{ "id": 3588574, "name": "CONTACT LENSES UNLIMITED, INC., Plaintiff, v. CARL R. JOHNSON et al., Defendants (Belle Goldstrich et al., Third-Party Plaintiffs-Appellants; Hallmark & Johnson Properties, Ltd., Third-Party Defendant-Appellee)", "name_abbreviation": "Contact Lenses Unlimited, Inc. v. Johnson", "decision_date": "1988-11-22", "docket_number": "No. 87\u20142468", "first_page": "875", "last_page": "880", "citations": [ { "type": "official", "cite": "176 Ill. App. 3d 875" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "412 N.E.2d 587", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "89 Ill. App. 3d 861", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5538495 ], "pin_cites": [ { "page": "869" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/89/0861-01" ] }, { "cite": "469 N.E.2d 689", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "128 Ill. App. 3d 11", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3524523 ], "weight": 2, "pin_cites": [ { "page": "18" }, { "page": "18" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/128/0011-01" ] }, { "cite": "92 Ill. 2d 171", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3097419 ], "pin_cites": [ { "page": "177" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/92/0171-01" ] }, { "cite": "91 Ill. 2d 69", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3092944 ], "opinion_index": 0, "case_paths": [ "/ill-2d/91/0069-01" ] }, { "cite": "112 Ill. 2d 87", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5538683 ], "weight": 2, "pin_cites": [ { "page": "94, 96, 97-98" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/112/0087-01" ] }, { "cite": "412 N.E.2d 651", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "89 Ill. App. 3d 932", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5539544 ], "pin_cites": [ { "page": "936" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/89/0932-01" ] }, { "cite": "452 N.E.2d 620", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1980, "opinion_index": 0 }, { "cite": "116 Ill. App. 3d 448", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3518321 ], "year": 1980, "pin_cites": [ { "page": "457" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/116/0448-01" ] } ], "analysis": { "cardinality": 578, "char_count": 10380, "ocr_confidence": 0.779, "pagerank": { "raw": 1.1193969455285479e-07, "percentile": 0.5730839906110357 }, "sha256": "8d65079550980d0e4dae9f1768a4840ab8211589bc6bb0b4d1280f2153558f79", "simhash": "1:135fa3de4a8b0ad6", "word_count": 1658 }, "last_updated": "2023-07-14T15:43:30.106689+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "CONTACT LENSES UNLIMITED, INC., Plaintiff, v. CARL R. JOHNSON et al., Defendants (Belle Goldstrich et al., Third-Party Plaintiffs-Appellants; Hallmark & Johnson Properties, Ltd., Third-Party Defendant-Appellee)." ], "opinions": [ { "text": "JUSTICE SCARIANO\ndelivered the opinion of the court:\nThird-party plaintiffs appeal the dismissal of their complaint seeking indemnity based upon an express indemnity agreement and on an agent-principal relationship, arguing that the trial court erred in ruling that they were seeking tort rather than contract damages.\nThird-party defendants Hallmark & Johnson (Hallmark) manage a building owned by third-party plaintiffs (the Owners). Plaintiff Contact Lenses Unlimited, Inc. (Contact), a tenant in the building, had a lease which granted it \u201c[t]he exclusive right to sell and service contact eye lenses in Lessor\u2019s building.\u201d Contact brought suit against both Hallmark and the Owners, alleging that the Owners, acting through Hallmark, breached this exclusivity provision in its lease by granting one to another tenant, For Eyes Optical Company, and by permitting For Eyes to sell and service contact eye lenses. The Owners then filed a third-party action against Hallmark, seeking relief from Hallmark in the event that the Owners were found liable to Contact in the underlying action, and alleging in their fourth amended third-party complaint the following:\nHallmark & Johnson has asserted that it performed its management duties to the Owners pursuant to a management agreement dated September 12,1968.\nThe management agreement provides, in part, that \u201cThe Agent also shall not be liable for any error of judgment or for any mistake of fact of [sic] law, or for anything which it may do or refrain from doing hereinafter, except in cases of willful misconduct or gross negligence.\u201d\nHallmark & Johnson entered into the leases with Contact Lenses and For Eyes without consulting with or seeking the approval of the Owners, in violation of the management agreement.\nHallmark & Johnson knowingly ignored the exclusivity provision in Contact Lenses\u2019 lease, in conscious disregard for the rights of Contact Lenses.\nHallmark & Johnson\u2019s conduct constituted willful misconduct and gross negligence, thereby violating the express provisions of the management agreement.\nThe trial court dismissed the third-party complaint, holding that it was deficient because it attempted to assert tort liability in a breach of contract case, and stating:\n\u201cA reading of the whole paragraph, it\u2019s clear to me that the intention of the parties deals with something relating to property damage and personal injury; namely, tort. The whole gist of that paragraph deals with tort. To use the phrase \u2018willful misconduct\u2019 or \u2018gross negligence\u2019 in the context of a contractual purported cause of action, it seems to me it\u2019s just not proper at all.\n* * *\n*** [I]n reading the complaint, the fourth amended third-party complaint, it\u2019s clear to the Court that the thrust of that cause of action is *** for economic damages, economic losses, is [sic] exactly what is being prayed for.\n* * *\nYou are pleading a contract cause of action, and you can\u2019t plead a willful and wanton breach of a contract. That\u2019s all there is to it.\u201d\nOpinion\nThe contract provision at issue provides as follows:\n\u201cThe Owner further agrees: (a) To save the Agent harmless from all damage suits in connection with the management of the herein described property and from liability suffered by any employee or other person whomsoever, and to carry, at his own expense, necessary public liability and workmen\u2019s compensation insurance, adequate to protect the interests of the parties hereto, which policies shall be so written as to protect the Agent in the same manner and to the same extent they protect the Owner, and will name the Agent as co-insured. The Agent shall also not be liable for any error of judgment or for any mistake of fact of [sic] law, or for anything which it may do or refrain from doing hereinafter, except in cases of willful misconduct or gross negligence.\u201d\nThe Owners contend that they pleaded facts constituting willful misconduct and gross negligence, conduct for which Hallmark expressly agreed to be held liable, thus properly bringing their claim within the contractual indemnity limitation. They also claim that they have stated a cause of action for breach of contract by alleging that Hallmark failed to use due diligence in the management of the building and failed to obtain their approval of the subject leases, in violation of the management agreement. Hallmark responds that the applicable contract provision precludes liability for a breach of contract action seeking recovery for solely economic loss. It also maintains that theories of willful misconduct and gross negligence are confined to tort actions. See Coleman v. Hermann (1983), 116 Ill. App. 3d 448, 457, 452 N.E.2d 620; Mantia v. Kaminski (1980), 89 Ill. App. 3d 932, 936, 412 N.E.2d 651 (\u201cWilful and wanton conduct has been defined as \u2018an intentional or reckless disregard for the safety of others\u2019 \u201d).\nThe trial judge relied on Morrow v. L.A. Goldschmidt Associates, Inc. (1986), 112 Ill. 2d 87, in dismissing the Owners\u2019 complaint. In that case, plaintiffs, purchasers of townhouses designed, constructed and sold by defendants, sought damages for breaches of express warranty and an implied warranty of habitability, as well as punitive damages for willful and wanton misconduct. The trial court dismissed the willful and wanton misconduct counts but was reversed by the appellate court. The supreme court affirmed the dismissal, stating:\n\u201cBoth defendants and plaintiffs agree that under Illinois law counts VIII through XI must be construed as alleging a tort in order to properly state a cause of action for punitive damages.\n* * *\nThe line of demarcation between tort and contract is sometimes difficult to make, and occasionally, the conduct complained of can constitute both a breach of contract and a tort. [Citations.] Nevertheless, this court held in Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, that recovery for solely economic losses is more appropriately governed by contract, rather than tort, law principles..\n* * *\n***[I]n the present case, plaintiffs seek to recover only the costs of repairs to their homes caused by defendants\u2019 alleged faulty workmanship. Like the plaintiff in Redarowicz, the plaintiffs here have not alleged a harm \u2018above and beyond disappointed expectations.\u2019 (Redarowicz v. Ohlendorf (1982), 92 Ill. 2d 171, 177.) *** [T]he plaintiffs essentially are complaining that they did not receive the benefit of their bargain \u2014 a harm which is appropriately remedied by bringing an action for breach of contract.\n*** Simply characterizing a breach of contract as \u2018wilful and wanton\u2019 does not change the fact that plaintiffs are only seeking recovery for harm to a contract-like interest. We cannot agree that a breach of contract becomes a tort just because the breach was wilful and wanton.\u201d 112 Ill. 2d at 94, 96, 97-98.\nThe Owners contend that Morrow is distinguishable from the instant case and therefore does not apply, maintaining that they did not attempt \u201cto couch a breach of contract action in the language of tort\u201d and that they used language of willful and wanton misconduct and gross negligence merely because that is the language used in the management agreement which Hallmark allegedly breached.\nAt issue is the proper interpretation of section 4(a) of the management agreement, which provides, as previously noted, that \u201cThe Agent shall also not be liable for any error of judgment or for any mistake of fact of [sic] law, or for anything which it may do or refrain from doing hereinafter, except in cases of willful misconduct or gross negligence.\u201d Hallmark claims that this clause means that it will be held liable for only its intentional torts and that it has immunity from all other claims. The Owners contend that all other provisions of the management agreement are meaningless and Hallmark\u2019s duties under the agreement are only illusory if section 4(a) does provide Hallmark with immunity. They maintain that the clause applies only in a third-party personal injury action and has no applicability in a breach of contract case.\nIt is well settled that a contract should be construed as a whole to give effect to the intention of the parties, and should also be construed so as to make the obligations imposed by its terms mutually binding upon the parties, unless such a construction is wholly negated by the language used. (De Witt County Building Comm\u2019n v. City of DeWitt (1984), 128 Ill. App. 3d 11, 18, 469 N.E.2d 689.) Contract terms should be construed to avoid the conclusion that other terms are redundant or meaningless. (De Witt, 128 Ill. App. 3d at 18.) Courts will give a reasonable construction to contracts rather than one leading to absurd results, and a construction is favored which will be most equitable to both parties, instead of one which will give one party an unfair advantage over the other. Board of Education v. Chi cago Teachers Union, Local 1 (1980), 89 Ill. App. 3d 861, 869, 412 N.E.2d 587.\nWe agree with the trial judge that section 4(a) of the management agreement relates to torts, but we hold that at the same time it does not preclude a contract action. There would be no purpose for including, for example, the requirements that Hallmark use due diligence and secure approval of leases if it could ignore those provisions with no penalty. Construing section 4(a) as Hallmark suggests would render the other provisions meaningless and make the contract unfair, a result that could not have been within the contemplation of the parties when they entered into this agreement.\nFor the foregoing reasons, the judgment of the circuit court of Cook County is reversed, and this cause is remanded to the circuit court for further proceedings consistent with this opinion.\nReversed and remanded.\nHARTMAN, P.J., and BILANDIC, J., concur.", "type": "majority", "author": "JUSTICE SCARIANO" } ], "attorneys": [ "Alan P. Solow, Pamela McLean Meyerson, and Amy L. Bess, all of Goldberg, Kohn, Bell, Black, Rosenbloom & Moritz, Ltd., of Chicago, for appellants.", "Hinshaw, Culbertson, Moelmann, Hoban & Fuller, of Chicago (William G. Swindal, Stephen R. Swofford, and Kearney W. Kilens, of counsel), for appellee." ], "corrections": "", "head_matter": "CONTACT LENSES UNLIMITED, INC., Plaintiff, v. CARL R. JOHNSON et al., Defendants (Belle Goldstrich et al., Third-Party Plaintiffs-Appellants; Hallmark & Johnson Properties, Ltd., Third-Party Defendant-Appellee).\nFirst District (2nd Division)\nNo. 87\u20142468\nOpinion filed November 22, 1988.\nAlan P. Solow, Pamela McLean Meyerson, and Amy L. Bess, all of Goldberg, Kohn, Bell, Black, Rosenbloom & Moritz, Ltd., of Chicago, for appellants.\nHinshaw, Culbertson, Moelmann, Hoban & Fuller, of Chicago (William G. Swindal, Stephen R. Swofford, and Kearney W. Kilens, of counsel), for appellee." }, "file_name": "0875-01", "first_page_order": 897, "last_page_order": 902 }