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Walsh Construction Co. v. Chicago Explosive Services, LLC

United States District Court, N.D. Indiana, Hammond Division

October 20, 2014



RUDY LOZANO, District Judge.

This matter is before the Court on Defendant Chicago Explosive Services, LLC's Motion to Dismiss Count II and III of Plaintiff's Complaint, filed by Defendant, Chicago Explosive Services, LLC, on June 11, 2014 (DE #13). For the reasons set forth below, the motion is DENIED.


Plaintiff, Walsh Construction Company ("Walsh"), filed its Complaint on March 17, 2014. (DE #1.) The Complaint lists the following claims: Count I, Breach of Contract against Chicago Explosive Services, LLC ("CES"); Count II, Breach of Contract for Failure to Indemnify against CES; Count III, Breach of Contract for Failure to Properly Procure Insurance against CES; Count IV, Negligence against CES; Count V, Negligence against PMG Industrial, LLC ("PMG"); Count VI, Strict Liability against CES; and Count VII, Strict Liability against PMG. (DE #1.) CES filed a Motion for Enlargement of Time in which to Answer or Otherwise Respond to Complaint on May 30, 2014. (DE #11.) CES then filed its Answer to Complaint and Motion to Dismiss Count II and III of Plaintiff's Complaint on June 11, 2014. (DE's #13 & #15.) Walsh filed its response on June 25, 2014. (DE #17.) CES filed its reply on June 30, 2014. (DE #18.) The motion is thus ripe for adjudication.



Walsh, an Illinois corporation, was hired by the Indiana Department of Transportation ("INDOT") pursuant to INDOT Contract IB-30997-A to demolish the Cline Avenue Bridge ("Bridge") in East Chicago, Indiana. (Comp. ¶¶ 1, 8-9.) Walsh retained CES, an Indiana limited liability company, pursuant to a subcontract agreement ("Subcontract") to perform certain "blasting" tasks associated with the Bridge demolition. ( Id. at ¶¶ 2, 8-10; see also Subcontract, DE #1-1.) According to the Subcontract, the scope of CES's work was to include blasting of Spans 12 and 14 of the Bridge, and it required that the "[b]lasting be performed such that Span 12 falls away from the Indiana Harbor Canal on the landward side of Pier 13 and Span 14 falls away from the Indiana Harbor Canal on the landward side of Pier 14." (Comp. ¶¶ 9-10; see also Subcontract, DE #1-1, pp. 2-3.) Several documents, labeled as exhibits A through M, were attached to and expressly incorporated into the Subcontract. (see list of documents at Subcontract, DE #1-1, p. 1.) Exhibit A of the Subcontract delineates the relevant Terms and Conditions and includes an indemnification provision as follows:

Article 9 - Indemnification
9.1 Indemnification. To the fullest extent permitted by law, Subcontractor shall indemnify, defend (with counsel reasonably satisfactory to Contractor), and save harmless Owner, Owner's Representative, Architect/Engineer, Contractor, and Contractor's surety, as well as any individual and/or entity that Contractor is required by contract to indemnify, defend and/or hold harmless, and their partners, insurers, parents, members, subsidiaries, related corporations officers, directors, agents and employees, and each of them, (hereafter collectively "Indemnified Parties" and individually "Indemnified Party") from and against any and all suits, actions, legal or administrative proceedings, claims, debts, demands, damages, consequential damages, liabilities, judgments, fines, penalties, interest, actual attorney's fees, costs and expenses of whatever kind or nature (hereafter "Indemnified Claims") and whether they may arise before, during or after performance of Subcontractor's Work which are in any manner directly or indirectly caused, occasioned or contributed to, in whole or in part, or claimed to be caused, occasioned, or contributed to, in whole or in part, through any act, omission, fault or negligence whether active or passive of Subcontractor, or anyone acting under its direction, control, or on its behalf or for which it is legally responsible, in connection with or incident to the Subcontractor's Work or arising out of any failure of Subcontractor to perform any of the terms and conditions of this Subcontract: without limiting the generality of the foregoing, the same shall include injury or death to any person or persons (including Subcontractor's employees) and damage to any property, regardless of where located, including the property of Owner and Contractor. Subcontractor's obligation to provide a defense for an Indemnified Party shall arise regardless of the merits of the matter and shall continue until a final determination of fault is made. Subcontractor's obligation to Indemnify, defend and hold harmless an Indemnified Party shall apply regardless of any allegations of active and/or passive negligent acts or omissions of an Indemnified Party. Subcontractor, however, shall be relieved of and shall have no further obligation to Indemnify an Indemnified Party under the Subcontract Documents upon a final determination, to the extent that an Indemnified Claim is due to the negligence or willful misconduct of that Indemnified Party or such Party's agents or employees. Contractor shall be entitled to recover actual attorney fees and court costs and all other costs, expenses and liabilities incurred by Contractor in an action brought to enforce all or any part of this Article 9. Subcontractor's obligations described in this paragraph shall not be construed to negate, abridge, or reduce other rights or obligations of indemnity which would otherwise exist as to a party or person described in this paragraph.

(Subcontract, DE #1-1, pp. 10-11.) Exhibit B of the Subcontract describes the "Scope, Clarification, Alternates, and Unit Prices" of the agreement. ( Id. at pp. 2-3.) As part of those terms, CES agreed to obtain $2, 000, 000 in insurance coverage naming Walsh as an insured and consisting of a combination of Commercial General Liability ("CGL") and Excess coverage, plus CES agreed to purchase an additional $5, 000, 000 blasting insurance policy for its work related to the Subcontract. (Comp. ¶¶ 12-13; Subcontract, DE #1-1, pp. 2-3 & 15-16.) In Inclusion 18, the parties agreed that:

Chicago Explosive Services will provide a $5 million blasting insurance policy, in addition to the requirements listed in Exhibit D of this agreement. A claim will be made against this blasting insurance policy for any costs Walsh Construction incurs that results from Chicago Explosives Service's non-conformance to the scope of work as outline in inclusions 24 and 25.

(Subcontract, DE #1-1, pp. 2.) The language of Inclusion 24 states that "[CES] will provide a skyjack forklift capable of reach (sic) 45 ft." ( Id. ) The language of Inclusion 25 states the scope of work as follows:

Segment 1 Scope of Work includes:
a. Blasting of Segment 1 Including ...

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