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ERNST v. PARKSHORE CLUB APTS. L.P.

August 23, 1994

CHRISTINE E. ERNST, Plaintiff,
v.
PARKSHORE CLUB APARTMENTS LIMITED PARTNERSHIP, a Michigan partnership; WACKER/RANDOLPH CORPORATION, 1 a Michigan corporation; AMURCON DEVELOPMENT CORPORATION, a Michigan corporation; OMINIBUS/HARBOR REALTY GROUP, INC., an Illinois corporation; and GOLUB & Co.,2 an Illinois corporation, Defendants.


Zagel


The opinion of the court was delivered by: JAMES B. ZAGEL

The ParkShore is a luxury high-rise apartment building located in Chicago, Illinois. Plaintiff Christine Ernst, a citizen of the state of Florida, signed a one-year lease agreement for a furnished, one-bedroom unit in The ParkShore on June 20, 1991. During the morning of February 5, 1992, Ernst Zarate, a maintenance employee at The Park Shore, unlocked Ernst's unit with a passkey and entered Ernst's apartment. Ernst was showering when Zarate surprised her, parting the shower curtain and slashing at her with a six-inch diver's knife. Ernst struggled with Zarate, and he cut her knee. Zarate then fled from the apartment. Zarate was arrested that day, and on January 8, 1993, he was convicted of home invasion, armed violence and aggravated battery.

 Parkshore Club Apartments Limited Partnership was the beneficiary of the Illinois land trust that owned The ParkShore. Amurcon Development Corporation was the real estate developer of The ParkShore. Parkshore Club contracted with Amurcon Development Corporation of Chicago for the management of The ParkShore on June 1, 1991. Amurcon and Amurcon of Chicago are two separate corporations. Amurcon of Chicago subsequently contracted with Omnibus/Harbor Realty for the co-management of The ParkShore. Omnibus employed Tracy Braun, the property manager of The ParkShore, and Joe Cacic, the chief engineer of The ParkShore. Braun, acting on behalf of Omnibus, hired Ramon Zarate as a part-time maintenance person at The ParkShore on July 18, 1991, after Cacic recommended him. Prior to their employment with Omnibus, Braun, Cacic and Zarate were employed at Presidential Towers. Zarate was soon promoted to a full-time maintenance position in October 1991.

 The defendants now move for summary judgment on liability for negligence.

 I. STANDARD OF REVIEW

 Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). No genuine issue of material fact exists if no reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). Summary judgment also must be entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden at trial." Tatalovich v. City of Superior, 904 F.2d 1135, 1139 (7th Cir. 1990) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). But the court must draw all reasonable inferences in the light most favorable to the non-moving party. Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir. 1991).

 II. NEGLIGENT HIRING/SUPERVISION

 To recover under any negligence theory, a plaintiff must establish that: (1) the defendants owed a duty of care to the plaintiff; (2) the defendants breached that duty; and (3) the breach proximate caused the plaintiff's alleged injury. Cunis v. Brennan, 56 Ill. 2d 372, 308 N.E.2d 617 (Ill. 1974). Whether defendants owed a duty of care is a question of law to be decided by the court. Mieher v. Brown, 54 Ill. 2d 539, 301 N.E.2d 307, 308 (Ill. 1973).

 Defendants assert that neither Parkshore nor Amurcon owed any duty of care to Ernst. Although neither Parkshore nor Amurcon had any direct relationship with Ernst so that the law would impose a duty of care, the plaintiff here attempts to hold Parkshore Club and Amurcon vicariously liable for the negligence of Amurcon of Chicago and Omnibus in the management of The ParkShore. Therefore, the question with respect to Parkshore Club and Amurcon is whether vicarious liability lies under the facts of this case.

 Illinois law does not hold employers liable for the negligence of independent contractors except where the employer orders or directs the acts which cause the alleged harm. Spivey v. Brown, 150 Ill. App. 3d 139, 502 N.E.2d 23, 25, 103 Ill. Dec. 876 (Ill. App. Ct. 1986); Milz v. M. J. Meadows, Inc., 234 Ill. App. 3d 281, 599 N.E.2d 1290, 1295, 175 Ill. Dec. 276 (Ill. App. Ct. 1992). The undisputed facts indicate that Parkshore Club contracted with Amurcon of Chicago for the management of the building and that the management agreement explicitly designates Amurcon of Chicago as an independent contractor. Amurcon then contracted with Omnibus for co-management of the building. "If the parties to the relationship are bound by a contract which by its terms clearly defines that relationship as that of employer/independent contractor and the parties abide by that contract, then the contract may be conclusive of their relationship." Manahan v. Daily News-Tribune, 50 Ill. App. 3d 9, 365 N.E.2d 1045, 1051, 8 Ill. Dec. 659 (Ill. App. Ct. 1977). Amurcon of Chicago abided by the contract, conducting itself as an independent contractor. Significantly, Amurcon of Chicago maintained the right to control the details, as evidenced by their exclusive control over the hiring and firing and employees. That is to say, Amurcon of Chicago was free to achieve the end of managing the building without its methods being controlled by its "employer." Consequently, neither Parkshore nor Amurcon can be held liable for the negligence of its independent contractors, Amurcon of Chicago and Omnibus.

 Nevertheless, plaintiff seeks to hold Amurcon liable directly for its own negligence in its management of The Parkshore. Amurcon was the real estate developer of The ParkShore and, prior to July 10, 1992, did not manage the building; Amurcon of Chicago co-managed the building with Omnibus. The only evidence plaintiff adduces that suggests Amurcon managed the building is a Chicago Tribune advertisement that identifies "Amurcon Development Corp." as the manager of the building with Omnibus. This is not enough to create a genuine issue of material fact. Mitchell Meisner's affidavit and the remainder of the record clarifies that the advertisement referred to Amurcon of Chicago and that Amurcon never attempted to hire or supervise any employees for the management, nor performed any of the duties of managing the premises prior to July 10, 1992. Given these undisputed facts, no reasonable jury could find that Amurcon managed the building, much less hold Amurcon liable for its negligence in management.

 Finally, although the parties refrain from using terms such as "piercing the corporate veil," it is clear from plaintiff's arguments that she seeks to hold Amurcon liable as a sister corporation of Amurcon of Chicago. Courts are generally reluctant to pierce the corporate veil. Pederson v. Paragon Pool Enters., 214 Ill. App. 3d 815, 574 N.E.2d 165, 167, 158 Ill. Dec. 371 (Ill. App. Ct. 1991). "A party seeking to have a corporate identity disregarded must come forward with a substantial showing that one corporation is really a dummy or sham for another." Id. (affirming summary judgment where plaintiff had not come forward with any evidence that the two corporations mixed corporate assets or that one was a sham for the benefit of the other). The plaintiff here has not come forward with any evidence, much less a substantial showing, that Amurcon of Chicago is a sham corporation set up for the benefit of Amurcon. Therefore, there is no basis for ignoring the separate corporate identity of Amurcon of Chicago.

 The question then remains whether Amurcon of Chicago and Omnibus can be held liable for negligence in the management of The ParkShore. In Illinois, employers are directly liable for negligent hiring and retention and, thus, have a duty to refrain from hiring or retaining an employee who is a threat to third persons to whom the employee is exposed. Bates v. Doria, 150 Ill. App. 3d 1025, 502 N.E.2d 454, 458, 104 Ill. Dec. 191 (Ill. App. Ct. 1986). Ernst claims Amurcon of Chicago and Omnibus breached that duty when they failed to investigate ...


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