Munoz v. Nucor Steel Kankakee, Inc.

• Decision Date: 09 August 2022
• Docket Number: 21-1287
• Citation: Munoz v. Nucor Steel Kankakee, Inc., 44 F.4th 595 (7th Cir. 2022)
• Parties: Oscar MUNOZ and Munoz Sons Trucking, LLC, Plaintiffs-Appellants, v. NUCOR STEEL KANKAKEE, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

44 F.4th 595

Oscar MUNOZ and Munoz Sons Trucking, LLC, Plaintiffs-Appellants,

v.NUCOR STEEL KANKAKEE, INC., Defendant-Appellee.

No. 21-1287

United States Court of Appeals, Seventh Circuit.

Argued November 2, 2021

Decided August 9, 2022

Jeffrey Thut, Attorney, Noonan, Perillo & Thut, Waukegan, IL, for Plaintiffs-Appellants.

Thomas Gonzalez, Attorney, Scopelitis, Garvin, Light, Hanson & Feary, P.C., Milwaukee, WI, for Defendant-Appellee.

Before Sykes, Chief Judge, Flaum and Jackson-Akiwumi, Circuit Judges.

Jackson-Akiwumi, Circuit Judge.

Oscar Munoz sued Nucor Steel Kankakee, Inc., for injuries he suffered while he was at Nucor's scrap metal facility.The district court granted summary judgment for Nucor after finding that Munoz's injuries were within the scope of a valid exculpatory clause that Munoz signed.We affirm.

I

Munoz is a truck driver with 20 years of experience.He established his own trucking company, Munoz Sons Trucking, LLC, and, in 2016, also became an independent contractor for Star Line Trucking.Companies contract with Star Line to haul a variety of materials to different locations, and Star Line hires independent contractors like Munoz to do the hauling.The companies pay Star Line for the hauling, and Star Line in turn pays Munoz for his services.Star Line dispatch tells Munoz about these hauling jobs a day in advance.

As an independent contractor for Star Line, Munoz began delivering scrap metal to Nucor's scrap metal yard in Kankakee, Illinois, around May 2016.At one point, he delivered scrap metal to Nucor every day; later it became once a week.Before he could enter Nucor's facility for the first time each year, Munoz signed a Gate Entry Agreement that contained an exculpatory clause releasing Nucor of any liability for any injuries sustained at the facility.Munoz signed the Agreement in June 2016, January 2017, and January 2018(the Agreement at issue).

When hauling scrap metal to places like Nucor, Munoz sweeps his truck as a matter of course because the load leaves behind shavings, called turnings.Star Line requires its independent contractors to sweep out their trucks between loads.Nucor does not require drivers to sweep.Nucor nonetheless provides a dirt pile into which haulers sweep their trucks.

Nucor requires drivers to use a ladder or man door when climbing in and out of their truck beds at the dirt pile.The parties dispute whether, when drivers use a ladder (as opposed to a man door), Nucor requires them to use the ladder Nucor provides, which is a rolling staircase, or gives them the option of using the ladder attached to their truck.Regardless, for his ladder or man door option, Munoz always used the rolling staircase provided by Nucor.Nucor performs no maintenance on the staircase and leaves it outside exposed to the elements.Nucor employees inspect the staircase whenever they use it, but not when haulers do.

In March 2018, Munoz delivered scrap metal to Nucor and then drove to the dirt pile as usual.Munoz climbed up the staircase to sweep his truck bed.But once he finished sweeping and started to climb down, the staircase broke at the wheel and axle—which turned out to be rusted—and he fell from the top of the staircase.Munoz injured his shoulder, which required surgery, and his lower back, which continues to cause him problems today.

Munoz filed a suit on behalf of himself and Munoz Sons Trucking against Nucor, alleging one count of negligence and one count of willful and wanton conduct for failure to maintain or repair the staircase.¹Nucor argued that the exculpatory clause in the Agreement barred the claims.The parties filed cross-motions for summary judgment, and the district court ruled in favor of Nucor.Munoz and Munoz Sons Trucking appeal the decision.²

II

We review de novo a district court's decision on cross-motions for summary judgment.Markel Ins. Co. v. Rau , 954 F.3d 1012, 1016(7th Cir.2020)(citation omitted).We construe all facts and inferences in favor of the nonmoving party.Id.Summary judgment is appropriate when there is no genuine dispute of material fact.FED R. CIV. P. 56(a)."A disputed fact is only material if it ‘might affect the outcome of the suit under the governing law.’ "Hoffman-Dombrowski v. Arlington Int'l Racecourse, Inc. , 254 F.3d 644, 650(7th Cir.2001)(citation omitted).

Munoz advances three arguments for reversing the district court's summary judgment ruling: (1) the disparate bargaining power between the parties renders the exculpatory clause invalid; (2) Nucor's failure to maintain or repair the staircase was not within the scope of the exculpatory clause; and (3) Nucor's conduct was willful and wanton, so the clause is unenforceable in this case.None of these arguments carries the day.

All three arguments concern the exculpatory clause in the Gate Entry Agreement between Munoz and Nucor.Under Illinois law, exculpatory clauses are generally disfavored and are strictly construed against the benefitting party.³Hamer v. City Segway Tours of Chi., LLC , 402 Ill.App.3d 42, 341 Ill.Dec. 368, 930 N.E.2d 578, 581(2010)(citingScott & Fetzer Co. v. Montgomery Ward & Co. , 112 Ill.2d 378, 98 Ill.Dec. 1, 493 N.E.2d 1022, 1029(1986) ).Nonetheless, "[a]bsent fraud or willful and wanton negligence, a contract's exculpatory clause will be valid and enforceable unless (1) the bargaining position of the parties reflects a substantial disparity, (2) enforcement violates public policy, or (3) the social relationship between the parties militates against upholding the clause."Hawkins v. Cap. Fitness, Inc. , 2015 IL App (1st) 133716, ¶ 18, 390 Ill.Dec. 510, 29 N.E.3d 442(citation omitted).

A

We first address Munoz's argument about bargaining power.Exculpatory agreements cannot be enforced if they are between parties with certain special relationships, such as employer-employee, or between the public and a public service (e.g., innkeeper, common carrier, public utility).White v. Vill. of Homewood , 256 Ill.App.3d 354, 195 Ill.Dec. 152, 628 N.E.2d 616, 619–20(1993)(citations omitted).Such provisions are also unenforceable if "there is such a disparity of bargaining power that the agreement does not represent a free choice on the part of the plaintiff, such as a monopoly or [where]a plaintiff[has no] reasonable alternative."Id.(citation omitted).

Relying on White , Munoz contends that his relationship with Nucor is like an employer-employee relationship.He argues that he had no choice in signing the Agreement because if he refused to sign, he would have been prohibited from delivering scrap metal to Nucor, thus losing a sizable portion of his business.Munoz notes that deliveries to Nucor accounted for 18% of his total income in 2018, 25% of his income during six months of 2018, and nearly 40% of his income in April 2018.But Munoz overstates his relationship with Nucor; Munoz is an independent contractor with Star Line, who is not a party to this case.

White , on the other hand, addressed a direct economic relationship between a potential employer and a job applicant.There, a job applicant was injured while taking part in a physical agility test for a position at the local fire department.195 Ill.Dec. 152, 628 N.E.2d at 617.To participate in the test, she had to sign an exculpatory clause.

Id. , 195 Ill.Dec. 152, 628 N.E.2d at 620.The court found that the relationship of a "potential employer and job applicant[ ] is akin to the relationship between an employer and employee," and that as a job applicant, the plaintiff was subject to an "economic compulsion," where she would not have qualified for the position without the agility test.Id.

Munoz would stretch White 's logic through several degrees of separation.Nucor does not pay Munoz; it does not even pay Star Line.Nucor pays Star Line's customer who sends the scrap metal, who in turn pays Star Line a fee for coordinating the delivery, who then gives Munoz a cut for the actual transportation.We do not agree that this type of attenuated relationship establishes such disparate bargaining power that would render Munoz's choice nugatory.

Munoz is more like the plaintiff in Johnson v. Salvation Army , who had multiple choices for a drug and alcohol rehabilitation program and actively chose to attend one that required signing an exculpatory clause.2011 IL App (1st) 103323, ¶¶ 24–32, 354 Ill.Dec. 169, 957 N.E.2d 485.There, the court distinguished White because that case involved "employment, an essential economic necessity," while the defendant in Johnson offered the plaintiff only rehabilitation services and not "the alleged necessities [of food and shelter]plaintiff argue[d]he was under an economic compulsion to acquire."Id.at ¶ 32.Munoz similarly does not adequately explain what core necessity required him to deliver only to Nucor.Munoz is an independent contractor who receives information about upcoming hauls a day in advance.Munoz's self-employment purportedly allows him to decide which jobs he wants to take.The evidence shows that he made many trips to facilities besides Nucor.He hauls glass and other materials, wholly separate from Nucor's industry.On this record, Munoz could choose to not haul scrap metal at all.⁴If Munoz had no meaningful choice in the jobs Star Line offered him (and there is no evidence in the record of this), perhaps that could be persuasive—but that would only concern the disparate nature of his relationship with Star Line, not Nucor.Munoz has not shown that the balance in his bargaining power with Nucor was so uneven as to vitiate the exculpatory clause.

B

Munoz's second argument is that his injuries were not foreseeable and therefore fell outside the scope of the exculpatory clause.Illinois courts have held that an exculpatory clause "constitutes an express assumption of risk wherein one party consents to relieve another party of a particular obligation."Platt v. Gateway Int'l Motorsports Corp. , 351 Ill.App.3d 326, 286 Ill.Dec....