MARY SANDLIN, individually and as Representative of the Estate of WILLIAM L. SANDLIN, deceased, Plaintiff, v. HARRAH‘S ILLINOIS CORPORATION d/b/a HARRAH‘S JOLIET HOTEL AND CASINO, LOONEY RICKS KISS ARCHITECTS, INC., HNEDAK BOBO GROUP, INC., and PEPPER CONSTRUCTION COMPANY, Defendants. (Harrah‘s Illinois Corporation, Defendant and Counterplaintiff-Appellant; Hnedak Bobo Group, Inc., Defendant and Counterdefendant-Appellee; Looney Ricks Kiss Architects, Inc. and Pepper Construction Company, Defendants and Counterdefendants.)
No. 3-15-0018
APPELLATE COURT OF ILLINOIS THIRD DISTRICT
September 2, 2016
2016 IL App (3d) 150018
The Honorable Theodore J. Jarz, Judge, presiding.
Appeal from the Circuit Court of the 12th Judicial Circuit, Will County, Illinois. Circuit No. 13-L-188
Justices Lytton and McDade concurred in the judgment and opinion.
OPINION
¶ 1 In the context of a personal injury action arising out of a slip and fall injury at a hotel, one of the codefendants, Harrah‘s Illinois Corporation (Harrah‘s), filed a counterclaim against another codefendant, Hnedak Bobo Group, Inc. (HBG), seeking contractual indemnification or contribution (count I) and statutory contribution (count II).12 After all of the defendants settled with plaintiff and good-faith findings were made, the trial court granted summary judgment for HBG on both counts of the counterclaim. Harrah‘s appeals the grant of summary judgment but only as to count I (contractual contribution) of the counterclaim. We affirm the trial court‘s judgment.
¶ 2 FACTS
¶ 3 In 1999, Harrah‘s started building a hotel in Joliet, Will County, Illinois. The project was completed the following year. HBG served as the primary architect on the project. Of relevance to this appeal, the contract between Harrah‘s and HBG for the construction project provided, in pertinent part, as follows:
“5.1 Indemnification. To the fullest extent permitted by law, Architect, on behalf of itself and its agents (all of said parties are herein sometimes collectively referred to as the ‘Indemnitors‘), shall fully indemnify, defend, save and hold Owner, its partners, all successor owners and/or partners and their agents, employees, partners and anyone else acting for or on behalf of any of them (all of said parties are herein collectively referred to as the ‘Indemnitees‘) harmless from and against all liability, damage, loss, claims, demands, actions and
expenses of any nature whatsoever including, but not limited to reasonable attorney‘s fees which arise out of or are connected with, or are claimed to arise out of or be connected with: (i) any negligent act, error or omission or any willful misconduct or other fault by any Indemnitor in the performance of any services to be performed hereunder; (ii) any failure to comply with applicable laws, codes, rules, regulations or ordinances; (iii) any breach of any obligations of Indemnitors as set forth in this Agreement.”3
¶ 4 In July 2004, plaintiff‘s decedent, William Sandlin, was staying as a guest in the hotel when he slipped and fell on a wet part of the floor outside of his hotel room shower and was injured. Plaintiff, William‘s wife, Mary Sandlin (both individually and as the representative of William‘s estate), brought suit against Harrah‘s, HBG, and two other parties who were involved in the construction project, alleging various theories of liability. Most or all of the defendants filed counterclaims against each other. One counterclaim was filed by Harrah‘s against HBG. In that counterclaim, which was later amended, Harrah‘s sought contractual contribution pursuant to section 5.1 of the parties’ agreement (count I) and statutory contribution pursuant to the Joint Tortfeasor Contribution Act (Contribution Act) (
¶ 5 During the course of the trial-court proceedings, all of the defendants eventually settled with the plaintiff, good-faith findings were made as to each of the settlements, and plaintiff‘s complaint was dismissed with prejudice. All of the counterclaims were also dismissed with prejudice, except for one─Harrah‘s counterclaim against HBG for contractual contribution and for statutory contribution. Based upon the good-faith settlements of all of the parties, HBG moved for summary judgment on Harrah‘s counterclaim.
¶ 6 A hearing was held on the motion for summary judgment in August 2014. By the time of the hearing, the parties had fully briefed the matters before the trial court. After listening to the arguments of the attorneys, the trial court granted summary judgment for HBG on Harrah‘s counterclaim. Following the denial of its motion to reconsider, Harrah‘s appealed the grant of summary judgment but only as to count I (contractual contribution) of its counterclaim.
¶ 7 ANALYSIS
¶ 8 On appeal, Harrah‘s argues that the trial court erred in granting summary judgment for HBG on Harrah‘s counterclaim for contractual contribution. Harrah‘s asserts that summary judgment should not have been granted for HBG because the defense-cost obligation contained in the indemnification clause of the parties’ contract was valid and because Harrah‘s had a constitutional right to the enforcement of that obligation. Harrah‘s asserts further that the trial court‘s ruling to the contrary directly conflicts with Harrah‘s constitutional right to freedom of contract. According to Harrah‘s, if the Illinois legislature had intended to extinguish contract claims for defense-cost reimbursement
¶ 9 HBG argues that the trial court‘s grant of summary judgment was proper and should be upheld. HBG asserts that the grant of summary judgment in its favor was appropriate for two reasons: (1) because Harrah‘s made no effort to separate out those defense costs that it incurred as a result of its own conduct from those defense costs that it incurred as a result of HBG‘s conduct and (2) because section 5.1 of the parties’ contract required contribution, not indemnification, regardless of the label placed upon that provision, and the right to contribution was extinguished, pursuant to the Contribution Act, based upon both HBG‘s and Harrah‘s good-faith settlements with the plaintiff. HBG asserts further that the trial court‘s ruling in this case was consistent with the case law in this area and did not abridge Harrah‘s right to freedom of contract. In addition, as to Harrah‘s assertion regarding statutory interpretation, HBG contends that it is actually Harrah‘s assertion, and not HBG‘s, that is contrary to the plain language of the Contribution Act. For all of the reasons set forth, HBG asks that we affirm the trial court‘s grant of summary judgment in its favor on Harrah‘s counterclaim for contractual contribution.
¶ 10 The purpose of summary judgment is not to try a question of fact but to determine if one exists. Adams v. Northern Illinois Gas Co., 211 Ill. 2d 32, 42-43 (2004). Summary judgment should be granted only where the pleadings and supporting documents, when viewed in the light most favorable to the nonmoving party, show that there is no genuine issue as to any material fact and that the moving party is clearly entitled to a judgment as a matter of law.
¶ 11 The question before this court in this appeal is whether the indemnification provision (section 5.1) in the construction contract between the parties allows Harrah‘s to recover its defense costs from HBG, despite the fact that both Harrah‘s and HBG entered into good-faith settlements with the plaintiff. A very similar issue was presented to the Appellate
¶ 12 On appeal in the Pierre Condominium case, the appellate court found that the contract provision in question was a contribution clause, rather than an indemnification clause, because an indemnification clause of that nature in a construction contract would have been void pursuant to the Indemnification Act, the parties were presumed to have entered into the contract with knowledge of the existing laws, neither the label placed on the contract provision nor its literal terms were dispositive, and an interpretation of the contract that rendered the contract enforceable was preferable to one that rendered the contract void. Id. at 774-75.
¶ 13 Having determined that the clause in question required contribution, rather than indemnification, the appellate court in Pierre Condominium turned to the issue of whether the contract-contribution claim was extinguished by the good-faith settlement. Id. at 775. Similar to Harrah‘s in the instant case, the adjacent-property owner in the Pierre Condominium case argued that the contract-contribution claim was valid based upon the right to freedom of contract. Id. at 775-76. The appellate court rejected that argument and held that the contract-contribution claim was at odds with the Contribution Act and that it violated the public policy that encouraged settlements. Id. at 776-78. The appellate court noted that the adjacent property owner‘s contention─that the parties could contract out of the Contribution Act‘s good-faith
¶ 14 For the reasons stated in the Pierre Condominium case, we reach the same conclusion here. See id. at 774-78. As the appellate court found in Pierre Condominium, in the present case, despite the label placed upon the provision and its references to indemnification, section 5.1 of the parties’ contract must be viewed as a contribution clause, rather than an indemnification clause. See id. at 774-75; see also Braye v. Archer-Daniels-Midland Co., 175 Ill. 2d 201, 213-18 (1997) (the supreme court found, although somewhat implicitly, that the provision that was at issue in the construction contract involved was a contribution provision and not an indemnification provision); Liccardi v. Stolt Terminals, Inc., 178 Ill. 2d 540, 548-50 (1997) (same); Herington v. J.S. Alberici Construction Co., 266 Ill. App. 3d 489, 493-95 (1994) (the appellate court held that an indemnification agreement contained in a construction contract was in truth an agreement to make contribution, since “partial indemnity” did not exist, regardless of how the provision was labeled or the technical terms it contained). As a matter of contract interpretation, we must presume that the contracting parties before us knew the law at the time that they entered into the contract─that a full indemnification clause in a construction contract would violate the Indemnification Act, that such a provision would not be enforceable, and that partial indemnity did not exist. See Pierre Condominium, 378 Ill. App. 3d at 774-75; Herington, 266 Ill. App. 3d at 493-95.
¶ 15 We also conclude, as the appellate court did in Pierre Condominium, that to the extent that section 5.1 of the construction contract in the present case provides a contractual right to contribution that is independent of the Contribution Act, that provision is at odds with the Contribution Act and violates the public policy that encourages settlement. See Pierre Condominium, 378 Ill. App. 3d at 776-78; see also Herington, 266 Ill. App. 3d at 494-95. As with the adjacent property owner in Pierre Condominium, Harrah‘s right to freedom of contact in the instant case does not prevail over the policy considerations embodied in the Contribution Act. See Pierre Condominium, 378 Ill. App. 3d at 778; see also BHI Corp. v. Litgen Concrete Cutting & Coring Co., 214 Ill. 2d 356, 366 (2005) (the supreme court held that assignments of claims that were given to the settling defendants as part of their settlement agreements with the plaintiffs could not be used by the settling defendants to recover indirect contribution from the nonsettling defendant in a contractual “end run” around the Contribution Act). We, therefore, reject Harrah‘s freedom-of-contract argument on this issue.
¶ 16 In reaching that conclusion, we note that our ruling here is consistent with and supported by a plain reading of sections
¶ 17 For all of the reasons stated above, we affirm the trial court‘s order, granting summary judgment for HBG on count I of Harrah‘s counterclaim (contractual contribution). Having done so, we need not address the other assertion made by HBG in support of its argument on appeal─that summary judgment was appropriately granted in its favor because Harrah‘s failed to separate out the defense costs that were attributable to its own conduct from the defense costs that were attributable to HBG‘s conduct.
¶ 18 CONCLUSION
¶ 19 For the foregoing reasons, we affirm the judgment of the circuit court of Will County.
¶ 20 Affirmed.