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07/20/95 PHYLLIS J. BEALS v. SUPERIOR WELDING

July 20, 1995

PHYLLIS J. BEALS, ADMINISTRATOR OF THE ESTATE OF JAMES F. BEALS, DECEASED, PLAINTIFF-APPELLANT,
v.
SUPERIOR WELDING COMPANY, HALL & SCHWARTZ CONSULTING ENGINEERS, N/K/A HALL, SCHWARTZ & AHLENIUS, INDUSTRIAL RISK INSURERS, FACTORY MUTUAL ENGINEERING CORPORATION, LUMBERMEN'S MUTUAL CASUALTY COMPANY, AND THE DOW CHEMICAL COMPANY, DEFENDANTS-APPELLEES. AND BURDICK PLUMBING AND HEATING COMPANY, EXPERT TECHNICAL SERVICES, INC., AND WVP CORPORATION, DEFENDANTS.



Appeal from Circuit Court of Macon County. No. 90L214. Honorable John K. Greanias, Judge Presiding.

Petition for Leave to Appeal Denied December 6, 1995.

Honorable John T. McCULLOUGH, J., Honorable James A. Knecht, P.j., Honorable Frederick S. Green, J., Concurring

The opinion of the court was delivered by: Mccullough

JUSTICE MCCULLOUGH delivered the opinion of the court:

Plaintiff filed a complaint generally sounding in negligence against Superior Welding Company (Superior), with amended counts against various defendants, for the death of plaintiff's decedent during a work-related accident at A.E. Staley Manufacturing Company (Staley). All defendants, except Superior, obtained dismissal by summary judgment; Superior was dismissed pursuant to sections 2-619(a)(9) and (a)(5) of the Code of Civil Procedure (Code) (735 ILCS 5/2-619(a)(9), (a)(5) (West 1992)), and a Rule 304(a) finding was entered (Official Reports Advance Sheet No. 26 (Dec. 12, 1993), R. 304(a), eff. Feb. 1, 1994). Plaintiff appeals arguing the trial court erred in dismissing Superior and entering summary judgment for the other defendants. We affirm in part, reverse in part, and remand.

On May 15, 1990, plaintiff's decedent and another employee were working inside industrial reactor tank No. 1 at Staley's facilities in Decatur when toxic liquid propylene oxide entered the tank through pipes connecting it to reactor tank No. 2, which was then being evacuated. The other employee escaped but decedent was fatally overcome by the fumes. We will discuss the facts only as necessary for resolution of the issues respecting each defendant.

I. SUPERIOR WELDING COMPANY

Superior initially contends that dismissal may be supported by Hunt v. Blasius (1978), 74 Ill. 2d 203, 384 N.E.2d 368, 23 Ill. Dec. 574, based on its allegation that it did not "design" the reactor tank in question. The trial court found there was not sufficient evidentiary material before it to make a ruling based on Hunt. Since Superior has not seen fit to present more than a bare contention, without analysis or factual support showing how Hunt supports its motion to dismiss, the issue is waived for purposes of review. See In re Marriage of Wade (1987), 158 Ill. App. 3d 255, 270, 511 N.E.2d 156, 167, 110 Ill. Dec. 321.

Plaintiff alleges the trial court erred in granting Superior's section 2-619 motion to dismiss because disputed questions of fact exist regarding (1) Superior's corporate existence at the time of manufacture, and (2) whether the repose provisions of section 13-214(b) of the Code (735 ILCS 5/13-214(b) (West 1992)) bar the cause of action.

The trial court allowed Superior's motion to dismiss pursuant to section 2-619(9) of the Code finding that the evidentiary materials relied on by Superior show it "was not a legally existing entity at the time of the manufacture or design or installation of the tank." A "Superior Welding Company" existed in Decatur in 1960 at the time reactor tank No. 1 was manufactured and installed, and a "Superior Welding Company" existed in Decatur at the time of suit, but Superior alleges it is not the same entity.

Part of the evidentiary materials submitted by Superior in support of its motion to dismiss was the affidavit of Superior's president, Bruce Hampton, who identified reactor tank No. 1 as having been manufactured by "Superior Welding." He stated:

"I am aware that serial number 6061 indicates that the tank was manufactured in the year 1960, and was the sixty-first job the Company did during the calendar year 1960. Additionally, I have examined drawings for that particular tank, and I know from the serial number and from the drawings that this tank was produced by Superior Welding during the calendar year 1960, and was also installed that year at the A.E. Staley Manufacturing Company."

Also included was the affidavit of Superior's vice president and general manager, Ken Stolley, who asserted he "has been employed at the facilities of Superior Welding Company in Decatur, Illinois, for approximately 18 years," that he reviewed engineering drawings and specification sheets normally and customarily kept by Superior as part of its business records, and that Superior did not "design" the reactor tank manufactured in 1960.

Superior also submitted its answers to interrogatories propounded by plaintiff and various incorporation and dissolution documents.

The evidence indicates that in 1946, an entity called "Superior Welding Company" was incorporated as an Illinois corporation, with its registered office in Decatur, Illinois, with one of its shareholders and president listed as Robert W. Kopetz. In January 1966, "Superior Welding Company" (Illinois Superior) amended its articles of incorporation to change its name to "Decatur Liquidating Co.," with its president listed as Robert W. Kopetz. According to Superior's answers to interrogatories, "Superior Welding Company" became a wholly owned subsidiary of an entity identified as Keystone Industries on December 27, 1965, and was incorporated in Delaware as "Superior Welding Company" (Delaware Superior). The Illinois corporation was dissolved in December 1966. Delaware Superior apparently continued manufacturing operations at the same locale as Illinois Superior based on Ken Stolley's affidavit stating that he worked for "Superior" in Decatur since 1973, and a letter written by R. W. Kopetz in January 1970 on the letterhead of "Superior Welding Company" in Decatur which was sent to Staley quoting the price for another reactor of the same type as manufactured in 1960. According to Superior's answers to interrogatories, which are far from clear, Delaware Superior dissolved in June 1981 and another company moved to Decatur from Warrensburg in July 1981, hired certain of Delaware Superior's employees, and changed its name to "Superior Welding Company." It is unclear whether this involved an acquisition of assets or merger. Thereafter, in January 1987, certain unidentified assets of this last "Superior Welding Company" were purchased by another corporation "and included in a company utilizing the name of Superior Tank, Inc.," which also changed its name to "Superior Welding Company," the entity that does business as the defendant Superior herein.

While no valid cause of action which accrues after dissolution may be brought against a dissolved corporation ( Blankenship v. Demmler Manufacturing Co. (1980), 89 Ill. App. 3d 569, 574, 411 N.E.2d 1153, 1156, 44 Ill. Dec. 787):

"it is sufficient in order to treat one corporation as the alter ego of another where there is such a unity of interest and ownership that the individuality of one corporation has ceased, and where the observance of the fiction of separate existence would under the circumstances sanction a fraud by promoting injustice." ( Edwards v. Chicago & Northwestern Ry. Co. (1967), 79 Ill. App. 2d 48, 52, 223 N.E.2d 163, 165.)

If upon hearing a section 2-619 motion, "a material and genuine disputed question of fact is raised the court *** shall so deny it if the action is one in which a party is entitled to a trial by jury." (735 ILCS 5/2-619(c) (West 1992); see Daiwa Bank, Limited v. La Salle National Trust, N.A. (1992), 229 Ill. App. 3d 366, 384, 593 N.E.2d 105, 116, 170 Ill. Dec. 563.) Given the apparent linkage between the Illinois and Delaware corporations, the gaps and inconsistencies in the evidence regarding the continuing existence of an entity bearing Superior's name, location, and admittedly at least some of its assets, and the admission by Superior's president that it manufactured the reactor tank ...


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