Stewart-Warner Corp. v. Burns Internat'l Sec. Serv., Inc.

• Citation: 353 F. Supp. 1387
• Decision Date: 06 February 1973
• Docket Number: No. 71 C 336.,71 C 336.
• Parties: STEWART WARNER CORPORATION, Plaintiff, v. BURNS INTERNATIONAL SECURITY SERVICES, INC., Defendant.
• Court: U.S. District Court — Northern District of Illinois

353 F. Supp. 1387

STEWART WARNER CORPORATION, Plaintiff, v. BURNS INTERNATIONAL SECURITY SERVICES, INC., Defendant.

No. 71 C 336.

United States District Court, N. D. Illinois, E. D.

February 6, 1973.

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Holland C. Capper, Chicago, Ill., for plaintiff.

Paul L. Pawlowski, Chicago, Ill., for defendant.

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND MEMORANDUM OPINION AND ORDER ON POST TRIAL MOTIONS

McLAREN, District Judge.

In this matter, plaintiff sued for the value of goods destroyed in a fire set by a security guard employed by defendant. Counts I and II of the complaint were tried to a jury on the theory of negligent hiring. Count III was simultaneously tried to the Court on the theory of statutory liability. The jury found for plaintiff on Counts I and II, and the Court entered judgment for plaintiff on Count III, adopting the jury's determination of damages. Defendant has moved for judgment N.O.V. or a new trial as to the negligence counts.

The Court's findings of fact and conclusions of law on Count III are set forth first, followed by discussion of defendant's allegations of error on the trial of Counts I and II.

COUNT III

The statute upon which Count III is based, Ill.Rev.Stat. ch. 38, § 201-10b(10), provides:

"The holder of a certificate of authority who employs persons to assist him in the work of private detective and in the conduct of such business shall at all times during such employment be legally responsible for the good conduct in the business of each and every person so employed."

In denying defendant's motion to dismiss Count III, Judge Napoli held at an earlier stage that 10b(10) was designed to subject holders of certificates of authority to some measure of civil liability. Plaintiff asserts that this liability extends to all wrongful acts of employees of detective agencies, regardless of whether they were negligently hired and whether the acts are negligent or intentional, so long as they were committed while the employee was actually on the job. Although Judge Napoli's opinion may be interpreted to hold that 10b(10) broadens the scope of liability to this extent, it did not specifically so state. This Court is of the opinion that such is the proper interpretation of the statute.

Black's Law Dictionary 1476 (rev. 4th ed.) defines "responsible" as "liable, legally accountable or answerable." Thus the plain language of the statute makes defendant answerable for all acts of its employees in its business.

The construction urged by defendant would interpret 10b(10) as simply reiterating the common law, thus attributing to the legislature an idle act in adopting 10b(10). In Apex Smelting Co. v. Burns, 175 F.2d 978, 981 (7th Cir. 1949), a case involving facts very similar to those here, the court upheld a directed verdict for defendant where (1) there had been no showing of negligent hiring, and (2) respondeat superior was inapplicable because the employee's act was intentional and therefore beyond the scope of his employment. Section 201-10b was subsequently enacted.

The construction of 10b(10) contended for by plaintiff and adopted by this Court accords the statute a meaning which is consistent with its apparent purpose to remove from users of agency services the burden of loss from intentional injury inflicted by detective agency employees—which was the effect of Apex—and place it upon the agencies as a cost of doing business. Users are in no position to screen security employees; the agencies are. And 10b(10), as here interpreted, provides a substantial incentive for the agencies to do so with the utmost care.

The facts in this case are relatively simple. Defendant employed one Anderson on a certain date and ordered him to duty guarding a warehouse that night. Anderson was an applicant who walked in off the street; defendant put him to work without investigating his background, without testing his intelligence or ability to read or write, and without requiring identification or proof of age. The second night he was on duty, Anderson deliberately set fire to the second floor of the warehouse. The evidence is undisputed that plaintiff's property was stored on the first and second floors of that warehouse; that the fire proximately caused damage to the property; and that defendant was a holder of a certificate of authority under the Illinois Detective's Act. In light of the foregoing, and even viewing the evidence most favorably to defendant, the Court concludes that plaintiff is entitled to prevail, and defendant is liable to plaintiff, under Section 10b(10) of the Act. Any other reading of the Act, in the Court's view, would make the Act a nullity.

The judgment heretofore entered in favor of plaintiff and against defendant in the sum of $142,246 is hereby reaffirmed.

The foregoing will stand as this Court's findings of fact and conclusions of law with respect to Count III.

COUNTS I and II

At the close of all the evidence on liability, defendant moved for a directed verdict. The motion was denied and the action was submitted to the jury, the question of the sufficiency of the evidence to go to the jury being reserved. The federal courts in this circuit apply the state standard for direction of verdicts in diversity cases. Ettling v. Sander, 447 F.2d 593, 594 (7th Cir. 1971). Viewing the evidence most favorably to plaintiff, the Court concludes that the evidence did not so overwhelmingly favor defendant that no verdict for plaintiff could ever stand. Pedrick v. Peoria & E.R.R., 37 Ill.2d 494, 510, 229 N.E.2d 504, 513 (1967). Accordingly, the matter was properly submitted to the jury and the motion for judgment N.O.V. is denied.

Defendant further asserts that this Court improperly denied its motion to substitute the Sun Insurance Company as plaintiff and therefore lacks diversity jurisdiction. Defendant's assertions in this regard have already been adequately dealt with in the opinion denying the motion to substitute. Stewart Warner Corp. v. Burns Int'l Security Serv., Inc., 343 F.Supp. 953, 954-55...