Appeals panel reverses ESL decision

By Steve Gonzalez | Aug 13, 2008

The Fifth District Appellate Court has reversed a decision by Madison County Circuit Judge Andy Matoesian that granted summary judgment to counter defendant ESL Delivery Services.

The Fifth District entered their ruling July 25.

ESL Delivery originally filed a civil lawsuit against Delivery Network, the owner and operator of a warehouse in Granite City.

According to court documents, ESL Delivery entered into a lease agreement with Delivery Network on April 1, 2003, for the storage of goods and the lease of office space inside the warehouse.

The lease called for ESL Delivery to be responsible for maintenance and operations of a wall unit that provided heat and cooling and insurance for all their contents within the office.

On Oct. 26, 2003, a fire started at the warehouse and the building's alarm system notified the fire department and the building's sprinkler system activated.

Shortly after arriving at the scene, Granite City Fire Department appeared to have extinguished the fire and while they were present at the scene someone deactivated the warehouse's alarm/sprinkler system.

Court documents show about seven hours after the initial fire call, during the early morning hours of Oct. 27, 2003, the fire reignited but the fire department was not immediately notified because the alarm and sprinkler system had been turned off.

Once firefighters responded to the blaze, it took them nearly 10 hours to control the fire, which eventually destroyed Delivery Network's warehouse and the warehouse's contents, as well as an adjacent warehouse facility and its contents.

In 2004, ESL Delivery sued Delivery Network, alleging that Delivery Network's negligence was the proximate cause of their fire damages.

ESL Delivery alleged Delivery Network's failure to reset the alarm/sprinkler system after the first fire was the proximate cause of the damage to their property which occurred when the fire reignited.

Delivery Network filed a counterclaim for contribution against ESL Delivery, alleging their negligent failure to properly operate and maintain its wall unit heaters in its leased office space was a proximate cause of the fire.

According to court documents, Delivery Network settled all claims against them leaving Delivery Network's counterclaim for contribution against ESL Delivery as the sole remaining claim.

Delivery Network's insurance carrier asserted a subrogation right to seek contribution from ESL Delivery prompting ESL to file a motion for summary judgment arguing Delivery Network could not maintain a contribution action against them for fire damage even if the fire had started as a result of their own negligence.

Matoesian granted ESL Delivery's motion on Jan. 7, 2007, and Delivery Network appealed his decision.

Writing for the court, Presiding Justice Bruce Stewart said a party is entitled to summary judgment "if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

"In the present case, there are material issues of fact, and ESL is not entitled to a judgment as a matter of law," Stewart wrote. "Therefore, we reverse the circuit court's summary judgment and remand this cause for further proceedings."

The Fifth District ruled that the case presents the issue of whether a landlord's liability insurance carrier has a subrogation right to seek contribution against a tenant where the tenant's negligence causes damage to the real and personal property of third parties.

Stewart writes, "Section 2(a) of the Joint Tortfeasor Contribution Act (740 ILCS 100/2(a) (West 2006)) establishes a right of contribution between two or more persons who are subject to liability in tort arising out of the same injury to property."

He added, "Under this statutory provision, Delivery Network had a right to seek contribution from ESL to the extent of ESL's prorated share of common liability."

"Delivery Network's liability insurance carrier paid the liability on behalf of Delivery Network and, therefore, has a subrogation right to seek contribution from ESL for ESL's prorated share of the liability," Stewart added.

"There are triable issues of fact concerning whether ESL was negligent and, if so, the extent of its prorated share of the common liability," Stewart concluded. "Accordingly, the circuit court erred in granting ESL a summary judgment on Delivery Network's claim for contribution."

Justices James Wexstten and Richard Goldenhersh concurred with the decision.

The Fifth District remanded the case back to Matoesian for further proceedings.

Michael Ward of Brown & James in St. Louis represented ESL Delivery in the appeal.

Karen Kendall of Heyl Royster's Peoria office represented Delivery Network.

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