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SHELL OIL COMPANY v. FOSTER-WHEELER CORPORATION

September 26, 1962

SHELL OIL COMPANY, A CORPORATION, PLAINTIFF,
v.
FOSTER-WHEELER CORPORATION, A CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Juergens, District Judge.

This suit is the aftermath of one filed in the Circuit Court of St. Clair County, Illinois; there tried to conclusion with an appeal to the Supreme Court of the State of Illinois, which affirmed.

The judge of this court, then a judge of the Third Judicial Circuit of the State of Illinois, heard the pretrial motions in the original case entitled "Golden Kennerly v. Shell Oil Company," Cause No. 3457. The trial was before another judge.

The parties further stipulated and agreed that all of the above encompasses all of the evidence necessary to a decision in this case except as to the amount of plaintiff's recovery and no factual dispute is involved between plaintiff and defendant relative to the evidence to be considered in this case on the question of liability herein. They further stipulated that the only question is whether or not the plaintiff is entitled to recover in this proceeding against the defendant and, if so, the amount of damages to be awarded.

The instant complaint and amendment thereto allege that the action by Kennerly in 3457 was predicated on a claimed violation of the Structural Work Act (Illinois Revised Statutes, 1957, Chapter 48, paragraphs 60-69); that the evidence showed that Kennerly was an employee of Foster-Wheeler Corporation, which had a contract as general contractor with Shell to construct and erect a distillation unit at Shell's Wood River, Madison County, Illinois refinery; that Kennerly fell from a scaffold and received various serious and permanent injuries; that Foster-Wheeler was careless and negligent in the erection of the scaffold and that such negligence was the proximate cause of the injuries to Kennerly; that the verdict of the jury and judgment of the court were based on the evidence that the scaffold was not erected in a safe, suitable and proper manner as required by the statute; that on May 23, 1958 the decision of the Supreme Court of Illinois, affirming the judgment of the Circuit Court of St. Clair County, Illinois, became final and thereafter Shell paid the judgment with interest thereon in the aggregate amount of $85,020.83 plus costs; that no part of this amount has been repaid to the plaintiff by the defendant herein or by any other person, firm or corporation in its behalf.

The complaint and the amendment thereto further allege that the injury to Kennerly was produced solely through negligence on the part of the defendant and through no negligence on the part of the plaintiff; that a carpenter of defendant built the scaffold with lumber furnished by the defendant; and that Kennerly was an employee of the defendant and no employee of Shell when the incident occurred. Plaintiff further alleges that it had no control over the materials used in the scaffolds or the employees working thereon — all of which were under the control of the defendant. Plaintiff further alleges that Foster-Wheeler was primarily negligent and that it should be reimbursed for the expenditures made by it to Kennerly in the original case.

By its fourth defense it alleges that Kennerly's amended complaint charged Shell as being the owner, jointly occupying the building with Foster-Wheeler and controlling and directing the construction thereof; that the effect of the general verdict was to find Shell guilty of all charges; that Shell had actual knowledge that the scaffold was defective; and that the effect of the verdict was finding Shell guilty of active negligence.

The fifth defense alleges that Kennerly's amended complaint charges Shell with willfully and knowingly failing to comply with the Act and jointly occupying and controlling the building with Foster-Wheeler; that the effect of the general verdict was to find Shell guilty of all charges; that the jury had evidence that Kennerly informed Shell that the scaffold was dangerous; and that the verdict was in effect finding Shell guilty of active negligence.

By its sixth defense the defendant says that Kennerly's amended complaint charges that Shell failed to comply with the Act and jointly occupied and controlled the building with Foster-Wheeler and Foster-Wheeler was controlled by Shell; that the effect of the general verdict was to find Shell guilty of all charges; that the Act imposed a nondelegable duty upon the owner and grants no right of indemnity or subrogation or contribution.

By its seventh defense it alleges that Kennerly was an employee of Foster-Wheeler, both of whom were bound by the Illinois Workmen's Compensation Act; that the injury arose with, of and in the course of his employ with Foster-Wheeler; that Foster-Wheeler has discharged its obligation under the Illinois Workmen's Compensation Act; that the Illinois Workmen's Compensation Act prohibits a common law or statutory right of action by Kennerly against Foster-Wheeler; and that Shell has no cause of action against Foster-Wheeler for any liability over and beyond the liability of Foster-Wheeler.

The accuracy of all the pleadings, the testimony (excluding medical), the instructions, verdict and judgment has been stipulated by the parties. Both parties have moved for summary judgment. A legal question only is involved.

The copy of the transcript of the evidence, attached to the motion of Foster-Wheeler for summary judgment, having been stipulated to as constituting a full and complete transcript of the proceedings of the trial of the original action, deleting and excluding therefrom evidence and testimony concerning the injuries and damages sustained by Kennerly and the medical testimony with respect to treatment rendered to him therefor, authorizes this court to rely thereon for its decision.

For a proper and full consideration of this case it is deemed advisable to briefly set forth the testimony of the various witnesses in Kennerly v. Shell.

Everett Turner, a welding foreman for Foster-Wheeler, testified that Foster-Wheeler was putting up a new distilling unit on the Shell property; that the scaffold was built on the day of the accident; that several other subcontractors had employees in the area, including one or two inspectors from Shell's inspection department; that Shell's protection department (who were watchmen) was daily "making the rounds"; that the inspection department was there to inspect materials and workmen doing the welding and they calipered all fittings, namely, the pipe and valve fittings and also inspected the welding work and type of material; that Mr. Lambert of Shell was the construction engineer who checked with Foster-Wheeler; that someone from the engineering office periodically would come in and check progress of the work and blueprints; that revisions were made by Shell on the blueprints as work progressed; that "our men" would put tests on the pipes and the inspection department would okay; that "we" had a Shell and a Foster-Wheeler badge; that Shell gave "us" a mimeographed sheet of rules (Rules for Contractors' Employees); that the protection department and the safety department enforced smoking and rules "the like of that"; that smoking rules were enforced; that if violations were encountered, they were reported to the office and Foster-Wheeler would terminate the employment; that "Shell inspection department would inform Foster-Wheeler when we were wrong and come back to us."

On cross-examination he testified that his pay check came from Foster-Wheeler; that he was not an employee of Shell; that Shell enforced smoking rules; and that Shell watchmen or policemen would report smoking regardless of whether it was Shell or Foster-Wheeler men. He further testified that weld testing was provided for in the plans and specifications; that if Shell found a leak it would tell "us" and Foster-Wheeler; that Foster-Wheeler carpenters built the platform; that none of Shell's carpenters ever worked on that scaffold.

On redirect-examination he testified that ever so often the payroll of the job was checked and when the Foster-Wheeler paymaster came around, a representative of Shell was with him to check the individual receiving his paycheck.

Miles Tolliver testified that on April 7, 1953 he was working for Foster-Wheeler as a steamfitter on the property of Shell; that he was on the patented scaffold that Kennerly had worked on; that Shell inspectors would come around when a weld was finished; that he would see watchmen several times each day; that a Shell representative would check the badge numbers when they were paid. On cross-examination he testified that the badge numbers were checked to see if the man who had the badge was drawing the right pay; that Foster-Wheeler paid him; that all the men working up around the platform were Foster-Wheeler employees; that Foster-Wheeler men built the scaffold and no Shell man worked on it.

Raymond S. Logan testified that on April 7, 1953 he was a Foster-Wheeler foreman, putting up part of a distilling unit for Shell; that Mark Lambert was construction superintendent for Shell; that he saw him around the job and that "he would be just generally looking the job over"; that Mr. Hanson, an engineer under Lambert, was there practically every day; that a man from the auditing department once a month would distribute checks; that he would see Shell's inspectors or safety men in and around the job; that Shell usually had a man present while the welders took the test; that Shell Oil Company employment office issued a set of rules before they went on the job.

He further testified that Shell's engineer sometimes told him to make changes and other times "it would go back to the boss of Foster Wheeler"; that some chrome alloy pipe was badly bruised in shipment and Shell's inspectors made them build it up before they let them erect it; that Shell inspected the work and it would not be accepted until proper; that Shell inspectors examined the welds; that a Shell watchman took out some "banned men"; that the company watchmen made the rounds generally over all the plant; that "they had up past 400 acres of ground"; that if a watchman caught him smoking, "I don't know who he would report me to."

Lester Strader testified that on April 7, 1953, he was working for Foster-Wheeler, fitting pipe at the Shell plant; that there were quite a few other outfits who also were working on the job. On cross-examination he testified that Foster-Wheeler carpenters built the scaffold.

Golden Kennerly, testifying in his own behalf, said that on April 7, 1953 he was a steamfitter-welder employed by Foster-Wheeler Corporation on construction at Shell Oil Company premises at Wood River, Illinois, working on a new distilling unit they were building; that he told inspector Thompson of Shell that the scaffold was defective and had no hand rail; that Thompson replied, "There is nothing I can do about it."; that there were Shell employees working around the job at the same time; that he got a set of rules; that Shell uniform watchmen took a man off the premises (on cross-examination he said for drinking purposes).

On cross-examination Kinnerly testified that on April 7, 1953 he had been working for Foster-Wheeler for about a year; that he was not employed by Shell Oil in any way and had never been employed by Shell; that a Foster-Wheeler carpenter made the scaffold from which he fell; that he was not a Shell carpenter; that Everett Turner was his foreman; that Thompson was an inspector of welds; that he did not say a word to Turner, who worked with him on the scaffold, that it was dangerous; that he talked to no one else from Shell about the scaffold; that Shell watchmen were enforcing the rules on all men working on the premises against drinking and smoking; that Liberty Mutual Insurance Company paid his doctor and hospital bills on behalf of Foster-Wheeler.

Mark Lambert, for the defendant, testified he was construction superintendent of Shell Oil Company's plant at Wood River, Illinois, which covers approximately three sections of land, about 1928 acres; that he had been with them for twenty-six years; that the work being done was on a guaranteed maximum contract of $6,000,000; that FosterWheeler gave Shell a fixed sum and any saving below that figure was to be divided 75% to Foster-Wheeler and 25% to Shell; that it was to Shell's interest to see that the costs were kept down; that checks were made on the badges of the workmen in connection with saving money on the project; that Shell's treasury department would check or observe the giving out of the weekly checks of Foster-Wheeler so that there would not be any collusion or featherbedding.

He further testified that Foster-Wheeler prepared the specifications for this unit, which were submitted to and accepted by Shell; that he does not recall any changes in the specifications; that Shell did not do any of the construction work on this unit; that Shell later took possession of the unit on notice to him from Foster-Wheeler, after which they brought their people in; that in 1953 he was construction superintendent and had general supervision so far as Shell's supervision over the erection of this new distilling unit; that he had one assistant on this unit; and that he went out on the area from time to time when this unit was being built.

He further testified that Shell had rules in effect concerning smoking and drinking and other things of that kind that applied to both Shell and contractors' employees; that these rules would be carried out by their protection department, consisting of about twelve men, of which one and two part time were over this unit doing duties comparable to police; that they had no actual construction work duties; that Mr. Hanson was project engineer and Mr. Thompson was welding inspector; that they had two full time and one part time inspector on this job; that Thompson's duties did not include inspecting the building of the scaffold by Foster-Wheeler or the erection thereof; that the purpose of inspecting the welds was to get a complete project that was tight and acceptable for operations and to see that there were no leaks; that Thompson's work required him to go in and about the new construction work where welds were being completed; that the policemen watched for smoking, drinking, fighting and any infractions of that sort; that if the inspector found something not in accord with the plans and specifications, if it was of a minor nature, he would take it up directly with Foster-Wheeler, but if it could not be corrected at the place he appealed to the resident engineer or his assistant, Mr. Hanson, or to "me." On cross-examination he testified that Shell policemen do not remove men for infractions of its rules; they report the men and infraction to the contractor employing them, who removes them at Shell's request; that Shell's men had the right under the contract to make inspection; and that he never made any attempt to inspect any scaffold on any of the jobs.

Clark Hanson, for the defendant, testified he had been working for Shell eight and one-half years and that he was working as project engineer at the time of the accident; that his principal business was to see that Foster-Wheeler built the unit according to plans and specifications; that he had nothing to do with the erection, construction or inspection of the scaffolds; that nobody at Shell had anything to do with the erection or construction of scaffolds or with their inspection after they were erected; that Mr. Thompson had nothing to do with the inspection of scaffolds or building them or anything of that nature.

Mr. Everett Turner, called by the defendant, testified he was welding foreman for Foster-Wheeler; that he was working with Kennerly when he fell on April 7, 1953; that he knew Mr. Thompson, inspector for Shell; that he was around the area; that he never heard Kennerly say to Thompson, "I don't like this scaffold; it is dangerous because the boards are not nailed down and there is no hand rail." On cross-examination he testified that Kennerly said to him before he fell that he didn't like the scaffold. On redirect he testified that any grievance that Kennerly had would be taken up with him or with his superior.

James W. Thompson, for the defendant, testified that on April 7, 1953 he was engineering inspector for Shell, inspecting welds, checking walls, thickness of pipe, etc.; that he does not recall Kennerly saying to him, "I don't like this. It is too dangerous because the boards are not nailed down and there is no hand rail or guard rail."; that he did not recall any conversation with Kennerly. On cross-examination he testified he conducted the welding tests to see that the workers were qualified workers to do the work they wanted them to do; that Shell does not inspect scaffolds.

The agreement entered into on January 25, 1951 by and between Foster-Wheeler Corporation, designated as "Contractor," and the Shell Oil Company, designated as "Purchaser," provided in paragraph "FIRST":

    "The CONTRACTOR will provide mechanical design
  and prepare all drawings and specifications, and
  will furnish all labor and materials, ship,
  unload, deliver to site, suitably store all
  materials as required, construct and erect the
  complete 60,000 Bbl./Day Crude Distillation Unit
  at PURCHASER'S Wood River, Illinois, Refinery, in
  accordance with the attached EXHIBIT `C',
  entitled `Description of 60,000 Bbl. Crude
  Distillation Unit, Wood River, Illinois Refinery,
  Shell Oil Co.', dated September 13, 1951 and the
  addendum thereto entitled EXHIBIT `D'."

According to Article G, paragraph 4 a, b and c, the insulation was subcontracted. The Chicago Bridge was a subcontractor identified as Foster-Wheeler Purchase Order RC-576-2, and there were other subcontractors responsible to Foster-Wheeler. From a reading of the entire contract between Shell Oil and Foster-Wheeler, Foster-Wheeler was an independent contractor who guaranteed the maximum selling price of the complete distillation unit would be $6,054,005, subject to increase or decrease according to the provisions set forth in the contract, which have no particular bearing upon the decision herein.

The Court gave two instructions at the request of the plaintiff — the first a damage instruction and the second an instruction quoting the statute as follows:

    "Any owner, contractor, subcontractor, foreman
  or other person having charge of the erection,
  construction, repairing, alteration, removal or
  painting of any building, bridge, viaduct or
  other structure within the provisions of this
  Act, shall comply with all the terms thereof."

At defendant's request the court gave nine instructions — the first to the effect that the complaint is no evidence; the second that a corporation is entitled to the same fair trial as an individual. The third was a sympathy and prejudice instruction. The fourth was an instruction on Section 60, Chapter 48, Illinois Revised Statutes. Instruction No. 5 in effect told the jury that the plaintiff must prove that the defendant knowingly and willfully failed to comply with the statute. Instruction No. 6 said "knowingly permitting" the erection and construction of a scaffold that was not done in a safe, suitable and proper manner is a material averment which plaintiff must prove. Instruction No. 7 told the jury that unless the plaintiff proved that the scaffold was unsafe he could not recover. No. 8 informed the jury that they must find that Shell willfully violated the provisions of the Act. Suggested Instruction No. 10 warned the jury against guessing, speculating and conjecturing on the amount of damages.

The court refused the instruction which went to the very heart of the case; namely, defendant's suggested instruction No. 11, which told the jury that before the plaintiff could recover he would have to prove that Shell had charge of the erection or construction of the refining unit in question before the terms of the statute would apply to it. Thus, we can see that "in charge of" was not in issue in Kennerly.

The jury found a general verdict in favor of the plaintiff and against the defendant and assessed plaintiff's damages at $77,000. ...


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