Turner Ozanne v. Hyman Power

111 F.3d 1312, 1997 U.S. App. LEXIS 7608
CourtCourt of Appeals for the Seventh Circuit
DecidedApril 17, 1997
Docket96-2003
StatusPublished
Cited by18 cases

This text of 111 F.3d 1312 (Turner Ozanne v. Hyman Power) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Turner Ozanne v. Hyman Power, 111 F.3d 1312, 1997 U.S. App. LEXIS 7608 (7th Cir. 1997).

Opinion

111 F.3d 1312

TURNER/OZANNE, a Joint Venture, Turner Construction Company
and Ozanne Construction Company, Plaintiffs-Appellants,
and
Knight Architects, Engineers, Planners, Inc., Intervening
Plaintiff-Appellant,
v.
HYMAN/POWER, a Joint Venture, George Hyman Construction
Company and Power Contracting and Engineering,
Defendants-Appellees.

Nos. 96-2003, 96-2059.

United States Court of Appeals,
Seventh Circuit.

Argued Oct. 28, 1996.
Decided April 17, 1997.

Steven B. Belgrade (argued), Kim R. Kardas, John A. O'Donnell, Belgrade & O'Donnell, Chicago, IL, for Plaintiffs-Appellants.

Christopher G. Walsh, Jr. (argued), Roger J. Guerin, Rothschild, Barry & Myers, Chicago, IL, for Defendants-Appellees.

Before POSNER, Chief Judge, and EASTERBROOK and RIPPLE, Circuit Judges.

RIPPLE, Circuit Judge.

This action arises out of an accident that occurred during the construction of a United States Post Office in Cook County, Illinois. Numerous injured employees have instituted tort suits against the construction manager contractor ("CMC"), Turner/Ozanne ("Turner"),1 the architect, Knight Architects, Engineers, Planners, Inc. ("Knight"),2 and the general contractor, Hyman/Power ("Hyman").3 Each of these entities had entered into a separate contract with the United States Postal Service ("USPS") with respect to the construction of the Post Office. In the contract between Hyman and the USPS, Hyman had agreed to indemnify the USPS for claims arising from the construction of the Post Office. Turner brought this declaratory judgment action alleging that it is entitled to the benefit of this provision, despite an Illinois statute that invalidates contractor indemnity provisions. Turner contends that the indemnity provision must be interpreted under federal common law. The district court held that the provision was subject to Illinois law and therefore not enforceable. For the following reasons, we affirm the judgment of the district court.

* BACKGROUND

A. Facts4

Turner was awarded the CMC contract with the USPS for the latter's Central Region in March 1992. Under this contract, Turner agreed to act as the USPS' on-site representative for postal facilities construction in Colorado, Illinois, Indiana, Iowa, Michigan, South Dakota, Wisconsin and Wyoming. The Turner contract provides:

The CMC shall be responsible for directing the efforts of the construction contractor [the general contractor] within the provisions of the contract documents. The Construction Management Contractor shall be responsible for exercising the professional construction judgment to interpret the contract documents and judge acceptable workmanship on behalf of the U.S. Postal Service....

....

The CMC shall be considered primarily responsible by the USPS for achieving project objectives, namely a facility constructed by the contractual completion date in accordance with the contract documents and within budget. The Construction Management Contractor shall be responsible for taking all actions within his authority to meet these objectives....

R.1, Ex.A, Attach. 2, Art. 10.7, at 18. This contract also provides:

The USPS considers the CMC a "representative" and makes no representations that it will assist the CMC in any way to assert claims against a construction contractor under the indemnity provision of the construction contract.... It is the responsibility of the CMC to secure and maintain the extent of liability insurance he deems necessary for his protection in the execution of this contract.

Id. Art. 5.1-5.2, at 11. Under this contract, Turner, as CMC, did not perform any of the construction work or hire any subcontractors to perform any construction work.

Knight contracted with the USPS to perform various architectural and engineering services in relation to the demolition and site preparation for the Post Office project.

Hyman entered into a contract with the USPS and agreed to act as the general contractor for the project. In one of the provisions of the Hyman contract, Hyman agreed to indemnify the USPS for all claims and damages arising out of the project. The indemnity provision provides:

The contractor must save harmless and indemnify the Postal Service and its officers, agents, representatives, and employees from all claims, loss, damage, actions, causes of action, and/or expenses resulting from, brought for, or on account of any personal injury or property damage received or sustained by any persons or property growing out of, occurring, or attributable to any work performed under or related to this contract, resulting in whole or in part from the negligent acts or omissions of the contractor, any subcontractor, or any employee, agent, or representative of the contractor or any subcontractor.

R.1, Ex.B, § G.26, at 33.

On or about November 3, 1993, while the building was under construction, the structural beams collapsed, causing personal injuries to a number of the workers on the site. Some of these workers have filed suits for negligence in the Circuit Court for Cook County, Illinois against the parties to this action. Turner tendered a demand of Hyman to defend and indemnify Turner in the underlying suits; Hyman has refused.

B. District Court Proceedings

Turner filed this declaratory judgment action in the district court on May 15, 1995. It alleged that it was an agent or representative of the USPS and sought a declaration that Hyman had a duty to defend and indemnify it. Turner submitted that the district court could exercise both federal question and diversity jurisdiction over the dispute. Turner alleged that federal question jurisdiction was present because it was an agent of the USPS and that therefore federal common law would govern the application of the Hyman contract to Turner. With respect to diversity of citizenship, Turner alleged greater than $50,000 in controversy--the jurisdictional amount at that time.

Hyman responded by filing a motion to dismiss. See Fed.R.Civ.P. 12(b)(6). Hyman submitted that Turner's allegations, even if proven, would not entitle Turner to any relief. Hyman contended that the indemnification clause was unenforceable as applied to Turner because the clause's construction was governed by Illinois law, under which the provision is void as against public policy.

Before the district court ruled on the Rule 12(b)(6) motion, Knight sought permissive intervention, alleging that many questions of law and fact between the main action and Knight's action were similar. See Fed.R.Civ.P. 24(b)(2).5 The court granted the intervention, and Knight filed a claim against Hyman seeking a declaration that Hyman has the duty to defend and indemnify Knight under the indemnification clause of the Hyman contract.

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Cite This Page — Counsel Stack

Bluebook (online)
111 F.3d 1312, 1997 U.S. App. LEXIS 7608, Counsel Stack Legal Research, https://law.counselstack.com/opinion/turner-ozanne-v-hyman-power-ca7-1997.