Hiatt v. W. Plastics, Inc.

• Decision Date: 29 December 2014
• Docket Number: No. 2–14–0178.,2–14–0178.
• Citation: 36 N.E.3d 852
• Parties: Michael HIATT, Plaintiff–Appellant, v. WESTERN PLASTICS, INC., National Rubber Stamp Company, Inc., National Rubber Machine, Try–R–Electric Company, China National Rubber Machinery Corporation, General Binding Corporation, American C.N.C. Machine Company, Inc., and Leonard Hofkamp, Defendants (Illinois Tool Works, Inc., Defendant–Appellee).
• Court: United States Appellate Court of Illinois

36 N.E.3d 852

Michael HIATT, Plaintiff–Appellant

v.WESTERN PLASTICS, INC., National Rubber Stamp Company, Inc., National Rubber Machine, Try–R–Electric Company, China National Rubber Machinery Corporation, General Binding Corporation, American C.N.C. Machine Company, Inc., and Leonard Hofkamp, Defendants (Illinois Tool Works, Inc., Defendant–Appellee).

No. 2–14–0178.

Appellate Court of Illinois, Second District.

Dec. 29, 2014.

Devon C. Bruce, of Powers, Rogers & Smith, P.C., of Chicago, for appellant.

J. Kent Mathewson, Karen Kies DeGrand, and Timothy L. Hogan, all of Donohue, Brown, Mathewson & Smyth LLC, of Chicago, for appellee.

OPINION

Justice ZENOFF

delivered the judgment of the court, with opinion.

¶ 1 Plaintiff, Michael Hiatt, was an employee of Western Plastics, Inc. (Western), which uses extruding machines to produce plastic sheets. The machines heat plastic pellets into a putty form and then push the material through metal rollers to create plastic sheets of desired thicknesses. On October 15, 2007, while cleaning one machine's spinning rollers, plaintiff's arms were crushed between the rollers and had to be amputated. Plaintiff sued Western and other defendants, all but one of which either have been dismissed or have entered into settlement agreements with plaintiff. The only remaining defendant, Illinois Tool Works, Inc. (ITW), operated one of its divisions next door to Western and sold products that Western produced. Plaintiff alleged that ITW was liable to him because it either (1) was engaged in a joint venture with Western, (2) retained control over Western, giving rise to a duty of care, or (3) had actual or constructive knowledge that the extruding machine was unreasonably dangerous. The trial court entered summary judgment in ITW's favor, finding that it was not engaged in a joint venture with Western and owed no duty of care to plaintiff. For the following reasons, we reverse and remand.

¶ 2 I. BACKGROUND

¶ 3 Count IV of plaintiff's sixth amended complaint alleged as follows. ITW and Western were engaged in a joint venture to manufacture and sell plastic products. They shared profits and losses and exercised joint control and management of the manufacturing process, and they both contributed money, resources, equipment, and employees to the venture. ITW controlled the manner in which Western manufactured its products, including the pace and speed of the extruding machines. ITW knew that the extruding machine that injured plaintiff was unreasonably dangerous in that it lacked a proper emergency stopping mechanism and other safety devices. ITW was negligent individually and as a joint venturer with Western, in that it allowed plaintiff to work on an unreasonably dangerous machine, failed to provide adequate warnings and instructions, failed to provide adequate safety devices, and failed to identify and correct safety hazards. ITW's acts or omissions proximately caused plaintiff's injuries.

¶ 4 ITW moved for summary judgment on count IV, contending that there was no genuine issue of material fact as to whether it was engaged in a joint venture with Western, retained control over the manufacturing process, or knew that the extruding machine that injured plaintiff was unreasonably dangerous. Rather than recite ITW's and plaintiff's arguments in support of and in opposition to summary judgment, which in essence are the same arguments they make on appeal, we summarize the deposition testimony and documentary evidence.

¶ 5 A. Don Edelstein's Deposition

¶ 6 Don Edelstein testified as follows. He had been part owner of Western since 1977, when he and three other individuals started the company. Originally, Edelstein worked as a machine operator at Western. In 1986 or 1987, his primary responsibility became machine maintenance, which remained his responsibility at the time of plaintiff's accident.

¶ 7 In 1999, Western built its third extruding machine, which was the machine that injured plaintiff. The machine was a clone of Western's other extruding machines. Western purchased the components for the machine from various entities, and Edelstein assembled the components, hiring an electrician and a welder for some of the work. At Edelstein's direction, the electrician, Leonard Hofkamp, installed an emergency stop cord on the machine exactly as the stop cords were installed on Western's other machines. Edelstein estimated that 95% of the plastic that Western produced on its third extruding machine was for ITW. However, ITW played no role in the design or construction of the machine. Other than plaintiff's, no injuries had occurred on the machine.

¶ 8 ITW was Western's biggest customer. At the time of the accident, ITW accounted for 70% to 80% of Western's business. Although ITW was headquartered elsewhere, it had a facility next door to Western, in the same building. ITW and Western were separated by a wall and shared a loading dock. Edelstein believed that ITW moved into the building to reduce shipping costs, because most of the material that it sold came from Western.

¶ 9 A written manufacturing agreement governed the relationship between Western and ITW. Broadly speaking, Western's intent upon entering into the agreement was to sell more products and increase profits. Western did not have written agreements with any of its other customers.

¶ 10 ITW supplied to Western the plastic pellets used to produce ITW's products. The pellets used a proprietary formula that ITW owned. In addition, ITW supplied some of the pallets used to ship its products and the labels to be placed on its products. The manufacturing agreement contained a formula for setting the price at which Western would sell products to ITW, based on the number of pounds of product manufactured. For customers other than ITW, Western supplied the raw material and the pallets. The price of products for customers other than ITW was based on the number of plastic sheets produced, not on weight.

¶ 11 Edelstein testified that ITW owned electronic monitoring devices that were installed on two of Western's extruding machines. The devices measured the thickness of the plastic sheets as they were produced. The devices were capable of controlling the speed of the machines. When an extruding machine was set to “manual,” the machine operator controlled the speed. When an extruding machine was set to “automatic,” the monitoring device controlled the speed. When Western manufactured material for ITW, the machines were set to automatic. Although the monitoring devices were capable of controlling a machine's speed, ITW was unable to control the speed from its office. Instead, based on information that ITW provided, Western had programmed tolerances into the monitoring devices. The devices regulated each machine's speed to ensure that it produced material within the tolerances. For each roll of plastic produced, the monitoring devices also relayed the tolerances to ITW, which received a printout of the information. A wire from the devices ran through the wall into ITW's office. ITW incurred the expense of purchasing, installing, and maintaining the devices.

¶ 12 Upon further questioning, Edelstein clarified that there were two major components of each extruding machine—the portion “where the plastic is extruded” and the “downstream” portion, which contained the rollers that injured plaintiff. The monitoring devices were installed on and controlled the speed of the downstream portion of the machines. The speed of that portion affected the thickness of the plastic sheets being produced.

¶ 13 The monitoring device on the machine that injured plaintiff was not “activated” at the time of the accident, because the downstream portion of the machine had been separated from the extruder portion and plaintiff was standing between the two sections, cleaning the rollers on the downstream portion. When the two portions of the machine were separated, no material could move through the machine, and the monitoring device could not control the speed of the machine.

¶ 14 None of Western's other customers had monitoring devices installed on its machines like ITW did. However, like ITW, Western's other customers provided specifications for the thickness of the plastic sheets and rolls that they ordered.

¶ 15 Edelstein testified that Richard Pedersen worked as a “broker” for ITW and would enter Western on a daily basis to pick up completed orders. Pedersen did not have keys to Western. In addition to picking up completed orders, Pedersen helped with scheduling ITW's orders. Pedersen would create a schedule based on the thickness of the materials to be produced. The schedule ensured that Western did not “lose production,” as Western could produce products with the same thickness at the same time. Other than Pedersen, ITW employees occasionally came to Western for other reasons, for instance, if there was a quality issue that needed to be addressed. This happened “maybe a half a dozen times over the years,” possibly more.

¶ 16 B. Chris Benson's Deposition

¶ 17 Chris Benson testified as follows. He began working for ITW in 1986 in its Fastex division, which was located in Des Plaines, Illinois. In 1996, the Formex product line became part of the Fastex division. Formex is a flame-retardant polypropylene electrical insulation that is used in various electrical components. In 2000 or 2001, the Formex line was split off from the Fastex division and became a separate division of ITW. At that time, the Formex division moved into the space next to Western in Addison, Illinois. Western manufactured the Formex products.

¶ 18 Benson was responsible for, among other things, ordering raw material and issuing purchase orders to Western. When Benson issued a purchase order to Western, he identified the products he was ordering by part number and specified a quantity. The manufacturing agreement between ITW and Western contained the specifications for each product. The specifications consisted of a desired...