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Gray v. National Restoration Systems

April 16, 2004

VALERIE GRAY, INDIV., AND AS INDEPENDENT ADM'R OF THE ESTATE OF WILLIAM GRAY, DECEASED, PLAINTIFF-APPELLANT,
v.
NATIONAL RESTORATION SYSTEMS, INC., AN ILLINOIS CORPORATION; CRENOVA, INC., A FOREIGN CORPORATION, F/K/A HULS AMERICA, INC., A FOREIGN CORPORATION; AND THE GLENROCK CO., AN ILLINOIS CORPORATION, DEFENDANTS-APPELLEES
(DEGUSSA CORPORATION, A FOREIGN CORPORATION; CREANOVA, INC., A FOREIGN CORPORATION; SIVENTO, INC., A FOREIGN CORPORATION; DEGUSSA HULS CORPORATION, A FOREIGN CORPORATION, F/K/A HULS AMERICA, INC., A FOREIGN CORPORATION, F/K/A SIVENTO INC., A FOREIGN CORPORATION, F/K/A KAY FRIES, INC., A FOREIGN CORPORATION, F/K/A DYNAMIT NOBEL CORPORATION OF AMERICA, INC., A FOREIGN CORPORATION, F/K/A DEGUSSA CORPORATION, DEFENDANTS).



Appeal from the Circuit Court of Cook County. No. 97 L 7538. Honorable Paddy H. McNamara, Judge Presiding.

The opinion of the court was delivered by: Justice Reid

The plaintiff, Valerie Gray (Gray), individually and as special administrator of the estate of William Gray, deceased, (decedent), brought a survival action, an action for wrongful death and a family expense action against the defendants, National Restoration Systems, Inc. (National Restoration), Crenova, Inc., f/k/a Huls America, Inc. (Huls),*fn1 and The Glenrock Corporation (Glenrock), to recover damages for the fatal injuries incurred by her husband, the decedent, resulting from an explosion at the decedent's workplace.

Gray appeals from the following orders of the circuit court of Cook County: (1) an order of May 31, 2000, which granted National Restoration's motion to dismiss Gray's second amended complaint pursuant to section 2-619(a)(9) of the Illinois Code of Civil Procedure (735 ILCS 5/2-619(a)(9) (West 2002)) with prejudice, (2) an order of September 13, 2000, that granted summary judgment in favor of Huls as to certain portions of Gray's second amended complaint, (3) an order of September 12, 2000, that granted Glenrock's section 2-619 motion to dismiss Gray's second amended complaint with prejudice, and the portion of a June 20, 2001 order that denied Gray's motion for leave to allow her third amended complaint to stand against Glenrock and that also struck Glenrock from Gray's third amended complaint, and (4) a September 28, 2001, order that denied Gray's motion to plead punitive damages. For the reasons that follow, we reverse the decision of the trial court in part, affirm it in part, and remand the cause for further proceedings.

BACKGROUND

National Resurfacing, Inc. (National Resurfacing), and National Restoration provided concrete repair, waterproofing and caulking services for a restoration project located at the Days Inn Hotel in Chicago, Illinois, in July 1995. During a deposition, Thomas F. Reagan (T. Reagan) stated that he was the president of National Restoration and oversaw the Days Inn project. T. Reagan said that at the time of the occurrence, the decedent was an employee of National Restoration.

During a deposition, Frank Reagan (F. Reagan), T. Reagan's father and also an owner of National Restoration and National Resurfacing, stated that although National Restoration and National Resurfacing were two separate legal entities, he and his son ran the two companies as if they were one. F. Reagan stated that the decedent was an employee of National Resurfacing at the time of the incident. F. Reagan's statement was supported by a W2 form for the decedent which was from National Resurfacing.

Huls manufactures a concrete waterproofing product called Chem-Trete BSM 20. Glenrock sells construction products including Chem-Trete BSM 20. Glenrock sold Chem-Trete BSM 20 to National Restoration and National Resurfacing for the Days Inn project.

The decedent worked as a laborer at the Days Inn project.

On July 20, 1995, decedent was fatally injured when he attempted to saw the lid off a 55-gallon drum that contained residue of Chem-Trete BSM 20 and the drum exploded.

Deposition testimony reveals that Nicholas LaFleur, the decedent's direct supervisor, had instructed the decedent to load a Dumpster with debris by use of a chute from the second floor which led to the Dumpster. Several hours later, decedent's co-worker, Gerald McLin, spoke with decedent and as McLin turned to walk away, he saw decedent pick up a saw. When McLin was approximately eight feet away from Gray, McLin heard the saw cut into a drum and then heard a loud explosion. McLin turned around and saw flames.

Chem-Trete BSM 20 consists in relevant part of 70% ethanol and 10% methanol. Huls attached a label to every container of Chem-Trete BSM 20 which displays a large red diamond with a flame inside and reads: "FLAMMABLE LIQUID." The label also contains the following additional warnings:

"WARNING!

FLAMMABLE LIQUID AND VAPOR.

KEEP AWAY FROM HEAT, SPARKS, AND FLAME.

Since emptied containers retain product residue, follow label warnings even after container is emptied.

Before Using This Chemical, Read Material Safety Data Sheet."

F. Reagan stated that he informed the decedent in July 1995 that the material safety data sheet (MSDS) for the Chem-Trete BSM 20 was in the "job box" and that the decedent could read it anytime. LeFleur confirmed that the MSDS for the Chem-Trete BSM 20 was in the job box and that the decedent could read it anytime. T. Reagan also confirmed that the MSDS was in the job box.

After the explosion, photographs were taken of the drum that the decedent had cut with a saw. The pictures revealed that some text was missing from the label, but that the warnings, "Since emptied containers contain product residue, follow label warnings even when container is emptied ***," and "KEEP AWAY FROM HEAT, SPARKS, AND FLAME," appear on the label, along with the large, red diamond with the warning "FLAMMABLE LIQUID."

On October 5, 1995, Gray filed a worker's compensation claim (Application for adjustment No. 95 WC 57531), with the State of Illinois Industrial Commission against "National Resurfacing Inc. d/b/a National Restoration Systems" for damages associated with decedent's fatal accident.

On June 25, 1997, Gray filed suit against: (1) "National Restoration Systems, Inc., f/k/a National Resurfacing Inc.," for negligence, (2) Huls for negligence and strict liability, and (3) American States Insurance Co., Weidner & McAuliffe, Ltd., and Richard J. Leamy, Jr., for spoliation of evidence.

On July 21, 1997, Gray filed her first amended complaint. Once again the complaint named "National Restoration Systems, Inc., f/k/a National Resurfacing Inc.," as a defendant. Furthermore, Gray added seven additional defendants, which included Glenrock for strict liability and negligence.

On September 30, 1997, "National Restoration Systems, Inc., f/k/a National Resurfacing Inc. (collectively, 'National')," filed a motion to dismiss Gray's first amended complaint pursuant to section 2-619 of the Illinois Code of Civil Procedure (735 ILCS 5/2-619(a)(9) (West 2002)) based on the exclusive remedy provision of the Workers' Compensation Act (820 ILCS 305/5(a) (West 2002))(the Act), which states:

"No common law or statutory right to recover damages from the employer *** for injury or death sustained by any employee while engaged in the line of his duty as such employee, other than the compensation herein provided, is available to any employee who is covered by the provisions of this Act, to any one wholly or partially dependent upon him, the legal representatives of his estate, or any one otherwise entitled to recover damages for such injury."

On December 22, 1997, the trial court denied National Restoration's motion without prejudice. The trial court advised the parties that if Gray collected any money from National Restoration in the worker's compensation proceeding, her common law action would be dismissed.

Gray's claims against Richard J. Leamy, Jr., were settled and dismissed on April 2, 1999. On April 12, 1999, Gray's claims against American States Insurance Co. and Weidner & McAuliffe, Ltd., were settled and dismissed.

On February 14, 2000, Gray filed a second amended complaint against "National Restoration Systems, Inc., an Illinois corporation," Huls and Glenrock. In the complaint, Gray alleged that Huls and Glenrock negligently failed to incorporate labeling on Chem-Trete BSM 20 drums that would warn users of: (1) its explosive potential in violation of 29 CFR §1910.1200(f) (2003), and (2) the nature and extent of the risk and harm from explosion when power equipment capable of producing heat or sparks is operated on or in the vicinity of Chem-Trete BSM 20. In addition, Gray alleged that Huls and Glenrock carelessly and negligently: (1) failed to provide adequate warnings to users of Chem-Trete BSM 20 that would give notice of the concealed risk of the explosive potential of Chem-Trete BSM 20 vapors remaining in purportedly empty drums; (2) sold to National Restoration a quantity of Chem-Trete BSM 20 without investigating the ability of National Restoration to apply, use, store and dispose of such a chemical safely; (3) failed to ascertain whether National Restoration complied with applicable federal regulations in its use of Chem-Trete BSM 20; (4) failed to approve users of their product; and (5) sold drums of Chem-Trete BSM 20 to persons who were not qualified applicators of the chemical.

On March 1, 2000, the Industrial Commission approved a settlement in Gray's worker's compensation claim. The settlement contract lump-sum petition and order (settlement contract) was entitled "Valerie Gray, widow of William Gray, deceased v. National Restoration Systems, Inc. a/k/a National Resurfacing, Inc." The settlement contract stated:

"Respondent, William Gray's employer, National Restoration, Inc., to pay and petitioner to accept $220,000 in full and final settlement of any and all claims under the Worker's Compensation and Occupational Disease Acts for all accidental injuries allegedly incurred as described herein ***."

On March 10, 2000, "National Restoration Systems, Inc. f/k/a National Resurfacing, Inc." filed a section 2-619(a)(9) motion to dismiss Gray's second amended complaint based on the settlement contract and the exclusive remedy provision of the Act (820 ILCS 305/11 (West 2002)). Section 11 of the Act states:

"§11. The compensation herein provided, together with the provisions of this Act, shall be the measure of the responsibility of any employer engaged in any of the enterprises or businesses enumerated in Section 3 of this Act, or of any employer who is not engaged in any such enterprises or businesses, but who has elected to provide and pay compensation for accidental injuries sustained by any employee arising out of and in the course of the employment according to the provisions of this Act, and whose election to continue under this Act, has not been nullified by any action of his employees as provided for in this Act." 820 ILCS 305/11 (West 2002).

On March 13, 2000, Glenrock moved to dismiss Gray's second amended complaint pursuant to section 2-619(a)(9) based on the facts that: Glenrock was merely a distributor of Chem-Trete BSM 20; Glenrock receives drums of Chem-Trete BSM 20 from Huls in sealed containers and does not alter the drums or the Chem-Trete BSM 20 in any manner; Glenrock served merely as a conduit between Huls and the end user, in this case, National Restoration; Glenrock neither determines the form or content of the label and the MSDS, nor does it investigate, train or approve the customers who purchase Chem-Trete BSM 20; and Huls does not require Glenrock to certify that its customers are knowledgeable in the use and application of Chem-Trete BSM 20.

On August 11, 2000, Gray filed a response to Glenrock's motion to dismiss claiming that the deposition testimony of Michael Watson, a Glenrock officer, suggested that Glenrock did not provide National Restoration with the MSDS. Gray also attached a document issued by Huls regarding Chem-Trete BSM 20 entitled "Product Data Test Information." Dated November 1996, 16 months following decedent's fatal injury, Gray argued that the document retroactively imposed a duty upon Glenrock to sell Chem-Trete BSM 20 only to approved applicators of the chemical.

Gray also cited the affidavit of Ed McGettigan, Huls national sales manager, and claimed that this affidavit suggested that Glenrock was required to certify that National Restoration was aware of the contents of the Chem-Trete BSM 20 label and MSDS. In this affidavit, McGettigan stated:

"Huls did not require The Glenrock Company to in any way certify Glenrock's customers regarding the customer's knowledge of the nature of Chem-Trete BSM 20 or the application of the product beyond any national standards contained in the product labeling affixed to the metal drums by Huls America or contained in the Material Safety Data Sheets issued in compliance with Federal government regulations."

On May 31, 2000, the trial court entered an order wherein it: (1) determined that at the time of the accident, National Restoration was the decedent's immediate employer, (2) granted National Restoration's section 2-619(a)(9) motion to dismiss with prejudice, and (3) stated that the order was "not final and appealable."

On June 23, 2000, Huls filed a motion for summary judgment regarding Gray's negligence claims. Huls attached to the motion a color copy of the Chem-Trete BSM 20 label to illustrate that the label contained the warnings, "FLAMMABLE LIQUID AND VAPOR," "Keep away from heat, sparks, and flame," "Since emptied containers contain product residue, follow label warnings even when container is emptied" and the large red diamond that stated, "FLAMMABLE LIQUID."

Gray's response to Huls' motion attached the affidavit of an expert, Robert Kretvix. In the affidavit, Kretvix stated that he compared the color label attached to Huls' motion with postoccurrence photographs of the drum, and the postoccurrence photographs indicated that the warning "FLAMMABLE LIQUID AND VAPOR" was not on the label of the drum that Gray sawed, thereby admitting that the drum displayed the other warnings.

On August 2, 2000, Huls filed a motion to withdraw sections of its motion for summary judgment on the issue of the adequacy of the warnings. On August 11, 2000, over Gray's objection, the trial court granted Huls' motion to withdraw portions of its motion of summary judgment.

On September 13, 2000, the trial court heard arguments on Huls' motion for summary judgment. The trial court addressed Gray's claim that the postoccurrence photographs indicated that certain text was missing from the label of the drum that the decedent sawed. The court stated:

"Even under your [plaintiff's] theory, there [are] still the words on the destroyed drum's label, since emptied containers contain product reside, follow label warnings after container is empty; and ...


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