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Liberty Mutual Insurance v. Aluminum Co. of America
Citations: 154 Ill. App. 3d 341; 507 N.E.2d 125; 107 Ill. Dec. 461; 1987 Ill. App. LEXIS 2306Docket: No. 86—0216
Court: Appellate Court of Illinois; March 30, 1987; Illinois; State Appellate Court
On August 18, 1967, H. H. Robertson Company entered into a sale agreement to acquire the stock and assets of Cupples Products Corporation from the Aluminum Company of America, which was mandated by a court order for Alcoa to divest its interests in Cupples. Prior to this sale, Alcoa had subcontracted Cupples for work related to the construction of the John Hancock Center. Under the sale agreement, Robertson assumed Cupples’ incomplete obligations but Alcoa retained liability for any warranties regarding the Hancock Center. In 1982, Frank Whitmer filed a personal injury complaint against Guppies, a division of Robertson, alleging negligence in the fabrication and installation of the curtain wall, which led to automobile fumes entering his residence. Liberty Mutual Insurance, the insurer for Robertson and Cupples, initiated a declaratory judgment action against Alcoa, claiming that Alcoa retained all liabilities related to the Hancock project and sought reimbursement for legal expenses incurred in defending the Whitmer case. The trial court denied Alcoa’s motion for summary judgment and granted Liberty’s, ruling that Liberty had no obligation to defend Robertson in the Whitmer action and ordering Alcoa to reimburse Liberty for defense costs. Alcoa appealed, arguing that the court incorrectly granted summary judgment, asserting there was a genuine issue of fact regarding Robertson’s liability based on the sale agreement and subcontract language, which Alcoa contended did not fully exculpate Robertson from all liabilities related to Cupples’ construction work. The court emphasized that summary judgment is only appropriate when no genuine issue of material fact exists and should be granted when the right to it is clear. Alcoa contends that certain contractual provisions only relieve Robertson of liability for claims related to work completed before the closing date and for claims based on breach of warranty or guarantee. Specifically, in paragraph 8, Alcoa outlines its contract with Tishman Construction for the John Hancock Center project and details that Robertson will assume Cupples' obligations under the subcontract for work not completed before the closing date, with specific exceptions. Notably, Robertson is not liable for any warranties or guarantees related to the project. The relevant indemnification clause in the subcontract indicates that Cupples must hold Alcoa harmless from claims due to negligence. However, since the Whitmer complaint solely alleges negligence against Guppies and does not cite breach of warranty, the provisions do not relieve Robertson of liability in this instance. The trial court incorrectly granted summary judgment for Liberty based on the mistaken belief that these provisions exculpated Robertson from all liability. Alcoa maintains that, under the terms of subparagraph 8(B), Robertson assumed all liabilities for work not completed prior to the closing date, and there is no evidence that Cupples completed any work before that date. Consequently, this provision effectively limits Alcoa’s liability for any work completed post-closing date. The appellate court concludes that the trial court's denial of Alcoa's motion for summary judgment was erroneous. Since there is no evidence to suggest Alcoa had any potential liability under the sales agreement, the court reverses the trial court's judgment and remands with instructions to enter summary judgment for Alcoa.