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03/14/97 THERESA RISCH v. PAUL J. KREZ COMPANY

March 14, 1997

THERESA RISCH, AS SPECIAL ADMINISTRATOR OF THE ESTATE OF RONALD RISCH, DECEASED, AND PATRICIA MAGUIRE, AS SPECIAL ADMINISTRATOR OF THE ESTATE OF JOHN MAGUIRE, DECEASED, PLAINTIFFS-APPELLANTS,
v.
PAUL J. KREZ COMPANY, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County. Nos. 93-L-12100, 94-L-01416. Honorable Dean M. Trafelet, Judge Presiding.

As Corrected March 26, 1997. Rehearing Denied April 15, 1997. Released for Publication April 24, 1997.

The Honorable Justice Theis delivered the opinion of the court. Hoffman and Cahill, JJ., concur.

The opinion of the court was delivered by: Theis

JUSTICE THEIS delivered the opinion of the court:

Plaintiffs appeal the trial court's order granting defendant's motion for summary judgment. Plaintiffs brought suit against the Paul J. Krez Company and others to recover damages for the wrongful deaths of their husbands. Plaintiffs alleged that their husbands' deaths were the result of exposure to asbestos products designed, processed, manufactured, sold, and distributed by Krez. Krez filed a motion for summary judgment, claiming that the construction-design management and supervision statute of repose (construction statute of repose) barred plaintiffs' action. 735 ILCS 5/13-214 (West 1992). The trial court granted the motion and plaintiffs appeal. We affirm.

Incident to their employment, Ronald Risch and John Maguire were each exposed to asbestos pipe-covering material during the 1960s and 1970s. In 1992, both men were diagnosed as having mesothelioma, a fatal cancer of the chest abdominal lining. In their depositions, Risch and Maguire testified that the Krez employees installed the Owens Corning Kaylo insulation at their jobsites. Risch and Maguire subsequently died from mesothelioma. Their estates brought wrongful death actions against Krez.

Plaintiffs each alleged that Krez designed, processed, manufactured, sold, and distributed asbestos insulation. The essence of the complaints is that Krez failed to warn and advise the product users of the dangers of working with and being exposed to asbestos-containing products. The complaints further charged that Krez failed to develop a safer alternative product, despite knowledge of the hazards.

In response, Krez denied that it was in the business of manufacturing, distributing, and selling asbestos-containing products. To the contrary, Krez claimed that, as an installer, Krez merely brought its materials to various worksites under the terms of labor and material subcontracts. Krez filed motions for summary judgment, arguing that plaintiffs' suits were barred by the construction statute of repose, which limits the ability to bring an action sounding in tort to 10 years after the alleged act or omission. 735 ILCS 5-13-214(b) (West 1992).

Plaintiffs challenged Krez's motions by arguing that they were not seeking redress for Krez's installation activities, but for Krez's role as a manufacturer, distributor, and seller. Plaintiffs claimed that Krez's installation activities were merely incidental to Krez's sale and transfer of the asbestos products. In support of their allegations, plaintiffs argued that Krez's failure to pay sales tax is evidence of their status as a seller, as no sales tax is incurred when wholesale goods are transferred to a purchaser with the intent to resell.

Furthermore, plaintiffs demonstrated that Krez paid the Illinois retailers occupational tax associated with the asbestos products. The Illinois retailers occupational tax is a tax on the occupation of making retail sales in the state. Plaintiffs acknowledged, however, that Krez was using "asbestos containing products manufactured by Johns Manville, Standard Insulation and Empire Ace." Plaintiffs did not introduce any evidence that Krez sold or distributed such products to subcontractors, or to purchasers independent of sales on a labor and material basis.

The trial court granted Krez's motions for summary judgment, finding that the holdings in Illinois Masonic Medical Center v. AC&S, 266 Ill. App. 3d 631, 640 N.E.2d 31, 203 Ill. Dec. 604 (1994), and McIntosh v. A & M Insulation Co., 244 Ill. App. 3d 247, 614 N.E.2d 203, 185 Ill. Dec. 69 (1993), were controlling. The court ruled that the evidence demonstrated Krez was in the business of installing insulation, and that any sale of such products was merely incidental to its installation activities. The plaintiffs appealed and filed motions for consolidation.

On appeal, plaintiffs argue that while the construction statute of repose may bar actions based upon defendant's installation activities, plaintiffs' action is based solely upon defendant's role as a manufacturer and seller of asbestos-containing materials. Plaintiffs claim that selling is a separate and distinct activity which is not protected under the construction statute of repose. Because adoption of such an argument would render the "activity analysis" futile, we affirm the trial court's ruling.

The construction statute of repose provides that:

"No action based upon tort, contract or otherwise may be brought against any person for an act or omission of such person in the design, planning, supervision, observation or management of construction, or construction of an improvement to real property after 10 years have ...


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