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06/02/89 Corrugated Metals, Inc., v. the Industrial Commission

June 2, 1989





540 N.E.2d 479, 184 Ill. App. 3d 549, 132 Ill. Dec. 739 1989.IL.833

Appeal from the Circuit Court of Cook County; the Hon. Alexander White, Judge, presiding.


JUSTICE McNAMARA delivered the opinion of the court. BARRY, P.J., and WOODWARD, McCULLOUGH, and LEWIS, JJ., concur.


Claimant, Christopher Clay, filed a claim under the Workers' Compensation Act (Act) (Ill. Rev. Stat. 1987, ch. 48, par. 138.1 et seq.) against respondents, Corrugated Metals, Inc. (Corrugated), and Manpower-Ready Men, Inc. (Ready-Men). The arbitrator and the Industrial Commission awarded claimant benefits and found that Ready-Men and Corrugated had entered into a risk-shifting agreement pursuant to which Ready-Men agreed to provide workers' compensation insurance for the employees which it loaned to Corrugated. The trial court reversed the decision of the Commission as to the risk-shifting agreement. Neither employer disputes the award to claimant. Corrugated appeals, contending that the trial court applied an incorrect standard of review; that the trial court erred in concluding that Ready-Men had not agreed to provide workers' compensation insurance for the loaned employee; that claimant's "work ticket" limiting the types of work in which he could engage was an invalid attempt to modify the contract; and that if the modification was valid, the trial court's Conclusion that claimant was operating a machine in violation of the contract was erroneous.

This appeal arises from the following facts. In June or July 1986, Thomas Schmitz, the midwest operations manager of Corrugated, contacted Stanley Estwin, the office manager of the Ready-Men office located in Chicago. Corrugated is in the business of processing sheet metal, and Ready-Men is in the business of providing temporary labor to employers in various types of business. Schmitz inquired about obtaining temporary help for Corrugated. Estwin quoted a fee of $5 per hour per temporary worker. Schmitz testified that during the initial conversation, he asked Estwin about insurance. Estwin replied that the $5-per-hour fee covered everything. Specifically, Estwin stated:

"That covers everything. Covers F.I.C.A. You don't have any records, payroll records, and it also covers workmen's compensation."

Estwin did not indicate that there were any limitations on the workers' compensation insurance. Schmitz stated that he did not ask for a written agreement regarding the insurance because it did not come to his mind. Subsequently, Corrugated accepted the services of Ready-Men.

On February 16, 1987, Ready-Men sent claimant to Corrugated for work. Claimant reported to work at 7:30 a.m. He presented a Ready-Men work ticket to Corrugated and proceeded to work. The work ticket is a preprinted form which is used to direct the laborer to his daily assignment. The borrowing employer also uses it to certify the number of hours worked. The ticket contains the following language:

"We are introducing herewith our READY-MEN INC., personnel. At the completion of the assignment would you kindly verify the hours of work performed by each individual per day and sign this certificate that the above is correct and the work has been performed in a satisfactory manner. READY-MEN, INC. employees are not to operate machinery, automotive, truck equipment or mechanical devices unless agreed to in advance."

Claimant was assigned to work at a metal-bending machine. He worked with Dan Murphy, a machine operator employed by Corrugated, and another Ready-Men temporary worker. He was assigned to help feed long sheets of metal through a machine. He also was assigned to help clean the machine. Cleaning the machine involved the use of banding equipment to scrape debris from the machine rollers while the machine was running. During the cleaning process, claimant's right-hand glove became caught in the roller and his hand was pulled into and crushed by the machine's rollers. Murphy stopped the machine and ran the machine back to remove claimant's hand. As a result of the accident, claimant sustained severe injuries and eventually a portion of his right hand was amputated.

Schmitz testified that after the accident, he contacted the Ready-Men office. Although he did not receive any specific information regarding workers' compensation coverage, he was informed by an employee at Ready-Men that they usually would handle that type of thing. Schmitz then spoke with Estwin and informed him that he would send the information regarding what had happened. Estwin replied that he would forward the information to the main office.

Schmitz also testified that in December 1986, another Ready-Men employee had been injured while working at Corrugated. That employee was stacking equipment on a roll-former machine when he sustained an injury. Schmitz stated that Corrugated did not receive any billing for the medical treatment which the employee received, nor did it ...

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