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KORCZAK v. HIBBLER

April 7, 2004.

KEVIN M. KORCZAK AND PHILIP J. SCHMIDT, as the Administrator of the Estate of Frances L. Korczak and Babe Doe Korczak, Plaintiffs,
v.
The Honorable William J, Hibbler FAIZEL SEDEMAN, a/k/a FAIZEL FEDEMAN, THERMAL SOLUTIONS, INC., CRC-EVANS PIPELINE INT'L, INC., AND PIPELINE INDUCTION HEAT LTD., Defendants



The opinion of the court was delivered by: WILLIAM J. HIBBLER, District Judge

MEMORANDUM OPINION AND ORDER

A tragic accident involving vehicles driven by Kevin Korczak and Faizel Sedeman resulted in the death of Korczak's wife, Frances Korczak, and their unborn child, Baby Doe Korczak. After the accident, Korczak sued Sedeman as well as Thermal Solutions and CRC-Evans Pipeline International. Korczak alleges that Sedeman negligently caused the accident because he drove on the wrong side of the road and further alleges that Thermal Solutions and CRC-Evans are vicariously liable for Sedeman's negligence under the doctrines of respondeat superior and negligent entrustment. The corporate Defendants have moved for summary judgment, both arguing that Sedeman was not acting as their agent at the time of the accident. CRC — Evans also argues that it loaned Sedeman to Thermal Solutions and therefore it is not liable for his actions. Thermal Solutions argues that it is entitled to summary judgment on the Plaintiffs' negligent entrustment claims because Sedeman had a valid international driver's license. Thermal Solutions' motion for summary judgment is GRANTED in part and DENIED in part. CRC-Evans' motion for summary judgment is DENIED.

I. Factual Background

  Faizel Sedeman worked for International Heat Treatment (IHT), a subsidiary of CRC-Evans, and was a citizen and resident of South Africa. (Def. Thermal Solutions 56.1(a)(3) Statement, ¶¶ 5, 9; Pl. 56.1(b)(3)(B) Statement, ¶ 1). In 2001, Thermal Solutions asked IHT to supply it with heat treatment technicians for a contract that it had with an Illinois Citgo refinery. (Pl. 56.1(b)(3)(B) Statement, ¶ 10). As a result, IHT contracted with Thermal Solutions to send six employees, all of whom, including Sedeman, were citizens of South Africa, to Thermal Solutions to work from its Griffith, Indiana location. (Def. Thermal Solutions 56.l(a)(3) Statement, ¶¶ 10; Sedeman Dep. at 37). According to the parties' arrangement, IHT billed Thermal Solutions $19/hour for the workers' time, while Thermal Solutions billed Citgo $22/hour for their time. (PL 56.1(b)(3)(B) Statement, ¶¶ 4, 1.2). Sedeman, however, received his pay, based on the number of hours that he worked at the Citgo refinery, directly from IHT. (Def. Thermal Solutions 56.1(a)(3) Statement, ¶ 13). Thermal Solutions paid for Sedeman's travel from and back to South Africa. (Pl.56.l(b)(3)(B) Statement, ¶ 11), Thermal Solutions also paid for Sedeman's food and lodging while he remained in the United States. (Pl. 56.1(b)(3)(B) Statement, ¶¶ 20-21).

  During the time Sedeman worked at the Citgo refinery, he was supervised by Phil Robinson, Thermal Solutions' Citgo jobsite project manager. (Pl. 56.1(b)(3)(B) Statement, ¶ 22). Robinson told Sedeman when to report to work, when to leave, and gave other orders and directions regarding his work. (Pl. 56.l(b)(3)(B) Statement, ¶¶ 23, 25). Robinson also had the authority to discharge Sedeman. (Pl. 56.l(b)(3)(B) Statement, ¶¶ 26-27), At the same time Sedeman's contract with IHT specified that it had the absolute discretion to set and change Sedeman's working hours, (Del CRC-Evans Mot. Summ. J., Ex. G). Further, Sedeman's contract gave IHT the right to terminate Sedeman and directed Sedeman to follow IHT's grievance procedures should he have a dispute regarding his employment. (Def. CRC-Evans Mot. Summ. J., Ex. G).

  When Sedeman arrived at the Citgo refinery, Thermal Solutions supplied him with a minivan to drive while he was in the United States, (Def. Thermal Solutions 56.1(a)(3) Statement, ¶ 14). Sedeman had an international driver's license, (Def, Thermal Solutions 56.l(a)(3) Statement, ¶ 15). Thermal Solutions did not, however, supply all of the South African workers with minivans, instead renting only three vans for general work use. (Pl. 56.1(b)(3)(B) Statement, ¶¶ 30, 33), According to Sedeman, he received a one of the minivans because he was "the best driver out of the whole lot." (Sedeman Dep. at 55). Thermal Solutions occasionally directed Sedeman to drive Robinson and other Thermal Solutions to and from the airport, the motel at which the South African workers stayed, the Citgo refinery, and the Griffith, Indiana shop. (PL 56.l(b)(3)(B) Statement, ¶¶ 32). Each day Sedeman drove three or four of the South African workers to the job site from the hotel at which they stayed. (Pl. 56.1(b)(3)(B) Statement, ¶¶ 31). Furthermore, Sedeman admitted in his deposition that it was his responsibility, even if he wanted to go somewhere else, to drive Tarkwin Enrick, another South African worker, back to the hotel, becau se there was no public transportation and Enrick had no other way to return to the hotel from the job site, (Sedeman Dep. at 269). Although Sedeman did not bill for travel time, Thermal Solutions reimbursed him for all gas expenses. (Def. Thermal Solutions 56.l(a)(3) Statement, ¶ 19; Pl. 56.1(b)(3)(B) Statement, ¶ 36).

  On November 11, 2001, Sedeman had signed out for the day, and was driving Enrick to the hotel when the accident occurred, (Def. Thermal Solutions 56.l(a)(3) Statement, ¶ 22; Pl.56. l(b)(3)(B) Statement, ¶ 49). The accident occurred shortly after Sedeman pulled out of the Citgo gate. (PL 56.1(b)(3)(B) Statement, ¶ 49).

  As a result of the accident, the Plaintiffs filed a twenty-count complaint against Sedeman, Thermal Solutions, and CRC-Evans. With regard to the corporate Defendants, the Plaintiffs allege that they are liable because Sedeman acted as their agent at the time of the accident and because they negligently entrusted Sedeman with their vehicle. Thermal Solutions moves to dismiss on two grounds: (1) that Sedeman did not act as its agent at the time of the accident; (2) that it did not negligently entrust Sedeman with the vehicle. CRC-Evans also moves for summary judgment on two grounds: (1) that Sedeman was not acting as its agent at the time of the accident; (2) even if Sedeman was acting as an agent at the time of the accident, he was an agent of Thermal Solutions and not CRO-Evans.

  II. Standard of Review

  Summary judgment obviates the need for a trial where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law, Fed.R.Civ.P. 56(c), The party seeking summary judgment bears the initial burden of proving there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In response, the non-moving party cannot rest on bare pleadings alone but must designate specific material facts in the record showing that there is a genuine issue for trial. Id. at 324; Insolia v. Philip Morris Inc., 216 F.3d 596, 598 (7th Cir. 2000). A material fact must be outcome determinative under the governing law. Insolia, 216 F.3d at 598-99. The Court must construe all facts in a light most favorable to the non-moving party as well as view all reasonable inferences in that party's favor, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986),

  The Court has jurisdiction over this dispute by diversity, as the parties are of diverse citizenship and the amount in controversy is in excess of $75,000. 28 U.S.C. § 1332(a). A federal court sitting in diversity applies the substantive law of the forum state as well as its conflicts rules. Day & Zimmerman, Inc. v, Challoner, 423 U.S. 3, 96 S.Ct. 167, 46 L. Ed.2d 3 (1975); Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L. Ed, 1477 (1941). Here, the Plaintiffs are citizens of Illinois and the accident occurred in Illinois, and the parties agree that Illinois law should apply. Thus, the Court applies Illinois law,

  III. Analysis

 A. Scope of Employment

  Both Thermal Solutions and CRC-Evans argue that Sedeman was not acting as an agent at the time of the accident. The crux of the corporate Defendants' argument is that Sedeman had clocked out for the day and at the time of the accident was traveling to the hotel at which he stayed. Under Illinois law, for an employer to be vicariously liable for an employee's torts under the doctrine of respondeat superior, the torts must have been committed within the scope of the employment. See Pyne v. Witmer, 129 Ill.2d 351, 360, 543 N.E.2d 1304 (1989); Hogun v. City of Chicago, 319 Ill. App. 531, 536, 49 N.E.2d 861 (1943). Whether such a relationship exists is a factual question, and summary judgment is inappropriate when scope of employment is at issue. See, e.g., Pyne, 129 Ill.2d at 358-59; Laird v. Baxter Health Care Corp., 272 Ill. App.3d 280, 289, 650 N.E.2d 215 (1995); Giannoble v. P & M Heating and Air Conditioning, Inc., 233 Ill. App.3d 1051, 1056, 599 N.E.2d 1183 ...


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