Russell v. PPG Industries, Inc.

• Decision Date: 09 January 1992
• Docket Number: No. 90-3121,90-3121
• Citation: 953 F.2d 326
• Parties: 34 Fed. R. Evid. Serv. 906 Mitchell T. RUSSELL and Barbara A. Russell, Plaintiffs-Appellants, v. PPG INDUSTRIES, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 326

953 F.2d 326

34 Fed. R. Evid. Serv. 906

Mitchell T. RUSSELL and Barbara A. Russell, Plaintiffs-Appellants, v. PPG INDUSTRIES, INC., Defendant-Appellee.

No. 90-3121.

United States Court of Appeals Seventh Circuit.

Argued Sept. 25, 1991.

Decided Jan. 9, 1992.

Jeffrey D. Frederick, Johnson, Frank, Frederick & Walsh, Urbana, Ill., D. Jeffrey Ezra (argued), Jon G. Carlson, Carlson & Associates, Edwardsville, Ill., for plaintiffs-appellants.

Timothy J. Forman, Hinshaw, Culbertson, Moelmann, Hoban & Fuller, Urbana, Ill., Matthew J. Maddox (argued), Hinshaw & Culbertson, Springfield, Ill., for defendant-appellee.

Before CUMMINGS, FLAUM, and EASTERBROOK, Circuit Judges.

FLAUM, Circuit Judge.

Mitchell Russell was injured September 26, 1986, while working at the PPG Industries, Inc. (PPG) plant in Mt. Zion, Illinois. Russell was employed at the time by Perry Steel Construction Company, Inc. (Perry), which had contracted with PPG to construct, install, and perform on-site repairs to new production process equipment at the plant. His duties generally consisted of such activities as pouring concrete, operating a jack-hammer, masonry, and clean-up work.

Occasionally, Russell worked with PPG engineers on a glass furnace testing project which was outside the scope of the construction and repair contract. The project was conducted in a restricted area of the plant, and workers assigned to it required security clearances and received special training. Because of the special training required, PPG often would request specific Perry workers who had previously worked on the project. PPG typically would inform a Perry foreman that it needed a certain number of workers for a particular day and the foreman, in turn, would notify those workers on the day that they were to assist PPG with the furnace testing.

Russell was working on the furnace testing project when he was injured. During the testing he supported himself by placing his hand on an I-beam running above the furnace. As he leaned against the beam, his hand touched a high-voltage electric power bar, resulting in the injury that prompted this lawsuit. Russell brought this diversity action against PPG alleging negligence, violation of the Illinois Structural Work Act, willful and wanton misconduct, and intentional tort. His wife joined in the complaint, alleging loss of companionship, consortium, and support. The District Court granted summary judgment to PPG.

On appeal, Russell contends that the court erred in finding that he was a "loaned employee" of PPG at the time of his injury and therefore barred by the Illinois Workers' Compensation Act (IWCA) from suing PPG for common-law or statutory remedies grounded in negligence. He also asserts that he alleged sufficient facts to support his intentional tort claim. We affirm.

I.

The IWCA makes provision for "loaning" and "borrowing" employers. See Ill.Rev.Stat ch. 48, p 138.1(a)(4). When one employer loans an employee to another employer, the borrowing employer is primarily liable for compensation if the loaned employee is injured in the course of employment. Id. A loaned employee may not sue the borrowing employer for common-law or statutory remedies and is limited to recovery under the Act. Id. p 138.5; see Saldana v. Wirtz Cartage Co., 74 Ill.2d 379, 24 Ill.Dec. 523, 527, 385 N.E.2d 664, 668 (1978).

In granting summary judgment to PPG, the District Court determined as a matter of law that Russell was a loaned employee of PPG. Although such a determination is ordinarily a question of fact, "if the undisputed facts permit but a single inference," the question can be characterized as one of law. A.J. Johnson Paving Co. v. Industrial Comm'n, 82 Ill.2d 341, 45 Ill.Dec. 126, 130, 412 N.E.2d 477, 481 (1980). Our task is to determine whether a triable issue of fact is presented on this record. See Trenholm v. Edwin Cooper, Inc., 152 Ill.App.3d 6, 105 Ill.Dec. 61, 62, 503 N.E.2d 1067, 1068 (5th Dist.1986).

As a threshold matter, Russell asserts that PPG cannot maintain the "borrowing employer" defense unless Perry Steel is a "loaning employer" as explicitly defined by the relevant statute. ¹ We disagree. As PPG correctly points out, the IWCA "provides a definition of loaning employer; it does not provide the only definition of loaning employer." Appellee's Br. at 29 (emphasis in original). The statute does not preclude other employers, who are not in the business of hiring, procuring, or furnishing employees, from claiming the defense. It merely removes the need for further inquiry into status when employers falling within the explicit statutory definition are involved.

Because Perry is not, by definition, a loaning employer, further inquiry is required. Illinois law provides that two primary factors determine whether a loaned employee relationship exists: (1) whether the borrowing employer had the right to direct and control the manner in which the plaintiff performed the work; and (2) whether a contract of hire, either express or implied, existed between the plaintiff and the defendant. A.J. Johnson, 45 Ill.Dec. at 130, 412 N.E.2d at 481; Gundich v. Emerson-Comstock Co., 21 Ill.2d 117, 171 N.E.2d 60, 63 (1960). Of the two, the right to control is primary. A.J. Johnson, 45 Ill.Dec. at 129, 412 N.E.2d at 480 ("The main criterion for determining when a worker becomes a loaned employee is whether the special employer has control of the employee's services.") (quoting Saldana, 24 Ill.Dec. at 527, 385 N.E.2d at 668). As a general rule, the Act "should be liberally construed to bring persons within the term 'employer-employee.' " Saldana, 24 Ill.Dec. at 528, 385 N.E.2d at 669 (citing Allen-Garcia Co. v. Industrial Comm'n, 334 Ill. 390, 166 N.E. 78, 80 (1929)). We examine each factor in turn.

A.

Whether an employer has "control" over an employee's work depends upon the character of the supervision of the work done, the manner of direction of the servant, the right to discharge, the matter of hiring, and the mode of payment. Saldana, 24 Ill.Dec. at 528, 385 N.E.2d at 669; Freeman v. Augustine's, Inc., 46 Ill.App.3d 230, 4 Ill.Dec. 870, 873, 360 N.E.2d 1245, 1248 (5th Dist.1977). In finding that PPG had the right to control the manner in which Russell worked, the District Court noted that Russell reported to Walt Bisline, a PPG employee, and that Bisline instructed Russell how to test the furnace, had the authority to send back to Perry any PPG employees he found unsatisfactory, directed when Russell took breaks, and authorized Russell's overtime.

In arguing against the court's finding, Russell relies heavily on the fact that he received his salary from Perry, not PPG, and that Perry withheld taxes and insurance benefits from Russell's checks. While mode of payment is relevant in determining control, Saldana, 24 Ill.Dec. at 528, 385 N.E.2d at 669, it is not determinative. "The mere fact that the employee does not receive his wages from the special employer will not defeat the finding of a loaned-employee situation." A.J. Johnson, 45 Ill.Dec. at 130, 412 N.E.2d at 481. Cf. Allen-Garcia Co., 166 N.E. at 81 (fact that borrowing employer did not pay employee's wages "would not determine that he was not its employee."). Rather, "[t]he question of who pays an employee's wages is only one factor to be considered along with other factors in determining whether an employment relationship exists." Dildine v. Hunt Transp., Inc., 196 Ill.App.3d 392, 143 Ill.Dec. 94, 96, 553 N.E.2d 801, 803 (3d Dist.1990). Although Dildine involved a joint, rather than loaned, employee scenario, its reasoning is also applicable here. We must determine whether the "totality of the relevant factors" requires a finding that PPG controlled Russell's work. Id.

Although Russell was not paid directly by PPG, PPG's mode of payment in reimbursing Perry for work on the furnace project militates in favor of a finding of control. Employee time on the furnace testing project was not included in the general, reimbursable construction contract between Perry and PPG, but rather was billed separately and set up on a special purchase order. Perry billed PPG for the number of people on the project times the hourly rate, plus a profit factor. Thus, Perry billed PPG for the number of hours Russell worked for PPG on the project, and the amount Perry charged included the salary Perry paid to Russell plus a profit factor. Such an arrangement undercuts Russell's argument. See Highway Ins. Co. v. Sears, Roebuck & Co., 92 Ill.App.2d 214, 235 N.E.2d 309, 313 (1st Dist.1968) (in finding loaned employee relation, court noted that general employer had resigned full control of plaintiff for time being, and was merely "conduit" through which employees were paid); see also Allen-Garcia, 166 N.E. at 81.

Russell further contends that he was not a loaned employee because he was not "wholly free" from Perry's control and "wholly subject" to PPG's control during the relevant time period. Richard v. Illinois Bell Telephone Co., 66 Ill.App.3d 825, 23 Ill.Dec. 215, 222, 383 N.E.2d 1242, 1249 (1st Dist.1978); Freeman, 4 Ill.Dec. at 872, 360 N.E.2d at 1247. The facts indicate otherwise. Walt Bisline told Russell when to report to work, and set his hours and break times (which often differed from his usual hours and break times with Perry). When working with Bisline, Russell reported directly to him and received orders and directions only from him and other PPG personnel. Moreover, Russell admitted in his deposition that he was under Bisline's, not his labor foreman's, supervision, "took [his] orders from" Bisline, ² and considered Bisline his supervisor. Russell Deposition at 20-23. Russell's deposition shows that Bisline's authority over him was exclusive:

Q: When you worked for Walt [Bisline], did you report in the ordinary way or did you go directly to where he had told you to go?

A: I went directly where Walt told me to.

Q: When you got there in the morning, was he there?

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