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Garland v. Morgan Stanley and Company, Inc.

Court of Appeals of Illinois, First District, Fourth Division

September 12, 2013

JENNIFER E. GARLAND, Independent Administrator of the Estate of Scott A. Garland, Deceased, Plaintiff-Appellant,
MORGAN STANLEY AND COMPANY, INC., and DONNA TUREK, Independent Administrator of the Estate of Mark Turek, Deceased, Defendants-Appellees (Sybaris Club International, Inc., et al. Defendants).

Appeal from the Circuit Court of Cook County. Nos. 06L6532, 06L1410, 06L5121, 08L6121, 10L4345, cons. The Honorable Irwin J. Solganick, Judge Presiding.

JUSTICE FITZGERALD SMITH delivered the judgment of the court, with opinion. Presiding Justice Howse and Justice Epstein concurred in the judgment and opinion.



¶ 1 These consolidated appeals stem from a fatal airplane crash which resulted in the deaths of all four individuals onboard the aircraft. Following the crash, plaintiff Jennifer Garland (plaintiff), the widow and administrator of the estate of decedent Scott Garland (Garland), brought suit against various individuals and entities, alleging wrongful death and survival claims. Relevant to this appeal, plaintiff sought recovery from decedent Garland's employer, Morgan Stanley & Company, Inc. (Morgan Stanley), as well as Garland's co-employee and the estate of the deceased pilot of the aircraft at the time of the accident, Mark Turek (Turek).

¶ 2 Morgan Stanley and Donna Turek, Mark Turek's widow and the administrator of the estate of Mark Turek, sought dismissal of plaintiff's common law tort claims based on the exclusive remedy provision of the Illinois Workers Compensation Act (the Act) (820 ILCS 305/1 et seq. (West 2010)). Morgan Stanley via a motion to dismiss pursuant to section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2010)), and Turek via a motion for summary judgment pursuant to section 2-1005 of the Code (735 ILCS 5/2-1005 (West 2010)). This cause stems from the trial court's July 7, 2011, orders granting Morgan Stanley's and Turek's dispositive motions.[1]

¶ 3 Plaintiff appeals, contending the trial court erred in dismissing these causes based on the exclusive remedy provision of the Act because: (1) Morgan Stanley and Turek purposefully endangered Garland; and (2) the dual capacity doctrine precluded such dismissal. Specifically, plaintiff argues that the unique circumstances leading up to the crash brought this cause within a recognized exception to the exclusive remedy provision, including: Morgan Stanley operated a de facto air service for its employees; Turek was allowed to transport his co-employees without supervision; Turek was unqualified to make that particular flight; and, unbeknownst to Garland, Turek made that particular flight as a test of his piloting abilities as a precursor to his purchasing a share of the airplane. For the following reasons, we affirm.


¶ 5 On January 30, 2006, Mark Turek, the pilot in command of a Cessna 421B aircraft, and three passengers, Kenneth Knudson, Scott Garland, and Michael Waugh, were en route from a Kansas airport to the Palwaukee Municipal Airport in Wheeling, Illinois, upon return from a business trip to meet with a prospective Morgan Stanley client. As Turek piloted the Cessna 421B for landing, the aircraft crashed, killing all four occupants on board.

¶ 6 Plaintiff's decedent, Garland, and Turek were both financial advisors employed by Morgan Stanley. They were accompanied on the flight by an owner of the plane, Kenneth Knudson, and Michael Waugh, an existing Morgan Stanley customer of Garland. Waugh's father, who resided in Kansas and was not on the aircraft, was the potential Morgan Stanley client they had been visiting in Kansas.

¶ 7 At the time of the accident, Morgan Stanley did not prohibit its employees from flying privately owned airplanes to conduct company business.[2] The record on appeal includes deposition testimony by Bernice Jee, human resources manager at Morgan Stanley in which she testified that, prior to the aircraft crash at issue here, there was no policy regarding the use of private aircraft. Jeffery Adams, Morgan Stanley's representative deponent, also testified that, prior to the aircraft crash at issue here, there was no policy in place at Morgan Stanley regarding the use of private aircraft for business purposes. Adams further testified that he was regional director for the Midwest, defined as Illinois, Wisconsin, Minnesota, Missouri, Indiana, and Ohio, and that, in those states, only 5 financial advisors out of approximately 1, 000 in Morgan Stanley's Midwest branches had pilot licenses. Only two of the five pilots identified, Turek and one other employee, flew private aircraft for Morgan Stanley business.

¶ 8 Thomas Ryan testified that, at the time of the aircraft crash, he was the Morgan Stanley complex manager based out of Riverwoods, Illinois, the office at which both Garland and Turek were based. At that time, he had supervisory authority over both Garland and Turek. He testified that the company would reimburse travel expenses for its traveling financial advisers, up to a particular monetary cap. In his opinion, Turek was a "very organized individual" whose biggest hobby was flying his airplane. Although Morgan Stanley did not have a policy prohibiting its employees from using private aircraft for their business trips, he did not think Turek had done so very often. Ryan estimated that Turek had flown private aircraft for business purposes on two or three occasions, and had submitted requests for reimbursement of expenses for those prior trips "on a couple of occasions." Ryan had approved those expense requests. He testified there was a comment in Morgan Stanley's policies and procedures handbook which discouraged using private aircraft for business trips. When asked whether Morgan Stanley required its financial advisors who were also pilots to submit proof of flight training and licensure, he responded that it did not, but nor did it require those who would drive while traveling for business to submit proof of possession of a driver's license. He further explained that, while financial advisors occasionally flew private aircraft to their destinations, they could also elect to drive cars or fly commercially.

¶ 9 As we noted in a previous decision regarding this same aircraft crash, Turek was an experienced, licensed private pilot, and specifically qualified to fly multi-engine aircraft: "Prior to January 2006, Turek was fully licensed by the Federal Aviation Administration (FAA) to fly twin-engine aircraft, including the accident aircraft. From January 6 through January 9, 2006, Turek completed a flight training course with Recurrent to transition from his Baron B55 twin-engine plane to the Cessna 421B. Previous to taking this course, Turek had 1, 284.05 hours of total flight experience, including over 1, 050 hours in multi-engine aircraft. Turek had piloted a Cessna 421B aircraft for over 29 hours. At the time he completed the Recurrent course, Turek had been an FAA-licensed pilot for nine years. There is no argument made that Turek was not properly qualified to pilot the subject aircraft under FAA regulations." Waugh v. Morgan Stanley & Co., 2012 IL App (1st) 102653, ¶ 7.

¶ 10 The accident aircraft was owned, operated, and maintained by HK Golden Eagle, Inc., a corporation unrelated to Morgan Stanley. Decedent Knudson and Howard Levinson co-owned HK Golden Eagle. Neither Knudson nor Levinson worked for Morgan Stanley. Knudson had a prospective business customer in Kansas with whom he wanted to meet, and Turek was apparently interested in possibly becoming part owner of the subject aircraft. On January 9, 2006, Turek paid Knudson $20, 000 for a "wet lease" of the subject aircraft, meaning fuel coverage and time spent flying the aircraft.

¶ 11 On January 30, 2006, Turek, Garland, Waugh, and Knudson departed Palwaukee Airport in Wheeling, Illinois, in the Cessna 421B for Kansas. HK Golden Eagle co-owner Levinson testified in deposition that Knudson would have been watching Turek pilot the aircraft to observe how he handled the controls in flight.

¶ 12 On arrival in Kansas, Turek, Garland, and Waugh met with Waugh's father over lunch to discuss the possibility of the senior Waugh becoming a Morgan Stanley client, and Knudson met with his business acquaintance at a separate lunch meeting.

¶ 13 Following these meetings, the four men departed Kansas for Palwaukee Airport. On approach to Palwaukee that evening, the weather was overcast and with a mixture of freezing precipitation that turned to light snow and mist. As it approached Palwaukee Airport, the aircraft stalled due to low airspeed and crashed, killing all aboard. The crash occurred at 6:29 p.m.

¶ 14 At the time of the crash, Morgan Stanley maintained worker's compensation insurance through Liberty Mutual Insurance Company. After the crash, it chose to avail itself of the Act for its employees' work-related injury claims. On January 27, 2009, plaintiff filed an application for adjustment of claim with the Illinois Workers' Compensation Commission, verifying that Scott Garland was fatally injured in the course of his work for Morgan Stanley. Specifically, to the question "How did the accident occur?", plaintiff answered "Injured while working." Additionally, plaintiff testified at her deposition that Scott Garland traveled on business the day of the accident for the purpose of pursuing a potential client on behalf of Morgan Stanley. Plaintiff has not cashed the benefits check she received from Liberty Mutual.[3]

¶ 15 The estates of each decedent filed wrongful death and survival actions, which actions were consolidated for discovery.[4] Relevant to this appeal, plaintiff brought wrongful death and survival claims against Garland's employer, Morgan Stanley, as well as against his co-employee, Turek.

¶ 16 On November 5, 2010, plaintiff filed her ninth amended complaint at law against Morgan Stanley, Donna Turek, and several other defendants. This complaint consisted of 18 counts, 6 counts of which are directed jointly against Morgan Stanley and Donna Turek. These six counts are based upon the alleged liability of Morgan Stanley and Turek under the Illinois Wrongful Death Act (740 ILCS 180/1 (West 2010)) and the Illinois Survival Act (755 ILCS 5/27-6 (West 2010)). Specifically, the counts against Morgan Stanley and Turek are as follows:

Count XI: wrongful death and negligence (pursuant to section 1 of the Wrongful
Death Act (740 ILCS 180/1 (West 2010)));
Count XII: survival–negligence (pursuant to section 6 of the Survival Act (755
ILCS 5/27-6 (West 2010)));
Count XIII: wrongful death–purposeful danger (pursuant to ...

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