Behrendt v. Gulf Underwriters Ins. Co.
| Decision Date | 09 July 2009 |
| Docket Number | No. 2006AP2910.,2006AP2910. |
| Parties | Kenneth J. BEHRENDT, Plaintiff-Appellant-Petitioner, v. GULF UNDERWRITERS INSURANCE CO. and Silvan Industries, Inc., Defendants-Respondents, Auto Owners Insurance Co., Peter Harding, Cincinnati Insurance Co., W.D.M. Enterprises of Marinette, WI and James E. Fisher, Defendants. |
| Court | Wisconsin Supreme Court |
For the plaintiff-appellant-petitioner there were briefs by Mark S. Young, Rhonda L. Lanford, and Habush Habush & Rottier S.C., Milwaukee, and oral argument by Mark S. Young.
For the defendants-respondents there was a brief by John J. Laffey, Michael D. Rosenberg, Sarah Thomas Pagels, and Whyte Hirschboeck Dudek S.C., Milwaukee, and oral argument by John J. Laffey.
¶ 1
This is a review of an unpublished court of appeals decision1 affirming an order granting summary judgment to Silvan Industries, Inc. (Silvan) and its insurer, Gulf Underwriters Insurance Co. (Gulf). Silvan and Gulf were among those sued by Kenneth Behrendt (Behrendt) after he was injured when a tank exploded while he was using it at his job in an oil change business. The tank had been fabricated as a favor to Behrendt's employer; it was made as a side job by someone who worked at Silvan at the time, and it was subsequently customized for use in the oil change business. Behrendt claimed that Silvan was negligent in permitting the tank to be made as a side job and vicariously liable for its employee's conduct in making the tank, but Silvan won dismissal of the claims, and the court of appeals affirmed. Behrendt sought review here of the court of appeals' decision.
¶ 2 For the reasons set forth below, we affirm the grant of summary judgment on both the vicarious liability claim and the negligence claim. In order for an employer to be vicariously liable for an employee's act, the act must have been within the scope of employment. We agree with the court of appeals that summary judgment is appropriate on the claim of vicarious liability because the only evidence presented was that the tank was a side project that was completed for the employee's own purpose and thus was outside the scope of employment.
¶ 3 As to the negligence claim, we reach the same result as the court of appeals though we arrive at that result via a somewhat different analysis. We agree with both the circuit court and the court of appeals that the focus here is properly on whether Silvan could have foreseen the effects of its policy. We also agree that, as a matter of law, it was not foreseeable that under Silvan's policy of allowing employees to do side projects, a non-pressurized tank built as a side job would later be modified and pressurized and, years later, explode and cause injury. However, while the court of appeals affirmed the grant of summary judgment on the grounds that the lack of foreseeability meant that Silvan had no duty to Behrendt, we reiterate our prior holdings in the vast majority of cases that every person is subject to a duty to exercise ordinary care in all of his or her activities. Silvan was subject to such a duty with regard to its policies on side jobs, and under these circumstances that duty required Silvan to exercise care that its policy on side jobs did not create an unreasonable risk of injury to Behrendt.
¶ 4 However, we then look at whether Silvan breached that duty by failing to exercise the care a reasonable person would use in similar circumstances. In most cases, whether a defendant breached a duty is a question of fact that is submitted to the jury and thus is not appropriate for summary judgment. In this case, however, it is the lack of foreseeable risk that convinces us, as a matter of law, that Silvan cannot be said to have failed to exercise ordinary care with regard to its policy on side jobs. Further, there is no material fact in dispute as to Silvan's policies about side jobs and its prohibition on employees making pressurized vessels as side jobs for personal use. There is in addition uncontroverted evidence in the record that Silvan took steps such as having holes cut into any tanks that were considered as scrap—as well as testimony of the tank's owner that this tank itself originally had holes in it—and that the point of cutting holes into the tanks was to keep them from being used with air pressure. Summary judgment is appropriate on the negligence claim because under these circumstances Silvan did not breach its duty to act with ordinary care.
¶ 5 Behrendt's claims arise from the explosion of a tank, and the tank, to which fixtures were later added, was originally built as a side job by a Silvan employee. The questions raised in this appeal thus concern Silvan's policy of permitting employees to use company equipment and scrap materials to make items for personal use. Silvan manufactures tanks to be used under pressure, such as air receivers and water tanks. Pressurized vessels are subject to strict manufacturing codes and third-party inspection; after each tank is tested, inspected and certified, it is labeled and registered with the National Board of Boilers and Pressure Vessel Inspectors.2 Silvan's policy permitting side jobs prohibited employees from making pressurized tanks, and a system was in place to prevent employees' personal use of any tanks that were scrapped by the company: holes were cut in any scrapped tanks to make them worthless as pressurized vessels.
¶ 6 As noted above, one of the side jobs made by a Silvan employee is at the center of this case. When Daniel Linczeski (Linczeski) decided to open an oil change business, he needed a piece of equipment to collect oil drained from vehicles, and he went to his father-in-law, James Fisher (Fisher), who worked at Silvan. Fisher and a co-worker at Silvan, Rex Sommers (Sommers), welded pieces of scrap metal to create a large flat-bottomed cylinder with a domed top. The tank, which was several feet high and held about 55 gallons of oil, was delivered to Linczeski. Testimony in the record indicates that after the tank was fabricated, the system for collecting and disposing of oil was modified over a period of weeks. Linczeski got Peter Harding (Harding), a plumber, to plug several holes in the side of the tank. The plumber also fitted the tank with valves— one for the top that allowed oil to be drained into the tank but could be closed to keep oil from splashing out when the tank was moved, and one at the bottom of the tank to allow oil to be drained out of the tank. Other changes were made to make the tank more convenient to use; for example, wheels were added to the bottom to make it easy to move around, and studs were added to the side so that wrenches could be hung on the tank. Linczeski's modifications ultimately included having one of the plugs that had originally plugged a hole taken off the tank and substituting instead a fitting that could be hooked up to an air hose. Air pressure could then be used to empty the tank.3
¶ 7 The tank was apparently used without incident until June 15, 2004, when Behrendt, an employee of Linczeski's, was using the tank with air pressure. It exploded, and he was injured. Behrendt sued Silvan, alleging negligence; he also sued Fisher for negligence and, in connection with Fisher's alleged negligence, alleged vicarious liability against Silvan for Fisher's acts as its employee.4 Behrendt alleged that the shape of the tank and the welds holding it together made it dangerous to be used with air pressure; therefore, he argued, Fisher was liable for fabricating it, and Silvan was both vicariously liable as his employer and liable in its own right for having a policy permitting side jobs. Silvan argued it was only the subsequent pressurizing of the tank that was the reason for the explosion, and that in any event, the original construction was outside the scope of Fisher's employment. Therefore, Silvan argued, the company was not liable under any theory.
¶ 8 All the defendants moved for summary judgment. The Marinette County Circuit Court, Judge David G. Miron presiding, denied Fisher's and Harding's motions for summary judgment. The circuit court granted Silvan's summary judgment motion on Behrendt's strict liability claim because Silvan did not manufacture the tank. The circuit court also granted Silvan's summary judgment motion on the negligence claim and on the vicarious liability claim, ruling that public policy factors barred a finding of negligence against Silvan because the negligence was too remote from the injury and because allowing recovery would open the door to fraudulent claims and would have no sensible or just stopping point.5
¶ 9 Behrendt appealed. The court of appeals affirmed the circuit court decision. Behrendt v. Gulf Underwriters Ins. Co., No. 2006AP2910, unpublished slip op., 2008 WL 495621 (Wis.Ct.App. Feb. 26, 2008). The court of appeals affirmed dismissal of the vicarious liability claim against Silvan because Fisher was not working within his scope of employment at Silvan when he built the tank. Id., ¶ 9. The court stated that the side projects were "solely for the employees' personal benefit" and thus were so little actuated by the purpose of serving the employer that as a matter of law there was no vicarious liability. Id., ¶¶ 8-9.
¶ 10 The court of appeals also affirmed summary judgment as to the negligence claim on the grounds that Silvan had no duty to Behrendt because any harm caused by Fisher was unforeseeable: "[T]his lack of foreseeability and absurdly attenuated chain of events ... supports the circuit court's ruling...." Id., ¶ 13. The court of appeals stated that "[t]he only facts relevant to Silvan's duty are the existence of its policies permitting side jobs but prohibiting manufacture of pressure vessels." Id.
¶ 11 Review of a grant of summary judgment is de novo. Green Spring Farms v. Kersten, 136 Wis.2d 304, 315-17, 401 N.W.2d...
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