St. Joseph Hospital v. Corbetta Construction Co. (21 Ill. App. 3d 925, 1974)

Mr. JUSTICE HALLETT

delivered the opinion of the court:

This involves consolidated appeals from two actions in the circuit court of Cook County. Both arose primarily out of problems flowing from the installation of Textolite plastic laminate wall paneling on the walls of the new St. Joseph Hospital during its construction, which paneling proved to have a “flame spread” rating some 17 times the maximum permitted under the Chicago Building Code and had to be replaced with paneling complying with said Code.

The first was a declaratory judgment action brought by the Hospital against its architect, the contractor and the manufacturer-supplier of said wall paneling. The second was an action at law brought by the manufacturer-supplier against the contractor for the price of said original paneling. Further discussion of the litigation, its outcome and the various appeals will be deferred for the present.

While this is an extremely long (hundreds of documents, 5000 pages of transcript, and 444 pages of appellate briefs) consolidated appeal, involving two lawsuits, four adverse parties and two jury trials (taking 6V2 weeks), the “bare bones” of the controversy are relatively simple.

The St. Joseph Hospital (the Hospital) in 1958 entered into a contract with architect Belli & Belli of Missouri (Belli) for the erection of a hospital on a new site in Chicago to replace one erected before the Great Chicago Fire of 1871, and the general construction of the hospital was undertaken by the Corbetta Construction Company (Corbetta). In April of 1965, when the building had been substantially completed, the Hospital was advised by the city collector that its application for a license to operate the Hospital had been disapproved because the wall paneling (General Electric’s “Textolite”) which covered its rooms and corridors, and had been manufactured and furnished by the General Electric Company (General Electric), did not comply with a Chicago Code requirement that such paneling have a “flame spread” rating of not to exceed 15. Actually it had a rating of 255, 17 times the maximum. The city also threatened criminal action against the Hospital for operating without said license.

At this juncture, the Hospital called upon all of the parties involved to remedy the situation and withheld from Corbetta final payment of some $453,000. Although all of the parties deplored the situation, each took the position that it was not itself at fault and that only others were to blame. At about this time Corbetta advised the Hospital that it was their intention to file suit for the $453,000 so withheld by the Hospital.

Faced with the threat of two lawsuits and a complete shutdown of its operation, the Hospital, on May 14, 1965, filed a complaint for declaratory judgment against Corbetta, Belli and General Electric, setting forth the above described controversy between the parties, and attaching copies of the various contracts, subcontracts and applicable municipal ordinances. As the result of a petition for immediate relief, an order was entered in this action, permitting the Hospital to take immediate steps to remove the Textolite wall paneling and to replace it with paneling approved by the city of Chicago, all without prejudice to the rights of any of the parties.

Under this order, the Textolite wall paneling was removed and replaced with Westinghouse Micarta paneling, an asbestos plastic laminate installed on an asbestos panel, meeting the 15 flame-spread rating of the Chicago Building Code, at a total cost of some $300,000.

Meanwhile, the Hospital amended its complaint; various motions to dismiss by Belli and General Electric were filed and denied; Corbetta counterclaimed against the Hospital, Belli and General Electric; Belli cross-claimed against Corbetta and General Electric; and, eventually, appropriate answers were filed to the complaints, counterclaims and cross-claims and the case was at issue. The trial court, on the motion of the Hospital, segregated the various counterclaims and cross-claims from the question of liability and this is not here challenged. It also deferred the question of damages until after liability had been determined and this is here challenged only by Belli.

The jury in the trial with respect to liability to the Hospital rendered a verdict against all three defendants. At the close of all the evidence in said trial, the court directed a verdict for the Hospital and against Cor-betta on its counterclaim. A subsequent jury then determined that the costs of reconstructing the corridors of the Hospital with a wall paneling which complied with the Chicago Building Code, plus attorneys’ fees, were $431,770.55. In addition, Corbetta and General Electric were found jointly and severally liable to the Hospital for attorneys’ litigation expenses of $112,251.21.

The various defendants had filed cross-claims against each other, each contending that any recovery by the Hospital against it should be passed on to other defendants. At the conclusion of the jury trial on the question of liability, all defendants waived jury and submitted their cross-claims to the court, which denied all such indemnity claims. The Hospital having retained amounts awarded it, Corbetta was given a separate judgment against Belli and General Electric for one-third of the damages and against General Electric for one-half of the litigation expense. The result is that, under the present judgment, each of the three defendants will bear one-third of the general damages and that Corbetta and General Electric will each bear one-half of the Hospital’s litigation expense.

Under a second count of its complaint, the Hospital sought to recover from all three defendants for the cost of reconstructing portions of the corridor walls behind which were located pipe or access spaces, to meet the city’s one hour fire resistance requirements. Judgment was entered on this count for the Hospital against Belli, for $17,178.31.

The second lawsuit, Cáse No. 56761, is an action by General Electric against Corbetta, seeking to recover payment for the Textolite plastic laminate wall paneling originally affixed to the walls of the hospital. The trial court dismissed this action on Corbetta’s motion on the ground that the material facts determined in the case brought by the Hospital against all three defendants precluded General Electric from recovery.

All three defendants have appealed, raising many issues. Rather than to note each party’s various contentions here, we shall discuss the issues under nine general headings, noting the several parties’ positions with respect thereto as seems appropriate.

I.

As we see it, the first question to be resolved is whether the trial court erred in refusing to dismiss the Hospital’s complaint for declaratory judgment. Only defendant Belli here challenges this ruling.

Section 57.1 of the Civil Practice Act (Ill. Rev. Stat. 1969, ch. 110, par. 57.1) provides as follows:

“§ 57.1. Declaratory judgments. (1) No action or proceeding is open to objection on the ground that a merely declaratory judgment, decree or order is sought thereby. The court may, in cases of actual controversy, make binding declarations of rights, having the force of final judgments, whether or not any consequential relief is or could be claimed, including the determination, at the instance of anyone interested in the controversy, of the construction of any statute, municipal ordinance, or other governmental regulation, or of any deed, will, contract or other written instrument, and a declaration of the rights of the parties interested. The foregoing enumeration does not exclude other cases of actual controversy.”

The Hospital’s filing its declaratory action when it did, without waiting for an even more complete disaster, certainly was proper.

In Trossman v. Trossman (1960), 24 Ill.App.2d 521, 165 N.E.2d 368, this court, in reversing the dismissal of a declaratory judgment action and remanding the cause for further proceedings, at page 531, quoted as follows from 26 C.J.S. Declaratory Judgments §28 (1956):

“ ‘It is not essential to a proceeding for a declaratory judgment that there be a violation of a right, a breach of duty, or a wrong committed by one party against the other. The mere existence of a cloud, the denial of a right, the assertion of an unfounded claim, the existence of conflicting claims, or the uncertainty or insecurity occasioned by new events may constitute the operative facts entitling a party to declaratory relief.’ ”

In Walton Playboy Clubs, Inc. v. City of Chicago (1962), 37 Ill.App. 2d 425, 185 N.E.2d 719, in affirming (with some modifications) a declaratory judgment involving a threatened revocation of the plaintiffs license to do business, this court, at pages 428-429, said:

“Apart from this, the situation confronting the plaintiff at the time this suit was started made it singularly fitting to seek relief by way of declaratory judgment. The plaintiff had made a large investment in a business which, in its general outline, was in conformity with several others, long-conducted without interference by the City. It had received from the Department of Police an official opinion of the City’s Department of Law stating that its method of doing business was illegal. It had every reason to believe that the City would proceed against it in accordance with the opinion. The success of its business depended upon the sale of memberships and the threat of having its licenses revoked would discourage their sale. Its business and its investment were in jeopardy. A justiciable controversy existed. The facts and the interpretation of the applicable statutes were in dispute. The plaintiff did not have to sit back and wait for the blow to fall just because the altercation might be decided in an alternative action (Liquor Control Act, 111 Rev Stats (1959) c43) which the City could invoke when it got ready. This was especially so in view of the plaintiff’s offer in its complaint to promptly comply with the court’s construction of the law. American Civil Liberties Union v. City of Chicago, 3 Ill2d 334, 121 NE2d 585; Kitt v. City of Chicago, 415 Ill 246, 112 NE2d 607; Retail Liquor Dealers’ Protective Ass'n v. Fleck, 408 Ill 219, 96 NE2d 556.”

To the same general effect, see Roberts v. Roberts (1967), 90 Ill.App. 2d 184, 187, 234 N.E.2d 372; La Salle Casualty Co. v. Lobono (1968), 93 Ill.App.2d 114, 117-118, 236 N.E.2d 405; Crest Commercial, Inc. v. Union-Hall, Inc. (1968), 104 Ill.App.2d 110,114-115, 243 N.E.2d 652.

In its opening brief, Belli contends that the plaintiffs complaint should have been dismissed because an adequate remedy at law was available to the plaintiff. Reliance is placed upon only one case, Goldberg v. Valve Corporation of America (1967), 89 Ill.App.2d 383, 233 N.E.2d 85. It was there held that an action brought by an employee who had a written contract of employment, which had been terminated by his employer, did not properly come within the ambit of the Declaratory Judgment Act. In that case, the court, at page 392, said:

“Plaintiff now by his complaint seeks not to have his present rights in an existing contract declared in a preventive fashion, rather he endeavors to have them enforced and executed after the fact. He has shewn no actual and present controversy in its true sense.” (Emphasis supplied.)

Furthermore in Goldberg, the contract had been terminated and the damages, if any (the opinion seems to express doubt that any could arise) were ascertainable. Here, the contract had not been completed and the damages could not yet be ascertained, and were not in fact ascertained until the Textolite wall paneling had been removed and paneling meeting the City Building Code had replaced it. It should also be noted that legal writers and other Illinois cases appear to express views differing considerably from some of those expressed in Goldberg.

In American Civil Liberties Union v. Chicago, 3 Ill.2d 334, 353, 121 N.E.2d 585, Mr. Justice Schaefer, speaking for our supreme court, at page 353, said:

“* * 6 Defendants’ contention that the availability of affirmative relief by way of mandamus bars an action for a declaratory judgment is refuted by the explicit language of section 57% of the Civil Practice Act. (Ill. Rev. Stat. 1953, chap. 110, par. 181.1.) Goodyear Tire and Rubber Co. v. Tierney, 411 Ill. 421, is not to the contrary. We there held only that a plaintiff desiring to challenge the validity of a tax assessment must pursue the statutory remedies provided by the Revenue Act, and that a declaratory judgment, like an injunction, could not be had in the absence of circumstances supplying a basis for interference with the collection of taxes. The case in no way suggests that an action for declaratory relief is defeated by the mere existence of another form of action which could presently be employed.”

To the same effect see Koziol v. Village of Rosemont (1961), 32 Ill. App.2d 320, 327, 177 N.E.2d 867; La Salle Casualty Co. v. Lobono (1968), 93 Ill.App.2d 114, 118, 236 N.E.2d 405; Kitt v. City of Chicago (1953), 415 Ill. 246, 252, 12 N.E.2d 607; Elm Lawn Cemetery Co. v. City of Northlake (1968), 94 Ill.App.2d 387, 391, 237 N.E.2d 345; Young v. Hansen (1969), 118 Ill.App.2d 1, 5-6, 249 N.E.2d 300.

We therefore conclude that declaratory judgment was properly employed in this case.

II.

The second question to be resolved, as we see it, is whether the trial court erred in conducting separate trials, one to determine the basic liability of the various defendants to the Hospital and, another to determine how much the Hospital should recover (by retention or otherwise) to compensate it for the removal of the Textolite wall paneling and tibe subsequent installation of Micarta wall paneling meeting the require-ménts of the City Building Code. Again, no defendant other than Belli challenges the procedure adopted by the trial court.

In its opening brief, Belli cited no cases and contended only that:

“* * * We know of no authority for such procedure in Illinois courts, the only provisions for severance being contained ini The Illinois Practice Act, chapter 110, I.R.S., Paragraphs 22, 44 and 51. Paragraph 23 permits servance [sic] as to parties. Paragraph 44 permits separate trial as to causes of action as does paragraph 51. Nothing permits or authorizes separate trials on the issues of liability and damages. * * *”

Later it supplemented its brief by citing Mason v. Dunn (1972), 6 Ill. App.3d 448, 285 N.E.2d 191, where the Appellate Court for the Second District held that, in the trial of a personal injury action, “there is no statute or Supreme Court rule in Illinois which expressly allows severance of issues” and “that the trial court is without inherent authority to sever the issues of liability and damages.” It therefore reversed a judgment so reached and remanded the case for a new trial.

Both said argument and said case miss the point, in that, as we have above demonstrated and held, the case at bar was properly brought and prosecuted as an action for declaratory judgment, with provisions expressly providing for the adjudication or declaration of rights in the first instance, followed, if necessary, with further coercive action, including money judgments.

Section 57.1 of the Civil Practice Act (Ill. Rev. Stat. 1965, ch. 110, par. 57.1), entitled “Declaratory Judgments,” in parts here pertinent, provides:

“(2) Subject to rules, declarations of rights, as herein provided for, may be obtained by means of a pleading seeking that relief alone, or as incident to or part of a complaint, counterclaim or other pleading seeking other relief as well, and if a declaration of rights is the only relief asked, the case may be set for early hearing as in the case of a motion.

(3) If further relief based upon a declaration of right becomes necessary or proper after the declaration has been made, application may be made by petition to any court having jurisdiction for an order directed to any party or parties whose rights have been determined by the declaration to show cause why the further relief should not be granted forthwith, upon reasonable notice prescribed by the court in its order.”

In Jenner & Tone’s Historical and Practice Notes (S.H.A. (1965), ch. 110, par. 57.1, at 132), it is said:

“* * * It is now settled in Illinois and other states that the supplemental relief contemplated by statutory provisions such as subsection (3) of the Illinois Act is not limited to further declaratory relief, Burgard v. Mascoutah Lumber Co., supra, and that such further relief may include assessment of damages or other affirmative relief obtainable by petition in the same action and in the same court in which the declaratory relief was obtained. Anderson, Declaratory Judgments, (2d ed., 1951, §451).”

In Burgard v. Mascoutah Lumber Co. (1955), 6 Ill.App.2d 210, 127 N.E.2d 464, in affirming a money judgment entered for the defendant against the plaintiff in a declaratory judgment action, the Appellate Court for the Fourth District, at page 218, said:

“It is generally held that it is proper to award coercive relief after declaring the rights of the parties, including the entry of a money judgment. Tolle v. Struve, 124 Cal. App. 263, 12 P.2d 61; Alfred E. Joy Co. v. New Amsterdam Casualty Co., 98 Conn. 794, 120 Atl. 684; Holly Sugar Corp. v. Fritzler, 42 Wyo. 446, 296 Pac. 206."

To the same effect see Crerar Clinch Coal Co. v. Board of Education (1957), 13 Ill.App.2d 208, 218, 141 N.E.2d 393; Greene v. Gust (1960), 26 Ill.App.2d 2, 6, 167 N.E.2d 438; Mundo v. DeGrazio (1966), 77 Ill. App.2d 52, 222 N.E.2d 253 (abstract opinion).

We therefore hold that the trial court properly severed the trial as to basic liability from the trial as to how much the Hospital should recover.

III.

This brings us to what we perceive to be the third issue — How much (in dollars) should the Hospital recover (by retention or otherwise) to compensate it for the expenses involved in the removal of the General Electric Textolite waU paneling and the instaUation in its place of the Westinghouse Micarta wall paneling?

The defendants (putting aside for the present their several contentions that they are not liable at all) contend, inter alia, that the Hospital is not entitled to recover the extra cost of the more expensive Micarta paneling and the extra labor costs required by its more difficult installation, and that, insofar as such extra costs are included, the jury’s verdict (and the court’s judgment thereon) unjustly enriches the Hospital by giving it, free of charge, better and more expensive wall paneling than it had bargained for and thus puts it in a better position than it would have been had the original contracts been fully performed. We are of the considered opinion that this contention is well founded in this case.

In 22 Am. Jur. 2d Damages § 12 (1965), at 28, it is said:

“§ 12. Compensation as the general rule or objective. Compensation is the stated goal of courts in awarding damages for tortious injury or for breach of a contractual promise. With torts, compensation most often takes the form of putting the plaintiff in the same financial position he was in prior to the tort. With contracts, compensation is most often stated in terms of placing the plaintiff in the same financial position in which he would have been had the promise not been broken.”

and, in section 13, at page 30, that:

“® ® * The law will not put him in a better position than he would be in had the wrong not been done or the contract not been broken.”

In 25 C.J.S. Damages § 74 (1966), at 846, 849, it is said:

“Compensation is the value of the performance of the contract; the person injured is, as far as it is possible to do so by a monetary award, to be placed in the position he would have been in had the contract been performed. ® * ®

On the other hand, the injured person is limited to the loss actually suffered by reason of the breach; he is not to be put in a better position by a recovery of damages for the breach than he would have been in if there had been performance.”

Some of the many cases holding that the “injured party is limited to the loss actually suffered by reason of the breach and is not to be put in a better position by a recovery of damages for the breach than he would have been in had there been performance,” are (chronologically): Ciminelli v. Umland Brothers Inc. (1932), 236 App. Div. 154, 258 N.Y.S. 143, 144; Hennen v. Streeter (1934), 55 Nev. 285, 31 P.2d 160, 163; Lastinger v. City of Adel (1943), 69 Ga. App. 535, 26 S.E.2d 158, 159; Blair v. United States (8th Cir. 1945), 150 F.2d 676; Talbot-Quevereaux Const. Co. v. Tandy (Mo. App. 1953), 260 S.W.2d 314, 316; Ficara v. Belleau (1954), 331 Mass. 80, 117 N.E.2d 287, 289; Thorne v. White (D.C. Mun. App. 1954), 103 A.2d 579, 580-81; United Protective Workers v. Ford Motor Co. (7th Cir. 1955), 223 F.2d 49, 53; Western Oil & Fuel Co. v. Kemp (8th cir. 1957), 245 F.2d 633, 644; Wickman v. Opper (1961), 188 Cal.App.2d 129, 10 Cal. Rptr. 291, 294; Dehnart v. Waukesha Brewing Co. (1963), 21 Wis.2d 583, 124 N.W.2d 664, 670; Hendrie v. Board of County Commissioners (1963), 153 Colo. 432, 387 P.2d 266, 271; Richter Contracting Co. v. Continental Casualty Co. (1964), 230 Cal.App.2d 491, 41 Cal. Rptr. 98, 107; Hanz Trucking, Inc. v. Harris Brothers Co. (1965), 29 Wis.2d 254, 138 N.W.2d 238, 246; Oakwood Villa Apartments, Inc. v. Gulu (1968), 9 Mich.App. 568, 157 N.W.2d 816; Dierickx v. Vulcan Industries (1968), 10 Mich.App. 67, 158 N.W.2d 778, 782; Dewaay v. Muhr (Iowa 1968), 160 N.W.2d 454, 459; Boten v. Brecklein (Mo. 1970), 452 S.W.2d 86, 93; Mid-Continent Telephone Corp. v. Home Telephone Co. (N.D. Miss. 1970), 319 F.Supp. 1176; Crawford v. Associates, Inc. v. Groves-Keen, Inc. (1972), 127 Ga. App. 646, 194 S.E.2d 499, 502; and Louise Caroline Nursing Home, Inc. v. Dix Construction Corp. (Mass. 1972), 285 N.E.2d 904.

Illinois follows this rule. In Anderson v. Long Grove Country Club Estates (1969), 111 Ill.App.2d 127, 249 N.E.2d 343, the Appellate Court for the Second District, through Mr. Justice Davis, at page 141, said:

“The buyer also claims that the damages were excessive and that the seller got more under the judgment than he bargained for in his contract. We agree that the purpose of damages is to put the injured party in the position he would have been in had the contract been fully performed. 22 Amjur2d, Damages, §§ 45, 4g_ * * *»

Finally, let us examine one case in which the operative facts are very similar to those of the case here before us.

In Henry J. Robb, Inc. v. Urdahl (D.C. Mun. App. 1951), 78 A.2d 387, the appellant, owner of a garage, hired appellees, consulting engineers, to prepare plans and specifications for, and to supervise the installation of, a heating system sufficient in size and design to heat the building to a temperature of seventy degrees. Appellees prepared plans and specifications; bids based thereon were obtained; and a contract for the installation was awarded to Combustioneer Corporation at a cost of $4,602. The work was done by the contractor under appellees’ supervision, but upon completion, it was found that the building was inadequately heated.

Investigation disclosed that in preparing the plans the appellees had made a mathematical error. To correct this, they prepared additional plans calling for three new heaters and the relocation of one. Appellant accepted these plans and authorized the contractor to do the work called for by them at a cost of $1,403. Appellant then sued appellee engineers for this sum, less $138.06, the balance due appellees on their agreed fee. Appellees filed a counterclaim for the balance of their agreed fee.

The trial court found that had the plans been correctly drawn originally the cost of the installation would have been $183.30 less than the total cost of the two jobs, due to an increase in costs of materials and labor between the dates of the original and final installations. Findings and judgments were entered for the appellant for $183.30 and for ap-pellees for $138 on their counterclaim.

In affirming, the court, at pages 388-389, said:

“Compensation is the basic principle of damages. For breach of contract the injured party is entitled to be compensated for losses which are the natural consequence and proximate result of the breach. The purpose of such compensation is to place the injured party in as good a position as that in which full performance would have placed him. He is not entitled because of a breach to be put in a better position than he would have been had the contract been fully performed.

We have found no case squarely in point with the present one, but applying the general principles of damages above stated we conclude that the judgment of the trial court was correct. Ap-pellees contracted to furnish plans for a heating system which would heat the building to seventy degrees. They did not contract to install the system or guarantee that the system could be installed for any specified sum. Appellees through negligence failed to furnish the proper plans, but when such negligence was discovered they supplied supplemental plans which together with the original plans fulfilled their contract obligation. Had the original plans been free from error the heating system would have cost appellant $183.30 less than was the cost by use of the original and supplemental plans. Thus appellees’ error cost appellant $183.30 and appellees are hable for that amount. Such amount places appellant in the same position it would have been in if the error had not been committed. A larger sum would permit appellant to profit by appellees’ mistake.

It is true that appellees’ error caused appellant to believe and expect it would get the plant at a lesser price than it actually cost. But, without some special circumstances not here shown, the law does not provide compensation for disappointment over non-realization of a belief or expectation.”

In order properly to apply the law as above outlined to the facts of this case, we must first determine what the Hospital would have received, insofar as wall paneling is concerned, had the basic contracts been fully performed in the first place.

The Hospital entered into a contract with Belli for all architectural and engineering services in connection with the design and erection of the new hospital, which provided that:

“The owner hereby engages the Architect to perform the following services: the preparation of preliminary studies and design drawings for the Hospital and the necessary conferences in connection therewith; the preparation of working drawings, specifications, large scale and full size detail drawings, for the Hospital; the structural and mechanical design for the contract drawings and specifications; the drafting of forms of proposals for the several trades; the taking of bids and the preparation of contracts; the checking of shop drawings; the inspection of models; the issuance of certifications for payment; the keeping of accounts, the general administration of the business and the supervision of the construction of the Hospital, all of which is hereinafter referred to as the ‘Work’ ”.

The contract further provided that:

“The plans, specifications and drawings will be prepared in such manner as will permit the application and submission of bids and the letting of contracts on a separate trades basis; that is to say, the Owner will not have one general contract for the construction of the Hospital in its entirety, but Architect will on behalf of Owner submit specific proposals to the separate trades and contracts will be executed by the separate trades directly with the Owner covering all of the work required to be performed and materials furnished for the construction of the Hospital. Part of the Work, as defined above, will be the supervision by Architect of the performance of these separate contracts.”

The contract further provided that the Hospital, for said services, pay Belli 9Vz% of the cost of the work excluding certain costs such as sterilizers, lights, etc. This was in lieu of the 6 to 8% ordinarily charged by architects.

As a result, there was actually no general contractor having general supervision of the work, but Belli was to prepare and submit specific proposals to the separate trades and contracts were then to be executed between them and the Hospital, their performances being supervised by Belli.

Under this arrangement, bids were taken for the general construction of the hospital and Corbetta was awarded the contract for $6,011,910, later revised to $6,224,900.

This contract, inter alia, originally required Corbetta to furnish and install U.S. Plywood Corporation’s “Novoply” plaster laminate veneered wall paneling, composed of resin-treated wood flakes and veneer particles, or approved equal, but, as is usual, provided that change orders could be made by Belli and, after approval by the Hospital, would be forwarded to Corbetta, which would then execute them.

In August of 1962, Belli prepared a “change order” requiring Corbetta to furnish and install, in lieu of said “Novoply” and at no increase in cost, General Electric’s 5/16" thick Batten Panel System, consisting of a textured patterned high-pressure laminated plastic base (Textolite) on tempered hardboard with equivalent plastic laminate balancing sheet on the back. This change order was approved in writing by Sister Vincent for the Hospital.

As subsequently developed, this “Textolite” wall paneling had a “flame spread” of 255, some 17 times the maximum set by the Chicago Building Code, and the only plastic laminate wall paneling then being manufactured which could have met the Code’s maximum flame-spread requirement was Westinghouse’s Micarta (asbestos), which eventually replaced the Textolite.

On October 26, 1962, General Electric and Corbetta entered into a subcontract under which General Electric was to furnish and install its said Textolite wall paneling in the Hospital but this was revised to provide that Corbetta install the paneling as subcontractor of General Electric.

The actual installation of the Textolite began in September of 1963 and was completed 7 months later in the latter part of March or the early part of April, 1964, and on April 17, 1964, the “change over” from the old hospital to the new one took place.

Summarizing the foregoing, under the contracts involved, the Hospital was, insofar as wall paneling is concerned, entitled to have Belli use its best professional skill in selecting a wall paneling meeting, among other criteria, the Chicago Building Code’s maximum flame spread rating of 15. There is no real doubt that Belli should originally have specified Westinghouse’s Micarta asbestos wall paneling which was the only plastic laminate wall paneling which met the flame spread standard set by the Chicago Building Code.

But had Belli so complied with its contract, the Hospital would have had to pay not the relatively modest cost of the Textolite wall paneling material, and the costs of its relatively simple installation, but the greatly increased cost of the Micarta asbestos paneling, plus the greatly increased costs of its more difficult installation. And, as Sister Vincent (the administrator of the Hospital during the construction, who signed the order requiring the change from “Novoply” to “Textolite” on behalf of the Hospital) testified, she would have signed a change order specifying a plastic laminate wall covering which cost more “if it was necessary to comply with the Code.”

Certainly the Hospital should not receive, without paying more than it originally had agreed to pay for the Textolite, a windfall in the form of the more expensive Micarta paneling and the extra labor costs required by its more difficult installation, merely because its architect initially failed to specify it. The same applies to the door stops, solid core doors and hardware and their installation, which were necessary and were furnished in the reconstruction but were not included in BeHi’s original plans and specifications.

Excluding the $112,770.55 attorneys’ fees, the jury’s verdict was for $319,519.34, being the total of two items, $297,479.86 paid by the Hospital to H. B. Barnard & Co., for the removal and reconstruction, and $22,039.48 ($23,199.45, less 5% of the sum paid to Schmidt, Garden & Erickson) paid for architectural services in connection with the same.

Applying the law as above outlined to the facts of this case, the jury’s verdict is utterly unsupported by and contrary to the undisputed evidence to the extent of $116,484, as shown by the foUowing.

Micarta paneling (which, due to savings resulting from increased production, had not increased in cost since 1963) would have cost $106,000 in 1963. The Textolite paneling, instaHed and later removed, cost $58,000 in 1963 ($87,000 less one-third for paneling not removed.) On this alone the Hospital is ahead $48,000.

The Micarta, being much harder and more expensive to instaH than the Textolite, would have cost $80,000 to instaH in 1963 (the actual cost of instaHation of $107,750 was a 30% increase over 1963). The Textolite cost $33,000 to instaH in 1963. On this, the Hospital is ahead another $47,000.

To this add door stops $4,298, solid core doors and hardware $8,811 and instaHation of $8,375 (which were not originaUy specified or instaHed but were added at the time the paneling was replaced) for a subtotal of $21,484.

These three items total $116,484, and we therefore wiU reduce the sum the Hospital is entitled to recover (by retention or otherwise) by this amount.

IV.

This brings us to what we perceive to be the fourth issue — Which defendants, if any, are liable to the Hospital for the damages above described? This we shaU break down into three subdivisions — BeHi, Cor-betta and General Electric.

(a) Belli

In Section V of BeHi’s brief it contends, in substance, that it committed no tort and did not breach its contract with the Hospital to design and supervise the construction of the new hospital, and that it “in the normal course of such supervision ascertained that the General Electric Batten Panel System designated in its change order number G-33 would have to be replaced. This is not any unusual situation.”

The evidence in this case establishes that BeHi not only was IegaHy required to know but did in fact know that the Chicago Building Code required that paneling installed in such building have a “flame spread” rating of not to exceed 15; that Belli specified General Electric’s “Texto-lite” paneling without making any investigation whatsoever to determine whether or not it met that standard; that during the 7 months it took to install the Textolite no one at Belli discovered that said material had a flame spread 17 times the maximum and could not possibly be installed upon the walls of any hospital in Chicago; that Belli therefore made a gross error in specifying it in said change order; and that it was only the insistence of the building inspector that a certificate be filed that uncovered the fact that on one had ever bothered to procure the consent of the building department to change order G-33 as issued to Cor-betta.

According to Belli’s brief, this was “commonplace practice” and should somehow be excused because, after the discoveiy of Belli’s error, it refused to issue an architect’s certificate certifying that Corbetta had properly completed its work, thus holding up the final payment to Corbetta. No cases are cited in support of this theory.

In Straus v. Buchman (1904), 96 App. Div. 270, 89 N.Y. S. 226, the plaintiff purchased a partially completed building and employed the defendants as architects to superintend and supervise the remainder of the work to be performed thereon. At the time of the purchase, a change in the plans of the building, of which the defendants were fully advised, was agreed upon between the plaintiff and his vendor, the change requiring a new support for certain tail beams. These the architects permitted to be rested on studding partitions, contrary to the requirements of a statute applicable to buildings at that place. The building when completed proved to be defective, and the plaintiff sued the defendants for his damages. In holding the defendants liable, the court said:

“* * * The placing of these timbers, and the manner in which they were secured, was not only a serious defect, but a direct violation of the statute in force at that time relating to the construction of buildings in the city of New York (section 476, c. 275, p. 547, Laws 1892), which provided that m no case shall either end of a beam or beams rest on stud partitions.’ It was the duty of the defendants, under their contract with plaintiff, not only to see that the beams were properly placed, but especially to see that the placing of them conformed to the requirements of the statute. This they failed to do.” 96 App.Div. at 273-74, 89 N.Y.S. at 229.

In Nave v. McGrane (1910), 19 Idaho 111, 113 P.82, the plaintiff, an architect, sued to recover for his services in drawing plans for a building which the defendant contemplated constructing. At the trial it was shown that the building as designed by the architect violated the building ordinances of the city where the building was intended to be erected. It was held that the architect could not recover, the court saying:

“So far as an architect is concerned, there is always an implied contract that the work shall be suitable and capable of being used for the purpose for which it is prepared. Apart from questions of public policy, this principle would prevent him from recovering upon plans and specifications prepared in violation of law, unless he was directed to so prepare them by the owner.” 19 Idaho at 128-29, 113 P. at 88.

In Scott v. Potomac Insurance Co. (1959), 217 Ore. 323, 341 P.2d 1083, an architect specified improper material (metal tubing), without ascertaining its suitability. In holding the architect liable, the court said:

“It ill behooves a man professing professional skill to say I know nothing of an article which I am called upon to use in the practice of my profession.” 217 Ore. at 334, 341 P.2d at 1088.

In 12 Vand. L. Rev. 711 (1959), in an article by Prof. George M. Bell entitled “Professional Negligence of Architects and Engineers,” it is said, at pages 715-716, under the subtitle “Liability to the Owner for a Defective building”:

“Architects and engineers hold themselves out as competent to produce work requiring: (a) skill in the preparation of plans, drawings or designs suitable for the particular work to be executed; (b) knowledge of the materials to be used and the proper application for use; (c) knowledge of construction methods and procedures. Presumably, if the architect or engineer fails to use reasonable care to produce a satisfactory structure, he may be sued either for a breach of an implied term of his contract or in negligence. * * *”

Nor can Belli avoid liability on the ground that, by refusing to issue a final certificate for payment after its error had been discovered, enough money was withheld from Corbetta to cover the loss. As we shall subsequently demonstrate, Corbetta was not itself at fault and payment to it was wrongfully withheld. The error in specifying Textolite was that of Belli; not Corbetta.

We therefore must and do hold that, although others may also be at fault, Belli, which, as architect, specified the Textolite paneling without ascertaining its flame spread rating, and permitted its installation over a period of some 7 months, is liable to the Hospital for the damages proximately flowing therefrom. We therefore conclude that the jury’s verdict for the Hospital and against Belli as to liability was and is correct and approve that verdict.

(b) Corbetta

Corbetta opens its argument that it is not liable for damages flowing from its installation of the very paneling specified in change order G-33 as follows:

“Despite the 5,000 page record, the central issue is a simple one: When an owner, through its agent architect, directs the contractor to install certain material, does not the owner impliedly warrant to the contractor that the material is suitable?”

Not only Corbetta but the other parties seem to have overlooked the fact that said change order was signed not only by Belli, as the Hospital’s architect, but by the Hospital itself in the person of Sister Vincent, its administrator, so that Corbetta’s said initial inquiry could better have been worded as follows:

“Where an owner, through its architect and the Sister who administered the hospital, issued a change order which specified that a particular material be installed, does not such owner warrant that said material is suitable?”

In 6 Corbin on Contracts § 1338 at 394 (1962), it is said:

“If the destruction of the partly completed structure or the defects in it when completed are caused by the representations of the owner on which the contractor reasonably relied, or by defects in plans and specifications supplied by the owner which the contractor was required to follow, the contractor will not be liable in damages for nonperformance and will not be denied a judgment for compensation. In such a case the nonperformance is caused by the owner and is not a breach of contract.”

and in 6 Wifliston, Contracts 5518 (rev. ed. 1938) it is said:

“Though the builder may be liable if he fails, by reason of defective plans furnished him, to complete work which he has undertaken, yet if he can and does complete it according to the plans he is not liable for subsequent inferiority, injury, or destruction of the work, due to the defective character of the plans.”

In 6 A.L.R. 3d, in an annotation entitled “Construction Contractor’s Liability to Contractee for Defects or Insufficiency of Work Attributable to the Latter’s Plans and Specifications,” in § 2, at pages 1397-1398, it is said:

Ҥ 2. Rule that contractor is not liable

While a distinction between completed and uncompleted work with reference to the applicability of the rule has been drawn in a few jurisdictions, the rule has become well settled in practically every American jurisdiction in which the matter has been involved, that a construction contractor who has foUowed plans or specifications furnished by the contractee, his architect, or engineer, and which have proved to be defective or insufficient, wiU not be responsible to the contractee for loss or damage which results, at least after the work is completed, solely from the defective or insufficient plans or specifications, in the absence of any negligence on the contractor’s part, or any express warranty by him as to their being sufficient or free from defects.”

citing, inter alia:

“Ill—Clark v. Pope (1873 ) 70 Ill 128; Sperry v. Fanning (1875) 80 Ill 371; R. F. Conway Co. v. Chicago (1916 ) 274 Ill 369, 113 NE 703.”

In Clark, our supreme court, at page 132, said:

“When it shall be established the building was constructed in a workmanlike manner, after the plans furnished, or, if there was any material deviation, it was made with the knowledge and consent of the committee, there would be no responsibility rest-on the contractors, no matter from what cause it was destroyed, whether from its own inherent weakness in the mode of construction, or from the extraordinary violence of the storm. Their undertaking was simply to do the work with reasonable skiH, after the designs furnished by the architects. They were not guarantors as to the strength of the edifice when finished, or its capacity to withstand the violence of the winds.”

In Conway, in reversing the dismissal of a suit by a contractor against the city on a paving contract, where, because of faulty plans and specifications furnished by the city, the finished street proved to be unsatisfactory, our supreme court, at page 377, said:

«# « e The contract is not merely to do a particular thing but to do it in a particular way, using specified materials in accordance with the plans and specifications, which are to be the sole guide. The contractor had no discretion as to materials to be used or the manner in which the work was to be done. * * *”

Other Illinois cases to the same effect are: MacRitchie v. City of Lake View (1889), 30 Ill.App. 393, 398; Ruddy v. McDonald (1910), 244 Ill. 494, 498-499, 91 N.E. 651; Woodley v. Zeman (1913), 178 Ill.App. 369, 371.

To the same effect in other jurisdictions see MacKnight Flintic Stone Co. v. Mayor (1899), 160 N.Y. 72, 54 N.E. 661, 664; Penn Bridge Co. v. City of New Orleans (5th Cir. 1915), 222 F. 737, 742; United States v. Spearin (1918), 248 U.S. 132, 136, 63 L.Ed. 166, 39 S.Ct. 59; Ham- maker v. Schleigh (1929), 157 Md. 652, 147 A. 790, 795; Trustees of the First Baptist Church v. McElroy (1955), 223 Miss. 327, 78 So. 2d 138; and Corporation of Presiding Bishop v. Cavanaugh (1963), 217 Cal. App.2d 492, 32 Cal. Rptr. 144, 153.

In passing, we should mention Corbetta’s argument that Belli, under the contract in this case, was the Hospital’s “exclusive agent,” whose acts, at least as between the Hospital and Corbetta, were binding upon the Hospital. While we fully agree with this contention, it is really not necessary to reach it, first, because the Hospital’s administrator Sister Vincent herself also signed the change order; and, second, because, in most of the cases above cited, the defective plans and specifications causing the difficulty were issued by the owner’s architect, not the owner, and yet the court in such cases held that the owner was bound and that the contractor who followed them was not liable to the owner.

Unless other considerations are here present sufficient to alter our thinking, the foregoing would lead us to conclude that the answer to Corbetta’s said inquiry is “yes” and that it is not hable for the damages flowing from its having installed the precise material specified in change order G-33, signed by the Hospital’s architect Belli and by the Hospital’s then Administrator, Sister Vincent.

The Hospital contends, however, that a different result should prevail here because the agreement between it and Corbetta contained the following provisions:

“Article 4. Contractor further agrees to save and hold harmless Owner and Architect of, from and against any and all losses, damages, costs and expenses including court costs and attorneys’ fees incurred and paid by Owner and Architect, or either of them arising out of, or in connection with any and all acts or omissions of Contractor, any subcontractors of Contractor and all employees, representatives and agents of Contractor and subcontractors. * * *

Article 5. Contractor agrees to guarantee his work against all defects in materials and workmanship for a period of two years from date of completion as evidenced by the issuance of the final Architect’s Certificate.”

The flaw in this contention is that what the Hospital is in reality urging is that the above quoted language be construed to require Cor-betta to indemnify it (and Belli) against the proximate results of what it (and Belli) had expressly and precisely ordered Corbetta to do— viz.: to install General Electric’s Textolite wall paneling on the walls and corridors of the hospital. All that Corbetta did was to carry out that explicit order.

To require Corbetta to indemnify the Hospital and Belli for doing what they precisely had ordered it to do would in our opinion, be even more unfair than to hold that Corbetta must, on the basis of the above quoted language, indemnify the Hospital (and Belli) for their own mere negligence.

But it is the law in Illinois that an indemnity contract will not be construed as indemnifying one against his own negligence unless such a construction is required by clear and explicit language of the contract.

The basic Illinois case in this area is Westinghouse Electric Elevator Co. v. LaSalle Monroe Building Corp. (1947), 395 Ill. 429, 70 N.E.2d 604, where our supreme court, at pages 433-434, said:

“It is quite generally held that an indemnity contract will not be construed as indemnifying one against his own negligence, unless such a construction is required by clear and explicit language in the contract, (Sinclair Oil Co. v. Thornley, 127 Fed. 2d 128; Doughnut Machine Corp. v. Bibbey, 65 Fed. 2d 634,) or such intention is expressed in unequivocal terms. Thompson-Starrett Co. v. Otis Elevator Co. 271 N.Y. 36, 2 N.E.2d 35; Employers Liability Assur. Corp. Ltd. of London Eng. v. New York Linen Supply & Laundry Co. 239 N.Y. 560, 147 N.E. 195; Manhattan Railway Co. v. Cornell, 54 Hun. 292, 7 N.Y.S. 557, affirmed in 130 N.Y. 637, 29 N.E. 151.”

In Mesker Bros. Iron Co. v. Des Lauriers Column Mold Co. (1972), 8 Ill.App.3d 113, 289 N.E.2d 223, this court, after citing and quoting from Westinghouse, at page 116, concluded as follows:

“Defendant correctly points out that to enforce the indemnity clause as plaintiff suggests would make defendant responsible even for plaintiffs total failure to perform under its contract with F & S. Therefore, we hold that unless the terms of the indemnity clause clearly provide that a sub-contractor is to assume the risk of negligent manufacture of materials supplied by his contractor, the indemnity clause should not be construed to include such a risk. The damage here resulted not from any negligence in the installation of the materials, but the defective manufacture of such materials by the plaintiff, and since the clause in question does not expressly provide that defendant is to assume such risk, the plaintiff is not entitled to indemnification for the resultant damage.”

In Tatar v. Maxon Construction Co. (1973), 54 Ill.2d 64, 294 N.E.2d 272, in affirming a judgment that no indemnity was provided, our supreme court, at pages 67-68, said:

“The leading case in this jurisdiction on the question involved here is Westinghouse Electric Elevator Co. v. LaSalle Monroe Building Corp., 395 Ill. 429, in which the court said at page 432: ‘It is a general rule governing the construction of contracts that unless a contract is ambiguous, its meaning must be determined from the words used; and the courts will not, because a more equitable result might be reached thereby, construe into the contract provisions that are not therein.’ The court further said, ‘It is quite generally held that an indemnity contract will not be construed as indemnifying one against his own negligence, unless such a construction is required by clear and explicit language of the contract [citations], or such intention is expressed in unequivocal terms.’ 395 Ill. at 433.

We have examined the authorities cited by the parties and many of those collected at 27 A.L.R.3d 663, and conclude that the contractual provisions involved are so varied that each must stand on its own language and little is to be gained by an attempt to analyze, distinguish or reconcile the decisions. The only guidance afforded is found in the accepted rule of interpretation which requires that the agreement be given a fair and reasonable interpretation based upon a consideration of all of its language and provisions.

The indemnity agreement provides that Freesen will indemnify Maxon ‘against all expenses, claims, suits, or judgments of every kind whatsoever * * * by reason of, arising out of, or connected with, accidents, injuries, or damages, which may occur upon or about the Subcontractor’s work.’ The provision for insurance requires Freesen to maintain policies ‘such as will protect the Subcontractor, the General Contractor * # * from claims for damage to property, and injury to persons, * * * which may arise out of Subcontractor’s work.’ Although the indemnity agreement is clearly intended to be less restrictive than the provision for liability insurance, we conclude that when measured against the standards set forth in Westinghouse, it does not, under the circumstances alleged in the pleadings, provide indemnity against claims arising out of Maxon’s own negligence, and the judgment of the appellate court is, accordingly, affirmed.”

And in Hulse v. Midwest Emery Freight Systems. Inc. (1973), 12 Ill. App.3d 316, 299 N.E.2d 24, the Appellate Court for the Fourth District, in reversing a judgment that the express indemnity constituted an undertaking to indemnify against a party's own negligence, at page 318, said:

“If, as is argued, the contract terms constitute a hold harmless agreement or an exculpatory agreement, the same result obtains. In Tatar v. Maxon Construction Co., Inc., 3 Ill.App.3d 352, 277 N.E.2d 715, aff’d. 54 Ill.2d 64, 294 N.E.2d 272, we observed that exculpatory clauses in contracts or language in contracts whereby a tort feasor seeks to excuse or transfer liability for his own wrongful or tortious act were not favored and such would be strictly construed. The operative language in this agreement under such construction does not obligate the plaintiff to pay for damages to the trailer occasioned by the defendant. Rather, the contract language relates to the obligation of the defendant to pay routine costs and damage to the equipment. Such cannot be construed as to be an undertaking by the plaintiff to exculpate the defendant from its own tortious conduct nor intentionally inflicted damage. (See Leach v. Eychaner, 1 Ill.App.3d 327, 273 N.E.2d 55; Moss v. Hunding, 27 Ill.App.2d 189, 169 N.E.2d 396.) * * *”

Viewing the language above quoted from Articles 4 and 5 of the contract between the Hospital and Corbetta in the light of these cases, we conclude that they do not make Corbetta hable to the Hospital (or to Belli) for the disastrous eventual results of Corbetta’s installing on the walls of the hospital precisely what the Hospital (and Belli) had ordered it to install.

The Hospital also contends that a difficult result should obtain here because Article 12 of the contract between it and Corbetta (quoting from the Hospital’s brief) required Corbetta:

“to comply with all ordinances, codes, etc., and to be responsible to plaintiff for all damages caused by violation of any such codes.”

This is in substance but another version of its earlier contention that the quoted language requires Corbetta to indemnify the Hospital for damages proximately flowing from Corbetta’s doing precisely what the Hospital (and Belli) had ordered it to do. We do not so construe said language.

Furthermore all parties (including the Hospital) are legally subject to such codes and, as the Hospital’s own brief well puts it: “Ignorance of the law excuses no one.”

The Hospital also argues that a different result should prevail here because, in January of 1963, before the installation, Mr. Derbyshire of General Electric wrote Mr. Egidi of Corbetta that its Batten Panel System “did not carry a flame spread rating of any kind” and that “we can supply a UL flame spread panel but not on the terms and drawings submitted in connection with the contract.”

In the first place, General Electric did not, at that time (or now), have a paneling which met the maximum of 15 set in the Chicago Code. In the second place, information to the effect that General Electric’s Batten Paneling Sysem did “not carry a flame spread rating of any kind” was nothing new in that all of the parties, including the Hospital and its architect Belli, had long known that, and Belli had already taken the position that this was of no concern to anyone other than himself and that the plans for the hospital had already been approved by the city. Had General Electric in said letter warned Corbetta and the others (as was the fact) that said paneling had a flame spread rating some 17 times that permitted under the Code, a far different issue would have been here presented.

We therefore conclude that Corbetta is, as a matter of law, not liable for such damages as here flowed from its having installed on the walls of the hospital the precise paneling specified in change order G-33 signed by Belli, the Hospital’s architect, and by Sister Vincent, its administrator. We therefore set aside the jury’s verdict to the contrary.

(c) General Electric

General Electric opens its argument that it is not liable for the damages flowing from Corbetta’s installation of General Electric’s “Texto-lite” paneling on the walls of the hospital in the following language:

“* * * It is the position of GE that the Hospital was not a third party beneficiary of its contract with Corbetta. But even if the Hospital was a third party beneficiary, it is still not entitled to any recovery since GE did not breach its contract with Corbetta but, rather, in accordance with the contract, it gave notice that its batten panel system was fire rated and that if a flame spread rated system was required the project would have to be reengineered and repriced.

If GE is held to be liable to the Hospital it is still not entitled to judgment since it suffered no damages because the amount withheld by the Hospital under its contract with Corbetta more than covered the costs of the removal and replacement of the GE paneling. * * *”

Disposing of the last contention first, it is without merit in this case inasmuch as we have heretofore held that Corbetta is not liable for any of the Hospital’s damages and, as we shall hereinafter demonstrate, is therefore entitled to recover that “hold back,” from the Hospital.

We do not reach or decide whether the Hospital is or is not a third-party beneficiary, in the traditional Lawrence v. Fox sense of the contract between General Electric and Corbetta. Although the contention and the Hospital’s response thereto are interesting and ingenious, we prefer, instead, to base our holding that General Electric is liable to the Hospital on other grounds.

Over and over, both in the trial court and in its brief and argument here, General Electric reiterates that:

“We warned the parties involved that Textolite was not rated.”

On August 28, 1962, a series of flame spread tests were made at the Underwriters Laboratories in Northbrook. Herbert Day, an employee of General Electric, was there. The tests were performed by Walter Haas of Underwriters and seven different products were tested. General Electric’s product Textolite (the same as was here installed) was placed in one of the tunnels and the fire turned on. The test lasted only 2 minutes and 16 seconds because by then the flames had traversed the entire (25 feet) length of the tunnel and the sample of Textolite was removed with its surface completely charred. That concluded the test and the flame spread was calculated at 254.6 or 255. The Textolite had the highest flame-spread rating of any of the products tested that day.

On August 31, 1962, Day reported to General Electric by a letter addressed to Mr. Thomas, with copies to Mr. Derbyshire of General Electric, and others. Haas, of Underwriters, explained the nature of the test and the result of the test on Textolite and said that the product was not given a flame-spread rating because they felt that no product testing out over 200 should be given a rating because it would be highly inflammable and dangerous.

On October 26, 1962, 2 months after said test, General Electric entered into its subcontract with Corbetta for the installation of this highly inflammable material on the walls of the plaintiff’s hospital in Chicago. No one other than General Electric knew at that time of the disastrous results of this test.

In December of 1962, representatives of General Electric, including Derbyshire, and of Corbetta met and discussed further the installation of Textolite in the plaintiff’s hospital. Again, Derbyshire said nothing of the results of said test to Corbetta’s representatives, or even to Warner, his own salesman.

On January 3, 1963, Derbyshire wrote Mr. Egidi, of Corbetta, as follows:

“Further at this time I wish to point out that our Batten Panel System does not carry a flame sprea