Ritacca Laser Center v. Brydges , 100 N.E.3d 569 ( 2018 )

2018 IL App (2d) 160989
No. 2-16-0989
Opinion filed February 13, 2018
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT
______________________________________________________________________________
RITACCA LASER CENTER, ) Appeal from the Circuit Court
) of Lake County.
Plaintiff-Appellant, )
)
v. ) No. 12-L-655
)
LOUIS BRYDGES, )
GEORGE RISEBOROUGH, )
BRYDGES RISEBOROUGH, and )
O’HARE ENGINEERING, )
) Honorable
Defendants ) Margaret J. Mullen and
) Michael J. Fusz,
(O’Hare Engineering, Defendant-Appellee). ) Judges, Presiding.
______________________________________________________________________________
JUSTICE McLAREN delivered the judgment of the court, with opinion.
Justices Jorgensen and Spence concurred in the judgment and opinion.
OPINION
¶1 Plaintiff, Ritacca Laser Center, appeals the trial court’s summary judgment in favor of
defendant O’Hare Engineering in this case involving a fire that occurred after defendant installed
HVAC systems in plaintiff’s office building. Plaintiff argues that the trial court erred by
granting summary judgment in favor of defendant and striking affidavits attached to plaintiff’s
response to defendant’s motion for summary judgment. We affirm.
¶2 I. BACKGROUND
2018 IL App (2d) 160989
¶3 On October 7, 2013, plaintiff, a medical service provider, filed a two-count third
amended complaint (complaint). Count I asserted legal malpractice against plaintiff’s lawyers;
that claim was dismissed and is not part of this appeal. Count II, pertinent to this appeal,
asserted negligence against defendant as follows. In June 2008, plaintiff entered into a contract
for Ryan, Inc. (Ryan), to construct improvements to remodel plaintiff’s basement into a surgical
suite. Ryan hired defendant to design, furnish, and install HVAC systems in plaintiff’s office
building. In December 2008, a few days after the grand opening of plaintiff’s remodeled office
building, a fire broke out, and an investigation suggested that defendant installed an air filter “too
close” to an electric heating coil. Plaintiff alleged that, due to defendant’s negligence, plaintiff
was unable to work out of its office building for three years, which resulted in lost business
income and property damage. Plaintiff tendered its claim to its insurance carrier, Erie Insurance
(Erie), and plaintiff settled with Erie, but the settlement did not cover all of plaintiff’s lost
business income. Plaintiff attached to its complaint the construction contract between it and
Ryan, which, in article 14, contained the following relevant provisions:
“(b) Builders Risk Insurance.
(i) Owner [(plaintiff)] shall purchase and maintain, until the date of
Substantial Completion, ‘all-risk’ builder’s risk insurance covering the Project
risk associated with such deductible [sic] shall be borne entirely by Owner. ***
***
(c) Waiver of Subrogation. Owner [(plaintiff)] and Design-Builder [(Ryan)]
waive all rights against each other, and against their respective agents, employees and
subcontractors, for damages caused by perils covered by the insurance to be maintained
pursuant to Paragraph 14(b) hereof, except such rights as they may have to the proceeds
of such insurance. If, during the Project construction period, the Owner insures
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properties, real or personal or both, at or adjacent to the site by property insurance under
policies separate from those insuring the Project, or if after final payment property
insurance is to be provided on the completed Project through a policy or policies other
than those insuring the Project during the construction period, the Owner shall waive all
rights against the Design-Builder, and against its respective agents, employees and
subcontractors, for damages caused by perils covered by this separate property
insurance.”
¶4 On October 9, 2015, defendant moved for summary judgment, asserting additional facts
and arguing the following. When plaintiff tendered its claim to Erie, it acknowledged that its
policy covered both property damage and related business-interruption losses caused by the fire.
When Erie refused to pay the amount of loss plaintiff claimed, plaintiff sued Erie in August
2009. In the course of litigation, plaintiff and Erie produced widely disparate calculations of
plaintiff’s business-interruption damages. Plaintiff claimed that its business-interruption losses
were $6.3 million whereas Erie’s expert opined that plaintiff’s business-interruption losses were
only $1.5 million. By June 2011, plaintiff and Erie had agreed on the amount of the property
losses but not the business-interruption losses. After mediation on the matter, plaintiff agreed to
release all of its business-interruption claims against Erie for $3.5 million. The total settlement
amount for property damage and business interruption was over $4 million. After the settlement,
plaintiff learned that Erie did not intend to bring a subrogation action against defendant, because
Erie’s legal counsel opined that plaintiff’s fire-related property damage and business-interruption
losses were caused by a “peril” covered by the Erie policy and, therefore, subrogation was barred
by the waiver in the construction contract. Defendant argued that plaintiff’s claim could not
proceed, because it waived any claims against defendant in the construction contract and
plaintiff’s lawsuit against defendant was frivolous.
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¶5 In support of its motion for summary judgment, defendant attached the following
documents: (1) plaintiff’s complaint against defendant, along with the attached construction
contract, and (2) plaintiff’s complaint against Erie. In the latter, plaintiff alleged that its policy
provided it with, inter alia, “insurance coverage for what is commonly referred to as business
interruption ***. The Policy was in full force and effect at all time material hereto [namely] The
Fire Loss ***.” Plaintiff also alleged that “Erie promised to pay income protection loss for the
shorter of 1. The time period required to build, repair, or replace such part of the building or
business personal property as has been damaged or destroyed as a result of a peril; or 2. Twelve
(12) consecutive months from the date of the loss.” Also attached to defendant’s motion were
the following: (1) a letter from an Erie representative indicating that, on the date of the fire, as
indicated by the enclosed declarations, plaintiff was covered for “Business Personal Property
[and] Income,” (2) the settlement agreement between plaintiff and Erie, (3) Erie’s counsel’s
letter stating that “the subrogation waiver cannot be overcome,” and (4) Erie’s declaration of
coverage indicating that plaintiff was covered for personal property damage and income loss.
¶6 In opposition to defendant’s motion for summary judgment, plaintiff asserted that the
waiver of subrogation contained in paragraph 14(c) of the construction contract applied only to
“damages caused by perils covered by insurance required under [paragraph] 14(b). *** Further,
[a]rticle 14[b] discussed builder’s Risk Insurance, stating that [plaintiff] shall purchase this
insurance, [and it clearly applied] only to property damage. *** In fact, [plaintiff] did not
purchase the Builders Risk Insurance but instead purchased a commercial package policy which
included income loss, not required under Article 14.” The construction contract could “be
construed as ambiguous because [it] does not specify that income loss is part of the builders[’]
risk. *** Therefore[,] *** the Court should construe the terms in the light most favorable to the
insured, [plaintiff].”
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2018 IL App (2d) 160989
¶7 In support of plaintiff’s response to defendant’s motion for summary judgment, plaintiff
attached the following: (1) the construction contract; (2) Erie’s insurance documents; (3) the
affidavit of Eric Routman, an attorney, who opined, in pertinent part, that paragraph 14(b) of the
construction contract required plaintiff to obtain property insurance, commonly referred to as
builders’ risk insurance, and that the waiver of subrogation in paragraph 14(c) was “limited to
damages caused by perils covered by [insurance] required by [paragraph] 14(b)”; (4) the
affidavit of Brian Paquette, plaintiff’s insurance broker, who stated that he did not issue a
builders’ risk policy to plaintiff; and (5) the affidavit of Daniel Ritacca, M.D., plaintiff’s
principal, who stated that he did not obtain a builders’ risk policy but, instead, purchased a
commercial package policy that included income-loss insurance, and income loss is not part of a
builders’ risk policy.
¶8 Defendant moved to strike the three affidavits attached to plaintiff’s response on the basis
that the affidavits were insufficient under Illinois Supreme Court Rule 191 (eff. Jan. 4, 2013).
¶9 On January 26, 2016, after a hearing on the matter, the trial court granted defendant’s
motion to strike plaintiff’s affidavits and granted plaintiff leave to file affidavits compliant with
Rule 191 no later than seven days prior to the hearing on defendant’s motion for summary
judgment. Plaintiff failed to file amended affidavits.
¶ 10 On February 9, 2016, after hearing argument on defendant’s motion for summary
judgment, the trial court granted defendant’s motion and granted defendant leave to file a motion
seeking to recover fees and costs from plaintiff by March 1, 2016. On March 2, 2016, defendant
filed a motion for sanctions against plaintiff pursuant to Illinois Supreme Court Rule 137 (eff.
July 1, 2013). On March 4, 2016, plaintiff filed a notice of appeal. However, because plaintiff’s
notice of appeal was premature due to defendant’s pending motion for sanctions, plaintiff
withdrew its appeal. On November 3, 2016, after hearing arguments by counsel, the trial court
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denied defendant’s motion for sanctions. On November 22, 2016, plaintiff filed its notice of
appeal.
¶ 11 II. ANALYSIS
¶ 12 A. Summary Judgment
¶ 13 Plaintiff argues that the trial court erred by granting summary judgment in defendant’s
favor, because it improperly interpreted the waiver of subrogation contained in the construction
agreement.
¶ 14 Summary judgment is appropriate when there are no genuine issues of material fact and
the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2014).
The trial court may grant summary judgment after considering “the pleadings, depositions,
admissions, exhibits, and affidavits on file in the case” and construing that evidence in favor of
the nonmoving party. Purtill v. Hess, 111 Ill. 2d 229, 240 (1986). Summary judgment aids in
the expeditious disposition of a lawsuit but should be allowed only “when the right of the
moving party is clear and free from doubt.” Id. We review de novo a trial court’s decision to
grant summary judgment. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d
90, 102 (1992).
¶ 15 The interpretation of a contract presents a question of law subject to de novo review in
accordance with the general rules applicable to contract interpretation. Gallagher v. Lenart, 226
Ill. 2d 208, 219 (2007). We construe a clear and unambiguous contract as a matter of law. See
Storino, Ramello & Durkin v. Rackow, 2015 IL App (1st) 142961, ¶ 18. Our primary goal in
interpreting a contract is to give effect to the intent of the parties. Thompson v. Gordon, 241 Ill.
2d 428, 441 (2011). When the words in the contract are clear and unambiguous, they must be
given their plain, ordinary, and popular meaning. Id. If the language of the contract is
susceptible to more than one reasonable meaning, it is ambiguous and a court can consider
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extrinsic evidence to determine the parties’ intent. However, the parties’ disagreement on the
meaning of a contract term does not, by itself, render that term ambiguous. Id. at 443. Rather,
ambiguity arises only when the language has more than one reasonable interpretation. Nicor,
Inc. v. Associated Electric & Gas Insurance Services Ltd., 223 Ill. 2d 407, 417 (2006).
¶ 16 Plaintiff argues that summary judgment was improper because (1) the construction
contract applied to property damage only and not to business-income loss, (2) plaintiff did not
purchase “builder’s risk insurance” as required by article 14, but instead plaintiff purchased a
commercial package policy that covered income loss, which was not required by article 14, and
(3) the construction contract is ambiguous in that it does not specify that income loss is part of
the builder’s risk, and thus it should be interpreted in plaintiff’s favor as it is the insured.
¶ 17 Defendant argues that the trial court properly granted summary judgment in its favor
because the relevant provisions of the construction contract unambiguously apply to the damages
incurred by plaintiff. We agree with defendant.
¶ 18 Paragraph 14(c) provided the following:
“Waiver of Subrogation. Owner [(plaintiff)] and Design-Builder [(Ryan)] waive
all rights against each other, and against their respective agents, employees and
subcontractors, for damages caused by perils covered by the insurance to be maintained
pursuant to Paragraph 14(b) hereof, except such rights as they may have to the proceeds
of such insurance. If, during the Project construction period, the Owner insures
properties, real or personal or both, at or adjacent to the site by property insurance under
policies separate from those insuring the Project, or if after final payment property
insurance is to be provided on the completed Project through a policy or policies other
than those insuring the Project during the construction period, the Owner shall waive all
rights against Design-Builder, and against its respective agents, employees and
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2018 IL App (2d) 160989
subcontractors, for damages caused by perils covered by this separate property
insurance.” (Emphases added.)
Paragraph 14(b)(i) provided, in part:
“Owner [(plaintiff)] shall purchase and maintain, until the date of Substantial
Completion, ‘all-risk’ builder’s risk insurance covering the Project.”
¶ 19 Plaintiff’s interpretation of the waiver of subrogation renders the second sentence of
paragraph 14(c) meaningless. The Erie insurance endorsement and the insurance policy attached
to plaintiff’s response to defendant’s motion for summary judgment indicate that plaintiff was
covered by an “Ultrapack Business Policy” that was in effect at the time of the fire and covered
property damage and income loss. The name of the policy is irrelevant because under paragraph
14(c) the waiver applied to claims “for damages caused by perils covered by this separate
property insurance.” Thus, plaintiff’s argument that the waiver did not apply, because it bought
a commercial policy, fails. Under either policy, the peril of fire was covered by insurance. The
nature and extent of the damages insured are immaterial because it is the peril covered and not
the type of damages that sustains the waiver.
¶ 20 We now address plaintiff’s concomitant arguments that the construction contract applied
to property damage only and not business-income loss and that the contract is ambiguous
because it does not specifically list income loss. We reject both arguments.
¶ 21 The waiver expressly covered “damages caused by perils.” The dictionary definition of
“damage” does not support plaintiff’s argument. Damage is defined as “loss due to injury”
(Webster’s Third New International Dictionary 571 (1993)) and loss or injury to person or
property (Black’s Law Dictionary 416 (8th ed. 2004)). These definitions are broad and
implicitly include loss of business income. To the extent that the waiver does not enumerate
different types of damages that could result from a peril, “it purports only to be inclusive, not
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preclusive.” Intergovernmental Risk Management v. O’Donnell, Wicklund, Pigozzi & Peterson
Architects, Inc., 295 Ill. App. 3d 784, 795-96 (1998). Nothing in the language of the waiver
indicates that the parties intended an exception for loss of business income. We will not add
terms to a contract to change the plain meaning, as expressed by the parties. See Empress
Casino Joliet Corp. v. W.E. O’Neil Construction Co., 2016 IL App (1st) 151166, ¶ 62; see also
Berryman Transfer & Storage Co. v. New Prime, Inc., 345 Ill. App. 3d 859, 863 (2004) (“Illinois
recognizes a strong presumption against provisions that easily could have been included in a
contract but were not.”). Thus, applying the plain and ordinary meaning of the term damages to
article 14 of the construction contract, we determine that it clearly and unambiguously included
loss of business income. Therefore, the trial court properly granted summary judgment in
defendant’s favor.
¶ 22 B. Affidavits
¶ 23 Plaintiff argues that the trial court improperly struck the affidavits of Routman, Paquette,
and Ritacca. According to plaintiff, the affidavits complied with Illinois Supreme Court Rule
191 (eff. Jan. 4, 2013).
¶ 24 The record on appeal, however, does not include a transcript of the hearing on the motion
to strike or a substitute in compliance with Illinois Supreme Court Rule 323 (eff. July 1, 2017).
An appellant has the burden of presenting a sufficiently complete record of the proceedings to
support a claim of error. In the absence of such a record on appeal, it will be presumed that the
order entered by the trial court was in conformity with the law. Foutch v. O’Bryant, 99 Ill. 2d
389, 391 (1984). Without an adequate report of the proceedings showing the basis for the trial
court’s ruling on the motion to strike, we must presume that its decision was appropriate. Id. at
391-92; see also Preze v. Borden Chemical, Inc., 336 Ill. App. 3d 52, 56 (2002) (absent a
complete record on appeal, the appellate court must assume that the trial court’s order was
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correct and had a sufficient factual basis). The trial court’s reasoning aside, the affidavits would
not have affected our interpretation of article 14 of the construction contract; therefore, they
would have had no impact on our determination that the trial court properly granted summary
judgment in favor of defendant.
¶ 25 C. Local Rule 2-1.04
¶ 26 Plaintiff argues that the trial court erred by granting summary judgment in defendant’s
favor when defendant failed to attach to its motion a statement of uncontested material facts
pursuant to Nineteenth Judicial Circuit Court Rule 2-1.04, formerly local rule 2.04. 19th Judicial
Cir. Ct. R. 2-1.04 (Oct. 24, 2016). Plaintiff also contends that, when defendant finally submitted
its statement of material facts, it was not in compliance, because the statements were in the form
of a chart rather than short paragraphs and were not numbered. Based on the trial court’s
inherent power to control its docket, it has discretion whether to impose sanctions for violating
local rules. VC&M, Ltd. v. Andrews, 2013 IL 114445, ¶ 26.
¶ 27 Local rule 2-1.04 governs motions for summary judgment and provides in pertinent part:
“A. In all filings pursuant to 735 ILCS 5/2-1005, the moving party shall serve and
file:
***
3. a statement of material facts as to which the moving party contends
there is no genuine issue and that entitles the moving party to a Judgment as a
matter of law[.]
***
The statement referred to in Section (A)(3) shall consist of short numbered
paragraphs, including within each paragraph specific references to affidavits, parts of the
record, and other supporting materials relied upon to support the facts set forth in that
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paragraph. Failure to submit such a statement constitutes grounds for denial or striking
of the Motion.” 19th Judicial Cir. Ct. R. 2-1.04(A) (Oct. 24, 2016).
¶ 28 Here, defendant initially violated the local rule by failing to attach a statement of material
facts when it filed its motion for summary judgment. However, as directed by the trial court,
defendant subsequently submitted its statement of material facts. We cannot say that the trial
court abused its discretion by allowing defendant to submit the statement of facts after it filed its
motion for summary judgment.
¶ 29 Further, plaintiff has failed to indicate how defendant’s alleged failure to comply with the
technical aspects of local rule 2-1.04(A) caused plaintiff any prejudice or surprise. Accordingly,
we cannot say that the trial court abused its discretion by not denying defendant’s motion for
summary judgment as a sanction for failing to comply with the local rule. See VC&M, 2013 IL
114445, ¶ 27 (holding that the trial court did not abuse its discretion by failing to sanction a party
for a violation of a local rule where the opposing party did not claim prejudice).
¶ 30 III. CONCLUSION
¶ 31 For the reasons stated, we affirm the trial court’s order.
¶ 32 Affirmed.
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