Summary
In Flora v. Home Federal Savings Loan Association (N.D. Ill. 1980), 489 F. Supp. 776, the district court denied an injured contractor's motion to strike the defendant's counterclaim for indemnification against him in a diversity action brought under the Structural Work Act.
Summary of this case from Simmons v. Union Electric Co.Opinion
No. 79 C 3645.
May 2, 1980.
Peter C. Bazos, Elgin, Robert J. Cooney, Cooney Stenn, Chicago, Ill., for plaintiffs.
William J. Furey, Hinshaw, Culbertson, Moelmann, Hoban Fuller, Ronald A. Parizek, James G. Head Associates, Chicago, Ill., for defendants.
MEMORANDUM OPINION AND ORDER
Plaintiff Howard M. Flora, doing business as the Flora Construction Company, participated in a construction project at defendant Home Federal Savings and Loan Association's ("Home Federal") offices in Elgin, Illinois. During the course of this project, Flora erected scaffolding at the job site. As a result of injuries caused by a fall from a scaffold on May 8, 1978, plaintiff has brought this diversity action seeking recovery under the Illinois Structural Work Act. Ill.Rev.Stat. Ch. 48, § 60 et seq. (1977). Home Federal has filed a counter-complaint against Flora seeking indemnification for any liability it may suffer in this case. Flora has moved to strike the counter-complaint on the ground that indemnification may not be sought against the injured person under the Structural Work Act. For the reasons hereinafter stated, Flora's motion is denied.
Flora argues that under the Structural Work Act the negligence of an employee may not be used to preclude recovery by that employee. Since he was working on the scaffold at the time of the injury, Flora contends that he falls within the Act's protection. On the other hand, Home Federal asserts that Flora assumed the dual capacity of employer and employee on the job and that while the Act protects Flora as an employee, it offers no similar shield from his liability as an employer.
A party may have separate and distinct legal capacities. See Duprey v. Shane, 39 Cal.2d 781, 249 P.2d 8 (1952); Marcus v. Green, 13 Ill.App.3d 699, 300 N.E.2d 512 (5th Dist. 1973). Flora may have been both an employee and employer on the construction site. In Illinois, the Structural Work Act has been construed to permit defendants guilty of passive negligence to receive indemnification from actively negligent parties. McInerney v. Hasbrook Construction Co., 62 Ill.2d 93, 338 N.E.2d 868 (1975); Miller v. DeWitt, 37 Ill.2d 273, 226 N.E.2d 630 (1967). The Act, however, does not permit indemnification to be recovered against an employee for his own negligence. See Palier v. Dreis and Krump Mfg. Co., 81 Ill.App.2d 1, 225 N.E.2d 67 (1st Dist. 1967). Thus, while Home Federal could obtain indemnification from Flora in his capacity as an employer, no such right exists against Flora, the employee.
The question arises as to whether the fact that Flora was both an employer and employee will preclude indemnification in this case. It would appear that indemnification is permitted against the employer in such a situation. In National Oats Company v. Volkman, 29 Ill.App.3d 298, 330 N.E.2d 514 (5th Dist. 1975), a partner in a construction company was killed while working on National's premises. The partner's next of kin filed suit and received a judgment against National. When National sought indemnification from the surviving partner, it was argued that indemnification was tantamount to a judgment against the injured person because the partnership entity would entitle him to cast liability for the indemnification upon the partnership. Id. at 303, 330 N.E.2d 514. Thus, the surviving partner asserted that to compel the injured person to indemnify for his own injury through his partnership liability would be to subvert the intent and purpose of the Act by depriving the injured person of the benefits of the Act. Id. The court, however, had "no hesitation in holding [the surviving partner] responsible for the violation of the Act although the injured person was a partner . . . and his estate may, or even likely will, share a part of the burden of the judgment in indemnity." Id. Furthermore, the court explicitly stated:
That [the injured party's] estate may . . . stand part of the liability for the violation of the Act will not stop the action over. Such ultimate liability is imposed because [the injured party] was a partner and the legal and financial implications that stem from the partnership entity, not because he was the injured person under the Act nor because he was the party whose negligence constituted the violation of the Act. . . .Id. The Volkman court held, therefore, that indemnification would be allowed.
By analogy to Volkman, indemnification may be obtained by Home Federal against Flora, because of his status as an employer and because of the legal and financial implications that flow therefrom. While Flora's dual capacity may be a fiction, "it must be indulged in order to place and spread the ultimate liability among those legally responsible." Id. Accordingly, Flora's motion to strike the counter-complaint is denied. It is so ordered.