Court Opinion

ID: 9726880
Source: CourtListenerOpinion
Date Created: 2023-08-26 13:11:08.804444+00
Date Added: 2024-06-11T18:25:31.666893
License: Public Domain

JUSTICE WELCH, dissenting: I would reverse the trial court’s dismissal and reinstate the third-party complaint for the following reasons. Both the majority opinion and the concurring opinion analyze the situation in terms of contract only, ignoring the tortious aspects of the case. The original complaint by Max-field alleged that the house was defective, dangerous, and faulty and that it failed to comply with the contract between the parties. Thus, the action can be characterized as one for a tortious breach of contract. The gist of the contractor’s third-party complaint is a denial of negligence on his part sufficient to breach the construction contract. If he, the contractor, is held liable for damage to the house, then he asserts that it is the manufacturer of the trusses and the supplier of the trusses and other building supplies that he used in building the house who are the real culprits in causing the damage. The majority decision relies on the case of Board of Education v. Joseph J. Duffy Co. (1968), 97 Ill. App. 2d 158, 240 N.E.2d 5. In Duffy the school board sued the architectural firm (Perkins) involved in building a new high school for breach of contract because of failure to supervise the general contractor (Duffy). The architectural firm filed a third-party complaint against the general contractor for indemnity which was dismissed. The architects appealed. Recovery by the school against the architects on a tort theory was barred by the statute of limitations. Therefore the indemnity count based on the underlying tort theory was moot and properly dismissed. The court held that the count by the school against the architects for breach of contract for failure to supervise the contractors would not support a third-party complaint by the architects against the contractors for indemnity. “Perkins’ breach was in its failure to supervise, and not in the fact that the contractor may have performed in an unworkmanlike manner. Thus, Duffy did not cause Perkins to breach its contract, assuming it is proven that Perkins breached its contractual obligation to supervise.” Board of Education v. Joseph J. Duffy Co. (1968), 97 Ill. App. 2d 158, 163, 240 N.E.2d 5, 8. In the instant cause the contractor alleges that the only reason he might be held liable for damage to the house is because he unknowingly used defective trusses supplied by the manufacturer and supplier, in other words that they caused his breach. “In Miller v. DeWitt [(1967) 37 Ill. 2d 273, 226 N.E.2d 630] the court held that a third-party complaint should not be dismissed unless it appears from the pleadings that in no event would the indemnitee have an action against the indemnitor. ” ° Rome v. Commonwealth Edison Co. (1980), 81 Ill. App. 3d 776, 780, 401 N.E.2d 1032, 1035, appeal denied (1980), 81 Ill. 2d 599. It is true that no facts supporting an express contractual basis for indemnity were alleged by third-party plaintiff. His complaint was based on an implied contract of indemnity theory. A right to indemnity, absent an express contractual undertaking, may be implied from the terms of the contract governing job responsibility or from the relationship of the parties to the particular work being done at the time the injuries were received. Tiffiny Decorating Co. v. General Accident Fire & Life Assurance Corp. (1973), 12 Ill. App. 3d 597, 601, 299 N.E.2d 378, 381. In its effort to find a basis for the contractor’s claim against the manufacturer and supplier the court assumed, erroneously, that the purchase of materials contract was the only thing which might support liability for indemnity. In this case, as in the case of Ozark Airlines, Inc. v. Fairchild-Hiller Corp. (1979), 71 Ill. App. 3d 637, 390 N.E.2d 444, the contract (between contractor and supplier, and by extension the contract between supplier and manufacturer) merely provided the relationship out of which arose the contractor’s right to seek indemnity. Ozark Airlines contracted in 1958 for the purchase of three airplanes from Fairchild-Hiller, an aircraft manufacturer. They were delivered in 1959. On November 16, 1966, at O’Hare Airport, Chicago, Illinois, while one of the planes was taxiing from the loading gate the landing gear (nose wheel and two main gears) retracted and the plane’s fuselage settled on the ramp. One passenger suffered personal injuries and the plane was damaged extensively. The passenger sued Ozark in Federal court for his injuries. Ozark filed a third-party action against Fairchild for indemnity of any judgment entered against it on the passenger’s behalf. Ozark settled the case with the passenger in May of 1970 for $60,000. One year later Ozark sued Fairchild in the Circuit Court in Illinois for damages arising from the 1966 accident. Counts I, II, and III of the complaint sought indemnity from Fairchild for the $60,000 Ozark paid the passenger. The theories of recovery were negligence, breach of warranty (express and implied), and strict liability. “Fairchild argues that the suit is barred by a 5-year statute of limitations [citation], since the relationship of the parties is contractual in nature and the cause of action accrued on the date of delivery of the aircraft, July 16, 1959. Ozark argues that the indemnity cause of action did not accrue until the settlement of Darragh’s personal injury suit on May 27, 1970 and, thus, is not barred by the statute of limitations. Ozark’s argument is well taken. # # # Additionally, plaintiff argues, and we agree, that the nature of Ozark’s action is not based on any express promise in the contract for indemnification. The contract merely provides the relationship out of which arises Ozark’s right to seek indemnity. * * * Therefore, we find that Ozark’s indemnity counts are not barred by the statute of limitations.” Ozark Airlines, Inc. v. Fairchild-Hiller Corp. (1979), 71 Ill. App. 3d 637, 638-39, 390 N.E.2d 444, 446. In this case because the materials were delivered by the manufacturer to the contractor for the supplier on April 3, 1974, more than four years before the third-party complaint was filed, the court applied the statute of limitations for contracts for sale of goods under the Uniform Commercial Code to bar the action. The claim was not based on breach of the contract for purchase of goods but on indemnity and is therefore not limited by the statute of limitations of the U.C.C., either as to the length of time of the statute or the time when the cause of action accrues and the statute starts to run. The cause of action for indemnity, if one exists, does not accrue until the defendant has judgment entered against him or until he settles the claim in reasonable anticipation of personal liability. (Forty-eight Insulations, Inc. v. Johns-Manville Products Corp. (N.D. Ill. 1979), 472 F. Supp. 385, 393.) Only at that point does the statute of limitations begin to run. The statute of limitations for indemnity actions is the general five-year statute for “all civil actions not otherwise provided for.” Ill. Rev. Stat. 1979, ch. 83, par. 16; Sherman House Hotel Co. v. Butler Street Foundry & Iron Co. (1912), 168 Ill. App. 549. Under Illinois law the defendant entitled to indemnity has a choice of filing a third-party complaint against a party or parties who may be liable to indemnify him as a part of the original action (Ill. Rev. Stat. 1979, ch. 110, par. 25(2)), or of waiting until the original action is over and filing a separate action for indemnity if he is found liable. (Gibbons v. Nalco Chemical Co. (1980), 91 Ill. App. 3d 917, 920, 417 N.E.2d 477, 480.) In effect, section 25(2) allows the third-party indemnity claim to be filed before it accrues, in order to promote settling of all claims in one action. (Muhlbauer v. Kruzel (1968), 39 Ill. 2d 226, 234 N.E.2d 790, 792). The third-party claim cannot be determined, however, before the underlying claim establishing liability and damages is determined. Klatt v. Commonwealth Edison Co. (1964), 55 Ill. App. 2d 120, 204 N.E.2d 319, modified on other grounds (1965), 33 Ill. 2d 481. Because the contractor’s third-party complaint did state a cause of action for indemnity, it should not have been dismissed. Because the cause of action will not ripen until or unless the contractor is found liable in the original action or settles the original action in reasonable anticipation of being found liable, at which time the statute of limitations will begin to run, the third-party complaint is not barred. I would therefore reverse the trial court and remand the cause with directions to reinstate the third-party complaint.