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No, 02 C 6619 Paged

The current contract states that Mason will indemnify Hartford for “any and all loss”
arising from the inspections. In looking at the case law cited by the parties, most cases dealing
with similar “any and all” language have determined that this is sufficient to provide coverage
for the indemnitee’s own negligence. See Freislinger, 99 F.3d at 1420; Economy Mechanical
Industries, Inc, v. T.J. Higgins Co., 294 Il.App.3d 150, 155-56, 689 N.E.2d 199, 202-03, 228
U.Dec. 327, 330-31 (II. App. 1" Dist. 1997); Ahivers v. Terminal R.R. Ass’n of St. Louis, 31
IApp.3d 166, 171, 334 N.E.2d 329, 333 (TI. App. 5" Dist. 1975). Mason does direct our
attention to one case that held that such language was insufficient. See Karsner vy. Lechters
Illinois, Inc., 331 [Il App.3d 474, 476-77, 771 N.E.2d 606, 608, 264 IIl.Dec. 902, 904 (II, App.
3" Dist. 2002), Based on the circumstances surrounding this contract, we believe, for the
purposes of a motion to dismiss, that the former interpretation is correct. In agreeing to
perform inspections, Hartford sought to protect itself from potentially large liability due to
Mason’s sales of the vessels to a third party.

This result is neither unfair nor unreasonable, Mason had the right to bargain with
Lumbermens when signing the contract and later with Hartford to find the best deal available
for the performance of the inspections, We must assume that Mason’s representatives read
and understood the contract and that it was willing to bear the costs as allocated by the
contract terms, It cannot now determine that it is unhappy with the bargain and ask us not
to enforce the contract.

Finally, it is not our place to determine whether a contract of this nature is in violation
of public policy. Ilinois has adopted statutes in other areas that prevent indemnitees from

contracting to cover their own negligence. See, ¢.g., Construction Contract Indemnification


No. 02 C 6619 Page3

While the complaint does not need to provide the correct legal theory to withstand a Rule

12(b)(6) motion, it must allege all of the elements necessary to recover, Ellsworth v. City of

Racine, 774 F.2d 182, 184 (7" Cir. 1985), cert. denied, 475 U.S, 1047 (1986).

Mason moves to dismiss the cross-claim, arguing that the contractual provision is
unenforceable because the provision is not a clear and explicit promise to indemnify against
its own negligence, that the construction of the contract that Hartford seeks is unfair and
unreasonable, and public policy dictates that we should not enforce the contractual provision.
Because we find that it may be possible for Hartford to prove facts that would entitle it to
enforce the indemnity provision, we deny the motion to dismiss,

Under Lilinois law parties may execute an indemnity agreement that encompasses the
indemnitee’s own negligence, as long as the agreement’s language is clear and unequivocal.
Native American Arts, Inc. vy, Adobe Moon Arts, Inc., 2001 WL 55544, *3 (N.D. Ill. 2001); see

also Allen y. International Harvester Co., 212 MApp.3d 655, 658-59, 571 N.E.2d 773, 776, 156

Tl. Dec. 793, 796 (II. App. 1* Dist, 1991), This does not mean that a contract must contain an
express provision providing for coverage of the indemnitee’s own negligence, only that an
indemnity provision, if ambiguous, will not be interpreted in this way. Freislinger y. Emro
Propane Co., 99 F.3d 1412, 1420 (7% Cir. 1996). To determine whether the contract at issue
covers the indemnitee’s own negligence, we must look at the particular language and the facts
surrounding the execution of the contract. Native American Arts, 2001 WL 55544 at *3, citing
Zadak v. Cannon, 59 Tb.2d 118,121, 319 N.E.2d 469, 471-72 (Ill. 1974). The Iinois Supreme
Court has stated that it serves “no useful purpose to attempt to analyze or reconcile the

humerous cases Interpreting indemnity clauses.” Zadak, 319 N.E.2d at 472.



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No. 02 C 6619 Page 5

for Negligence Act, 740 LLCS § 35/1; Managed Care Reform and Patient Rights Act, 215 1LCS
§ 134/95, While inspections of these vessels are required by the Boiler and Pressure Vessel
Safety Act, 430 § ILCS 75/1 et seq., there is no analogous section in that act which serves to
prevent coverage for the indemnitee’s own negligence. It is not our place to expand this statute
and determine that a contract of this nature violates public policy.
CONCLUSION
For the foregoing reasons, defendant Mason’s motion to dismiss co-defendant

Hartford’s cross-claim for indemnity is denied,

BR. Meow,

JAMES B, MORAN
Semior Judge, U. 8, District Court

Goh (3, 2003.



AE Minus OM Form (06897)

United States District Court, Northern District of Illinois (/ /)

Name of Assigned Jud; : Sitting Judge if Other
or Magistrate Jude James 1, Moran than Asie Judge
CASE NUMBER 02 C 6619 DATE 2/13/2003
CASE Washington Group Intemat’l Inc. Vs. Mason Manufacturing, Inc. et al.
TITLE

[In the following box (a) indicate the party filing the motion, c.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented, ]

MOTION:
Memorandum Opinion and Order
DOCKET ENTRY:
(1) n Filed motion of [ usc listing in “Motion” box above.]
(2) oO Brief in support of motion due ___
(3) Qa Answer briefto motion duc. Reply to answer bricfdue__
(4) im Ruling/Hearingon ___setfor_ at.
(3) of Status hearing[held/continued to] [set for/te-set for] on______sset for _ a
(6) oO Pretrial conference[held/continued to] [set for/re-set for] on _ _setfor at
(7) Oo Trial[sct for/re-set for] on sat
(8) ira] (Bench/Jury trial] [Hearing] held/continued to. at
(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OFRCP4(m) Ol Local Rule 41.1 OO FRCP41(a)(1) OO FRCP41(a)(2).

(10) WH (Otherdocketentry] Enter Memorandum Opinion and Order. Defendant Mason’s motion to dismiss
co-defendant Hartford’s cross-claim for indemnity is denied.

(1) @f [For further detail see order attached to the original minute order.)

No notices required, advised in open court.

Nu notices required

unl of notices

Notices mailed by judge's staff.

“eg 1 8 ant
Notified counsel by telephone. ¥EB dacdutees
o | Docketing to mail notices,
Mail AO 450 form, er rey dockehng dbp initials

Copy ta judge/mayistrate judge.

date mailed uotice
courtroom

WAH deputy’s
initials

Date/time received in
central Clerk's Office ailing deputy iin



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

WASHINGTON GROUP INTERNATIONAL,
INC., an Ohio corporation,

Plaintiff,

vs. No. 02 C 6619 as

MASON MANUFACTURING, INC., an
Illinois corporation, and THE HARTFORD
STEAM BOILER INSPECTION AND
INSURANCE CO., a Connecticut corporation,

)
)
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)
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Defendants. oi

MEMORANDUM OPINION AND ORDER

Plaintiff Washington Group International, Inc, filed suit against defendants Mason
Manufacturing, Inc, (Mason) and the Hartford Steam Boiler Inspection and Insurance Co.
(Hartford) for breach of contract, breach of express warranty, breach of the implied warranty
of merchantability, breach of the implied warranty of fitness for a particular use and negligent
misrepresentation arising from the construction and inspection of five hot oil service pressure
vessels. Defendant Hartford filed a cross-claim against co-defendant Mason for indemnity,
based on its inspection contract, Mason filed a motion to dismiss that cross-claim pursuant
to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, Mason’s motion to
dismiss is denied.

BACKGROUND

Plaintiff contracted with defendant Mason to construct five vessels for use by ‘Takasago

International Corp. (Takasago). These vessels are an integral part of Takasago’s fragrance

al\



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No. 02 C 6619 Page 2

manufacturing process. The vessels were designed and manufactured between February 1998
and September 1998, and delivered to Takasago’s University Park facility in September 1998,
In Spring 2000, Takasago attempted to use one of the vessels and allegedly discovered serious
design and manufacturing defects.

Defendant Hartford is the successor in interest to a contract signed by Mason and
Lumbermens Mutual Casualty Company (Lumbermens). This contract provides that
Hartford will perform certain inspection services, including inspection of the vessels at issue
in this case, Paragraph 10 of the service contract provides:

Maker agrees to hold-harmless and indemnify Lumbermens, its directors,

officers, agents and employees, of and from any and all loss, liability, damage

cost and expense, including attorneys’ fees (and including cost, expense and

attorneys’ fees in enforcing this contract) by reason of any claim, action or

alleged cause of action for any loss, damage or injury (including death) to any
person or property directly or indirectly arising out of, or related to the
inspection services provided by Lumbermens under this contract whether or not

the same are false and fraudulent; provided, however, that such indemnification

shall not be applicable to the extent that Lumbermiens is indemnified by the

United States of America or any authorized agent thereof, or, as to any nuclear

incident or nuclear energy hazard, is protected by insurance.

Hartford’s cross-claim alleges that this contractual provision requires that Mason indemnify
Hartford in the event that the plaintiff is successful in collecting damages from Hartford.
DISCUSSION

In deciding a Rule 12(b)(6) motion to dismiss we must assume the truth of all well-
pleaded allegations, making all inferences in the non-movant’s favor. Sidney S. Arst Co. v.
Pipefitters Welfare Educ. Fund, 25 F.3d 417, 420 (7" Cir. 1994), The court should dismiss a

claim only if it appears “beyond doubt that the plaintiff can prove no set of facts in support

of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46 (1957),