Keefe, Campbell & Associates, LLC

Editor’s comment: This lengthy decision also exhaustively analyzes the state of Illinois construction law and is a must-read for general contractors. In Grillo v. Yeager Construction, (No. 1-07-2335 December 31, 2008), the Illinois Appellate Court considered a claim where a stone mason fell off a scaffold erected on the perimeter of a house. Plaintiff supervised his own employees in the building of the scaffold. He alleged part of the reason the scaffold failed was due to a failure of the general contractor to backfill the property. Further, he had to use the unsafe scaffolding as he was under pressure to finish the work. He sued the homeowners and the general contractor alleging negligence. The homeowners’ motion for summary judgment was granted.

Plaintiff alleged Yeager Construction (“Yeager”) was the general contractor of the construction site and David Yeager (“David”) was an employee or agent of Defendant with whom he entered into a contract to perform the work. Yeager denied this. Following trial, the jury returned a verdict against Yeager. On appeal, Yeager contends, among other things, the trial court erred in denying its motion for judgment notwithstanding the verdict (judgment n.o.v.) where Plaintiff failed to establish a prima facie case of negligence.

Yeager argued Plaintiff failed to establish that it owed a duty of care pursuant to Section 414 of the Restatement (Second) of Torts, because there was no evidence David was Yeager’s employee or agent and there was no evidence Yeager was the general contractor for the project. The court disagreed finding Plaintiff introduced sufficient evidence to dispute Defendant’s claims. Although there was conflicting testimony with respect to what occurred surrounding the project, the court found the following salient facts:

Plaintiff testified he was hired by David to perform masonry work and David indicated Yeager would guarantee his payment. The homeowner testified Scott Yeager (“Scott”) told him David worked for Yeager and would supervise the project. Scott testified he prepared a schedule and outline for the construction project that listed “Yeager Construction Project Management Costs” and David would be the Superintendent and receive a monthly salary for project management and job supervision which included tasks such as acquiring subcontractor bids, procuring contracts for subcontractors, scheduling and organizing subcontractors and quality control. Monthly invoices for David’s work were prepared on Yeager letterhead, and that contract which Scott signed, identified Yeager as the Contractor and David as its representative.

There was also testimony the bank released loan money directly to Yeager. Further, Scott visited the construction site every month and provided weekly updates to the homeowners that Scott would obtain from David, who was at the construction site daily. There was also an insurance policy listing Yeager as the insured for the project.

Accordingly, the court found Plaintiff introduced sufficient evidence to dispute Defendant’s claims that David was not an employee or agent and Yeager was not the general contractor .The jury assessed the credibility of the witnesses in favor of Plaintiff by determining Yeager was the general contractor, which employed or granted authority to David. Since Plaintiff demonstrated a substantial factual dispute, involving the assessment of credibility of the witnesses and the determination regarding conflicting evidence is decisive to the outcome, the court reasoned a grant of judgment n.o.v. was not appropriate.

Yeager next contended it did not owe Plaintiff a duty of care where Plaintiff failed to prove the existence of a contract for masonry work between Plaintiff and Yeager as the evidence showed Plaintiff was hired by the homeowners. After considering the facts, along with the contradictory evidence presented by Plaintiff, the court held Yeager’s motion for judgment n.o.v. was properly denied on this basis as well.

Yeager next contended it owed no duty to Plaintiff under Section 414 of the Restatement (Second) of Torts, where Plaintiff, himself, was an independent contractor rather than the employee of an independent Contractor. Section 414 of the Restatement provides an exception to the general rule that one who employs an Independent Contractor is not liable for the acts or omissions of the independent contractor which states:

One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care. (emphasis added).

The court found there was sufficient evidence of control and supervision for the jury to decide whether Yeager was liable under the applicable section. The court also found evidence Yeager’s actions on the jobsite indicated Yeager retained more than a general right of supervision. Accordingly, based on the evidence presented at trial, the court found it cannot be said that no contrary verdict could ever stand. Thus, the court concluded the evidence supported the circuit court’s denial of Yeager’s motion for judgment n.o.v.

This article was researched and drafted by Brian J. Kaplan, J.D.. Please direct inquiries and comments to Brian at bkaplan@keefe-law.com.

Editor’s comment: We didn’t say it would be easy and we hope he is up to the difficult tasks we have given him. He inherits the highest U.S. debt of all time and the worst economy of our lifetimes. We call on all of our readers and all Americans to unite behind our leader to help and protect him in any and every way possible. We are confident he has the brains, guts and drive to get us out of the current mess but he needs our help, constructive criticism and support. Expect to see such support and constructive criticism from us. Let’s hope the inauguration sends a message to the world the U.S. is coming back strong.

Editor’s comment: We don’t know your personal political spin on illegal aliens as it relates to workers’ comp benefits but we want all veteran risk managers to understand some very simple thoughts on the topic.

The math on Illegal aliens isn’t hard to follow. Plaintiff trial lawyers make money on fees. If they are retained by clients who are illegal aliens and their illegal aliens don’t get benefits, Plaintiff trial lawyers don’t get fees.

There is a persistent rumor the current Illinois Commission and reviewing courts are friendly to Illinois’ Plaintiff trial lawyers. There is also a rumor the Commission and reviewing courts aren’t quite as friendly to Illinois business.

So no matter how you spin it, illegal aliens will get WC benefits, regardless of how “illegal” that might be under federal law. No one expects the federal courts; particularly the rare air of the U.S. Supreme Court will give a hoot. It is our reasoned legal opinion the U.S. Supreme Court will not consider taking an appeal of a measly state WC claim to confirm their position in Hoffman Plastics that it is illegal for an undocumented alien to get a job and such an employment contract has an illegal purpose and should therefore be voidable without payment of further services or compensation when discovered.

We note the State of North Carolina is considering such a ruling right now. North Carolina is obviously less friendly to trial lawyers than Illinois.

And if the U.S. Supreme Court won’t straighten it out, the states, particularly Illinois, will run around doing whatever they want. So if Illinois business doesn’t want to pay benefits to Illegal aliens, don’t hire illegal aliens. If they get hurt and can’t or won’t find replacement work, the “workers’ compensation penalty” in this state may be huge. Please don’t hesitate to reply with thoughts and comments.

Editor’s comment: We have heard the cry from hundreds of workers, “I have worked hard all my life and now I am injured from it.” As defense attorneys, we despise the claim “repetitive work” is a supposed “cause” of disc degeneration and back problems—the opposite conclusion may be more scientifically accurate. Workers who work regularly and lift properly may be healthier and have stronger discs than workers who lead more sedentary lifestyles. What could be a better comparison than birth twins?

To attack this truly non-scientific concept, researchers at the University of Alberta studied the effects of work on twins and reached some surprising conclusions. Michele Crites Battié, Ph.D. from the University of Alberta’s Faculty of Rehabilitation Medicine was the lead researcher in a long-term project they called the Twin Spine Study. Dr. Battié learned that when it comes to the world of disc degeneration, one should move slowly.

Dr. Battié: “In the last half-century the predominant model of disc degeneration was wear and tear from environmental influences, such as heavy lifting, smoking and exposure to whole-body vibration from motorized vehicles. Yet, there were conflicting findings about the effects of these environmental influences. In many epidemiological studies it is difficult to isolate the effect of a particular factor to determine whether it really contributes to an outcome of interest, in this case disc degeneration. With this in mind, we set out to conduct highly controlled studies.”

The Twin Spine Study, which began in 1991, was an international effort that grew to include researchers from the U.S., Finland, Canada, and the UK. Dr. Battié explains, “[w]e started off with a series of studies of identical twins who were exposure discordant, meaning that one twin was heavily exposed to the factor of interest, such as smoking or heavy lifting, and the other twin was not. Otherwise, the pairs of twins were the same gender, had the same genes, and were raised in the same childhood environment, so they shared many early exposures. It turned out that whether someone had a sedentary, light, or heavy physical job like logging actually had quite a modest effect on disc degeneration, even when exposed to these conditions over a lifetime. In one study we looked at 45 pairs of identical twins, with one twin of each pair having spent much more time driving (the issue being whole body vibration). Our results did not reflect any significant difference between twins where one drove and the other did not.”

As the researchers gathered around the MRIs from these early studies, they were particularly struck by one thing, says Dr. Battié. “We were quite surprised by the strong resemblance in disc degeneration between twin siblings, not only in the degree of degeneration, but also in the types of findings and locations involved. My colleagues and I then became very interested in exploring a genetic component to disc degeneration. To this end, we collected data on non-identical twins (same sex) who were raised in the same household. Thus most environmental exposures were similar as in the case of the identical twins. However, non-identical twins share only 50% of their genes on average. We found a very substantial genetic influence on disc degeneration in the lumbar spine. Also, the results of one of the recent studies indicate that the effect of factors such as body weight and muscle strength on disc degeneration, although modest, may be greater than that of physical exposures. Furthermore, regularly experienced physical loading may actually have a beneficial effect on disc degeneration.”

Dr. Battié continues, “Using both monozygotic and dizygotic twins we were able to conduct ‘classic’ twin studies on disc degeneration. Through these studies we were able to estimate the overall genetic contribution to disc degeneration and back pain history. We also looked at whether disc degeneration is a pathway through which genes influence back pain. Making this all more complex is that pain is subjective and difficult to measure. However, we did find evidence that disc degeneration is one pathway through which genes influence back pain, but it is only a small part of the back pain story.”

Getting to the nucleus of the issue, Dr. Battié states, “We looked at disc desiccation (drying), a primary aspect of disc degeneration, and found that routine loading is actually associated with less [drying]. So it may be that the disc isn’t totally unlike other musculoskeletal structures, but it is responding in a positive way to routine loading. It is sort of like a training effect. If you load a musculoskeletal structure gradually and routinely, it will strengthen, as is the case with muscles, tendons, and bones. Also, various environmental and behavioral exposures appear to have somewhat disparate effects on different signs of disc degeneration, such as disc desiccation and narrowing. In the past it was often thought that greater physical loading was bad for the disc across the board.”

In the future, says Dr. Battié, the field will have to expand its thinking beyond a biomechanical or simple wear and tear model of disc degeneration. “Going forward it will be important to understand that while we’ve been focused for decades on biomechanical factors as the cause of back problems, and the place to look for the answer, if we want to make headway we’ve got to broaden our approach to the problem. We also need to look in new ways at biomechanical factors; for example, not just looking at heavy or light physical demands, but at their interactions with other factors, such as genetics.”

As many things do, these new ideas about the origins of disc degeneration could involve a bit of a butterfly effect…one “small” change has implications for wider society. “There are definitely policy implications to this research,” states Dr. Battié. “Back pain was once attributed to degenerative findings and degenerative findings were attributed to work or leisure time physical demands. This implied an injury model―physical demands cause structural damage, which in turn leads to pain. Our data, however, suggests that the injury model may not be the most appropriate model for back pain and the degenerative changes seen on spine imaging. Some of the systems that operate on an injury model, such as North American workers’ compensation systems, will have to grapple with this issue. The bottom line is that if we don’t have a reasonable model or understanding of the problem we’ll never have a good solution.”

And with such a solid foundation, the team of North American and European researchers is marching forward. “We are embarking on research to identify the specific genes and biological mechanisms that influence disc degeneration and back pain problems, and we aim to clarify the role of environmental factors. It is also important to gain a sense of how degeneration occurs over time, and tease out what represents the natural progression and what can lead to back pain.”

Their research is continuing and we will continue to watch and report updated results. This is based on an article from the web at: http://ryortho.com/NEWSSHORTS/volume4/issue35/11-04-08-Double.html.

Please reply with your thoughts and comments.

Editor’s comment: We salute President-elect Barack Obama who won a tidy victory over his Republican challenger. We are also happy his party didn’t get a super-majority so both sides will remain engaged in the current crisis facing all of us.

We are certain Mr. Obama brings enormous intellect and drive to the Office of the President. We all trust he is up to the daunting task of righting the U.S. economy that may sink or swim before he gets sworn in on January 20. We are confident the need to carefully help the U.S. economy is his first and most abiding goal. It is our strong hope he defers the pro-union and anti-business laws that may be streaming onto his desk—U.S. business needs a break in every way and they don’t need the misnamed “Employee Free Choice Act” and other similar laws. And we agree strongly with one of our readers who hopes the government will follow the model of Franklin Roosevelt and start a “roads and bridges” program to put U.S. workers back to work in solid and reasonably paid jobs while improving our economy. We consider that concept strongly preferable to misspending way too much money in the continued military occupation of Arab lands the current administration insists on calling a “war.”

We agree strongly with mercurial stock picker Jim Cramer who points out “jobs trump everything” in economic stimulus packages. It doesn’t matter how low mortgage rates and gas prices drop; if you don’t have a job, you can’t afford to buy. With unemployment rates rising every day, we are watching Christmas retail sales to see if the economy gets a much-needed boost or slumps even further. Our vote for all human resources, insurance, risk and safety managers, if you have been waiting for the right time to make any major purchase, please buy American and buy now.

For those of us in the Illinois workers’ compensation and employment law industry, here are election results of note:

A. Democrat Pat Rogers defeated Republican Maureen H. Masterson-Pulia for the Fourth Subcircuit Schultz vacancy. While we hoped Arbitrator Pulia would be able to rise to the Circuit Court bench, we remain happy to have someone as sharp and as smart in her continuing role as an Arbitrator. We are confident she got the same short-end of the stick the larger legal community routinely hands veteran and capable workers’ compensation Arbitrators and lawyers. If you want to read her analysis of the topic, go to http://www.chicagotribune.com/news/opinion/letters/chi-081021judge_briefs,0,3369157.story.

B. Arbitrator Paula A. Gomora won her race to become a Judge of the Circuit Court for the 12th Judicial District in a more than 2-to-1 margin over Derek W. Ewanic. We understand Arbitrator Gomora is leaving the Commission before the end of November. We wish her all the best in her return to the bench.

C. In southern Illinois, risk and safety manager Dwight Kay lost his race against Jay Hoffman for the 112th District seat. We salute Dwight for his hard-fought efforts in trying to stem the tide in that part of Illinois.

D. Former IWCC chairman Dennis Ruth squeaked out a 100% victory for Circuit Court judge due to the absence of any opponent. We are confident any number of Commission folks are happy to see he will be working anywhere but at the Commission. We wish him all the best in his new challenge.

If you have thoughts and comments about the election, please send a reply.

Editor’s comment: Well, we again come to one of those defining events that is sure to affect the world of workers’ compensation in one way or the other. We are confident our readers are going to see two out of three good things happen tomorrow.

First, the current administration will be ending. While we are sure it will rile some of our readers, we have to admit we will never miss this interesting bunch currently inhabiting the White House and Washington, D.C. They have the lowest approval rating and the highest federal debt in the history of either concept. We aren’t alone in wishing them well while sending them off to the distant horizon. Please note this article from May 2000: http://archives.cnn.com/2000/ALLPOLITICS/stories/05/01/clinton.debt/. You will note U.S. debt was about $5.7 trillion when the current administration took office. In eight years, this country’s national debt is now $10.5 trillion or approximately $5 trillion higher! So when they claim they “held the line on taxes”, always remember they just printed more money and created massive debt for us to pay off in the future while they enjoy their government pensions.

We have also been amazed to see the current administration completely forget to plan, program, sketch, map out, diagram, arrange or prepare in any way for a successor. It is almost as if that concept was skipped. One would think if the members of the administration thought anything they did was the slightest bit important, they might want to see it survive to the next administration—instead; the polls are demonstrating we may have a “blue” president with an untouchable majority in both houses of Congress. It may be a generation before the “red” party gets back into power and lots of changes are going to be needed to resurrect their interests.

Second, the “blue” candidate may win, bringing a published author and brilliant orator to our highest office. It is our hope he will go a long way to end the infernal “victim mentality” in some communities because it is hard to be a victim and claim to be disenfranchised if your candidate is running the country. While we are confident this “blue” candidate will do everything in his wisdom and power to right the ship, we are also concerned when the folks who have donated to his giant war chest come to cash the checks they may think they get to write. Please note Illinoisans have already donated over $31 million to his campaign.

From the level of donations, we assure our readers the unions and trial lawyers are going to want lots of new laws, liberal/radical judges and increased benefits for their largesse. We are concerned the process of “tort deform,” and not reform, may be coming to a courtroom near you. While we don’t want to pre-judge, we also don’t see this candidate contributing to needed reforms that will help U.S. and Illinois businesses effectively compete and succeed in local and world markets. And to the extent U.S. workers’ compensation plaintiff lawyers quietly benefit from the millions donated by their partners, the big tort hotshots in the general liability system, we can expect workers’ comp to get more anti-business and less reasonable in both outcomes and secret legislative changes.

Third, and finally, the “red” candidate may win, bringing a maverick to Washington who may be able to rein in some of the special interests and pork projects. This senator is a highly decorated and distinguished war-hero who is a decent, honest and hard-working man who forecast the battles that have been waged during this long and arduous campaign that now is at an end. If he doesn’t win, we again feel his party will be headless and adrift in a sea run by the other side.

Please also note the very concept of “government” and politics are changing very rapidly. A number of very wealthy Illinois political insiders are facing federal indictments and trials. Political graft and job-buying are becoming dangerous things to do for those who prefer being out of prison. Some day, we hope this applies to the Illinois Workers’ Compensation Commission where supposedly “civil service” jobs still remain political plums. You may not know it but the Indiana Toll Roads and Chicago Skyway are no longer operated by the State of Indiana or City of Chicago. Midway Airport has been sold and O’Hare Airport may follow shortly. The Illinois Lottery is repeatedly on the block for the highest bidder. Major facets of government are being considered for privatization right now.

Could the Illinois Workers’ Compensation Commission be “out-sourced” and privatized? There is no reason why it couldn’t be—please remember the taxpayers don’t pay for it any longer; Illinois business pays the full cost but gets very little in return for their money. Will the IWCC be privatized? Well, there are major political objections and roadblocks, the biggest being the entrenched sources who have worked hard and long to have the place running in their image and likeness. As we have said in the past, Illinois business will get a say in running the Commission when they demand to do so and politically force that to occur.

Lots of different services that have traditionally been viewed as government-only may soon be sold by the respective governments for the upfront cash. The main reason is the power that comes from having the rights to broker the jobs, equipment and vendors may be disappearing. Once government services and equipment are sold, the jobs and workers are privatized and won’t be going back to the public sector. We predict this trend will grow and continue. Please expect the political landscape will continue to morph with it.

However the election turns out, we are sure it will herald a new kind of democracy and even newer election techniques that are going to be watched and copied for years to come. Please give us your thoughts and comments on the election. Whatever you do, please be sure to vote!!

Editor’s comment: It is hard to argue with this ruling and we point out all Illinois lawyers are being asked to take professional responsibility CLE courses that address civility in all proceedings. A federal judge in Philadelphia has refused to reconsider substantial sanctions imposed on a Chicago lawyer for failing to rein in a foul-mouthed client during a deposition.

In a decision in GMAC Bank v. HTFC Corp., U.S. District Judge Eduardo Robreno imposed sanctions of more than $29,000 on attorney Joseph R. Ziccardi of Chicago and his client whose alleged misconduct included dropping 73 “F bombs” during his deposition. Judge Robreno found the client who is the chief executive officer of Defendant HTFC, engaged in “hostile, uncivil, and vulgar conduct, which persisted throughout the nearly 12 hours of deposition testimony.” The record indicates the client dropped an “F-Bomb” or variations of it 73 times during the deposition, Judge Robreno noted the video showed his lawyer at one point “snickered” at his client’s conduct. Throughout the deposition, Judge Robreno said, the client “sought to intimidate opposing counsel by maintaining a persistently hostile demeanor, employing uncivil insults, and using profuse vulgarity.” The attorney was also to blame, Judge Robreno found, because he failed to stop his client’s tirades and persuade him to definitively answer questions.

Soon after, Ziccardi moved to withdraw as counsel. Ziccardi hired a different attorney to represent him in seeking to have the sanctions lifted. In his motion for reconsideration of sanctions, Ziccardi argued he was deprived of his right to due process because Judge Robreno failed to put Ziccardi on notice “as to the particular tool that the court was considering employing to sanction him.” And since the notice was deficient, Ziccardi argued, his “opportunity to be heard was meaningless.” The evidence, Ziccardi argued, shows he never joined in his client’s offensive conduct “by chuckling or otherwise.”

In a footnote in his February opinion, Judge Robreno said the video showed Ziccardi “chuckling at the client’s abusive behavior” and GMAC’s lawyer commented on the record “your snickering, counsel, is not appropriate either because all you’re doing is encouraging the behavior of your client.”

Judge Robreno rejected all of Ziccardi’s arguments, finding the technical flaw claimed by Ziccardi did not amount to a violation of the lawyer’s due process rights and none of the factual issues would change the judge’s mind. Judge Robreno found Ziccardi “allowed the deposition to drag on for over two days and nearly 12 hours of testimony, much of which was an unmitigated waste of time and resources,” and that he “never once suggested that the ill-fated deposition be adjourned.” As a result, Judge Robreno concluded “although courts would be wise to hesitate in close cases before second-guessing an attorney’s judgment as to when a deposition should be terminated, no such pause is warranted here.”

The decision to appeal the sanctions remains pending. It is difficult to imagine the cost of the appeal would match the chances of reversal.