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Mier v. Staley

MAY 8, 1975.





Plaintiff is appealing from the dismissal of certain counts of an amended complaint which alleged causes of action based on negligence by the defendants.

The complaint alleged that Ms. Mier was injured at the A.E. Staley Manufacturing Company when she fell off a manlift in the factory. The factory workers, members of the Allied Industrial Union, were on strike at the time of the injury. The directors and officers of the corporation, in response to this situation, decided to use office personnel to continue work at the factory. Ms. Mier had been employed as a clerk at Staley Manufacturing for 29 years.

In two counts Ms. Mier alleges that the directors and officers, by their official action, were negligent in directing office personnel to work in the factory knowing that the machinery there was dangerous to unexperienced persons. In two more counts she alleges that this action by the directors and officers was wilful and wanton negligence.

In separate counts she also alleges that Lumbermans, the general liability insurer of Staley Manufacturing, and Self-Insurers Service, the safety service organization of Staley, negligently performed safety inspections and thereby caused her injury.

She also alleges a products liability claim against the manufacturer of the manlift. This count was not dismissed and is not before us on appeal.

The counts against the directors, officers, insurer, and safety service organization were dismissed by the trial court on the ground that section 5(a) of the Workmen's Compensation Act (Ill. Rev. Stat. 1969, ch. 48, § 138.5(a)) barred a common-law negligence action against these parties. The trial court also found there was no just reason for delay of enforcement or appeal.

On appeal the plaintiff raises these issues: (1) Whether directors and officers are within the categories of persons granted immunity from suit for work-related injuries by the Workmen's Compensation Act, (2) If they are granted immunity, is the statute constitutional, (3) Whether the statute can constitutionally grant immunity to a safety-service organization retained by the employer, (4) Whether the statute can constitutionally grant immunity to the insurer of the employer, (5) Whether it was proper for the trial court to stay plaintiff's discovery.

• 1 Plaintiff's complaint alleges a work-related injury. Defendants' answers claim that the action is barred because of provisions of the Workmen's Compensation Act. That act does not bar every action arising from employment, only action against certain parties.

"(a) No common law or statutory right to recover damages from the employer, his insurer, his broker, any service organization retained by the employer, his insurer or his broker to provide safety service, advice of recommendations for the employer or the agents or employees of any of them 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, is available to any employee who is covered by the provisions of this Act, * * *." Ill. Rev. Stat. 1969, ch. 48, § 138.5(a).

A right of action is retained by the employee against other persons however. Ill. Rev. Stat. 1969, ch. 48, § 138.5(b).

The arguments in reference to the directors and officers of A.E. Staley Manufacturing Company will be considered first.

The statute bars actions against the employer, fellow employees and agents of the employer for injuries arising out of employment. Plaintiff first argues that directors and officers of the corporation do not fall within these categories. The issue, as it appears in the context of this case, is a question of first impression in this State.

Employer is defined in the Act as "Every person, firm, public or private corporation * * * who has any person in service or under any contract for hire, express or implied, oral or written * * *." Ill. Rev. Stat. 1969, ch. 48, § 138.1(a) 2.

Employee is defined as "Every person in the service of another under any contract of hire, express or implied, oral or written * * *." (Ill. Rev. Stat. 1969, ch. 48, § 138.1(b)2.)

Agent of the employer is not defined by the Act.

Plaintiff argues that the directors are not her employers because her employer is the corporate entity, A.E. Staley Manufacturing Company. Further, when acting in an official capacity, they are not co-employees because they have none of the characteristics of employees. Agents, it is urged, is synonymous with employees. A similar argument is presented as to the officers.

• 2 Illinois adheres to the "dual capacity" doctrine in determining whether a person is an employee who may receive Workmen's Compensation. (B.W. Sales Co. v. Industrial Com., 35 Ill.2d 418, 220 N.E.2d 405.) Under that doctrine a person who is an officer or director is not precluded from obtaining Workmen's Compensation benefits if he was acting in his capacity as an employee and not in his official capacity as an officer or director.

The obverse side of these decisions would be that such a person, in his official capacity, is the employer and therefore not entitled to benefits. Nothing in the Act would indicate that the definition of employer would differ depending on whether it was a question of obtaining benefits or obtaining immunity.

In Ryan v. State Auto Parts Corp., 255 Ill. App. 422, the court denied compensation benefits to an executive manager. The court states, "The Workmen's Compensation Act contemplates the relation of master or employer, on the one hand, and servant or employee on the other. One who is an officer of a corporation, while acting as such, represents the corporation and his acts are the acts of the corporation. He makes the contracts of employment of the corporation with the employees, and it would be an obvious misnomer to call him an employee while so acting for the corporation. * * *

`It is therefore generally held that executive officers of private corporations and members of partnerships are not entitled to compensation for injuries sustained in connection with the industry carried on by them, because a person cannot be at one and the same time employer and employee.'" Ryan v. Auto Parts Corp., 255 Ill. App. 422, 424.

This reasoning applies with equal force to directors of the corporation.

Plaintiff argues that only the corporate entity is the employer and its immunity does not extend to its human instrumentalities. She argues that the corporate veil should not be pierced when the effect would be to extend immunity.

Even were this correct, it does not necessarily lead to the conclusion that officers and directors are not immune.

The statute also grants immunity to "agents" of the employer. No case has been found which interprets this word as it is used in this Act.

In other contexts, officers and directors are referred to as agents of the corporation. See 13 I.L.P. Corporations § 414 (1955), where it states:

"A corporation can act only through its authorized officers and agents * * * and in its dealings with third persons it is represented by its board of directors or by officers or agents to ...

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