48
Geotechnical News • June 2012
ASFE NEWS
findings. The cost was not to exceed
$6,100. Cat Iron signed the proposal
on May 30, 2008, converting it to a
contract that included the following
limitation of liability (LoL) provision:
Item 5. Limitations of Liability.
The CLIENT [Plaintiff Cat Iron,
Inc.] agrees to limit Bodine’s
liability to the CLIENT and all
parties claiming through the client
or otherwise claiming reliance
on Bodine’s services, allegedly
arising from Bodine’s professional
acts or errors or omissions, to
a sum not to exceed Bodine’s
fees for the services performed
on the project, provided that
such claims are not attributable
to Bodine’s gross negligence or
intentional misconduct. In this
latter event, the limit of liability
will be increased to $25,000
less any applicable insurance
amount covering alleged damages
or claims. In no event shall
Bodine or any other party to this
agreement, including parties
which may have claim to have
a direct or indirect reliance on
Bodine’s services, be liable to
the other parties for incidental,
indirect or consequential damages
arising from any cause.
Bodine initiated its services and
submitted its report five weeks later.
Cat Iron then hired Parkland Environ-
mental Group to remove the asbestos.
Soon after he arrived at the building,
Parkland Vice President David Stow-
ers met with one of Cat Iron’s co-
owners, Robb Davis, and pointed out
to him close to 200,000 square feet of
obvious asbestos-containing materials
(ACMs) that Bodine failed to identify.
Stowers spoke with one of Bodine’s
inspectors – Richard Evey – who
allegedly said that he couldn’t believe
that Bodine’s inspectors had missed
so much, and admitted that Bodine
“screwed up.”
After what we can only assume were
failed negotiations, Cat Iron sued
Bodine in federal district court alleg-
ing damages in excess of $75,000 on
each of four counts: (1) breach of con-
tract; (2) breach of express warranty;
(3) negligence (and, in the alternative,
willful and wanton acts or omissions);
and (4) negligent misrepresentation.
Bodine responded by seeking a partial
summary judgment holding that the
LoL explicitly limited Cat Iron’s
damages to $6,100 and, that being the
case, the federal district court -- where
controversies must involve $75,000 –
lacked jurisdiction.
Cat Iron responded that the LoL – an
exculpatory clause – should not be
upheld because of Bodine’s “willful
and wanton or reckless misconduct,”
and because the provision violated
Illinois public policy given that the
state and federal government both
expressed an interest in asbestos-
related matters, especially the demoli-
tion of asbestos-laden buildings.
The first issue the court had to decide
was whether or not the LoL was valid,
and it had to do so (by virtue of the
contract) according to Illinois law,
whose precedents state, in essence:
Barring fraud or wanton or
wanton and willful negligence,
exculpatory clauses are valid
and enforceable unless: (1)
there is substantial disparity
in the two parties’ bargaining
position; (2) upholding the clause
would violate public policy;
or (3) something in the social
relationship between the two
parties militates against upholding
the clause.
“Here, the
damages limitation clause would on
its face appear to be valid. Both of the
parties involved are sophisticated cor-
porate entities, so there is no disparity
in bargaining power, and there is no
evidence of a fraud.” The court went
on to note that “willful and wanton
acts show an actual or deliberate intent
to harm or, if not intentional, an utter
indifference to or conscious disregard
for a person’s own safety or the safety
of others….Whether conduct amounts
to willful or wanton conduct is usually
a question for the jury.” Because Cat
Iron alleged willful and wanton or
reckless misconduct, and because –
when it comes to motions for sum-
mary judgment – the court must accept
“facts in a light most favorable to
Plaintiff… the court finds that Plaintiff
has successfully plead
[sic]
willful
and wanton misconduct.” Accordingly,
the court ruled on September 28, 2010,
“Plaintiff has adequately argued, at
this stage of the proceedings, that the
damages limitation clause as it applies
to willful and wanton misconduct in
limiting gross negligence or inten-
tional misconduct claims to $25,000
is invalid. Therefore, as Plaintiff has
plead
[sic]
that the alleged reckless
conduct…caused damage in excess of
$75,000, the court finds the juris-
dictional requirement has been met.
Defendant’s Motion for Partial Judg-
ment on the Pleadings and Motion for
Dismissal for Lack of Jurisdiction is
DENIED.”
Bodine was not deterred. In preparing
to file an amended motion for sum-
mary judgment, which it subsequently
did on February 24, 2011, it filed a
Federal Rule of Civil Procedure 30(b)
(6) Notice of Deposition, requesting
that Cat Iron “designate and produce
one or more officers, directors, manag-
ing agents, or other persons knowl-
edgeable to testify in detail” about
“all facts upon which Cat Iron bases
its allegation that Bodine Environmen-
tal Services, Inc., engaged in willful
and wanton misconduct in allegedly
failing to identify or report certain-
asbestos-containing materials”…and
the “nature, duration, and scope of
Cat Iron’s investigation in obtaining
the facts to support its allegation that
Bodine Environmental engaged in any
willful and wanton misconduct while
working on the Intermet project.”
Cat Iron produced Robb Davis to tes-
tify at the January 18, 2011 deposition.
There, Bodine’s attorney repeatedly
asked Davis about the facts Cat Iron
used to support its willful and wanton
misconduct allegations. According to
