Title: Guerino v. Depot Place Partnership

State: illinois

Issuer: Illinois Supreme Court

Document:

Opinion filed May 18, 2000.
JUSTICE HEIPLE delivered the opinion of the court:
In this complicated multiparty litigation, fourth-party defendant Semmerling 
Fence and Supply, Inc. (Semmerling), claims that fourth-party plaintiff, The 
Concrete Doctor, Inc. (Concrete Doctor), cannot state a cause of action for 
contribution under section 2 of the Joint Tortfeasor Contribution Act (the Act) 
(740 ILCS 100/2 (West 1996)) against Semmerling and other fourth-party 
defendants because Concrete Doctor's tort liability was extinguished, leaving 
only contractual liability as a basis for the action. In addition, fourth-party 
defendants Levy Shackleford, individually and doing business as Durabilt Fence 
Company (Shackleford); David Barton, individually and doing business as David 
Barton Fence Company (Barton); James Raupp (Raupp); and Waste Management of 
Illinois, Inc. (Waste Management), challenge the good faith of a settlement 
agreement between plaintiffs James and Katrina Guerino, defendant and 
third-party plaintiff Depot Place Partnership (Depot Place), and third-party 
defendant and fourth-party plaintiff Concrete Doctor. Because we agree with 
Semmerling that Concrete Doctor cannot state a claim for contribution against 
fourth-party defendants under the Act as a matter of law, we need not consider 
the good faith of the settlement agreement.
BACKGROUND
On March 23, 1993, plaintiffs filed an action in negligence against Depot 
Place. The complaint alleged that on April 5, 1991, James Guerino, an employee 
of Concrete Doctor, was injured by a falling I-beam, an integral part of a 
mechanical gate located on premises owned by Depot Place and leased to Concrete 
Doctor. Depot Place filed a third-party complaint against Concrete Doctor on 
February 5, 1996, seeking recovery on theories of liability under the 
Contribution Act, breach of contractual duties to inspect and maintain the 
premises under the lease, and indemnification based on an express indemnity 
provision in the lease agreement. Depot Place subsequently amended its 
third-party complaint to add contribution claims against Shackleford, Barton, 
Raupp, Waste Management and Semmerling. Depot Place alleged that each of the 
additional third-party defendants had some connection to the design, 
fabrication, construction, installation or maintenance of the allegedly 
defective mechanical gate.
All third-party defendants filed motions to dismiss Depot Place's claims as 
time-barred under the two-year statute of limitations for contribution actions. 
735 ILCS 5/13-204(b) (West 1996). The trial court granted the motions to dismiss 
with regard to the contribution actions, but refused to dismiss Depot Place's 
third-party action against Concrete Doctor for breach of contract and 
indemnification, which was subject to a 10-year statute of limitations. The 
appellate court affirmed the trial court's dismissal of the third-party 
contribution claims. Guerino v. Depot Place Partnership, 292 
Ill. App. 3d 1122 (1997) (unpublished order under Supreme Court Rule 23).
On April 18, 1997, Concrete Doctor filed a fourth-party complaint for 
contribution against Shackleford, Barton, Raupp, Waste Management and Semmerling 
(collectively, fourth-party defendants) pursuant to section 2 of the 
Contribution Act (740 ILCS 100/2 (West 1996)). Shortly afterward, on June 11, 
1997, plaintiffs, Depot Place and Concrete Doctor reached a settlement 
agreement. Concrete Doctor moved for a finding that the settlement was in good 
faith so that it could proceed with its fourth-party contribution action. Waste 
Management and Barton both filed objections, but on July 23, 1997, the trial 
court found the settlement in good faith.
In September 1997, fourth-party defendants filed motions to dismiss Concrete 
Doctor's fourth-party contribution action under both section 2-615 and section 
2-619 of the Code of Civil Procedure (735 ILCS 5/2-615, 2-619 (West 1996)), 
arguing that Concrete Doctor could not state a claim for contribution in tort 
when the only claims against it sounded in contract. The trial court granted 
these motions on December 17, 1997.
In a consolidated appeal, the appellate court affirmed the trial court's 
finding of good faith as to the settlement, but reversed the trial court's 
dismissal of Concrete Doctor's complaint for contribution, thus reinstating the 
contribution action against fourth-party defendants. Nos. 2-97-1042, 2-97-1043, 
2-98-0008 cons. (unpublished order under Supreme Court Rule 23). Fourth-party 
defendant Semmerling's petition for leave to appeal to this court, which argued 
that Concrete Doctor failed to state a cause of action under the Contribution 
Act, was denied. Guerino v. Depot Place Partnership (Levy Shackleford), 184 Ill. 2d 556 (1999) (leave to appeal denied). However, fourth-party defendant Waste 
Management's petition for leave to appeal, which argued that the settlement 
agreement was not reached in good faith, was allowed. Guerino v. Depot Place 
Partnership (Levy Shackleford), 184 Ill. 2d 556 (1999) (leave to appeal 
allowed). Shackleford, Barton and Raupp subsequently joined Waste Management's 
appeal. This court granted Semmerling's motion for leave to file a separate 
brief pursuant to Supreme Court Rule 318(a) (155 Ill. 2d R. 318(a)).
ANALYSIS
As a preliminary matter, Concrete Doctor argues that Semmerling may not now 
raise its claim that Concrete Doctor cannot state a cause of action against 
fourth-party defendants under the Contribution Act because this court denied 
Semmerling's petition for leave to appeal challenging the appellate court's 
reversal of the trial court's dismissal of Concrete Doctor's fourth-party 
contribution action. Concrete Doctor is incorrect.
First, we note that Waste Management's petition for leave to appeal, which 
was allowed by this court, requested review "for the reasons stated above and in 
the petition for leave to appeal filed by Semmerling Fence & Supply, Inc. 
(which is adopted and incorporated by reference herein)." Additionally, 
Semmerling's Rule 318(a) motion for leave to file its own brief, which was 
allowed by this court, specifically stated that it would focus on whether the 
trial court properly dismissed Concrete Doctor's fourth-party action for 
contribution. The fact that leave to appeal was denied carries no precedential 
value and in no way amounts to a consideration by this court of the merits of 
Semmerling's claims. See Relph v. Board of Education of DePue Unit School 
District No. 103, 84 Ill. 2d 436, 442 (1981); People v. Vance, 76 Ill. 2d 171, 182-83 (1979). This court's review may cover all matters properly 
raised and passed on in the course of litigation. Relph, 84 Ill. 2d  at 
442. Thus, the issues now raised by Semmerling are properly before this 
court.
Because we find Semmerling's claim that Concrete Doctor failed to state a 
cause of action under the Contribution Act dispositive, we shall address this 
issue first. Semmerling argues that, in reversing the circuit court's dismissal 
of Concrete Doctor's fourth-party complaint for contribution, the appellate 
court improperly relied upon section 2(a) of the Contribution Act, to the 
exclusion of section 2(b). According to Semmerling, because the only claims in 
Depot Place's third-party complaint which survived dismissal were based on 
Concrete Doctor's contractual obligations under its lease agreement with Depot 
Place, to which fourth-party defendants were not parties, Concrete Doctor is 
unable to state a claim under section 2(b) of the Act. Section 2 of the 
Contribution Act states:
In holding that fourth-party defendants could be held liable in contribution 
to Concrete Doctor, the appellate court relied upon the language of section 2(a) 
of the Act, which provides a right to contribution where two or more persons are 
"subject to liability in tort arising out of the same injury to person or 
property." 740 ILCS 100/2(a) (West 1996). This language has been interpreted by 
this court as allowing a right of contribution against a party who was 
potentially liable in tort to the underlying plaintiff at the time of the 
injury. See Vroegh v. J&M Forklift, 165 Ill. 2d 523, 529 (1995); 
Delaney v. McDonald's Corp., 158 Ill. 2d 465, 468 (1994); Doyle v. 
Rhodes, 101 Ill. 2d 1, 11 (1984). Thus, the appellate court reasoned, even 
though the third-party breach of contract and indemnity claims brought by Depot 
Place constituted the means by which Concrete Doctor was required to contribute 
towards plaintiffs' damages, fourth-party defendants were potentially liable in 
tort at the time plaintiffs' injuries occurred. Therefore, the appellate court 
concluded, Concrete Doctor stated a claim for contribution against fourth-party 
defendants.
The appellate court, however, misapprehended the holdings of Vroegh, 
Delaney and Doyle. In each of these cases, this court 
considered only whether a contribution defendant could be subject to liability 
within section 2(a) of the Contribution Act, and therefore liable for 
contribution to a contribution plaintiff, when the contribution defendant's 
liability to the original, underlying plaintiff was extinguished. 
Vroegh, 165 Ill. 2d at 528-29; Delaney, 158 Ill. 2d at 467-68; 
Doyle, 101 Ill. 2d  at 6. In each case, however, the contribution 
plaintiff's liability in tort remained intact. By contrast, in the instant case 
Concrete Doctor, the contribution plaintiff, has no tort liability, and is 
subject to liability to Depot Place solely on the basis of the lease agreement 
between the two parties. Thus, the issue presented in this case-whether a party 
who pays contract damages based upon an independent contractual obligation may 
recover contribution under the Act from other potential tortfeasors-is a matter 
of first impression before this court.
We agree with Semmerling's contention that the appellate court erred by 
looking solely to section 2(a) of the Contribution Act without regard to whether 
the elements of a contribution action found in section 2(b) are met. Section 
2(a) of the Act centers on a theoretical, inchoate right to contribution, while 
section 2(b) establishes the reality of what a contribution plaintiff must plead 
and prove in order to obtain recovery. Reading both sections together, it is 
clear that a party seeking contribution whose only liability is contractual 
liability fails to state a cause of action for contribution under the Act. 
Although Concrete Doctor's complaint for contribution may satisfy section 2(a) 
of the Act, the plain language of section 2(b) further provides for a right of 
contribution only in favor of "a tortfeasor who has paid more than his pro 
rata share of the common liability." 740 ILCS 100/2(b) (West 1996). In the 
instant case, Concrete Doctor cannot meet these additional requirements.
First, there is no common liability between Concrete Doctor and fourth-party 
defendants. Concrete Doctor settled its third-party action with Depot Place 
because of its perceived contractual liability under the lease agreement between 
the two parties. None of the fourth-party defendants, however, are parties to 
the lease agreement. Thus, fourth-party defendants share no common liability 
under it. Second, Concrete Doctor cannot be said to have paid more than its 
pro rata share because any liability was Concrete Doctor's alone 
pursuant to the lease. Fourth-party defendants share in no part of the 
contractual liability. Concrete Doctor thus has no right of contribution from 
fourth-party defendants.
Our holding is further consistent with the policies underlying the 
Contribution Act. Contribution liability is predicated on tort, not contract, 
liability. In the instant case, however, Concrete Doctor seeks contribution for 
amounts it paid to settle a third-party action based on its liability under a 
lease contract with Depot Place. Had it not been for Concrete Doctor's 
independent decision to enter into this lease agreement with Depot Place, 
Concrete Doctor would not even have a mechanism available by which to seek 
contribution. That Concrete Doctor made this fortuitous agreement should not 
subject fourth-party defendants to liability for a contract in which they took 
no part. Concrete Doctor alone bargained for the terms of its lease agreement 
with Depot Place, including the express indemnity provision and any potential 
exposure to damages. It cannot now use a contribution action to shift its 
bargained-for liability to fourth-party defendants. To hold fourth-party 
defendants liable in contribution to Concrete Doctor based upon these 
contractual obligations is unreasonable and falls outside the type of recovery 
contemplated by the Act.
Because we find that Concrete Doctor failed to state a claim for contribution 
against fourth-party defendants under the Act, we need not address whether the 
trial court abused its discretion in finding the settlement agreement between 
plaintiffs, Depot Place and Concrete Doctor in good faith.
CONCLUSION
For the above reasons, the appellate court's judgment reinstating Concrete 
Doctor's contribution claim against fourth-party defendants is reversed. The 
circuit court's judgment dismissing such claim is affirmed. The circuit and 
appellate courts' judgments as to the good faith of the settlement agreement are 
vacated.
Appellate court judgment reversed
in part and vacated in part;
circuit court judgment affirmed
in part and vacated in part.
JUSTICE RATHJE took no part in the consideration or decision of this 
case.
CHIEF JUSTICE HARRISON, dissenting:
Because we denied Semmerling's separate petition for leave to appeal, which 
challenged the appellate court's judgment reversing the circuit court's 
dismissal of Concrete Doctor's complaint for contribution against the 
fourth-party defendants (Guerino v. Depot Place Partnership, 184 Ill. 2d 556 
(1999) (leave to appeal denied)), the propriety of that judgment would normally 
be beyond our review in this proceeding. See, e.g., Vroegh v. 
J&M Forklift, 165 Ill. 2d 523, 527-28, 531 (1995). As the majority 
opinion notes, however, Waste Management's petition, which we did allow, 
expressly incorporated the issues raised by Semmerling, and Semmerling was 
subsequently granted leave to file a separate brief which raised the points it 
had previously asserted in its petition for leave to appeal. Under these 
circumstances, it would be disingenuous for us to now hold that Semmerling was 
barred from challenging the appellate court's judgment regarding the validity of 
Concrete Doctor's fourth-party claim. For this reason, I agree with the 
majority's conclusion that the matter is properly before us. I disagree, 
however, with how the matter has been resolved.
Contrary to my colleagues, I do not believe that Concrete Doctor failed to 
state a claim for contribution against the fourth-party defendants. Whether a 
party is potentially liable in tort is determined at the time of the injury out 
of which the right to contribution arises, not at the time the action for 
contribution is brought. Vroegh, 165 Ill. 2d  at 529. In the case before 
us, there is no doubt that Concrete Doctor was potentially liable in tort at the 
time Guerino was injured. As Guerino's employer, Concrete Doctor could have 
invoked the Workers' Compensation Act as an affirmative defense had it been sued 
by plaintiff directly, but the law is well established that the availability of 
such an affirmative defense does not preclude a defendant from availing itself 
of the Contribution Act. Vroegh, 165 Ill. 2d  at 529-30.
The fourth-party defendants were also potentially liable in tort at the time 
of Guerino's injury. That potential liability was not negated by their 
subsequent success in invoking the statute of limitations. As with the Workers' 
Compensation Act defense available to Concrete Doctor, the limitations defense 
available to the fourth-party defendants did not oust them from the provisions 
of the Contribution Act. Delaney v. McDonald's Corp., 158 Ill. 2d 465 
(1994).
Because Concrete Doctor and the fourth-party defendants were all potentially 
liable in tort as a result of Guerino's injury, there was a "right of 
contribution among them" within the meaning of section 2(a) of the Contribution 
Act (740 ILCS 100/2(a) (West 1996)). Contrary to the majority's holding, 
Concrete Doctor's right to seek contribution from the other tortfeasors was not 
extinguished by the dismissal of the third-party action against it. Because of 
its agreement with Depot Place, Concrete Doctor remained liable for Guerino's 
injuries. Although Concrete Doctor assumed liability for Guerino's injuries 
contractually, the ultimate basis for Concrete Doctor's liability is irrelevant. 
All that matters under the Contribution Act is that the party seeking 
contribution and the party from whom contribution is sought be potentially 
liable to the plaintiff, in tort, at the time the plaintiff was injured. 
Vroegh, 165 Ill. 2d  at 529. As previously indicated, that condition was 
satisfied here.
I note, moreover, that while Concrete Doctor's ultimate liability flowed from 
its contractual agreement with Depot Place, the damages for which Concrete 
Doctor was liable were based on the injuries sustained by Guerino which were 
compensable under tort law. The contractual provisions merely shifted the burden 
of paying the damages for those injuries from Deport Place back to Concrete 
Doctor. It is exactly as if Concrete Doctor had been sued in tort directly.
Because Concrete Doctor was potentially liable in tort at the time Guerino 
was injured and because the damages it paid were based on Guerino's tort claims, 
the appellate court was correct in concluding that the Concrete Doctor's 
complaint for contribution should not have been dismissed. Concrete Doctor had a 
viable claim under the Contribution Act, and allowing that claim to go forward 
is fully consistent with the Act's purposes. Accordingly, I believe that our 
court should proceed to the question for which we granted Waste Management's 
petition for leave to appeal, namely, whether the settlement for which Concrete 
Doctor seeks contribution was made in good faith. That is an issue my colleagues 
have failed to address but should. I therefore dissent.
JUSTICE BILANDIC joins in this dissent.