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St. Paul Mercury Insurance v. Aargus Security Systems, Inc.

Court of Appeals of Illinois, First District, Second Division

December 10, 2013

ST. PAUL MERCURY INSURANCE, a/s/o Mallers Building Limited Partnership, J. RICHMAN, and SPECTRUM PROPERTIES, INC., Plaintiffs-Appellants and Cross-Appellees,
v.
AARGUS SECURITY SYSTEMS, INC., Defendant-Appellee and Cross-Appellant, Peoples Gas Light and Coke Company, and Peoples Energy Corporation, Defendants.

Appeal from the Circuit Court of Cook County, Illinois No. 09 L 6303 The Honorable Eileen M. Brewer, Judge Presiding.

Presiding Justice Quinn and Justice Simon concurred in the judgment and opinion.

OPINION

HARRIS, JUSTICE.

¶ 1 Plaintiff, St. Paul Mercury Insurance, as subrogee of Mallers Building Limited Partnership, and J. Richman and Spectrum Properties, Inc. (Mallers), brought a complaint against defendant Aargus Security Systems, Inc. (Aargus), alleging that Aargus, as security provider for the "Mallers Building, " owned by subragors, negligently allowed the delivery of a propane tank that subsequently caused an explosion in the building. The complaint contained one count alleging negligence and one count alleging breach of contract. The circuit court granted Aargus's motion for summary judgment and struck two affidavits Mallers attached to its response to Aargus's summary judgment motion. The circuit court denied Mallers's subsequent motion to reconsider. At issue is: (1) whether a question of fact existed as to whether Aargus had a contractual duty to stop or report the delivery of propane tanks to the building; (2) whether the circuit court improperly struck two of the affidavits Mallers presented in opposition to Aargus's motion for summary judgement; and (3) whether the circuit court erred in denying Mallers's motion for reconsideration.

¶ 2 We hold that the circuit court properly granted summary judgment in Aargus's favor because Mallers failed to show, either by the terms of the contract or through evidence of a voluntary undertaking, that Aargus had a duty to stop or report the delivery of propane tanks to the building; that the circuit court properly struck both affidavits as they failed to comply with Illinois Supreme Court Rule 191 (Ill. S.Ct. R. 191 (eff. Jan 4, 2013); and that the circuit court properly denied Mallers' motion for reconsideration.

¶ 3 JURISDICTION

¶ 4 On November 1, 2011, the circuit court granted Aargus's motion for summary judgment. On February 22, 2012, the circuit court denied Mallers's motion for reconsideration. On March 23, 2012, Mallers timely filed its notice of appeal. Accordingly, this court has jurisdiction pursuant to Illinois Supreme Court Rules 301 and 303 governing appeals from final judgments entered below. Ill. S.Ct. R. 301 (eff. Feb. 1, 1994); R. 303 (eff. May 30, 2008).

¶ 5 BACKGROUND

¶ 6 On May 29, 2009, Mallers filed its complaint against Aargus alleging that its subrogor owned the Mallers Building located at 5 South Wabash in Chicago, Illinois. The building "had various tenants including tenants engaged in the jewelry business." According to the complaint, on April 1, 2002, J&R Welding delivered a tank of liquefied petroleum to Maria Pecak, doing business as Betty's Jewelry, in suite 617 of the building. A tenant in a space adjacent to Pecak's, Alfredo Mohedano, accepted the delivery on Pecak's behalf. Pecak later brought the tank to her suite. Plaintiff alleged that "[a] few hours later, an explosion occurred on the 6th floor of the building resulting in extensive property damage, property loss, building damage, and personal injury." Mallers further alleged "[i]t was later determined that the explosion was the result of the ignition of the liquefied petroleum" tank and that "[t]he tank was damaged and/or defective prior to the time of delivery." Mallers alleged that $14, 500, 000, had been paid for various insurance claims from the resulting damage.

¶ 7 Aargus, Mallers alleged, "served as the security services contractor for the Mallers Building and its tenants." According to the complaint, there was a time when the use of liquefied petroleum gas was permitted on the premises, specifically:

"At all times prior to April 1, 2002, when Peoples Gas was performing work on the natural gas lines in the Mallers Building and shut off the natural gas service to the tenants of the Mallers Building, and permitted the use of liquefied petroleum gas on the premises, Aargus served as the security provider."

Mallers alleged that Aargus "continuously permitted several different distributors of liquefied petroleum and/or propane gas tanks to make deliveries" to various tenants of the building and that Aargus "was authorized to search and investigate all deliveries and stop the delivery of prohibited or illegal materials and/or substances." Mallers alleged that one of the distributors "known" to Aargus delivered the tank that exploded on April 1, 2002.

¶ 8 Mallers alleged that Aargus "knew or should have known" that a dangerous condition was created by allowing deliveries, and tenants to accept deliveries, of liquefied petroleum and/or propane gas. Furthermore, Mallers alleged that Aargus either knew or should have known that liquefied petroleum and/or propane gas was "prohibited by the City of Chicago Building Code." According to Mallers, Aargus had a duty to exercise ordinary care for the safety of all the building's tenants and that it was negligent because it: allowed and/or facilitated the delivery of the hazardous tanks; allowed and/or facilitated the tenant's use of the hazardous liquified petroleum gas on the premises; allowed and/or facilitated delivery of the tanks while knowing that it was dangerous and violated local codes; failed to warn others; failed to notify tenants that use of liquified petroleum gas was prohibited; failed to post notices and warnings in the building regarding hazardous nature of liquified petroleum gas; failed to inspect deliveries of hazardous tanks; failed to have an adequate inspection plan; failed to inspect and/or remove liquified petroleum tanks; failed to warn tenants that liquified petroleum gas was being used and received on the premises; failed to provide proper personnel to administer the inspection and removal of hazardous tanks; violated the Chicago municipal code; failed to provide restrictions in leases and policies with tenants prohibiting liquified petroleum gas tanks on the premises; knew or should have known the general dangers associated with liquified petroleum gas tanks in buildings; knew or should have known that tenants in the building were accepting deliveries of liquified petroleum gas tanks; and "[w]as otherwise negligent." Plaintiff alleged that these acts or omissions were the proximate cause of the injuries and damages that occurred, which in turn caused plaintiff to pay out $14, 500, 000 pursuant to an insurance policy.

¶ 9 The breach of contract count in Mallers's complaint specified that it entered into a "Security Officer Contract" with defendant for the premises on March 29, 1993. Mallers alleged that Aargus, "[w]hile under contract for the provision of security services to the Mallers Building, continuously permitted the delivery of liquefied petroleum and/or propane gas to tenants of the Mallers Building." According to plaintiff, allowing such deliveries was a breach of the express and implied terms of the contract.

¶ 10 Mallers attached a copy of the contract to its complaint. The contract, labeled "Security Officer Contract, " is dated March 29, 1993. The contract states that the parties to the agreement are "Mallers-Chicago Management Inc., as agent for 5 S. Wabash Building, Chicago, IL 60603, " who the contract refers to as the "client, " and Aargus. The contract indicates that the "[c]lient desires that Aargus furnish security officers at its premises at" the building. Paragraph one of the contract states, in relevant part:

"During the term of this contract the Client agrees to use and Aargus agrees to furnish such number of uniformed Security Officers as may from time to time be required by the Client at the Client's premises, and Client agrees to pay Aargus the following per hour rate."

Paragraph one of the contract then goes on to discuss billing rates, hours, holidays, and vacation of the security officers, as well as overtime. The contract provides:

"The number of Security Officers, Security Officer posts, their location, and the hours and nature of Security Officers' duties may be varied from time to time at Client's request to meet Client's requirements. The protective services provided by Aargus are relative to the scope of the works set forth in paragraph one above, and additional protection is available at greater cost. The furnishing of the security services provided for herein does not guarantee protection against all contingencies."

The contract contains a provision indicating that the security guards are Aargus employees. Specifically, the provision provides as follows:

"The Security Officers shall perform such security services as the Client shall request but they shall be employees of Aargus, an independent contractor. The payment of taxes, Social Security Benefits, unemployment compensation taxes and wages shall be the sole function and responsibility of Aargus."

Additionally, the contract provided:

"Aargus and the Client agree that Client can give material changes to Aargus' main office representative or the On-Site Aargus Supervisor who shall transmit the directions to the Security Officers in the post orders or such other directions as the situation may require. Security Officers shall not be allowed to accept any directions from any Mallers' employees other than pursuant to this procedure."

The contract in its entirety is four pages long.

¶ 11 On December 31, 2009, Aargus filed its motion to dismiss pursuant to section 2-619 of the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2-619 (West 2010)) and a motion for summary judgment against Mallers. Aargus contended that the building "had long contained many jeweler tenants who required the use of various gases as heating sources for manufacturing and repairing jewelry." Aargus asserted that the routine delivery of tanks of various gases to the building was "well known" to Mallers and had a long history. Aargus characterized itself as a "contractor for services" at the Mallers Building and its contract was for "limited security related services at the Mallers Building." According to Aargus, the following facts, prior to the incident, were undisputed: that Mallers never sought or requested "that the property, materials and supplies, including tanks of gas be stopped, checked, inspected or otherwise inspected"; that there is no provision in the contract that obligated it to provide or pay for "staffing or services for stopping, checking, inspecting or in any manner analyzing property, materials or supplies being delivered to and brought onto the premises"; and that such services were never assumed or performed by Aargus. Aargus alleged that Mallers, at various times, admitted that it never requested such services nor were such services required under the contract between the parties. According to Aargus, Mallers's complaint sought to impose an "after-the-fact duty upon" it to perform services not contracted for or paid for by Mallers. Aargus argued that Mallers failed to establish any contractual obligation or impose any duty upon Aargus to sustain its claim. Specifically, Aargus asserted that Mallers cannot point to any specific obligation in the contract that establishes a duty owed by Aargus. Furthermore, Aargus argued that none of the alleged breaches alleged by Mallers were covered under the contract.

¶ 12 Defendant included numerous attachments in support of both of its motions, including depositions, a copy of the contract, and requests to admit. Harvey Borders, a security guard employed by Aargus who worked at the building, testified during his deposition that Aargus is a security company that does "building surveillance, customer service type security." When asked what the duties of a security guard at the building are, Borders answered as follows:

"Basically, we work inside a guard room. And there's about eight monitors. We just basically just monitor the cameras. And we do what they call detects rounds. And, basically, that's just walking through the building and just observing the building for anything that might be out of the ordinary."

Borders testified that "[a]fter 6:30 and all day on Sundays and holidays, " the guards record the names of the people who enter the building. On a regular day, two or three guards work at a time while on Sundays only one guard works per shift. Borders testified that typically one security guard works in the control room monitoring cameras in the building while the other one is doing rounds. The security guard in the guard room will also answer the phone and answer different questions for people and direct them to where they need to go. Borders testified that each floor had, at the time of the explosion, "at the most, " two cameras per floor which he thought were probably placed at each end of the floor. There were also cameras on the elevators but none in the lobby. When asked whether there were cameras by the freight elevator or the dock at the time of the explosion, Borders answered, "No." Aargus did not keep copies of the videos, but Borders thought the "building did." He did not know who was responsible for the placement of the cameras.

¶ 13 Borders testified as to what occurred during a "detects rounds." He described how each floor, except the lobby, which only has one, has three "detects strips." The security guard walks through the building and swipes each strip with a "detects gun, " which registers the swipe with a computer. Borders added that "you just walk through the building from floor to floor swiping each strip. And as you swipe it, basically you [are] just looking for maybe if a door is ajar, if a window's broken, you know, you check the bathrooms for anything out of the ordinary." A security guard does one detects round per shift, and the detects round takes 20 to 30 minutes to perform. When asked, "Do you ever have a reason to go inside a customer's space?" Borders answered "No." In addition to the above-described responsibilities, Borders testified that a security guard "might pass out memos" one or two times per month, and deliver late and rent notices from the management of the building. Borders answered "No" when asked whether a security guard delivers packages. When asked whether Aargus had any responsibilities regarding deliveries in 2002, Borders answered that most of the delivery companies "work that same building every day so they basically know where they want to go. But if its another delivery, most of the time they'll come up through the dock and get on the freight and the freight guy will take them up." Borders explained that there used to be elevator operators in the building that did not work for Aargus, but now the delivery people go up the freight elevator themselves.

¶ 14 Borders testified that Jay Richman, the owner of the building, instructed him on what his duties and responsibilities were at the building. Borders explained that Richman's instructions were "nothing significant" and testified that Richman might leave a package for someone to pick up or ask the security guard to look out for a person suspected of stealing. When asked whether "anybody at Aargus or anyone else ever [told] you that when you work as a security guard at the Mallers Building you're supposed to pay attention to whether anyone brings in propane, " Borders answered "No." Prior to the explosion, Borders never observed propane tanks in the building. He did sometimes observe a "green, long tank, " but he did not know what was in the tank. Prior to the explosion, tank deliveries would go from the dock to the freight elevator, and then onto the desired floor. After the explosion, any tanks delivered to the building were required to be inspected by the management of the building. The new, postexplosion policy was drafted by Mallers, not Aargus.

¶ 15 Borders testified that a security manual was kept in the guard room. The manual described working shifts, hours, break times, the time to do rounds, and a "pass down log" that the security guard was to maintain to let the security guard working the next shift know what had happened or any instructions regarding the building. Borders further testified that prior to the incident, it was a policy of the Mallers Building that tanks had to come in through the dock, not the lobby, and up on the freight elevator. No one had ever told him that propane was not supposed to be in the building. He had received calls from tenants complaining of a gas smell, and he would then call the engineer, who would then "take care of it." He was not responsible for checking any tanks coming into the building. Borders testified that the delivery of tanks to the building is normal and a usual occurrence.

¶ 16 Paulette Mendoza, a receptionist employed by Mallers Building, LLC, since 2000, testified during her deposition that her supervisor is "J[ay] Richman." As a receptionist, she answers the phone, makes deposits, does filing work, makes copies, and types leases, which Mendoza described as "office work." She testified that the only files in her office are the current leases and invoices such as utility and electric bills. Mendoza testified that when a notice needs to be sent to a tenant, an Aargus security guard will deliver the notice to the tenant. Besides giving notices for Aargus to deliver, Mendoza testified she does not engage in any other communication with any Aargus employees. She testified that inspectors from the city of Chicago perform inspections in the building more than once per year, but not more than five times per year. She does not keep records of the inspections and she was unaware if her supervisor kept them.

¶ 17 When asked what she remembered about the explosion, Mendoza testified that she remembered that there was an explosion in one of the tenant spaces which she thought was on the sixth floor. She testified that the cause of the explosion was a propane tank because that is what she "heard." She did not know when the propane tank was delivered. She testified that she has never seen any kind of gas or propane cylinder or tank in the building, but she has seen an oxygen cylinder or tank being delivered to the building. She now has to "sign off" on all tank deliveries to the building, a policy not in effect prior to the explosion. She did not know if propane was ever allowed in to the building. She testified that before the explosion, tanks were to be delivered through the loading dock. She believed that they were then taken up to tenants on the freight elevator.

¶ 18 Mendoza testified that she was to call Aargus "if there is something going on in a tenant space, " and that Aargus would call her if there was a problem with the monitors or the camera. The memos she had Aargus distribute occurred maybe one to five times a month and are from the office of the building, not Aargus. Aargus also delivered rent notices one time per month. Prior to the explosion, if Mendoza was not there, Aargus would answer the phone. Aargus was told it was to take a message and give the message to either Mendoza or Richman. Mendoza testified that she had never seen a building safety manual. She "believed" Aargus had a manual, but she had not seen it. When asked what Aargus's duties where, she answered "to watch monitors basically" and "[j]ust to make sure everything is going smoothly in the building. There's no commotion or anything." When asked whether it was supposed to be aware of who enters and exits the building, Mendoza answered "Yes." Mendoza clarified that Aargus was "supposed to watch the people come in and out of the building." When asked whether Aargus was "[t]o look for what, suspicious people, " Mendoza answered, "Right. Correct." When asked to define "suspicious person, " Mendoza answered that "if they see somebody - - either if I get a call from a tenant saying that there's somebody in the hallway that's been there for a while, something like that, then I call security and let them know just to keep an eye on them." When asked "based on the deliveries to the building, delivery men coming in with tanks, they weren't suspicious. They were supposed to be there, " Mendoza answered, "Correct."

¶ 19 Salvatore Chiovari, who at the time of the explosion worked as a security guard and an operator of the freight elevator for Aargus at the building, testified during his discovery deposition that he started working for Aargus in 1993 when Jay Richman and his partners took over the building. He ran the freight elevator and testified that his "job was strictly to bring supplies up and down on the freight." Chiovari testified that "we were actually supposed to do whatever Richman asked us to do." Chiovari testified that from 1993 until the explosion, tanks were taken up and down the freight elevator. When asked whether propane tanks were ever taken up, Chiovari answered that although he took tanks up, he did not look or check to see what kind of tanks they were. He knew of a security manual for Aargus, but he was not familiar with it and had never read it. His supervisor had the manual. Chiovari testified that deliveries were supposed to use the freight elevator, but people would use the passenger elevators if the freight elevator was "preoccupied" or if the delivery person was in a hurry. This also applied to people delivering tanks. Before the explosion, people making deliveries did not have to sign a log. When asked whether the delivery people had to get a badge or temporary identification, he answered "[n]ot to my knowledge, no." He agreed that prior to the explosion people could basically just come and go. When asked whether, prior to the explosion, he was "ever told by anyone what or who you should allow or not allow in the Mallers Building, " Chiovari answered that they had "problems with bums" who they "had to chase out, but that was about it." He clarified that he was to report anyone that looked "suspicious." He answered "No, " when asked whether he was "ever told any type of cargo or goods that you could not let into the Mallers Building." Prior to the explosion, Chiovari was not given any training as to what constituted unlawful activities in the building, he was not told to enforce any provisions of any leases, he was never told anything about "any hazardous materials or hazardous gases, " and he was never told anything about propane. Based on his experience in the building, he observed jewelers using torches that he thought were fueled by propane. He would hear jewelers discuss amongst themselves supplies, including propane, that they would use or need. Chiovari testified that jewelers continued to use propane even after an incident that occurred in August of 2000. He could not remember anyone bringing propane into the building on the day of the explosion in 2002. Although he saw Maria Pecak of Betty's Jewelry use a torch to repair jewelry in her shop, he did not know if she used propane gas. After the explosion, Richman told him no propane was allowed in the building. Prior to the explosion, Richman never told him anything about propane.

ΒΆ 20 In 1993, his employer changed to Aargus, and then he only worked the freight elevator. Supplies and materials were only supposed to be brought up the freight elevator. While employed by Aargus, he recalled delivery people telling him that they had propane or oxygen to deliver. He testified he would only know the difference between a propane tank and an oxygen tank if the delivery person told him. Chiovari testified that delivery of tanks was not suspicious and occurred on a daily basis. He agreed that he was to allow tenants to have tanks delivered to them. It was not part of his job to determine what went into the building. He was not supposed to detain anyone or anything and if he saw a suspicious package or person, he was supposed to call his supervisor. He was not supposed to question people. He testified that the guards were not supposed to accept packages and that they were not supposed to "deal with" packages. According to Chiovari this policy was in effect because they did not want to be ...


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