Court Opinion

ID: 9721227
Source: CourtListenerOpinion
Date Created: 2023-08-26 08:52:44.145171+00
Date Added: 2024-06-11T18:24:24.123986
License: Public Domain

Mr. PRESIDING JUSTICE TRAPP dissenting in part: I dissent from that portion of the opinion which reverses the award of costs of litigation and attorney’s fees by the trial court. It is to be carefully noted that the attorney’s fees and expenses here concerned are only those arising from the litigation between the principal» as an insurer, and the insured. It is thus of a different category than that found in the rule of Ritter v. Ritter, 381 Ill. 549, 46 N.E.2d 41, and House of Vision, Inc. v. Hiyane, 42 Ill.2d 45, 245 N.E.2d 468, which concerned the effort of the successful party to litigation to recover attorney’s fees from the unsuccessful party to that litigation. The principle opinion relies upon Reese v. Chicago, Burlington & Quincy R.R. Co., 5 Ill.App.3d 450. 283 N.E.2d 517, affirmed, 55 Ill.2d 356, 303 N.E.2d 382, wlr'ch held that litigation expenses are recoverable only when provided by the spec'fic terms of a written contract of indemnity. While the operative language in the complaint and in the order of the trial court is that defendant shall “indemnify” the plaintiff, it seems clear that the liability is to pay damages suffered by the principal for breach of contract rather than for indemnity. As stated in Black’s Law Dictionary, indemnity arises through a collateral contract by which one person engages to secure another against an anticipated loss or to prevent him from being damnified by the legal consequences of an act or forebearance on the part of one of the parties, or of some third person. Apart from specific contract, an obligation to indemnify arises only in the category of cases where the courts find “implied indemnity” as an exception to the rule, that there is no contribution among joint tortfeasors. The opinion in Gulf, Mobile ir Ohio R.R. Co. v. Arthur Dixon Transfer Co., 343 Ill.App.2d 148, 98 N.E.2d 783, discusses “implied indemnity” in the context that the indemnitee has been negligent to a degree sufficient to create legal liability. By reason of such liability the indemnitee is already subject to a suit by the injured party and no new burden of litigation costs is created by the acts of the indemnitor. In Chicago & Illinois Midland Ry. Co. v. Evans Construction Co., 32 Ill.2d 600, 208 N.E.2d 573, the court stated that it was necessary to draw a qualitative distinction between the indemnitee, whose negligence is passive, and an indemnitor, whose negligence is active. The cited Reese explicitly concerns indemnity between joint tortfeasors. Here, the plaintiff seeks to recover fees and costs of litigation which arise from a breach of contract duty by the agent, and he is not seeking an “implied indemnity” as one liable for negligence as a joint tort-feasor. Restatement (Second) of Agency, § 399 (1958), sets forth the remedies of the principal where the agent has violated his duties. The Comment directed to clause (h) says: “If an action is brought against the principal by third persons because of conduct by an agent or a subagent for which, as between the principal and the agent, the agent is responsible, the principal can, under the provisions of many modern statutes, cause the agent to be made a party to the action. Apart from statute, in such cases, if the principal notifies the agent to defend and the agent fails to defend, the principal is entitled to expenses thereafter incurred by him in a reasonable defense or compromise of the action.” Such statement receives some recognition in Ritter v. Ritter, 381 Ill. 549, 554-55, 46 N.E.2d 41, 44, wherein the court said: “While it is recognized that where the natural and proximate consequences of a wrongful act have been to involve the plaintiff in litigation with others, there may be a recovery in damages against the author of such act, measured by the reasonable expenses incurred in such litigation (Choukas v. Severyns, [3 Wash.2d 71, 99 P.2d 942, (1940)], yet the rule is equally well established that where an action based on the same wrongful act has been prosecuted by the plaintiff against the defendant to a successful issue, he can not in a subsequent action recover, as damages, his costs and expenses in the former action.” * # # That opinion cited Philpot v. Taylor, 75 Ill. 309; McEwen v. Kerfoot, 37 Ill. 530, and Himes v. Keighblingher, 14 Ill. 469, and distinguished them from those cases wherein the successful litigant sought to recover attorney’s fees from his unsuccessful adversaries. In such cited cases, persons acting as agents wrongfully delivered instruments concerning real estate which the owner was required to defend against. Since such defenses prevailed, the damages sustained were substantially the costs of litigation. While not presently an issue here, it is apparent that in those cases where a principal successfully defends a claim made by a third party because of the acts of the agent, the principal would not be able to recover from such agent the only substantial damages sustained, i.e., attorneys fees and costs of litigation. No significant reason is stated for distinguishing between actions upon rights under a contract and those actions necessaiy to protect rights in real estate. Such action may be equally necessary and equally substantial. That distinction is found as dicta in Kniznik v. Quick, 130 Ill.App.2d 273, 264 N.E.2d 707. That suit was for alienation of affections and the plaintiff sought attorney’s fees incurred in his actions for divorce and child custody. The opinion speaks of a public policy found in “An Act relating to the damages recoverable in actions for alienation of affections” (Ill. Rev. Stat. 1971, ch. 68, pars. 34 — 37), expressly limiting damages recoverable in such actions. That Act excludes many elements of damages and forbids exemplary damages. Such opinion had no occasion to consider elements of damage for the violation of contract duties as an agent here at issue. Similarly, no substantial reason is stated for limiting the recovery of such legal expense to wilful or malicious acts of the agent. The judgment of the trial court should be affirmed.