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Boatman v. Jordan

OCTOBER 23, 1968.




Appeal from the Circuit Court of Cook County; the Hon. HUGO M. FRIEND, Judge, presiding. Reversed and remanded. MR. PRESIDING JUSTICE MCCORMICK DELIVERED THE OPINION OF THE COURT.

Robert Boatman, plaintiff, filed a suit to recover damages for personal injuries allegedly sustained in the fall of an elevator in a commercial building. On September 13, 1962, plaintiff filed a second amended complaint, the one which is germane to the instant appeal. In that complaint the plaintiff joined as defendants Alvin Jordan, the owner of the building; one Elmer C. Warner, the previous owner of the building; Sherwin-Williams Co., and Lowe Brothers Co., who were either tenants or subtenants on or prior to January 7, 1961, the date of the accident; and two elevator maintenance companies. The complaint alleged that on or prior to that date, each, or some of the defendants, were guilty of negligent acts or negligent omissions which proximately caused physical injury to the plaintiff. All of the defendants filed answers. Jordan filed a third-party complaint against Warner, the elevator maintenance companies, and Forest Paint Company.

On November 27, 1964, defendant Jordan filed a motion with supporting affidavits and exhibits, seeking summary judgment against Boatman on the sole ground that plaintiff's claim was barred by the Workmen's Compensation Act, as set forth in detail later in this opinion. Boatman filed a reply to the motion and produced depositions on oral examination of Jordan and co-defendant Warner, the previous owner. The trial court sustained Jordan's motion for summary judgment in his favor, and in that order, in accordance with section 50(2) found that there was no just reason for delay in enforcement or appeal. From that order of the trial court this appeal is taken.

The plaintiff, Robert Boatman, was employed as a laborer by Forest Paint Co., in Forest Park, Illinois. He had been working in that capacity for six months prior to January 7, 1961. On that day, at about 9:00 a.m., the plaintiff was working with the foreman, Daniel Shaw, at 7236-7250 Franklin Street, Franklin Park, Illinois. They were engaged in moving the place of business of Forest Paint Company. At the request and direction of defendant Jordan, they were moving and storing drums of resin. With Jordan present, they rolled some drums onto the freight elevator of the building; took the drums to the fourth floor, removed them from the elevator, and stored them in a place designated by Jordan. Jordan then left and told Boatman and Shaw to take the other load up to the fourth floor.

After rolling six or eight drums onto the elevator Shaw and Boatman went to the fourth floor. The elevator was operated by pulling on a rope to start it and pulling another rope to stop it. After stopping at the fourth floor they remembered that they had to pick up some boards on the third floor. Shaw pulled the rope and the elevator started downward; when they got to the third floor he pulled the rope to stop. The elevator seemed to stop for an instant, then fell to the bottom of the shaft. The accident was caused by the breaking of rusty cables of the elevator. Boatman suffered physical injuries and received workmen's compensation from Forest Paint Co., his employer.

The building in which the accident occurred had been sold by Warner and his wife; title to the property was taken in trust by Oak Park National Bank for the sole benefit of Alvin Jordan, who was president, director and principal stockholder of Forest Paint Company. In his deposition submitted on the hearing on the motion for summary judgment, Jordan stated that the building was purchased by him in his own name as the sole beneficial owner under the trust, and that the price was paid from his own bank account. The deed in trust was dated November 4, 1960, and the sale was consummated November 15, 1960.

In the early part of October, Jordan and Warner viewed the premises. In his deposition Jordan stated that Warner told him he had just had the elevator inspected; that up to November 1960 the elevator had been inspected and serviced by Trimon Elevator Company.

On December 22, 1960, Jordan, by written lease, demised the entire building to Forest Paint Co., "to be occupied solely for the purpose of a paint factory, warehouse, office and a paint store," the lease to become effective January 1, 1961, and to terminate on October 31, 1962. After the Christmas holidays in 1960, Forest Paint Co. started to move in. The lease contained a clause providing that the lessee would keep said premises, including all appurtenances, in good repair during the term of the lease, at lessee's expense.

In his amended answer to the amended complaint, Jordan, among other affirmative defenses, pleaded the bar of section 5(a) of the Workmen's Compensation Act (Ill Rev Stats 1961, c 48, § 138.5(a)), which provides:

"No common law or statutory right to recover damages from the employer or his employees for injury or death sustained by any employee while engaged in the line of his duty as such employee, other than the compensation herein provided, shall be available to any employee who is covered by the provisions of this Act, to any one wholly or partially dependent upon him, the legal representatives of his estate, or any one otherwise entitled to recover damages for such injury."

At the time of the occurrence Boatman was an employee of a corporation occupying the building in question as a tenant under a formal lease from Jordan, the defendant, who was also president and principal stockholder of the corporate employer-tenant. In this court the only issue briefed by either party is whether Boatman's action against Jordan is barred by section 5(a) of the Workmen's Compensation Act, since Jordan was either the employer of Boatman, or a fellow-employee, or both. Jordan contends for the affirmative of that proposition.

Boatman, on the other hand, contends here that Jordan was not sued in his capacity as president of Boatman's employer, Forest Paint Co., but solely in his individual capacity as a landlord with certain duties to persons using the elevator in the building owned by him. In any case, a president of a corporation under Illinois law is not ipso facto a co-employee; in the instant case, the owner-landlord an individual, and the tenant-employer a corporation, were separate and distinct entities, and section 5(a) of the Workmen's Compensation Act is not applicable.

Boatman argues that Jordan has admitted that the building was purchased with his own funds and that he personally received a rental of $900 per month from Forest Paint Co., the corporate-tenant. In the brief filed by Jordan in this court he stated:

"Plaintiff in asking this Court to overrule the motion judge essentially contends that defendant as president and principal stockholder of Forest Paint was not an employe of that company within the meaning of Section 5(a) of the Workmen's Compensation Act; that in any event plaintiff has brought this action against defendant as an individual, and as owner of the building, and not as president or agent of the company. Plaintiff also urges this Court not to pierce the `corporate veil,' but to treat defendant as one entity and Forest Paint as another. On these premises, plaintiff contends further that since defendant in the usual scheme of things purportedly would have an independent liability as owner of the building, supposing plaintiff able to prove his case under the issues of negligence alleged in his amended complaint, triable issues of fact on the question of defendant's liability were for the jury and improperly were taken from the jury by the motion judge in ruling favorably on defendant's motion for summary judgment."

It is the rule in Illinois that an individual making a lease with an entity purporting to be a corporation is estopped to deny the separate corporate existence of the lessee. West Side Auction House Co. v. Connecticut Mut. Life Ins. Co., 186 Ill. 156, 160, 57 N.E. 839. It has also been held that the doctrine of corporate entity is one of substance and validity and should ...

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