Street's Tree Trimming Removal Contractors, Inc. v. Illinois Department of Transportation

ORDER

BIRNBAUM, J. This matter is before the Court on Respondent’s Motion for Summary Judgment pursuant to 735 ILCS 5/2-1005(c). Claimant filed a complaint on October 5, 2006, seeking contribution for a one million dollar settlement reached in a circuit court action. In that case, the plaintiff was a third party who was seriously injured when a large portion of a tree fell on her vehicle. That settlement released Claimant and its insurer, Scottsdale Insurance (“Scottsdale”) indicating that one or both paid the agreed settlement. The State of Illinois and the Illinois Department of Transportation (“IDOT”) were also named in the release, although the State was not a party to that action.

On or about January 28, 2003, Claimant and IDOT entered into a contract wherein Claimant was hired to perform “work” relating to tree removal in various counties within IDOT’s District 1. The “Standard Specifications” were incorporated into the contract of which Article 107.26 is set forth below:

The Contractor shall be responsible for any and all injuries to persons or damages to property due to the activities of the Contractor. The Contractor shall indemnify and hold harmless the Department, its officers, employees, and agents from any and all claims, lawsuits, actions, costs, fees of every nature or description, arising from, growing out of, or connected with the work, or on account of or in consequence of any neglect in safeguarding the work or on account of or in consequence of using unacceptable materials in constructing the work or because of any act or omission, neglect, or misconduct of the Contractor. This obligation is binding on the Contractor without regard to whether or not such claim, damage, loss, or expense is caused in part by the act, omission or negligence of the Department or its officers, employees, or agents.

Article 107.27 of the Standard Specifications also included the following provisions:

The Contractor shall obtain and thereafter keep in force the following insurance coverages provided by insurance companies acceptable to the Department and authorized to transact business under the laws of the State of Illinois. The coverage shall provide by an endorsement in the appropriate [*220] manner and form, the Department, its officers, and employees shall be named as additional insured with respect to the policies and any umbrella excess liability coverage for occurrences arising in whole or in part out of the work and operations performed. The Department may accept a separate owner’s protective liability policy in lieu of the Department, it’s (sic) officers, and employees being insured on the Contractor’s policies.

Claimant seeks contribution from the State for the settlement entered into the circuit court.

Specifically, Claimant alleges that IDOT’s negligence was the proximate cause of Priscilla Adolphson’s injuries caused when a tree located on state property fell on Mrs. Adolphson’s vehicle and of David Adolphson’s loss of consortium claim. Claimant claims that it is the sole owner of the claim for contribution but also claims that Scottsdale has a subrogation interest in the claim for contribution. Claimant stipulates that Scottsdale is the real party in interest since it paid the settlement with the Adolphsons.

Respondent seeks summary judgment based on the provisions of the Standard Specifications set forth above. Specifically, Respondent argues that Claimant’s claims are barred by the Indemnification Clause.

We agree. As set forth above, Article 107.26 requires that a contractor with IDOT “be responsible for any and all injuries to persons or damages to property due to the activities of the Contractor” and that “the Contractor shall indemnify and hold harmless the Department from any and all claims, lawsuits, actions, costs and fees … of every nature or description arising from, growing out of, or connected with the work.” Article 107.26 further provides that “[t]his obligation is binding on the Contractor without regard to whether or not such claim, damage, loss, or expense is cause in part by the act, omission, or negligence of the Department.” This provision clearly sets forth an agreement by Claimant to indemnify IDOT in actions such as the one filed in circuit court by the Adolphsons.

Claimant argues that the State postponed a work order to remove the tree that fell on Patricia Adolphson and therefore faces liability for that decision. This argument is without merit for two reasons. First, Respondent reauthorized the work order in March 2004, well before the tree fell causing the injury. Second, and more importantly, the contract specifically indemnifies IDOT even if it was also negligent as set forth in the final sentence of the Indemnification Cause: “This obligation is binding on the Contractor without regard to whether or not such claim, damages, loss, or expense is caused in part by the act, omission, or negligence of the Department or its officers, employees or agents.”

Claimant also argues that the “mere requirement” in the contract that Claimant purchase insurance for the State is not a bar to Claimant seeking contribution from the State citing Dowling v. Otis Elevator Co., 192 Ill. App. 3d 1064 (1st Dist. 1989). However, Dowling held that a promise to obtain insurance alone is not enough to create a duty to indemnify and that a contract must specifically contain a provision that requires indemnification, even in the event of the other party’s negligence. Section 107.26 of the Standard Specifications contains exactly that, an unequivocal expression of intent that Claimant is to indemnify the State even in the event that the State may also have been negligent. Claimant was required to provide insurance that insured both itself and the State for any personal injury claims alleging negligence of either party.

Respondent also argues that the anti-subrogation rule bars this claim. Again, we agree. Specifically, an insurer may not subrogate its own insured or any person or entity who has the status of a co-insured under the insurance policy. Dix Mutual Insurance Co. v. LaFrambroise, 149 Ill.2d 314, 597 N.E.2d 622 (1992).

Claimant stipulates that the real party in interest is its insurer, Scottsdale. The anti-subrogation rule is intended to prevent an insurer from recovering back from its insured that loss or damage the risk of which the insured had passed along to the insurer under the policy. See Chubb Insurance Co. v. DeChambre, No. 1-02-3686 (1st Dist., March 24, 2004). As set forth above, the State was covered under Scottsdale’s additional insurance endorsement. The anti-subrogation rule bars Scottsdale from seeking contribution from its own insured, IDOT.

[*221] In Claimant’s Combined Objection to a Motion to Strike Respondent’s Reply Brief and Affidavit, Claimant contends that Respondent’s reply brief “must be stricken because it is based on a new argument supported by an affidavit introducing new material facts into the case.” However, this Court finds that the unambiguous contractual provisions set forth previously bar Claimant and Claimant’s insurer, Scottsdale, from seeking contribution from IDOT. Thus, this Court rejects Claimant’s argument that Respondent raised a new argument and introduced “new material facts” in the case.

Summary judgment should be granted where there is no genuine issue of material fact for a trier of fact to hear. 735 ILCS 5/2-1005(c). Viewing the facts set forth by Claimant (the non-movant) in the most favorable light, this Court still finds that Claimant is bound by the contractual provisions set forth as a matter of law.

Accordingly, Respondent’s Motion for Summary Judgment is GRANTED. This matter is DISMISSED WITH PREJUDICE.

IT IS SO ORDERED.