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Fefferman v. Industrial Com.

OPINION FILED JANUARY 27, 1978.

ELAINE FEFFERMAN ET AL., APPELLEES,

v.

THE INDUSTRIAL COMMISSION ET AL. — (OTHA BUTTS, APPELLANT.)



Appeal from the Circuit Court of Cook County, the Hon. Arthur L. Dunne, Judge, presiding.

MR. JUSTICE CLARK DELIVERED THE OPINION OF THE COURT:

Rehearing denied March 30, 1978.

The Industrial Commission affirmed an arbitrator's award of workmen's compensation to the claimant, Otha Butts, for injuries sustained while employed in the dismantling of a building beneficially owned by the late Manuel Fefferman, his wife Etta, and daughter Elaine. The circuit court of Cook County set aside the decision of the Commission, and Butts appealed under our Rule 302(a) (58 Ill.2d R. 302(a)).

The parties agree that the basic issue is whether the owners (Feffermans) of a building are liable to pay workmen's compensation to the injured employee (Butts) of an uninsured contractor (Charles Dixon Wrecking Co.) who had been hired by the owners to demolish the structure.

Manuel Fefferman was in the business of general merchandise, textiles, government surplus and hospital supplies. He, with his wife and daughter, was the beneficiary of a land trust; title was held by the Central National Bank. The real estate was improved by a building, which was used for the storage of Fefferman's mercantile goods, and was located at 1222-26 S. Michigan in Chicago. Fefferman had not elected to come under the Workmen's Compensation Act (hereafter Act) (Ill. Rev. Stat. 1973, ch. 48, par. 138.1 et seq.).

The Dixon Wrecking Company was hired by Fefferman to demolish the building. It carried no workmen's compensation insurance. Butts was in the employ of the Dixon Company on January 18, 1973, when he was injured as a result of falling three stories while demolishing the structure. Butts filed a claim with the Industrial Commission, which afterwards affirmed the arbitrator's award. The circuit court set aside the award as against Fefferman but confirmed as against the Dixon Company.

The question can be narrowed to whether Fefferman was engaged in the business of maintaining or demolishing a structure as enumerated in section 3 of the Workmen's Compensation Act (automatic application of the Act when an employer elects not to become subject to the Act; Ill. Rev. Stat. 1973, ch. 48, par. 138.3). If so, Fefferman is liable under section 1 (Ill. Rev. Stat. 1973, ch. 48, par. 138.1). Section 1 in part reads:

"This Act may be cited as the Workmen's Compensation Act.

(a) The term `employer' as used in this Act means:

3. Any one engaging in any business or enterprise referred to in subsections 1 and 2 of Section 3 of this Act who undertakes to do any work enumerated therein, is liable to pay compensation to his own immediate employees in accordance with the provisions of this Act, and in addition thereto if he directly or indirectly engages any contractor whether principal or sub-contractor to do any such work, he is liable to pay compensation to the employees of any such contractor or sub-contractor unless such contractor or sub-contractor has insured, in any company or association authorized under the laws of this State to insure the liability to pay compensation under this Act, or guaranteed his liability to pay such compensation." (Emphasis added.)

Section 3 in part states:

"The provisions of this Act hereinafter following shall apply automatically and without election to the State, county, city, town, township, incorporated village or school district, body politic or municipal corporation, and to all employers and all their employees, engaged in any department of the following enterprises or businesses which are declared to be extra hazardous, namely:

1. The erection, maintaining, removing, remodeling, altering or ...


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