Could My Workers Maintain A Suit Against Me Under the Illinois Employee Classification Act?

Over the past two years we’ve seen quite a few Acts from the Illinois legislature regarding the industry and its operations. We’re still waiting on good case law interpreting the contractor prompt payment act. We saw the downfall of the attempt to reintroduce the structural work act. And now we have our first case regarding the act that many parties tried to defeat – the Illinois Employee Classification Act (820 ILCS 185/1 et seq.) (the ECA).

The ECA is a must-know for any contractor in the state that wants to classify the people working for it as an “independent contractor.” Prior to the act, we all know that it was common practice, for whatever reason, to call many employees independent contractors. Pay scales, union dues, liability issues, insurance rates and coverage, even labor laws played a part in the decision to classify someone working for you as someone working for you or someone you’ve contracted with to perform work for you.   The purpose of the act was to allow a statutory remedy for the widespread practice of employing laborers as independent contractors in a manner that circumvented many other obligations someone who was an employer would otherwise have.

The ECA invokes penalties and offers both public and private rights of action for those effected by their misclassification as “independent contractors.” This Synopsis of the ECA is available from the legislature’s website:

“Creates the Employee Classification Act. Provides that an individual performing services for a contractor is deemed to be an employee of the employer. Provides that an individual performing services for a contractor is deemed to be an employee of the contractor unless it is shown that: (1) the individual has been and will continue to be free from control or direction over the performance of the service for the contractor, both under the individual's contract of service and in fact; (2) the service performed by the individual is outside the usual course of services performed by the contractor; and (3) the individual is engaged in an independently established trade, occupation, profession or business; or (4) the individual is deemed a legitimate sole proprietor or partnership. Provides that subcontractors or lower tiered contractors are subject to all provisions of the Act. Provides that he Department of Labor shall post a summary of the requirements of this Act in English, Spanish, and Polish on its official web site and on bulletin boards in each of its offices. Provides that it is a violation of the Act for an employer or entity not to designate an individual as an employee under the Act unless the employer or entity satisfies the provisions of the Act. Provides for civil remedies and civil penalties.”

The ECA was introduced in February of 2007, passed both houses that May and was signed into law by the Governor in August of that year. The ECA took effect on January 1, 2008. 

Up through now, a majority of the claims made under the ECA have fallen by the wayside or been resolved in other venues and usually on other grounds. That looks like it may be changing given that on June 3, 2009, in the case of Chicago Regional Council of Carpenters et al v. Joseph J. Sciamanna, Inc. et al (N.D. IL – Doc No. 08 C 4636), a Northern District of Illinois court denied several parties motions to dismiss the amended complaint (a copy of the amended complaint can be found here) in favor of allowing the action to continue.

The action in Sciamanna was brought by the Chicago Regional Council of Carpenters and several other parties against a contractor and others seeking monetary, equitable and declaratory relief for the alleged misclassification of employees as independent contractors at construction sites building the Hilton Garden Inn hotels in Warrenville and Schaumburg.

Originally filed in state court, the action was removed to federal court by the defendants. In the amended complaint, plaintiffs allege that two of the workers on the site were misclassified under the act by Sciamanna and suffered because of that misclassification by not having been paid wages, employment benefits, proper payroll tax withholdings, FICA payments, Workers Compensation Insurance and payments under the Illinois Unemployment Insurance Act. The amended complaint seeks redress for the failure to properly post notices regarding the ECA at the site and for retaliation against the workers after they filed the suit seeking to exercise their rights under the ECA. Relevant to many employers, the union is also seeking classification as an interested party under the act and that it be granted monetary damages and attorneys fees. This is important given that individual employees may not always have the money or resources to obtain counsel to enforce their alleged rights, but suits brought by their unions for such practices could profoundly change the playing field for contractors practicing in violation of the ECA under the assumption that a single employee – contractor – may not have the ability to enforce their rights.

The opinion rendered by the District Court can be found here.

Parties should be paying attention to this and any other similar cases given that the actual allowance of a per-day fine for violation of the act to the union, or for damages and attorneys fee awards may start to make it incredibly costly for contractors to classify workers as independent contractors without first making sure that the classification comports with Section 10 of the act:

§ 10. Applicability; status of individuals performing service.

(a) For the purposes of this Act, an individual performing services for a contractor is deemed to be an employee of the employer except as provided in subsections (b) and (c) of this Section.

(b) An individual performing services for a contractor is deemed to be an employee of the contractor unless it is shown that:

(1) the individual has been and will continue to be free from control or direction over the performance of the service for the contractor, both under the individual's contract of service and in fact;

(2) the service performed by the individual is outside the usual course of services performed by the contractor; and

(3) the individual is engaged in an independently established trade, occupation, profession or business; or

(4) the individual is deemed a legitimate sole proprietor or partnership under subsection (c) of this Section.

(c) The sole proprietor or partnership performing services for a contractor as a subcontractor is deemed legitimate if it is shown that:

(1) the sole proprietor or partnership is performing the service free from the direction or control over the means and manner of providing the service, subject only to the right of the contractor for whom the service is provided to specify the desired result;

(2) the sole proprietor or partnership is not subject to cancellation or destruction upon severance of the relationship with the contractor;

(3) the sole proprietor or partnership has a substantial investment of capital in the sole proprietorship or partnership beyond ordinary tools and equipment and a personal vehicle;

(4) the sole proprietor or partnership owns the capital goods and gains the profits and bears the losses of the sole proprietorship or partnership;

(5) the sole proprietor or partnership makes its services available to the general public or the business community on a continuing basis;

(6) the sole proprietor or partnership includes services rendered on a Federal Income Tax Schedule as an independent business or profession;

(7) the sole proprietor or partnership performs services for the contractor under the sole proprietorship's or partnership's name;

(8) when the services being provided require a license or permit, the sole proprietor or partnership obtains and pays for the license or permit in the sole proprietorship's or partnership's name;

(9) the sole proprietor or partnership furnishes the tools and equipment necessary to provide the service;

(10) if necessary, the sole proprietor or partnership hires its own employees without contractor approval, pays the employees without reimbursement from the contractor and reports the employees' income to the Internal Revenue Service;

(11) the contractor does not represent the sole proprietorship or partnership as an employee of the contractor to its customers; and

(12) the sole proprietor or partnership has the right to perform similar services for others on whatever basis and whenever it chooses.

(d) Where a sole proprietor or partnership performing services for a contractor as a subcontractor is deemed not legitimate under subsection (c) of this Section, the sole proprietorship or partnership shall be deemed an individual for purposes of this Act.

(e) Subcontractors or lower tiered contractors are subject to all provisions of this Act.

(f) A contractor shall not be liable under this Act for any subcontractor's failure to properly classify persons performing services as employees, nor shall a subcontractor be liable for any lower tiered subcontractor's failure to properly classify persons performing services as employees.

Another interesting point is that the private right of action accrues at the final date of the provision of services and lasts for 3 years. The ECA defines both “construction” and “performing services”:

“Construction” means any constructing, altering, reconstructing, repairing, rehabilitating, refinishing, refurbishing, remodeling, remediating, renovating, custom fabricating, maintenance, landscaping, improving, wrecking, painting, decorating, demolishing, and adding to or subtracting from any building, structure, highway, roadway, street, bridge, alley, sewer, ditch, sewage disposal plant, water works, parking facility, railroad, excavation or other structure, project, development, real property or improvement, or to do any part thereof, whether or not the performance of the work herein described involves the addition to, or fabrication into, any structure, project, development, real property or improvement herein described of any material or article of merchandise. Construction shall also include moving construction related materials on the job site to or from the job site.

“Performing services” means the performance of any constructing, altering, reconstructing, repairing, rehabilitating, refinishing, refurbishing, remodeling, remediating, renovating, custom fabricating, maintenance, landscaping, improving, wrecking, painting, decorating, demolishing, and adding to or subtracting from any building, structure, highway, roadway, street, bridge, alley, sewer, ditch, sewage disposal plant, water works, parking facility, railroad, excavation or other structure, project, development, real property or improvement, or to do any part thereof, whether or not the performance of the work herein described involves the addition to, or fabrication into, any structure, project, development, real property or improvement herein described of any material or article of merchandise. Construction shall also include moving construction related materials on the job site to or from the job site.

With the ECA’s broad classification of both “construction” and “performing services” everyone thinking about calling someone an independent contractor should revisit the issue in light of the ECA and the potential for a cause of action brought by multiple worker or the union.

 

New Suit Fridays - 4-24-09

It’s Friday, so you know what that means, we bring you a collection of the complaints in some of the latest suits filed regarding matters touching on the industry:

  • Sure to be of interest to Chicago White Sox fans, Pacific Construction has brought a  breach of contract claim against Maverick Pools. The complaint alleges that Maverick breached the contract by “refusing to unload and install” two pre-manufactured pools and to construct a thermal pool. The damages sought are in excess of $107,496.00.
  • The complaints and allegations regarding the current mortgage crisis and the industry are likely just beginning. In this suit, a class action suit for federal securities violations is brought against Corus Bank and several others. The allegations are that Corus failed to tell investors that it was buying condominiums at prices that were inflated in developments financed by Corus and that the purchases caused inflated appraisals which led to inflated values on Corus’ books… So the bank allegedly didn’t actualize the proper losses on the loans it had made for the condominiums.
  • In one of the weirder suits we’ve seen over the past year, some owners allege that a building was built on their land without their knowledge. Gavric v. Brosna Construction alleges that the defendants owning a parcel adjacent to the plaintiffs’ constructed “a three story, sub-standard, apartment building” on their property illegally. The complaint alleges trespass, conversion, negligence, seeks termination of a lien placed on their land by the contractor who built the project, a count for slander of title, and seeks remedy under Illinois Forcible Entry and Detainer Act. (735 ILCS 5/9-101 et seq.)
  • In a home defect case, Rangel v. Jumic, et al, alleges that defendants failed to disclose material defects that they were aware of prior to the sale of a home to plaintiffs. The defects complained of include problems with the heat distribution system, water infiltrating through the masonry, cracks in portions of the home and problems with the hardwood floors. The suit contains counts for breach of contract, breach of the implied warranty of habitability and fitness for a particular purpose and violations of the Illinois Residential Real Property Disclosure Act. (765 ILCS 77/1 et seq.)
  • Finally, a condominium association has brought a suit against the developer of its property at 1255 South State Street as well as the owner of the garage in which residents of the condominium park. The complaint alleges that the developers deal with the owner of the garage and the effect of forcing a fee for parking in the garage that a recorded Declaration had on the plaintiffs was not disclosed to the plaintiffs. Prior to November of 2007, the residents had access to the garage and their parking spaces by use of “a remote clicker” provided by the garage owner and that in November of 2007, the garage owner installed a parking “toll system” that restricted the residents ability to come and go from their parking spaces.  There are several problems with the transponders alleged in the complaint among them, that the new parking system is not a benefit to the users of the property, that the residents were not properly informed of its installation, and that the owner has improperly requested that the residents pay for a portion of the new system. The residents seek a declaratory judgment regarding the new parking system and their rights granted by easement, and allege breach of fiduciary duty, fraud and consumer fraud.

When does a design professional owe a legal duty to the employee of a subcontractor on a construction site?

In Dorris v. Baxter & Woodman, the plaintiff, Leon Dorris, filed a lawsuit seeking damages for personal injuries sustained when he fell from a metal-grated walkway (air  bridge) that collapsed while he was working on the renovation of a wastewater treatment  plant owned by the City of Woodstock. In his lawsuit, Plaintiff named Baxter & Woodman, Inc. (“Baxter & Woodman”), Joseph J. Henderson & Son, Inc. (“Henderson”)  and Enviroquip, Inc. (“Enviroquip”) as defendants claiming the negligence of each entity proximately caused his injuries. Baxter & Woodman, an engineering firm, was retained by the City of Woodstock to provide engineering services and serve as the City’s representative on the construction project. Henderson was the general contractor for the project and Enviroquip was the manufacturer of the air bridge[1]. Plaintiff worked for Fischer Mechanical Group (“Fischer”),  the plumbing subcontractor on the project. 

As part of the construction project, Henderson erected/constructed a metal-grated platform as part of an air bridge that was to provide access to the center of a digester (large concrete tank used to treat wastewater). Two weeks after Henderson had installed the metal- grated platform, Plaintiff was walking on the platform when a portion of the metal grating collapsed causing him to fall into the digester. At the time of the accident, the metal grating was not secured with banding at the edges or with attachment clips at the ends as specified in the manufacturer’s installation instructions. The specification for the metal grating, included in the construction documents, required that the edges of the grating be secured with banding bars and that the metal grating be installed in accordance with the manufacturer’s installation instructions and approved shop drawings. The manufacturer’s instructions, which stated that the  grating should be banded at the edges and secured with at least four attachment clips at each end, were contained in a shop drawing approved by Baxter & Woodman and included as a  specification in the construction documents. 

The duties and responsibilities of Baxter & Woodman were defined in the contract documents. Specifically, Baxter & Woodman contractually agreed to act as the City’s on-site  project representative during the construction. Baxter & Woodman agreed to enforce the plans, drawings, and specifications and to “provide full and complete construction supervision  services.” The construction supervision services included “daily inspection” to ensure that all work was performed “in conformity with the Contract Documents.” Baxter & Woodman was further required to review and approve shop drawings, manufacturer’s literature and other submittals for compliance with the drawings and specifications. Significantly, this review and approval included the means and methods of construction that were “specifically and expressly called for by the Contract Documents.” Further, Baxter & Woodman had the authority to reject work that did not conform to the contract documents. 

Baxter & Woodman’s contract obligated it to provide a resident project representative to  observe the work in progress and assist the engineer in determining if the work is “proceeding in  accordance with the Contract Documents.” The resident project representative was required to report any work that “does not conform to the Contract Documents.” Per it contract, Baxter & Woodman had the authority to direct or assume control over “any aspect of the means, methods, techniques, sequences or procedures of construction [where] such advice or directions are specifically required by the Contract Documents.” 

Prior to trial, Baxter & Woodman was granted summary judgment as the court determined that it did not owe a duty to Plaintiff.  This decision was based on the court’s belief  that any duty Baxter & Woodman had to inspect the air bridge for compliance with the plans and specifications had not arisen as of the time of Plaintiff’s accident since the construction of the air bridge was not complete when Plaintiff fell. However, the trial court later reversed itself based on the fact that Baxter & Woodman’s contract did not require it to inspect the construction for compliance with the plans and specifications only after the work was complete. There was also deposition testimony indicating that Baxter & Woodman’s resident project representative had the authority to inspect the work whenever he chose. Further, it was Baxter & Woodman’s job to make sure that the work was performed in accordance with the plans and specifications and the construction documents expressly provided that the metal grating for the air bridge be banded and clipped before the platform was assembled over the digester. As such, the trial court reinstated the case against Baxter & Woodman. 

At trial, Baxter & Woodman’s resident project representative, Kevin Hinderliter, testified that he inspected ongoing work for defective materials and to enforce the contract specifications throughout the course of the project. Mr. Hinderliter acknowledged that he had at times discovered work that did not meet the specifications, and in those instances, he directly advised the contractor of the variance so the defect could be corrected. Mr. Hinderliter testified that, at time, he specifically insisted that certain work be redone in a manner that complied with the specifications. Additionally, Mr. Hinderliter discussed safety issues at Baxter & Woodman’s progress meetings and dealt with safety concerns. Furthermore, Mr. Hinderliter testified that on the day of Plaintiff’s accident, he knew that the grating did not have the banding along the edges or the attachment clips at the ends as required by the specifications.

At the close of the evidence, the jury found that Baxter & Woodman was 70% liable for Plaintiff’s injuries and returned a verdict of $11 million in favor of Plaintiff. Judgment of $3,675,000 was entered against Baxter & Woodman after the set off from the Henderson/Enviroquip settlement.

Baxter & Woodman appealed claiming, in part, that it owed no duty to Plaintiff.

The First District Appellate Court held that Baxter & Woodman had a duty to exercise its supervisory authority to ensure that the air bridge’s metal grating was secured by banding bars and attachment clips. Dorris v. Baxter & Woodman, No. 1-07-3126, p. 13 (December 2, 2008). In its reasoning, the Court cited various portions of Baxter & Woodman’s contract which obligated it to enforce the specifications, including the means and methods of the work that were expressly provided for by the contract documents, and provided authority to reject work that did not conform to the plans. Id. As such, the Court stated that Baxter & Woodman clearly and specifically agreed to this duty by the terms of its contract. Id. Further, the Court concluded that the contract documents required Baxter & Woodman to inspect the work for compliance with the specifications on an ongoing basis and to reject work that did not comply with the construction document. Id. at 14. Accordingly, the Court cited Putman v. Village of Bensenville, 337 Ill. App. 3d 197, 208, 786 N.E.2d 203 (2nd Dist. 2003) in stating that a claim of negligence may be based upon the failure to perform an act required by contract. In such circumstances where the duty of care arises out of a contract, the scope of such duty is defined by the terms of the contract. Putman, 377 Ill. App. 3d at 208-09; see also Ferentchak v. Village of Frankfort, 105 Ill.2d 474, 482, 475 N.E.2d 822 (1985). 

In Illinois, a design professional has a duty to protect a subcontractor’s employee from injury on a construction site where the design professional undertakes significant supervisory responsibilities or agrees to ensure that the work is performed in accordance with the contract documents. Dorris v. Baxter & Woodman, No. 1-07-3126, pp. 12-13 (December 2, 2008); see also Miller v. DeWitt, 37 Ill.2d 273, 284-85, 226 N.E.2d 630 (1967). 

This duty will not be charge of a design professional where the contract provides that the design professional (1) has no supervisory responsibility, (2) has no control of or responsibility for the means, methods, techniques, procedures or sequences of construction, (3) has no responsibility for the failure of any contractor to perform the work in accordance with the contract documents, and (4) has no responsibility to devise, implement or enforce any safety precautions or programs for the project. Dorris v. Baxter & Woodman, No. 1-07-3126, pp. 12-13 (December 2, 2008); see also Putman, 337 Ill. App. 3d at 208-09; Ferentchak, 105 Ill.2d at 480-81, 475 N.E.2d 822 (1985).

Some pointers:

  • In order to avoid claims and the liabilities as incurred by Baxter & Woodman, it is very important for design professionals to take certain precautions in drafting their contract. A design professional’s contract should explicitly detail the scope of services it is providing. The contract should unambiguously state that the design professional (1) has no supervisory responsibility, (2) has no control of or responsibility for the means, methods, techniques, procedures or sequences of construction, (3) has no responsibility for the failure of any contractor to perform the work in accordance with the contract documents, and (4) has no responsibility to devise, implement or enforce any safety precautions or programs for the project. As part of a design professional’s construction administration services, the designer often reviews the general progress of the work and may certify that work was performed in accordance with the contract documents. However, if this service is to be included in the design professional’s scope of services, the contract should explicitly state that the designer is not required to make an exhaustive or continuous inspections of the work and that the designer is not required to ensure proper construction methods or safety precautions or to see that construction documents are followed. Rather, the design professional may provide opinions or recommendations to the owner, which the owner need not necessarily follow. 
  • Additionally, it is equally important for design professionals to strictly adhere to their contract and not assume any additional duties by their conduct. The design professional should also avoid maintaining a continuous on-site presence so as to avoid any inference that it is supervising the construction or in control of the premises. Further, the design professional should avoid holding or attending jobsite safety meetings or inspections so as to avoid any inference of control or supervision over safety. If the design professional becomes aware of a variance from the construction documents or any potential safety hazard, the designer should report the issue to the owner and qualify its report as an opinion or suggestion for consideration by the owner. The designer should not directly stop any contractor’s work or issue any directive based on the construction work. Again, reporting opinions for consideration to the owner with a qualifier (i.e. this report is only the opinion of the designer and does not constitute a directive of action or in any way modify the designer’s responsibilities or duties under its contract) is the most prudent course of action. 

Following these recommendations does not guarantee that the design professional will not be sued or even found liable; however, these tips are provided to help reduce the risk of exposure associated with design professionals’ services.



[1] Henderson and Enviroquip (along with Plaintiff’s employer) settled with Plaintiff shortly before trial for $7,325,000, leaving Baxter & Woodman as the only remaining defendant.

 

The People v. Lincoln, Ltd. (1st Dist. Doc. No. 1-07-2517)

The Illinois EPA asked the State Attorney General's office to seek an injunction and civil penalties against the defendant for operating a "construction or demolition debris" landfill without a permit.  The defendant, a company operating a landfill in the Village of Ford Heights (a village the court describes as "an economically depressed community south of Chicago"), argued that the debris (a mound 70 feet tall spanning 26 acres) would be "waste" and therefore in violation of the Illinois Environmental Protection Act (415 ILCS 5/21(d)(2)) but for the fact that the landfill was the proposed site of an all-seasons downhill skiing facility which placed it under an exception to the act.


The question was certified:

   "Whether clean construction and demolition debris deposited onto the land for the purpose of providing the infrastructure for a recreational facility to be built at the site and to be used for snow skiing/snow boarding (facts which are undisputed for purposes of the August 4, 2007 partial summary judgment order) constitutes 'waste' under the Illinois Environmental Protection Act and requires a permit in compliance with the Act's waste disposal requirements including but not limited to 415 ILCS 5/3.305, 415 ILCS 5/21 et seq., 415 ILCS 5/21.1 and 35 Ill. Adm. Code 812.101(a)."


No Dumping.JPG

The court put aside the question regarding whether the debris deposited by the defendant was, in fact, "clean construction or demolition debris" reserving the issue for trial.  Assuming that the debris was "clean" the court found that there was nothing in the actions of the defendant by leveling the debris once it reached the site, demonstrating that it "separated or processed" the debris.  The court also found that the planned ski hill did not create an exception amounting to "returning [the debris] to the economic mainstream in the form of raw materials or products."  (415 ILCS 5/3.160)  The court reasoned that accepting the claim that the future use created an exception would negate landfill regulation by allowing any landfill operator with a future intention to avoid meaningful regulatory oversight.  The court additionally dismissed the defendants argument that an exception for using the debris as fill material was met - stating that the fill material exception was negated when the debris reached a height (70 feet) well above the adjacent land as the exception stated.


Answering the certified question in the negative, the court remanded the case.  The opinion is here.  For more information on what to do with construction debris, the IL EPA maintains this construction debris website.

Liability and Assumption of Risk

There's an interesting article in April's Architectural Record by Alec Applebaum concerning owner's rep work and the possibility of expanding the role of the designer to create new forms of business for an architect's firm.

Anybody undertaking a design-build arrangement will need to be familiar with rules about general contractors, safety and understand the significant liability risks associated with such a role.  In addition, undertaking owner's rep work could implicate a host of fiduciary responsibilities not considered.  Serious consideration regarding the qualifications and ability that is required to take on any expanded role is important.

We've had plenty of previous discussions about the types of liability a general contractor can face.  We have also been following a piece of legislation in the Illinois House of Representatives that would likely change the face of §414 liability cases.  In following these types of cases under Illinois law in the construction industry we have seen courts rule both ways when considering whether or not a GC undertook to control the work of its subcontractors.  

Now we have another...  In Calderon v. Residential Homes of America, et al. No. 1-07-1470 (2008) we've been given another piece of information concerning what amounts to control under the §414.  In Calderon, the plaintiff was roofing and injured himself while carrying shingles up a ladder to a roofing job.  The defendant was the GC and had a contract that instructed its subs to review a manual regarding safety that was kept in the GC's office and had a site superintendent who went around the job daily to ensure work progress.  The testimony during depositions revealed that the GC's superintendent was not aware that the shingles were transported by ladder rather than by crane or conveyor, and that the superintendent was not instructing the subs regarding how to perform their work, but was reviewing the site for progress.  The court upheld the trial court's grant of summary judgment and found that the facts (which can be read here in the opinion) did not amount to "control" sufficient to establish liability under the §414 exceptions.

There are plenty of minutia to consider when assuming a new role.  Jumping into any unfamiliar type of business arrangement means assuming new risks that you should be prepared for.

IL House Bill 2094 - From Adoption to Structural Safety


Here's a treat.  HB 2094 was introduced back in February of 2007 as a bill pertaining to the confidentiality of records and persons under the Adoption Act.  It sat in the House Rules Committee from April 27 of 2007 until April 8, 2008. 

On April 8, 2008, it was revived, cleverly, and an amendment was proposed striking the entirety of the bill and inserting what appears as a wholly new proposed bill regarding requirements for safety during construction.  The requirements will undoubtedly be interpreted as providing for strict liability against those found to have violated the act, they also confer a private right of action to people injured and a right for any attorney to enforce the act and receive fees if the Attorney General's office does not act promptly.  The act appears to contain provisions that pertain to just about everyone who could possibly be involved in a construction project.  Of note to Illinois Architects, and anyone drafting plans is Section 8 of the amendment:

  • "It shall be the duty of all architects or draftsmen engaged in preparing plans, specifications or drawings to be used in the erection, repairing, altering or removing of any building or structure within the terms and provisions of this Act to provide in such plans, specifications  and drawings for all the permanent structural features or requirements specified in this Act; and any failure on the part  of any such architect or draftsman to perform such duty, shall be a petty offense."

Importantly, this is an attempt, by its own admission, to reintroduce the Structural Work Act which was repealed in 1995.  The legislature had attempted to introduce the act in 2001, and our readers will have no trouble comparing the provisions of that bill, with all its clauses, to sections which are similar to this new attempt to bring back the Structural Work Act.

There are multiple articles and analysis comparing the shift in the law and the liability of different parties to construction efforts after the repeal of the original Structural Work Act.  Most notably, the shift created a fairer system allowing for comparative fault to be assessed by a finder of fact, and brought liability back to common law standards under §§ 414 and 343 of the restatement of torts.. forcing individuals to actually prove that those they were suing had some form of notice which provided a duty of care that was breached resulting in a plaintiff's injury.  Under the proposed act, Illinois law would again fall back into the category of states creating duties and responsibilities for construction entities where none may have existed.

Additionally, what does the "failure to act promptly" provision mean?  Could attorneys get into the business of policing construction sites for violations of the act, suing and recouping costs and fees?

If the real purpose of the act is to provide greater safety at construction sites and in planning, why confer a private right of action to those injured where fair and balanced methods of determining fault and damages exist under the common law and through other statutes?

Denying a Municipality's Immunity and Interpreting the Statute of Repose

In Trtanj v. The City of Granit City (Ill. App. Ct., 5th District, No. 5-07-0002), the plaintiffs owned a house that was filled with sewage after a thunderstorm.  During the thunderstorm, three sewage lift stations that normally operated to transport sewage through the city's system were left without power.  The city took two to three hours in getting the sewage systems back online.  As a result of the rainfall and issues with a clay pipe connecting the plaintiffs' property to the city's system, water and sewage backed up into the plaintiff's home.  Prior to the motion for summary judgment brought by the city, the city's superintendent of water testified that it should only take 15 minutes to set up a temporary lift system and 15 minutes to get it operational.

The plaintiffs brought an action in 2002 and later amended their complaint in 2005 alleging negligence in the design, construction, operation and maintenance of the sewer system, that the backup was a temporary nuisance, and also brought an action in trespass against the city.  The city responded in a motion for summary judgment that the claims were barred under the statue of repose (735 ILCS 5/13-214), that the tort immunity act applied (745 ILCS 10/2-201) to protect the city from suit, and that it was not liable because the backup occurred during an extraordinary rainstorm.

The trial court granted the motion for summary judgment and the plaintiffs appealed.

The appellate court found that material issues of fact existed where the city had known about the outside water infiltration into the sewer system through the plaintiff's clay pipe; and where the city's own superintendent of streets had testified that it should only take 15 minutes to set up the temporary pumps, not the two to three hours that it did take.

In adjudicating the repose claim, the court said that the statute of repose applied only to the construction and improvements of real property.  Because the plaintiff had alleged that the design installation and construction of the sewer station was at fault, the court found that these allegations were barred by the statute of repose when the design, construction and installation had occurred more than ten years prior to the filing of the lawsuit. 

The court went on to find that the statute did not protect the city from the claims that the maintenance and operation of the sewer system and the lift stations that occurred after their installation and within the ten year period were negligent.

The court cited a previous case, Prochnow v. Elpaso Golf Clib, Inc., 253 Ill. App. 3d 387, finding that while those claims that involved the design, construction, supervision, observation or management of the construction were exempt if the acts were outside of the ten year period, the persons responsible for possession or control and suppliers of the materials used in the maintenance and operation were subject to liability for reason of construction defects.

The court then went on to address the city's claim of immunity.  Holding that the statute protects only those acts of a municipality that are shown to be both an exercise of discretion and a policy determination, the court stated that acts which are ministerial are not protected.  After a discussion of the differences between policy determinations, acts of discretion, and ministerial acts, the court found that because the city's operation of the sewage system was subject to statutory and regulatory guidelines the actions were ministerial, and that there were material issues of fact concerning whether or not the city complied with those guidelines.  "Once a municipality decides to perform pubic work, the municipality must perform the public work with reasonable care and in a nonnegligent manner" (Slip Op. at 13).

The court also found that the determination of what might amount to an extraordinary sum of rainfall was not before the court and presented a question of fact for the jury.

The appellate court reversed the trial court's grant of summary judgment to the extent it was inconsistent with the appellate opinion.

Of note to design professionals and construction companies is the application of the ten year statute of repose.  Getting done with the work and getting out will start the clock running on the ten year period.  However, if follow up maintainance work is performed, that work is still potentially the subject of litigation. More importantly for many claimants is the willingness of the court to interpret the immunity statute and discern between policy, discretion, and ministerial acts.  It should not be overlooked that too often courts are willing to apply the immunity statute without adherence to the guidelines or undertaking the analysis to determine the exact nature of the act, perhaps inspections, construction, and maintenance can all be pled correctly to make certain the municipality has to explain its actions rather than simply pleading immunity.

Is the Benefit Worth The Risk For A General Contractor to Get Involved in Safety?

   


        In this recent opinion from the First District, the Court has upheld that a general's control through asserting its authority to stop work due to safety violations by its sub; the mandate that the sub hold weekly safety meetings and submit the minutes of those meetings for the general's review; and the subs contractual obligation to submit a site-specific safety plan all amount to enough retained control to present an issue of fact as to the general's liability under §414 of the restatement of torts.

            §414 states in relevant part that:

            "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."

            In the case of Wilkerson v. Schwendener (1-06-2653) the plaintiff was the employee of a sub and was placing some joists on a second floor of a retirement home project when his co-worker handed him a joist and struck him in the foot.

            The general had won summary judgment on the issue of §414 liability where it claimed to not have retained control of its subs work.  The Court found that the general had retained control where it required its sub to (1) comply with a 21 part list of safety regulations generated by the general; (2) hold weekly safety meetings and submit the minutes of those meetings; (3) prepare and submit a site-specific safety plan; and (4) attend the general's weekly safety meetings.  Additionally, at some point prior to the plaintiff's accident the general had sent a letter to the sub stating that the sub needed to get its safety program in order or the general "WILL STOP" (yes, it was all caps in the actual letter) the sub from continuing its work.

            The Court noted that generally, just having a supervisory role over safety would not have implicated the general in §414 liability, but here, with all the factors taken into account, and the threat of stopping the work if safety was not performed properly, the general did retain sufficient control and with it, liability.

            This raises some interesting questions regarding safety.  We know that a general wants to eliminate workplace accidents and that if it is not in charge of workplace safety, its subs might not toe the line (as here).  We also know that a general can't be everywhere at once on a job site.  So what should a general do now?  Should they be standing back and not getting involved in safety programs and full-on supervision?  Would that increase the number of accidents, but shield generals from liability under §414?  It seems a bit ridiculous that because a general was concerned with safety (preventing accidents) and interceded in different ways to increase safety (increase the prevention of accidents) that it should be held to be liable under §414 where its sub didn't have adequate safety in place in order to protect its own employees but where it did try to get the sub to conform to the plan and put adequate protections in place.  If the general hadn't had a plan and hadn't butted in, and hadn't threatened to stop the subs work, the accident would have happened, probably sooner, but it would be able to stand back and have a better argument against §414 liability.  The general didn't control all the safety, and unless there's a reason to believe that the sub would have put in place different and better safety measures than it could under the general's program, it's a bit ridiculous to say that the general should be at fault because it took certain steps to get the safety program of its lackadaisical subcontractor.

A win for owners managing existing properties.

    An owner can face multiple claims from a host of parties beyond the initial construction phases.  Where rental units are concerned, the duty to maintain a premises when renting or managing a property can be set both contractually and by common law.

            In the recent decision Young v. Prairie Management & Development, Inc., the First District Appellate Court was confronted with the issues of the duty to maintain the locks and common areas of a property and the possible existence of a common law duty to protect tenants from the actions of third-party criminals.

            In a win for owners across the state, the Court found that an honest substantial effort to maintain a property through regular checking and repair was just good ownership and not the creation of a duty to protect tenants from third-party criminal acts.

Our hats off to FGPPR's own Bob Boylan for bringing home this victory.