No. 3–06–0399
______________________________________________________________________________
Filed October 12, 2007.
IN THE APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 2007
DANIEL IOERGER; RANDY McCOMBS; ) Appeal from the Circuit Court
ROBERT LAMAR FOULKS, as Independent ) for the 10th Judicial Circuit,
Administrator of the Estate of Robert L. ) Peoria County, Illinois
Foulks, Sr., Deceased; and RALPH BILL; )
CONNIE WATSON, Administrator of the Estate )
of Ronald Watson, Deceased; and TRACY )
IRBY, Administrator of the Estate of John Irby,
)
Deceased, )
)
Plaintiffs-Appellants, )
)
v. ) No. 00–L–442
)
HALVERSON CONSTRUCTION CO., INC., an )
Illinois Corporation; MIDWEST FOUNDATION )
CORPORATION/HALVERSON )
CONSTRUCTION COMPANY, a Joint Venture, )
)
Defendants-Appellees. )
)
MICHAEL GRAFTON, Individually and as an )
Agent of JOB STRATEGIES, INC., a Corporation; )
HANSON PROFESSIONAL SERVICES, INC., a )
Delaware Corporation d/b/a Hanson )
Engineers, Inc.; ARK SYSTEMS, INC., a )
Corporation; and ST. PAUL FIRE AND MARINE )
INSURANCE COMPANY, a Corporation, ) Honorable
) Joe Vespa
Defendants. ) Judge, Presiding
______________________________________________________________________________
JUSTICE O’BRIEN delivered the opinion of the court:
______________________________________________________________________________
Plaintiffs Daniel Ioerger, Randy McCombs, Robert Foulks, administrator of the estate of
Robert L. Foulks, Sr., deceased, and Ralph Bill (collectively ironworkers), and other plaintiffs not
involved in this appeal, brought this negligence action against defendants Halverson Construction
Co., Inc., and Midwest Foundation Corp./Halverson Construction Co., a joint venture, and other
defendants not involved in this appeal, for injuries they sustained as a result of the collapse of a
scaffold at a bridge repair site. Halverson and the joint venture filed motions for summary judgment,
claiming immunity pursuant to the exclusive remedy provision of the Workers’ Compensation Act
(the Act) (820 ILCS 305/5(a) (West 2000)). The trial court granted the motions for summary
judgment and the ironworkers followed with this appeal. We reverse, finding that the exclusive
remedy provisions do not apply to either Halverson or the joint venture.
FACTS
In June 1999, defendants Midwest Foundation Corp. and Halverson Construction Co., Inc.,
formed a joint venture, Midwest Foundation Corp./Halverson Construction Co., in order to place a
bid with the Illinois Department of Transportation (IDOT) on the McCluggage Bridge repair project.
Midwest and Halverson executed a joint venture agreement which provided that the “the parties
hereby agree to constitute themselves as joint venturers for the purpose of submitting joint bids ***
for the performance of the construction contracts herein before described, and for the further purpose
of performing and completing such construction project.” The agreement also provided that the
profits and losses and liabilities resulting from the bridge project be shared 60% by Midwest and
40% by Halverson. Pursuant to the agreement, Midwest was fully responsible for:
“the performance of all labor for the Joint Venture, including
the payment of all payroll, payroll taxes, fringes, and other employee
expenses, including, but not limited to, the establishment of worker’s
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[sic] compensation insurance and the payment of all premiums
therefore. *** Midwest Foundation Corporation shall be entitled to
reimbursement from the Joint Venture for the costs incurred in
performing the foregoing obligations; such reimbursement to be paid
at such time or times as the Joint Venture shall determine.”
After IDOT accepted the joint venture’s bid, Halverson and Midwest performed separate
duties on the bridge. Midwest paid and supervised the ironworkers, who were employees solely of
Midwest. Midwest hired the employees who worked on “Ramp E,” the portion of the project that
Halverson personnel supervised. The joint venture did not hire or employ any workers. The joint
venture did not pay the wages of any workers on the project, including the injured ironworkers.
Neither Halverson nor the joint venture paid or contributed to the workers’ compensation premiums
covering the ironworkers; all premiums were paid by Midwest to Midwest’s workers’ compensation
insurer. Moreover, the parties admitted at oral argument that the joint venture has never reimbursed
Midwest for any expenses it incurred on the bridge project.
On April 24, 2000, the ironworkers were at the jobsite, working on a scaffold suspended
above the Illinois River when the scaffold collapsed, plunging them into the river below. Ioerger,
McCombs and Bill were injured and Foulks was killed. The ironworkers received workers’
compensation benefits for the injuries from their employer, Midwest. They subsequently filed this
tort action against Halverson and the joint venture. Both Halverson and the joint venture responded
with motions for summary judgment, claiming that they were afforded the same immunities from
common-law suits as Midwest under section 5(a) of the Act. Halverson argued that it was immune
as a member of the joint venture and an agent of both Midwest and the joint venture. The joint
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venture argued additionally that it was ultimately responsible for the ironworkers’ wages and
workers’ compensation premiums pursuant to the joint venture agreement. The trial court agreed
that Halverson and the joint venture were afforded immunity pursuant to section 5(a) and granted
their motions for summary judgment. The trial court also granted Halverson and the joint venture’s
motions to include Supreme Court Rule 304(a) (134 Ill. 2d R. 304(a)) language. The ironworkers
appealed.
ANALYSIS
The issue on appeal is whether the trial court erred when it granted summary judgment in
favor of Halverson and the joint venture. The ironworkers argue that the trial court erroneously
found that Halverson and the joint venture were afforded immunity under section 5(a) of the Act.
They contend that a genuine issue of material fact exists as to whether the exclusive remedy
provisions of the Act protect Halverson and the joint venture as co-joint venturers. Specifically, they
argue that whether Halverson’s status as a co-joint venturer of Midwest bars their tort action is a
question of fact; that their status as employees of the joint venture is a question of fact; and that
affording Halverson and the joint venture the Act’s immunity would frustrate the purpose of the Act.
Summary judgment should be granted only when “the pleadings, depositions, admissions on
file, and affidavits, if any, show that there is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law.” 735 ILCS 5/2-1005( c) (West 2004);
Bokodi v. Foster Wheeler Robbins, Inc., 312 Ill. App. 3d 1051, 1057, 728 N.E.2d 726, 730-31
(2000). “The purpose of summary judgment is not to try a question of fact but *** to determine
whether one exists.” Forsythe v. Clark USA, Inc., 224 Ill. 2d 274, 280, 864 N.E.2d 227, 232 (2007).
Summary judgment is a drastic measure which should only be granted with great caution and when
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the movant’s right to it is clear and free from doubt. Forsythe, 224 Ill. 2d at 280, 864 N.E.2d at 232.
When ruling on a motion for summary judgment, the court must construe all evidence and draw all
reasonable inferences in favor of the nonmoving party and strictly against the movant. Bokodi, 312
Ill. App. 3d at 1057, 728 N.E.2d at 731. This court reviews a trial court’s grant of summary
judgment de novo. Bokodi, 312 Ill. App. 3d at 1057, 728 N.E.2d at 731.
The Workers’ Compensation Act establishes a system of liability without fault by which the
employer exchanges traditional common-law defenses for the prohibition of common-law suits
against it. 820 ILCS 305/1 et seq. (West 2004); Forsythe, 224 Ill. 2d at 295, 864 N.E.2d at 240. The
purpose of workers’ compensation is to place upon the industry the costs of industrial accidents.
Meerbrey v. Marshall Field & Co., 139 Ill. 2d 455, 469, 564 N.E.2d 1222, 1229 (1990). The Act
bars all suits for personal injuries that arise out of and in the course of employment. Mier v. Staley,
28 Ill. App. 3d 373, 381, 329 N.E.2d 1, 8 (1975). Employers should not be required to provide
workers’ compensation and also pay out in common-law actions. Schmidt v. Milburn Brothers, Inc.,
296 Ill. App. 3d 260, 269, 694 N.E.2d 624, 629 (1998).
Section 5(a) of the Act states:
“No common law or statutory right to recover damages from
the employer, his insurer, his broker, any service organization
retained by the employer, his insurer or his broker to provide safety
service, advice or recommendations for the employer or the agents or
employees of any of them for injury or death sustained by any
employee while engaged in the line of his duty as such employee,
other than the compensation herein provided, is available to any
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employee who is covered by the provisions of this Act *** [or] the
legal representatives of his estate ***.” 820 ILCS 305/5(a) (West
2004).
The trial court relied on Moran v. Gust K. Newberg/Dugan & Meyers, 268 Ill. App. 3d 999,
645 N.E.2d 489 (1994), in concluding that Halverson and the joint venture were afforded immunity
as a member of a joint venture and as the joint venture itself. In Moran, the plaintiff argued, inter
alia, that there were disputed issues of fact regarding who employed him and whether there was an
agency relationship between his claimed employer and the joint venture. Moran, 268 Ill. App. 3d
at 1004, 645 N.E.2d at 492. The facts were in dispute as to who employed the plaintiff. Moran, 268
Ill. App. 3d at 1001-2, 645 N.E.2d at 490-91. The court concluded, however, that its analysis was
not altered by whether the plaintiff was employed by a member of the joint venture or the joint
venture itself. Moran, 268 Ill. App. 3d at 1005, 645 N.E.2d at 494. The court found that the joint
venture and its members, as agents of each other, have coextensive liabilities. Moran, 268 Ill. App.
3d at 1005, 645 N.E.2d at 494. The Moran court held that the liabilities of defendants were the same
as the liability of the plaintiff’s alleged employer and found that the tort claims against them were
barred under section 5(a). Moran, 268 Ill. App. 3d at 1005-6, 645 N.E.2d at 494.
In reaching that conclusion, the Moran court relied on Smith v. Metropolitan Sanitary District
of Greater Chicago, 77 Ill. 2d 313, 396 N.E.2d 524 (1979). The plaintiff in Smith was employed by
the joint venture. Smith, 77 Ill. 2d at 316, 396 N.E.2d at 526. After he was injured on the jobsite,
he filed actions against various parties, including defendant, a member of the joint venture, which
argued that the plaintiff’s claim against it was barred by section 5(a). Smith, 77 Ill. 2d at 316, 396
N.E.2d at 526. The defendant asserted that as a member of the joint venture, it was liable for the
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payment of the plaintiff’s workers’ compensation benefits and thus entitled to the Act’s protection.
Smith, 77 Ill. 2d at 317, 396 N.E.2d at 526. It further asserted that it was entitled to immunity as an
agent of the joint venture. Smith, 77 Ill. 2d at 317, 396 N.E.2d at 526-27. The Smith court agreed
and applied section 5(a) to bar the plaintiff’s claim against the defendant as a joint venture member.
Smith, 77 Ill. 2d at 318, 396 N.E.2d at 527. Looking to partnership law, the court found that
members of a joint venture are agents of the joint venture and that, as an agent, a member’s liability
would be coextensive with its principal, the joint venture. Smith, 77 Ill. 2d at 318, 396 N.E.2d at
527. Accordingly, the court held that because the joint venture was immune under section 5(a) as
the plaintiff’s employer, his claim against the defendant as a member of the joint venture was also
barred. Smith, 77 Ill. 2d at 318, 396 N.E.2d at 527.
As interpreted by Moran, Smith instructs that in the context of a joint venture, the statutory
protection under section 5(a) is a question of legal status such that if a joint venture exists, the joint
venture itself and all of its members are entitled to section 5(a) immunity. Moran, 268 Ill. App. 3d
at 1006, 645 N.E.2d at 494. In our view, in using Smith as the basis for its conclusion, the Moran
court neglected to carry its analysis far enough. We note that the defendant in Smith argued that it
was afforded protection under the Act because it had corresponding obligations, such as liability for
the plaintiff’s workers’ compensation benefits. Smith, 77 Ill. 2d at 317, 396 N.E.2d at 526. While
the Smith court did not discuss the defendant’s specific workers’ compensation obligations, it did
reason that, based on partnership principles, the defendant’s duty to the plaintiff and any liability for
a breach of that duty would be coextensive with that of the joint venture. Smith, 77 Ill. 2d at 318,
396 N.E.2d at 527. The Smith court thus focused on the defendant’s worker’s compensation
obligations in determining whether it was subject to the Act’s immunity. This extended analysis is
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supported by the decisions in Schmidt v. Milburn Brothers, Inc., 296 Ill. App. 3d 260, 694 N.E.2d
624 (1998), and Forsythe v. Clark USA, Inc., 224 Ill. 2d 274, 864 N.E.2d 227 (2007).
In Schmidt, the plaintiff was injured when the truck he was driving was hit by a truck driven
by the defendant. Schmidt, 296 Ill. App. 3d at 261, 694 N.E.2d at 625. Both the plaintiff and the
individual defendant were separately employed by companies that were part of a “family” of
companies. Schmidt, 296 Ill. App. 3d at 262, 694 N.E.2d at 625. The defendant’s employer was
also a defendant in the action. Schmidt, 296 Ill. App. 3d at 262, 694 N.E.2d at 625. At the time of
the accident, the men were working on different joint venture projects. Schmidt, 296 Ill. App. 3d
at 269, 694 N.E.2d at 630. The defendants argued that they were joint employers of both drivers and
members of the companies’ joint ventures and thus were immune from tort liability. Schmidt, 296
Ill. App. 3d at 265, 694 N.E.2d at 627. Expanding on the analysis set forth in Moran, the Schmidt
court inquired further to determine whether, in the context of a joint venture, the defendants seeking
section 5(a) immunity bore any of the responsibility for providing workers’ compensation benefits
to the injured employee. Schmidt, 296 Ill. App. 3d at 269-270, 694 N.E.2d at 629-30. The record
indicated that the “family” of companies were covered by a single workers’ compensation policy but
did not establish who paid the premiums. Schmidt, 296 Ill. App. 3d at 265, 694 N.E.2d at 627. The
court assumed that had the defendant company paid or contributed to the premiums, it would have
so stated. Schmidt, 296 Ill. App. 3d at 265, 694 N.E.2d at 627. The Schmidt court reasoned that to
afford the defendants immunity without any corresponding obligation in securing and paying for
workers’ compensation insurance would be contrary to the purpose of the Act. Schmidt, 296 Ill.
App. 3d at 269, 694 N.E.2d at 629-30. It thus reversed the grants of summary judgment and held
that whether the defendants were entitled to immunity as joint venturers was a matter for the trier
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of fact to determine. Schmidt, 296 Ill. App. 3d at 270, 694 N.E.2d at 630.
In Forsythe, the plaintiffs filed actions against their decedents’ employer and its parent
company. Forsythe, 224 Ill 2d at 277, 864 N.E.2d at 230. One of the issues before the court was
whether, under a theory of direct participant liability, section 5(a) immunizes the parent company.
Forsythe, 224 Ill 2d at 277-78, 864 N.E.2d at 230-31. The court determined that it did not, agreeing
with the Schmidt analysis that a party which did not bear the costs of providing workers’
compensation was not entitled to the Act’s immunity. Forsythe, 224 Ill 2d at 298, 864 N.E.2d at 242.
Noting that the parent company did not employ the decedents or pay the workers’ compensation
benefits to their families, the court found that the parent company was not entitled to protection
under the Act and held that it was not immunized under section 5(a). Forsythe, 224 Ill 2d at 298, 864
N.E.2d at 242.
In our view, the extended analysis employed in Smith, Schmidt and Forsythe is more attuned
to the purpose of section 5(a)’s grant of immunity. The analysis set forth in Moran, that a finding
that a joint venture exists affords immunity to the joint venture and all its members, is contrary to
the reason for immunity. There is no question that an employer should not have to pay workers
compensation and also have to pay out in tort actions. Conversely, a joint venture or one of its
members should not enjoy the Act’s immunity without bearing some of the corresponding
obligations. We agree with the rationale in Smith, Schmidt and Forsythe that the immunity should
serve to protect those who bear the burden of providing benefits.
The question for our determination in the instant case thus becomes whether Halverson and
the joint venture bore any responsibility for providing workers’ compensation for the ironworkers.
Based on our review of the record, we find that they did not. First, we note that there is no question
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that a joint venture existed under the instant facts. There is also no dispute that the ironworkers were
employees of Midwest, not the joint venture. Midwest hired and paid the employees, directed and
controlled their work, and provided workers’ compensation benefits for their injuries. Contrary to
the terms of the joint venture agreement, neither Halverson nor the joint venture reimbursed Midwest
for the wages it paid to the ironworkers prior to the injuries in this case. Neither Halverson nor the
joint venture contributed to the payment of workers’ compensation premiums or reimbursed
Midwest for its payment of them before the accident. Indeed, at the time of oral arguments,
months/years later, it was admitted that they had not reimbursed Midwest for any expenses
associated with the joint venture.
We believe that it would be bad public policy to allow Halverson and/or the joint venture,
at this point, to now deliver or postdate a check to Midwest for reimbursement of wages and
workers’ compensation premiums to fulfill its obligations under the joint venture agreement in order
to obtain the protection of the Act’s immunity. The mere fact that Halverson and Midwest were co-
joint venturers and part of the joint venture does not, in our view, provide them immunity under
section 5(a). In order to enjoy the Act’s immunity, they must also undertake its obligations.
We thus hold that Halverson and the joint venture are not entitled to the immunity under
section 5(a) of the Act because they did not bear any responsibility for providing workers’
compensation. To hold otherwise would allow Halverson and the joint venture to reap the benefits
of the Act without incurring any of the corresponding detriments. We acknowledge that our decision
contradicts the holding in Moran. However, in our opinion, the Moran court failed to focus on the
defendant’s workers’ compensation obligations as illustrated in Smith. Moreover, the analysis put
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forth in Moran has been diminished by the subsequent cases of Schmidt and Forsythe, each of which
employs an expanded analysis that is more aptly aligned with the Smith decision as well as the
purposes of the Act’s grant of immunity.
We disagree with the dissent that this cause should be remanded for a determination as to
whether Halverson and the joint venture actually bore any responsibility for providing workers’
compensation benefits to the ironworkers. In our view, had Halverson or the joint venture any
evidence that they contributed to or bore any obligations for providing workers’ compensation, they
would have presented it to the court. Therefore, remand is not necessary. Accordingly, we find that
the trial court’s grants of summary judgment to Halverson and the joint venture should be reversed
and this cause remanded for further proceedings consistent with this order.
For the foregoing reasons, the judgment of the circuit court of Peoria County is reversed and
this cause is remanded.
Reversed and remanded.
WRIGHT, J., concurs.
JUSTICE CARTER concurring in part and dissenting in part:
I agree with the majority’s conclusion that the trial court erred in granting summary judgment
in favor of Halverson and the joint venture (collectively referred to as defendants). I dissent,
however, because I believe that the majority’s ruling goes too far. In my opinion, a material issue
of fact remains as to whether defendants bore any of the responsibility of providing workers’
compensation benefits to plaintiffs. I would remand this case for a determination of that material
issue of fact.
When the trial court ruled upon this case, the application of the exclusive remedy provision
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in the area of joint venture was largely a question of legal status. See Moran v. Gust K.
Newberg/Dugan & Meyers, 268 Ill. App. 3d 999, 1006, 645 N.E.2d 489, 494 (1994). If the parties
had the legal status of joint venture, the joint venture itself and all members of the joint venture were
entitled to the statutory protection. See Moran, 268 Ill. App. 3d at 1006, 645 N.E.2d at 494. The
trial court was bound to follow those legal principles. See People v. Harris, 123 Ill. 2d 113, 128, 526
N.E.2d 335, 340 (1988) (decisions of an appellate court are binding precedent on all circuit courts
regardless of locale). Thus, when the parties litigated the matter before the trial court, the evidence
presented was for the sole purpose of showing whether a joint venture existed. The supreme court’s
ruling in Forsythe v. Clark USA, Inc., 224 Ill. 2d 274, 298, 864 N.E.2d 227, 241-42 (2007), changed
the analysis in this area. A court, ruling upon this issue, must now look beyond the existence of the
legal status of joint venture and inquire whether the party seeking the protection of the act has bore
some of the responsibility of providing workers’ compensation benefits. See Forsythe, 224 Ill. 2d
at 298, 864 N.E.2d at 241-42.
As the majority notes, defendants admitted at oral argument that they had not reimbursed
Midwest for the costs associated with providing workers’ compensation benefits for the project.
However, it cannot be determined from this record whether the project has been completed or
whether there are any gross profits from which to reimburse Midwest. Furthermore, the joint venture
agreement is ambiguous as to how and when a reimbursement will take place. No evidence was
presented on this issue in the trial court, because as noted above, the trial court’s only focus was on
whether the legal status of joint venture existed. Instead of giving the parties an opportunity to
litigate that issue of material fact before the trial court, the majority resolves the issue and finds that
defendants bore none of the responsibility of providing workers’ compensation benefits to the
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plaintiffs. That determination goes beyond our role here and should be left to the trial court. Even
if either one of the defendants or both are not entitled to the protection of the exclusive remedy
provision, there are possibly other potential issues. For example, whether there is a right of
contribution from Midwest, whether Midwest has waived the protection of the exclusive remedy
provision, and whether the Construction Contract Indemnification for Negligence Act (740 ILCS
35/0.01 et seq. (West 2006)) has any impact on the analysis. See Virginia Surety Co. v. Northern
Insurance Co. of New York, 224 Ill.2d 550, 866 N.E.2d 149 (2007).
In addition, I believe that there is a procedural flaw with the majority’s ruling. Defendants
moved for summary judgment on the issue of whether the exclusive remedy provisions of the Act
preclude plaintiffs’ common law tort action. Plaintiffs did not file a cross motion for summary
judgment on that issue. Instead, plaintiffs have argued throughout the proceedings that material
issues of fact prevent a grant of summary judgment. The majority’s ruling merely establishes that
at this time, it is not clear as a matter of law that defendants are entitled to judgment on that issue.
Contrary to the majority’s further assertion, defendants may still present evidence on that issue and
obtain judgment on that issue after a trial. This is no different than when a defendant in a personal
injury action files a motion for summary judgment alleging that he or she is not the proximate cause
of the plaintiff’s injuries. A denial of that motion does not prevent the defendant from litigating and
obtaining judgment on that issue after a trial.
For the foregoing reasons, I respectfully concur in part and dissent in part.
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