged amount of costs and fees. It is entitled to have that fact established under oath in court.

This case resembles Kulins v. Malco, A Microdot Company, Inc. (1979), 79 Ill.App.3d 982, 398 N.E.2d 1144, 35 Ill.Dec. 194. In that case the court entered and order finding that a severance pay plan was in full force and a certain modification was not applicable. The court, however, retained jurisdiction to determine questions relating to notice of the class, computation of amounts of liability and all other pending or related matters. On appeal, both parties contended, as Paschen argues here, that the trial court's order was final since it decided the only substantial issue in controversy and reserved only ministerial or incidental matters. The appellate court, however, ruled to the contrary, stating at 79 Ill.App.3d 985, 398 N.E.2d 1146, 35 Ill.Dec. 196:

"We find that the November 30 order was not a final judgment as to any of the claims. An order is final if 'it determines the ultimate rights of the parties with respect to distinct matters which have no bearing on other matters left for further consideration or if the matters left for future determination are merely incidental to the ultimate rights which have been adjudicated by the decree.' (Barnhart v. Barnhart (1953), 415 Ill. 303, 309, 114 N.E.2d 378, 381.) To be final, an order must conclude the litigation between the parties on the merits so that only execution remains to be accomplished if affirmed on appeal. (Coble v. Chicago Health Club, Inc. (1977), 53 Ill.App.3d 1019, 11 Ill.Dec. 734, 369 N.E.2d 188.) The November 30 order did not adjudicate the ultimate rights of any of the parties and did not conclude the litigation between the parties so that only execution remained to be accomplished if affirmed on appeal. The order merely made a preliminary finding that the 1967 severance pay policy 'is in full force and effect and is enforceable against the defendant and in favor of plaintiffs.' It did not adjudicate any of the ultimate rights of any of the plaintiffs. It did not grant any of the relief prayed for by any of the plaintiffs. Such relief could only be granted upon a further hearing at which facts necessary to make a determination as to relief can be ascertained. (Impey v. City of Wheaton (1965), 60 Ill.App.2d 99, 208 N.E.2d 419.) Until such further hearing and subsequent entry of judgment, the court's statement with respect to the 1967 severance pay policy constituted no more than a mere finding, which is unreviewable. Myers v. Myers (1977), 51 Ill.App.3d 830, 9 Ill.Dec. 603, 366 N.E.2d 1114."

Furthermore, even if the summary judgment order had determined all issues as between Paschen and Nacey, it would still not have been a final order since it did not resolve all issues in the case and no order was entered finding no just reason to delay appeal. The suit by Wilson against Nacey was not dismissed until January 25, 1979, the same date the judgment of no damages was entered. Supreme Court Rule 304(a) (Ill.Rev.Stat.1977, ch. 110A, par. 304(a)), provides that in the absence of a finding of no just reason to delay appeal any judgment that adjudicates fewer than all of the claims or the rights and liabilities of fewer than all of the parties is not enforceable or appealable and is subject to revision at any time before the entry of a judgment adjudicating all the claims, rights and liabilities of all the parties. Absent such finding, therefore, the trial court retains jurisdiction over the entire matter until...