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Century Display Mfg. v. D.r. Wager Constr.

OPINION FILED FEBRUARY 25, 1977.

CENTURY DISPLAY MANUFACTURING CORP. ET AL., PLAINTIFFS,

v.

D.R. WAGER CONSTRUCTION CO., INC., ET AL., DEFENDANTS. — (UNITED STATES STEEL CORPORATION, DEFENDANT-APPELLEE.)



APPEAL from the Circuit Court of Cook County; the Hon. MEL R. JIGANTI, Judge, presiding.

MR. PRESIDING JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT:

This action was brought to recover damages for fire losses to plaintiffs' property allegedly caused by the negligence and wilful and wanton misconduct of defendant United States Steel Corporation (USSC). Plaintiffs appeal from the grant of summary judgment to defendant.

Plaintiffs' amended complaint contained three counts. Count I was directed against D.R. Wager Construction Co. (Wager), a contractor not a party to this appeal, who was retained by plaintiffs to do remodeling work on the building in question. Count II alleged that USSC sold the subject building to plaintiffs, together with its fixtures — which included metal pipes, tanks and containers; that USSC knew or should have known highly flammable liquids were contained therein; that USSC breached a duty to warn plaintiffs of the presence and dangerous nature of the liquids; that the liquids ignited, and the building was damaged by fire as a direct and proximate result of the failure of USSC to warn plaintiffs of the liquids and/or its failure to remove them. Count III realleged the allegations of Count II as wilful and wanton misconduct on the part of USSC.

USSC's first amended answer denied plaintiffs' allegations, except that it admitted the sale of the premises and it asserted that a clause in the contract of sale released it from all claims arising because of the condition of the premises. In addition, it alleged that plaintiffs had a reasonable opportunity between the date it took possession (May 14, 1970) and the occurrence of the fire (August 5, 1970) to discover the existence of the liquids and to take appropriate precautions. Plaintiffs' reply denied those latter allegations.

In response to an interrogatory propounded by Wager, plaintiffs stated that they did not know of the presence of the liquid prior to August 4, 1970; that they did not warn Wager regarding the liquid; and that they did not know how much liquid had been on the premises. The reply of plaintiff Century Display Manufacturing Corporation (Century) to USSC's interrogatory stated that an agreement to purchase the premises from USSC was entered on April 28, 1970, and Century went into possession on May 14, 1970; that between September 1, 1969, and April 28, 1970, several of its executives on various occasions inspected the premises with a view toward determining their usefulness; that prior to April 28, 1970, it believed USSC used the premises for manufacturing; and that between April 28, 1970, and August 5, 1970, it used a portion of the premises for storage while repairing and remodeling were underway. In response to USSC's interrogatory, plaintiff Reliance Insurance Company (Reliance) stated that an inspection had been made by or on its behalf prior to the issuance of insurance on the premises; however, any records or reports which may have been made had been lost, misplaced, or destroyed.

In response to plaintiffs' interrogatories, USSC answered that prior to January 1, 1967, the premises known as USSC Chemical Division had been used for the manufacture of a variety of organic coatings products, consisting primarily of pigment-filled asphalt based solutions and various nonasphaltic coatings; that during 1967 and part of 1968 said products had been stored therein, and no use of the premises by USSC was made thereafter; that the last known use of the six gauging tanks located in the subject building had been for the measuring of asphalt cut-back or solvents; that the contents of these tanks while they were in use had included asphalt cut-back, mineral spirits, kerosene, and naphtha, which are basically aliphatic solvents; that similar products had been in the mixers and blending tanks; that no records are available concerning substances which may have been left in containers, tanks, pipes, equipment or component parts after the termination of operations on January 1, 1967; that a USSC employee, J. Louis Gurecka, had informed Century executives, Hugh Best and J.T. Weiss, on July 23, 1969, that the previous use of the premises was to mix asphaltic materials; that this conversation was had in connection with an inspection of the premises during which spillage of materials was noted and all persons looked into some of the tanks and noted that materials appeared to be in the tanks; that all liquids had been removed pursuant to its order, but that its records did not reflect the dates on which this was done; and that it had no knowledge to indicate that any of its employees had notified plaintiffs concerning the existence of asphalt cut-back, mineral spirits, kerosene, or naphtha in any of the pipes, tanks, equipment, or containers in the subject building.

USSC moved for summary judgment on the grounds that prior to the fire it had conveyed the premises to plaintiffs on an "as is" basis; that plaintiffs had exclusive possession and control of the premises from May 14, 1970, to August 5, 1970; that plaintiffs had released USSC from all claims arising from the condition of the premises; and that plaintiffs had the right to inspect the premises and, in fact, did inspect the buildings and their contents on numerous occasions. In support of its motion, USSC attached a letter from J.T. Weiss, president of Century, offering to purchase the buildings and their contents "as is" for a reduced cash price, the contract of sale, the deed, and affidavits from USSC employees stating that manufacturing had ceased in 1967 and that Century executives had visually inspected the entire premises, including the buildings and fixtures located therein.

Plaintiffs, in answer to the motion for summary judgment, asserted that USSC had a duty to warn them of the existence of a dangerous condition regarding which they had no knowledge; that the use of an "as is" provision does not exculpate a vendor from the result of his own negligence; that the release provision in the contract of sale was vague, ambiguous, and indefinite and therefore unenforceable; and that factual issues existed regarding the purchase of the property, the inspection of the property, and the lack of disclosure of the presence of flammable liquids. Attached to the answer were the affidavits of Hugh Best and J.T. Weiss, Century executives, which stated they neither received notice nor possessed independent knowledge of the existence of dangerous and explosive flammable liquids in the pipes located in the damaged building.

In a discovery deposition, Joseph T. Weiss, president of Century, testified that he took no scientific courses in college and was not associated with any organization which made, sold, or distributed asphaltic products and, in fact, had no idea as to the process or chemicals involved in making asphalt. Prior to closing, he had inspected the premises three to four times and a half dozen additional times between the dates of closing and the occurrence of the fire. During the course of these inspections, he visited all of the buildings and, in so doing, noticed tanks, mixers and many other things which were foreign to him, but he took no steps to determine if any substances were contained within the pipes and tanks. He stated that no representation had been made to him or in his presence as to whether or not anything was contained in the pipes and tanks, and that he never discussed with any USSC employees or representatives the proposed demolition of portions of the premises. Weiss knew that USSC had used chemicals on the premises, but this knowledge did not bother him since his only interest was in clearing out the buildings to create usable space. The sale was consummated on an "as is" basis, meaning that Century took the premises as it then existed — with all equipment, all materials, all chattels; i.e., everything there and in the condition it was in. Shortly after the closing, he assigned an employee to determine whether any of the chemical equipment could be sold to equipment dealers or users and also contracted with Wager to demolish portions of the subject building. He assumed that Wager had inspected the premises prior to tendering a proposal, but his negotiations with Wager had never included a discussion of what, if anything, was in the pipes or tanks, as his only concern with Wager was the cost of clearing the chemical machinery. Weiss also stated that he had no knowledge of the presence of explosive chemicals and that it was the business of another corporation which he served as president to buy and liquidate companies.

In his discovery deposition, Hugh W. Best, vice president of Division Lead, a division of Century, testified that he had an accounting background but was never associated with a company which made asphaltic products. He said that he had also inspected the premises on three occasions prior to the closing and two to three times per week thereafter. He had been told that the premises had been used in the manufacture of asphalt. In fact, sometime between the dates of closing and the occurrence of the fire, he had been informed that "asphalt or something" had been pumped through the overhead material supply pipes. However, he was never informed one way or the other as to the presence of flammable liquids and never discussed with anyone in or outside of this company what may have been in the pipes. He stated that he had no reason to tell USSC that Century was going to engage in the demolition of portions of the premises. After the date of closing, an employee of Century had inspected the machinery and equipment to determine its salability and, prior to the fire, had sold some of it. Best had been the Century representative who had negotiated with Wager concerning the demolition and remodeling of the premises but could not remember whether, in the course of an inspection tour of the premises with Wager, the pipes and/or their contents had been discussed. In addition, he said that he did not know what had caused the fire.

Defendant's motion for summary judgment was granted. Plaintiffs appeal this judgment.

OPINION

• 1 Plaintiffs first contend that genuine questions of fact exist concerning defendant's negligent conduct and that the trial court erred in finding to the contrary. Summary judgment proceedings ascertain whether a genuine issue as to any material fact exists and, should such an issue be uncovered, the motion should not be granted. (Powell v. R.J. Anderson, Inc. (1970), 124 Ill. App.2d 1, 260 N.E.2d 103.) The propriety of granting the motion is determined from a study of the pleadings, answers to interrogatories, depositions, and affidavits which are on filed. (Ill. Rev. Stat. 1975, ch. 110, par. 57.) Affidavits in support of a motion for summary judgment should be strictly construed and must leave no question as to the movant's right to judgment; whereas, the opposing party's counteraffidavits should receive a liberal construction. (American National Bank & Trust Co. v. Lembessis (1969), 116 Ill. App.2d 5, 10, 253 N.E.2d 126, 128.) The purpose of the proceeding is not to try an issue of fact and, although inferences may be drawn from undisputed facts, the motion should be granted only where reasonable men could not draw divergent inferences from those undisputed facts. Doran v. Pullman Standard Car Manufacturing Co., 45 Ill. App.3d 981, 360 N.E.2d 440; McVey v. Discher (1970), 122 Ill. App.2d 408, 259 N.E.2d 300.

In the case at bar, it cannot be disputed that defendant made no representations and apparently plaintiffs did not know whether or not any substances remained in the pipes or tanks. Clearly, during the extensive inspections and negotiations undertaken by the parties, plaintiffs did not ask for nor did defendant volunteer any information regarding the contents of the pipes and tanks. Thus, the questions in dispute here are (1) whether plaintiffs, in view of their offer to purchase the premises "as is," their knowledge of the former use of the premises, their numerous inspection tours of the structures — including their fixtures and contents, their observation of spillages from the tanks, the plans to demolish portions of the structures, inspection and sale of some of the chemical equipment, and their 2 1/2-month possession and control of the premises, should have ...


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