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Estate of Willis v. Kiferbaum Construction Corp.5/26/2005
v. Dunbar Corp.,, 104 Ill. App. 3d 371, 374-75; Ball Corp., 187 Ill. App. 3d at 178-79. While we have not uncovered any case law explicitly stating so, we believe that the privity of contract between general contractors and third-party contractors ought to be closer than that between building owners and subcontractors. However, this court is loathe to rewrite the rules of determining third-party beneficiary status merely on the basis of the identity of the litigants.
The Kiferbaum-Arlington contract contains no provisions granting Kiferbaum any rights to enforce subcontracts between Arlington and other subcontractors nor does it contain any provisions directing that any subcontracts undertaken by Arlington contain language designating Kiferbaum as an intended third-party beneficiary. Moreover, the Arlington-Decking & Steel subcontract contains no direct reference to Kiferbaum or any obligations by Decking & Steel toward Kiferbaum. Therefore, we find that Kiferbaum has no rights to enforce the terms of the Arlington-Decking & Steel subcontract.
Kiferbaum also argues that the Arlington-Decking & Steel subcontract shows a clear implication of an intent to benefit Kiferbaum mainly because Kiferbaum is named as the general contractor in the insurance rider. We disagree. This court regards a promise to obtain insurance as wholly different from a promise to indemnify. W.E. O'Neil Construction Co., 321 Ill. App. 3d at 557. Where there is a promise to obtain insurance, the promisor agrees to procure insurance but does not agree to bear responsibility in the event of injury or loss. A promise in a subcontract to name a third party as an additional insured is not inextricably tied to that party's promise to indemnify the party with whom it enters into the overarching agreement. W.E. O'Neil Construction Co., 321 Ill. App. 3d at 557. In the Arlington-Decking & Steel subcontract, Decking & Steel made no promise to indemnify Kiferbaum, only to name it as an additional insured on its general liability policy. Accordingly, Kiferbaum's argument on this point fails.
Furthermore, each subcontract states that, where the related provisions of another contract or subcontract differ, the terms of the immediate agreement govern. We believe those clauses manifest an intent to establish separate contractual relationships between Kiferbaum and Arlington and between Arlington and Decking & Steel. See Ball Corp., 187 Ill. App. 3d at 178. Moreover, as stated above, the indemnification provisions of each subcontract differ in that the Arlington-Decking & Steel agreement waives the limitation on claims for employee injuries while the Kiferbaum-Arlington agreement indemnifies Kiferbaum only "to the fullest extent permitted by law." Accordingly, we conclude that the terms of the Arlington-Decking & Steel indemnification provision, specifically the Kotecki waiver, apply only to those two parties and not to Kiferbaum.
We therefore find that Kiferbaum is not an intended third-party beneficiary of the Arlington-Decking & Steel subcontract and that its claim for contribution from Decking & Steel was limited to the amount allowed under the Workers' Compensation Act, pursuant to the rule of Kotecki.
We realize the importance of this decision in that its result can expose general contractors to substantial loss for the lax judgment of subcontractors working under them. Here, we have an instance where the subcontractors based their own agreement on a form drafted several years before Kotecki was decided and which conferred on Arlington, but not Kiferbaum, a right to unlimited contribution from Decking & Steel. While it certainly may not appear equitable
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