Court Opinion

ID: 9860418
Source: CourtListenerOpinion
Date Created: 2023-09-24 23:21:30.849646+00
Date Added: 2024-06-11T11:22:10.799522
License: Public Domain

BURKE, J., dissents: At the time Dealers agreed to defend the Opheim suit it was not discharging a prior contractual obligation; it was assuming an entirely new obligation, in exchange for which it was spared the risks of being made a third-party defendant in the suit. The fact that Opheim’s complaint did not name Dealers as a defendant does not mean that Dealers would not ultimately have to indemnify the railroad, and the fact that the hold-harmless clause excepted liability arising out of the “sole negligence” of the railroad, does not mean that Dealers might not ultimately have to indemnify the railroad if Opheim took a judgment against it. Forbearance to sue may constitute the consideration necessary to support an agreement, even if the claim upon which suit is threatened is doubtful. Dealers received the benefit of having full control of the litigation and the right to Norfolk’s full cooperation in the defense. Dealers and Truck Insurance Exchange do not deny that the railroad performed its part of the agreement. Dealers and Truck Insurance Exchange will not be permitted to back away from performing their part of the agreement. The record does not support appellants’ alternative argument that they contracted to assume the railroad’s defense because they misunderstood the law. Opheim was an employee of Dealers and by virtue of section 5(a) of the Workmen’s Compensation Act (Ill Rev Stats 1969, c 48, § 138.5) he was barred from asserting any common-law action against his employer to recover for his injuries. It is reasonable to assume that Dealers, as the employer, Truck Insurance Exchange, et al., as its liability carrier and Joseph Reynolds as Truck Insurance Exchange’s branch claim manager, were aware of that fact. There is nothing in the record suggesting that railroad’s counsel misunderstood the complaint or that he misrepresented what it contained. He sent copies of the complaint to Dealers which made its independent decision more than a month later. The record shows that counsel for the railroad was aware of the provision of the Workmen’s Compensation Act preventing Opheim from naming his employer in the complaint, and equally aware that Norfolk could file a third-party complaint against Dealers. Dealers, through its agent, Truck Insurance Exchange, for a sufficient consideration for its promise, entered into a valid contract to defend the railroad. Pursuant to the agreement, the railroad dismissed its third-party complaint, surrendered control of the defense to Dealers’ counsel and gave its full cooperation. There is no evidence of misrepresentation or mistake. Whether the railroad was prejudiced by Dealers’ subsequent breach of the contract is irrelevant. Dealers has refused to perform and that alone constitutes a breach. For these reasons the judgment should be affirmed.