Keefe, Campbell & Associates, LLC

Editor’s comment: Be sure to try to head this one off at the pass. While in certain settings, employers have always been potentially liable for the intentional torts of their employees, it is not the norm. Usually these situations are reserved to where the employee is authorized to forcefully contact third parties, to “place hands on” another – as in the case of bouncers or security guards at a night club. A recent federal court ruling from earlier this summer, while not specifically holding such, left open the possibility that a new situation could give rise to employer liability for another type of intentional tort – Intentional Infliction of Emotional Distress.

In Virginia Curran v. JP Morgan Chase, a recent case from the U.S. District Court for the Northern District of Illinois, Plaintiff Curran filed a multi-count complaint against both her individual supervisor and JP Morgan Chase as an institution alleging various violations of statute and various tort claims. While the majority of the decision simply addresses the failings of Plaintiff’s complaint, there are several pieces of dicta (statements of law that are not applicable to the case at hand, but nonetheless, potentially precedential) that offer a very intriguing and novel approach in regard to claims of Intentional Infliction of Emotional Distress (IIED).

IIED is not simply an act that embarrasses or frustrates a person. The actual language used as benchmark for what conduct is actionable is “extreme and outrageous.” Only conduct that shocks the conscious is the type of conduct upon which one would be able to base an IIED claim. One interesting thing addressed in Curran was whether this type of claim was pre-empted by the Illinois Human Rights Act when the defendant was the employer of Plaintiff. The court held as to individual persons, extreme and outrageous conduct would create a potential claim independent of the statute, which safeguards employees from various workplace abuses such as discrimination. While certain conduct could satisfy the requirements to be actionable under both the Act and under an IIED claim, that fact should not pre-empt and thereby preclude the filing of a common law tort claim. Only in settings where the actions giving rise to the claim were “inextricably linked to a civil rights violation such that there is no independent basis for the action apart from the [IHRA] itself” are such claims preempted.

A far more interesting and potentially costly issue was raised in relation to the employer, here JP Morgan Chase. The Federal court in Curran held, as to the employer of the manager, who was the actual intentional actor; there was potential liability under a respondeat superior theory. Respondeat superior is the legal name given to the idea that principals are liable for the tortious conduct of agents, as in the case of employers being liable for the car collisions caused by their employees. One of the key elements of the employer having liability in these settings is whether the employee was “acting within the scope of his or her employment.” The issue was only addressed in passing dicta in Curran due to the fact Plaintiff expressly pled her supervisor was acting outside the scope of his employment. Nonetheless, the court stated “Chase could theoretically be held liable for [manager’s] conduct under this theory … if [manager] were alleged to have committed the offending acts within the scope of his employment.”

Up to this point it has always been presumed extreme and outrageous conduct by a supervisor giving rise to an IIED claim would naturally be outside the scope of the supervisor’s employment. Take heart though, as our reasoned legal opinion is if a plaintiff were to prove enough facts to evidence the outrageous actions were within the scope of a manager’s employ, there may be little doubt the employer was not at least partially at fault. Proving it was within the scope of employment would involve demonstrating the employer seasonably knew of the actions of the supervisor and likely either approved or did nothing. That said, defense costs for every claim such as the one brought here will once again rise in the great state of Illinois.

Please remember our longstanding advice in all employment law claims including claims involving IIED—have your defense case-in-chief built before contacting counsel. Have a clear path for your line employees to report harassment, discrimination and “infliction of emotional distress” to your company watchdogs. Document, document, document investigation and curative action. Prepare for litigation at the earliest stage and you will be ready when and if a lawsuit or EEOC/IDHR charge arises.

This article was researched and written by Arik D. Hetue, J.D. If you have thoughts and comments, or would like the citation to the case, please send a reply to ahetue@keefe-law.com.

Editor’s comment: This case reiterates and is arguably a potential expansion of a theory already noted in various areas of Illinois law which generally holds a party who controls the work/worksite potentially liable for injury to subcontractors’ workers, even though they are not direct employees of the controlling party. It should be noted—the “control” exerted here involved removing an essential “tool” of the job which was to be contractually provided. In Carcia v. Wooton Construction, LTD (No. 1-07-1883 December 29, 2008), the Illinois Appellate Court, First District, First Division was presented with two questions: (1) whether Wooton retained sufficient control over the work by Cullen to impose a duty of reasonable care under section 414 of the Restatement (Second) of Torts) and (2) whether a material question of fact existed as to the proximate cause element of Plaintiff’s negligence claim against Wooton.

By way of background, in August 2002, a condominium complex known as “Kingsbury on the Park” in Chicago was being developed. The property was owned by Smithfield Properties. Wooton Construction, the general contractor, was a subsidiary of, or otherwise affiliated with Smithfield. Wooton contracted with Zalk Josephs Fabricators, to fabricate structural steel. Zalk subcontracted with Plaintiff’s employer, JP Cullen & Sons, to erect the steel. A crane was to be provided, however at some point Wooten indicated they were taking the crane for use by another party. Shortly before his lunch break on August 28, 2002, Plaintiff, an ironworking apprentice with the Cullen raising gang, was in the process of unloading a crane basket containing approximately 10 kegs of bolts which weighed between 100 and 200 pounds and plaintiff felt something “pop” in his back and he experienced severe pain. He reported the injury and, on September 4, 2002, went to Northwestern Hospital and was eventually diagnosed with a herniated disc for which he underwent surgery, but was not “cleared” by his doctor to return to ironworking.

On August 10, 2006, Plaintiff filed a second-amended complaint. Plaintiff alleged Defendants committed nine instances of negligence. The Court noted Defendants failed to provide a crane or other mechanical device to move the kegs of bolts. Subsequently, Plaintiff voluntarily dismissed Smithfield. Zalk’s motion was also granted and was not raised on appeal. Ultimately, Wooton filed a motion for summary judgment. Wooton contended it did not owe a duty to Plaintiff because it did not retain control over Cullen’s work under section 414 of the Restatement (Second) of Torts. Wooton also argued Plaintiff could not establish its acts or omissions proximately caused injury.

In its written order granting summary judgment, the trial court gave two grounds. First, Wooton owed no duty of care to Plaintiff. Second, in any event, Plaintiff could not show his injury was proximately caused by Wooton’s alleged breach of its duty of care. This Court noted the general rule—one who employs an independent contractor is not liable for the independent contractor’s acts or omissions. Section 414 provides an exception to this general rule. “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.” Restatement (Second) of Torts §414, at 397 (1965).

This exception, known as the “retained control exception,” was recognized by our supreme court in Larson v. Commonwealth Edison Co. In order for this exception to apply, it must be shown the general contractor retained sufficient control over the work of the subcontractor so the law recognizes the existence of a duty to exercise “supervisory control with reasonable care.” In this claim, the analysis focused on whether Wooton retained a level of control sufficient to give rise to a duty of reasonable care. In essence, Plaintiff contended a sufficient degree of control over the work by Cullen was exercised by Wooton’s control over the only crane available at the work site. The Cullen raising gang, of which Plaintiff was a part, required the use of a crane to perform its work. The contract between Wooton and Zalk, which was incorporated into the contract between Zalk and Cullen, expressly stated Wooton would provide the crane and, in accordance with industry practice, would control its use. Plaintiff argued Wooton, in controlling the use of the crane, had a duty to exercise reasonable care in taking the crane from use by Cullen. With Wooton assuming control over the only crane at the work site and in light of the conceded need for the use of the crane for the raising gang to perform its work, it followed Wooton retained some degree of control over the manner in which the work of the Cullen raising gang was done. Wooton controlled the “means and methods” of the work contracted to be done by the Cullen raising gang, by Wooton depriving Cullen of the use of the crane to do crane-dependent work. The Court noted direct evidence was presented of Wooton’s exercise of control over the unloading of the kegs of bolts by Plaintiff when a Wooten representative directed the basket full of kegs of bolts be unloaded manually. The Court noted this holding did not mean Wooton was liable for Plaintiff’s injuries; the alleged breach of the duty remained a question for the jury.

On the second question of proximate cause, the Court found Plaintiff presented sufficient evidence to support his claim—he would not have lifted the kegs manually but for Wooton’s control over the crane, which it sought to take from Cullen to give to another subcontractor. Based upon their findings, the Court noted the facts could give rise to a duty of care and it was for a jury to decide the question of proximate cause so they reversed and remanded for those determinations.

This case should be important to most general contractors. It may now be important to note to your various foremen and supervisors that they not only may create liability by “directing” the subcontractors in the manners by which duties are performed, but they now also may be creating liability by actions which affect the ability for the subcontractor to perform the duties such as moving equipment to other areas of the job. Our initial suggestion would be to review agreements with subcontractors to avoid providing equipment if possible or by allowing for the use of the equipment with a penalty for use past certain deadlines to cover the cost of delays caused by deadline overruns involving shared equipment. Obviously all new contracts would have to be reviewed on a case by case basis to make determinations of any potential “control by subtraction”. This article was researched and written by Shawn R. Biery, J.D. If you have thoughts and comments or need the case citation, please send a reply to sbiery@keefe-law.com.

Editor’s comment: This is one of those, “That’s Illinois” rulings. It doesn’t have to make sense or follow what we call the “plain English language” meaning of legislation. The current legal system, including our Legislature, Supreme Court and Governor’s mansion are run by the Plaintiff trial bar and such laws/rulings will continue until we are able to get reform or some sense of balance for Illinois business. Let us hope this concept and concern doesn’t start to bleed over to federal court, now seeing the current White House and Congress may be beholden to the same folks. We applaud the Illinois State Chamber of Commerce for filing an amicus brief in this case and trying to staunch the bleeding in such matters.

What the Plaintiff trial bar wants to happen in major claims is global settlements. The best way to get all defendants to settle and contribute in a major claim is to have the judiciary leave them holding the whole bag if they force their specific and possibly marginal interests to trial while other defendants bail and close with partial settlements. In a November 25, 2008, 4-2 ruling in Ready v. United/Goedecke Services, the Illinois Supreme Court held settled defendants cannot be taken into account when allocating fault under Section 2-1117 of the Illinois Code of Civil Procedure. Section 2-1117 provides, except for medical expenses and certain toxic tort claims falling under section 2-1118, a defendant is only jointly and severally liable if its share of fault is 25 percent or greater of the total fault “attributable to the plaintiff, the defendants sued by the plaintiff, and any third party defendants except the plaintiff’s employer.” By excluding settled defendants from this calculation, the Illinois Supreme Court has made it dramatically difficult for any defendant remaining at trial to avoid joint and several liability, even where such defendant may have played only a minor role in causing plaintiff’s injury.

The decedent in Ready was a mechanic at a power plant in Joliet, Illinois. He was killed when a truss slipped and fell from the eighth floor during a pipe-refitting project. Plaintiffs sued United/Goedecke, the subcontractor that dropped the truss, as well as the power plant and the general contractor for the project. They settled with the power plant and the general contractor and went to trial against United/Goedecke. At trial, the judge excluded evidence of negligence by the power plant and general contractor and declined to include them on the verdict form. The jury found United/Goedecke 65 percent at fault and decedent 35 percent at fault. After offsets for decedent’s negligence and prior settlements, the jury found United/Goedecke solely liable for $8.1 million. The appellate court reversed in pertinent part, holding under section 2-1117 fault should be assessed relative to all defendants, including defendants that settled before trial.

The Supreme Court’s plurality opinion, drafted by Justice Freeman concluded the phrase “defendants sued by the plaintiff” is somehow ambiguous with respect to settled defendants. With respect to our highest court, we consider that stretching the English language like a piece of Laffy Taffy. The Court rejected United/Goedecke’s plain English language argument noting “sued” is in the past tense and settled defendants are or were “defendants sued by the plaintiff.” Instead, because “sued” is not defined in the statute, the plurality turned to standard dictionary definitions to support its finding of ambiguity. The plurality noted that “sued” could mean, consistent with United/Goedecke’s view, “to seek justice or right from (a person) by legal process: bring an action against: prosecute judicially.” It could also mean, consistent with plaintiff’s view, “to proceed with (a legal action) and follow up to proper termination: gain by legal process.”

Thus, the Supreme Court’s plurality concluded, the “definitions provide no help in determining which of these contradictory views might have been intended” and “[w]e find no clear indication of a legislative preference for either of the parties’ asserted meanings over the other.” The Supreme Court’s plurality opinion bolstered its finding of ambiguity by noting the conflicting interpretations of the statute by the appellate courts. The plurality sought to determine legislative intent using two principles of statutory construction. The first principle stated that “where the legislature chooses not to amend a statute after a judicial construction, it is presumed that the legislature has acquiesced in the court’s statement of the legislative intent.” The appellate court had ruled in Blake settled defendants are excluded when apportioning fault. The 2003 amendment to section 2-1117 did not react to the prior holding. Thus, the plurality concluded, the “legislature’s failure to address Blake’s holding at that time is an indication of the legislature’s acceptance, as of 2003, of this judicial interpretation of section 2-1117.”

The second principle holds that “an amendment to a statute creates a presumption that the amendment was intended to change the law.” Here, the plurality relied on the Tort Reform Act of 1995, which was later held unconstitutional in Best v. Taylor Machine Works, 179 Ill. 2d 367 (1997). The Act specified that a party is a “tortfeasor” “regardless of whether that person may have settled with the plaintiff.” The plurality found that “the 1995 amendments are a compelling indication that settling defendants were not meant to be included in the apportionment of fault under the 1986 statute.” After applying these principles, the plurality also cited statements by Illinois Senator John Cullerton during the floor debate on Senate Bill 1296. The bill was passed by the Senate in March 2007 but remains pending in the House. Senator Cullerton stated Senate Bill 1296 was intended to clarify “what the intent of the 1986 law was. *** It just makes it clear, if you settle with somebody, their names don’t go on the verdict form.” These statements, according to the plurality, confirm the conclusion settled defendants are not “defendants sued by the plaintiff” within the meaning of section 2-1117.

Justice Garman wrote the dissent, which Justice Karmeier joined. They concluded the phrase “defendants sued by the plaintiff” “unambiguously refers to those individuals or entities against whom the plaintiff filed suit.” The dissent noted Black’s Law Dictionary defines the word “sue” as “[t]o institute a lawsuit against (another party),” and suggested the conflicting general usage definitions cited by the plurality do not make sense in the context of the statute. The statute, as the dissent pointed out, used the word “sued” in the past tense, which “renders only one of the two usages reasonable.” Thus, the dissent concluded, settled defendants were plainly “sued by the plaintiff.” The dissent was also highly critical of the plurality’s tools of statutory construction. With respect to the amendment in the Tort Reform Act of 1995, the dissent noted if a statute is ambiguous (as the plurality had found), “a subsequent amendment will clarify the statute rather than change the law.” Indeed, the Illinois Supreme Court had previously confirmed an “amendment of an unambiguous statute indicates a purpose to change the law, while no such purpose is indicated by the mere fact of an amendment of an ambiguous provision.” Thus, according to the dissent, the plurality’s principle of construction is “entirely misplaced” in this case.

The dissent also explained that the 2003 amendment had nothing to do with Blake. Instead, the legislature was acting for a specific purpose involving a different portion of the statute. The dissent was skeptical the legislature was even aware of Blake, an appellate court ruling, when it made this change. Thus, the 2003 amendment is not an indication of legislative acquiescence. Finally, Justice Garman’s dissent pointed out the fallacy of relying on Senator Cullerton’s statements in 2007 to determine the legislative intent behind the 1986 statute. As the dissent explained, a “member of a subsequent legislature who favors amending the existing statute is not an appropriate source of information as to the intent of the enacting legislature. I strongly object to the suggestion to the circuit and appellate courts that they should look to the content of floor debates in the current legislative session to determine the meaning of statutory language that has been on the books for decades.”

The Illinois Supreme Court’s opinion in Ready will have significant implications going forward. As an initial matter, lower courts will likely face the question of whether evidence concerning settled defendants is ever admissible at trial. In Ready, the trial judge excluded such evidence as irrelevant under section 2-1117, which the Illinois Supreme Court ultimately affirmed. Plaintiffs will likely use Ready to oppose the admission of any evidence concerning settled defendants.

We and most defense observers assert this evidence should still be admissible for other purposes, such as showing that a settled defendant was the sole proximate cause of the plaintiff’s injury. This issue was not addressed in Ready. However, in a tort action, if defendant elects to rebut plaintiff’s case, he is entitled to do so by any available means, including “show[ing]” any “evidence that negates causation.” Leonardi v. Loyola Univ. of Chicago. In Leonardi, the Illinois Supreme Court held that where there is evidence of other causes of a plaintiff’s injury, the defendant is “always” permitted to introduce that evidence so the jury can resolve whether some other cause was the sole proximate cause of the injury. Following two appellate court decisions that held that this evidentiary rule does not apply in asbestos cases, the Supreme Court is currently considering the proper role of a sole proximate cause defense in asbestos cases in Nolan v. Weil-McClain (Case No. 103137).

The rule announced in Ready will also have important practical implications. Plaintiffs can settle with defendants who are predominantly at fault for an injury but have minimal assets and/or insurance to pay any damages. Plaintiffs can then go to trial with deep-pocket defendants, even if their relation to the injury is much more tenuous. With the settled defendants out of the picture, the odds are greatly increased the judge or jury will allocate more than 25 percent of the fault to the remaining trial defendants, rendering them jointly and severally liable for major damages. This scheme naturally increases the pressure on major defendant to settle, even if defendant has strong defenses and/or the settlement is out of proportion to its specific culpability. The exclusion of settled defendants from the joint and several liability calculation under section 2-1117 makes it very dangerous to be the last defendant standing at trial.

We also caution, provided plaintiff’s settlement with another defendant is in good faith, the trial defendant(s) may be unable to sue the settling defendant for contribution. Accordingly, the value of proportionate fault and limited joint and several liability appears to be greatly diminished. The legislature originally enacted section 2-1117 with the intent that minimally responsible parties should not have to pay entire damage awards. But the Supreme Court’s ruling and interpretation of the Code of Civil Procedure will inexorably lead to this result.

The decision is on the web at: http://www.state.il.us/court/OPINIONS/SupremeCourt/2008/November/103474.pdf. Please reply with your thoughts and comments.