Hastings v. JEFCO Equipment Company, Inc. ( 2013 )

ILLINOIS OFFICIAL REPORTS
Appellate Court
Hastings v. Jefco Equipment Co., 2013 IL App (1st) 121568
Appellate Court DEIRDRE HASTINGS, Plaintiff-Appellant, v. JEFCO EQUIPMENT
Caption COMPANY, INC., Defendant-Appellee (Roszak/ADC, LLC; Rockford
Ornamental Iron, Inc.; TR Sienna Partners, LLC; and Sienna, Inc.,
Defendants).
District & No. First District, Fourth Division
Docket No. 1-12-1568
Rule 23 Order filed May 23, 2013
Rule 23 Order
withdrawn June 27, 2013
Opinion filed August 1, 2013
Held In an action for the injuries suffered by an ironworker when steel beams
(Note: This syllabus being unloaded by a crane operator fell on her, the entry of summary
constitutes no part of judgment for the owner of the crane based on the finding that the crane
the opinion of the court operator was a borrowed employee of the ironworker’s employer was
but has been prepared reversed and the cause was remanded for further proceedings, since
by the Reporter of questions of material fact existed as to whether the crane operator’s status
Decisions for the precluded summary judgment, including the crane owner’s right to
convenience of the discharge the operator and the control exercised by the ironworker’s
reader.)
employer over the crane operator.
Decision Under Appeal from the Circuit Court of Cook County, No. 07-L-8478; the Hon.
Review Eileen Mary Brewer, Judge, presiding.
Judgment Reversed and remanded.
Counsel on Steven R. Levin, of Levin, Riback Law Group, P.C., and Alvin R. Becker
Appeal and Matthew D. Elster, both of Beermann Pritkin Mirabelli Swerdlove
LLP, both of Chicago, for appellant.
Michael Resis, Marcie Thorp, and Joseph M. Eichberger, all of
SmithAmundsen LLC, of Chicago, for appellee.
Panel JUSTICE EPSTEIN delivered the judgment of the court, with opinion.
Presiding Justice Lavin and Justice Pucinski concurred in the judgment
and opinion.
OPINION
¶1 Plaintiff Deirdre Hastings appeals from the trial court’s order granting summary
judgment to defendant Jefco Equipment Co., Inc. Hastings was an ironworker employed by
third-party defendant Area Erectors, Inc., at the Sienna condominiums construction site in
Evanston, Illinois. On March 5, 2007, Hastings’ shoulder and leg were injured when a load
of steel beams being hoisted by a 90-ton crane fell from its rigging onto Hastings. In her
amended complaint, Hastings asserted claims for negligence and premises liability against
Jefco, the owner of the crane. She also brought claims against Roszak/ADC, LLC, the
general contractor; TR Sienna Partners, LLC, the owner of the premises; TR Sienna, Inc., its
manager; and Rockford Ornamental Iron, Inc., the steel fabricating company.
¶2 The record, developed through discovery, shows that on the date of the accident, Hastings
and other Area ironworkers were unloading steel beams from the bed of a flatbed truck. In
order to transport steel from the truck to a “shake-out” site, from which the steel would be
moved onto the structure being built, the ironworkers used a 90-ton hydraulic truck crane
owned by Jefco and operated by Greg Windbiel. At the time of the accident, Hastings was
standing in the shake-out area, waiting for Windbiel to deliver a load of six steel beams. As
Windbiel lifted the beams, they began to pivot counterclockwise in the air. As the load
approached Hastings, it bounced three times, approximately 8 to 10 inches each time.
Hastings reached up with her left hand and grabbed one of the columns in order to guide it,
but as she took her hand off the column, one of the eyes “popped off the hook” of the crane
and two of the steel beams struck her in the chest. Hastings fell, and one of the beams landed
on and broke her right leg.
¶3 After the parties conducted discovery, Jefco moved for summary judgment. The circuit
court granted summary judgment to Jefco on Hastings’ negligence claim, finding that
because the crane operator during the accident, Greg Windbiel, was a borrowed employee
of Area, Jefco was not liable for Hastings’ injuries. The trial court also granted summary
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judgment to Jefco on Hastings’ premises liability claim. The trial court later entered an order,
pursuant to Illinois Supreme Court Rule 304(a) (Ill. S. Ct. R. 304(a) (eff. Feb. 26, 2010)),
finding no just reason to delay the appeal. Focusing only on her negligence claim, Hastings’
sole argument on appeal is that summary judgment was improper because questions of fact
exist as to Windbiel’s status as a borrowed employee.
¶4 We review the trial court’s decision to grant summary judgment de novo. Outboard
Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992). Summary
judgment is proper where the pleadings, admissions, depositions and affidavits demonstrate
there is no genuine issue as to any material fact and that the movant is entitled to judgment
as a matter of law. Ioerger v. Halverson Construction Co., 232 Ill. 2d 196, 201 (2008); 735
ILCS 5/2-1005 (West 2010). We construe all evidence strictly against the moving party and
liberally in favor of the nonmoving party. Buenz v. Frontline Transportation Co., 227 Ill. 2d
302, 308 (2008). While summary judgment can aid in the expeditious disposition of a
lawsuit, it is a drastic measure that should only be permitted where the movant’s right is clear
and free from doubt. Williams v. Manchester, 228 Ill. 2d 404, 417 (2008).
¶5 An employee in the general employment of one employer may be loaned to another for
the performance of special work and take on the status of a “borrowed employee” while
performing the special service. Kawaguchi v. Gainer, 361 Ill. App. 3d 229, 240 (2005). If
an employee is a borrowed employee at the time of allegedly tortious conduct, the
employee’s general employer cannot be liable for such conduct and any vicarious liability
would rest on the borrowing employer. Behrens v. California Cartage Co., 373 Ill. App. 3d
860, 863-64 (2007).
¶6 Our supreme court has long recognized “that the criteria reiterated in the Illinois case law
for the existence of the master-servant relationship is the right to control, which includes the
power of discharge.” Gundich v. Emerson-Comstock Co., 21 Ill. 2d 117, 123 (1960). Illinois
courts have identified several factors to determine whether an alleged borrowing employer
has the right to control an allegedly borrowed employee: the manner in which the
performance of the employee’s duties is directed, the mode of payment, the right to
discharge, the terms of any written contract between the employers, and the general
employer’s ability to substitute among employees loaned to the borrowing employer.
Kawaguchi, 361 Ill. App. 3d at 240; Saldana v. Wirtz Cartage Co., 74 Ill. 2d 379, 390 (1978)
(noting that factors to determine control include “the matter of hiring, the mode of payment,
the right to discharge, and the manner of direction of the services” (internal quotation marks
omitted)); see also Dowe v. Birmingham Steel Corp., 2011 IL App (1st) 091997, ¶ 30
(separating the “right to control” from factors such as the “right to discharge,” but noting that
the right to control the manner in which the work is performed is considered to be the most
important factor in determining status of borrowed employee). Other factors relevant to the
question of borrowed employment include the level of skill required to perform the work;
who deducts or pays for insurance, social security, and taxes on the employee’s behalf; and
the length of service for the special employer. Dowe, 2011 IL App (1st) 091997, ¶ 30;
O’Loughlin v. ServiceMaster Co. Ltd. Partnership, 216 Ill. App. 3d 27, 34 (1991).
¶7 “Whether a loaned employee status exists is generally a question of fact, but it constitutes
a question of law if the facts are undisputed and capable of one inference.” Prodanic v.
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Grossinger City Autocorp, Inc., 2012 IL App (1st) 110993, ¶ 15; Kawaguchi, 361 Ill. App.
3d at 240. Our task is to review evidence in the record in a light most favorable to Hastings
to determine if there are questions of material fact as to whether Windbiel was a borrowed
employee of Area at the time of the accident.
¶8 Right of Area to Discharge Windbiel and Ability
of Jefco to Substitute Employees
¶9 Hastings argues that there is a genuine issue of material fact as to Area’s right to
discharge Windbiel. “The alleged borrowing employer need not have the power to dismiss
the alleged borrowed employee from his general employment; but, the alleged borrowing
employer must have the power to dismiss him from the borrowed employment.” Kawaguchi,
361 Ill. App. 3d at 240 n.6.
¶ 10 In his deposition, Windbiel stated that he believed that Area had the authority to order
him off the jobsite. But Brian Price, Area’s foreman, testified that if Area wanted a different
operator, it would find a different crane to lease:
“Q. If the crane lessee, in this case Area, had felt that the crane operator was
incompetent or dangerous or didn’t belong operating the crane, they could order that guy
or girl off the jobsite, correct?
A. I don’t know that we could tell them off the jobsite, but we wouldn’t be operating
with the crane, we wouldn’t be working with the crane.
Q. You would call somebody else and lease a different crane?
A. Yes.”
According to Price, if Area was unhappy with the crane operator, Area would find a new
crane company. This suggests not that Windbiel became an employee of Area, but that Area
had to settle for whomever Jefco sent to operate the Jefco crane. It is not as if Area relied on
Jefco or Jefco’s operators for all crane work: Area also had its own 45-ton crane, and when
Area used that crane, Area used one of its own operators.
¶ 11 Relatedly, nothing in the record suggests that Area had any input as to who would operate
the Jefco crane. In his deposition, Windbiel stated that he was assigned to work at the Sienna
site by Jefco’s owner. Windbiel also explained that a 90-ton crane required an oiler (a
mechanic for the crane), so typically he and Mike Olson worked together. It was not unusual
for them to switch crane operator and oiler duty, as they did on the day of the accident,
because they were both qualified to operate the crane. Yet there is nothing in the record that
suggests Area had any control over who was operating the crane at a particular time: the
crane rental agreement (discussed in detail below) is silent as to the particular Jefco worker
or workers that would operate the crane.
¶ 12 To sum up, an unspecified crane operator (and oiler) came along with the crane rented
from Jefco, and if Area wanted a different operator, it would lease from a different company.
While Windbiel testified that he believed that Area had the ability to discharge him, Area’s
foreman suggested that Windbiel’s services came as part of the crane agreement, such that
if Area were unhappy with the crane operator’s services, it would find a new crane company.
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¶ 13 Manner in Which the Performance of the
Employee’s Duties Are Directed
¶ 14 Generally, it can be expected that when a contractor rents a 90-ton crane and a worker
to operate it, the crane owner intends to retain control of the crane by retaining control over
the worker operating it:
“ ‘A continuance of the general employment is also indicated in the operation of a
machine where the general employer rents the machine and a servant to operate it,
particularly if the instrumentality is of considerable value. Normally, the general
employer expects the employee to protect his interests in the use of the instrumentality,
and these may be opposed to the interests of the temporary employer.’ ” Robinson v.
McDougal-Hartmann Co., 133 Ill. App. 2d 739, 742-43 (1971) (quoting Restatement
(Second) of Agency § 227, cmt. c (1958)).
Jefco argues, however, that “testimony about jobsite activities *** shows that the crane
operator was wholly under Area’s control at the project and free from control by Jefco.”
¶ 15 Jefco points out that Windbiel followed the hand signals of Area’s workers when, at
times, he could not see the load he was moving. Windbiel explained that he was “working
in the blind,” meaning that he did not have direct vision to where the load is picked or to
where the load ultimately ended up. Windbiel therefore relied on hand signals of two
different ironworker signalmen–one on the flatbed of a truck and another on the ground who
directed the load to the shake-out site. Once the ironworkers rigged and secured the load on
the truck, Windbiel lifted it, and he was only able to see the load for about 20 feet of
movement.
¶ 16 This court has held that “[e]ven if an employee receives directions from a party other than
his general employer such employee may nevertheless retain his status as an employee of the
general employer.” Robinson, 133 Ill. App. 2d at 742. More specifically, in Gundich v.
Emerson-Comstock Co., 21 Ill. 2d 117 (1960), our supreme court reasoned that by following
such hand signals, a crane operator did not become a loaned employee of a general
contractor:
“ ‘The giving of the signals under the circumstances of this case was not the giving of
orders, but of information; and the obedience to those signals showed co-operation rather
than subordination, and is not enough to show that there has been a change of
masters.’ ” (Emphasis in original.) Gundich, 21 Ill. 2d at 125 (quoting Standard Oil Co.
v. Anderson, 212 U.S. 215, 226 (1909)).
Here, as in Gundich, Windbiel was obedient to the hand signals of Area employees, for that
was the only way, other than radio or phone communication, that Windbiel could possibly
operate the crane in the blind. But as in Gundich, that fact does not establish that Area had
the right to control his actions as an employer would.
¶ 17 Moreover, in this particular case, there is testimony from Florencio Irizarry, an Area
ironworker, that Windbiel routinely disregarded the hand signals from the ironworkers:
“Q. So you had no problem with that crane operator obeying your hand signals, is that
fair?
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A. For the most part, meaning that half the time he’d listen and half the time just
hillbillied it, made it fast, which is what we call it. That’s what we call it.”
Similarly, Irizarry stated that Windbiel would sometimes adjust the crane as he saw fit,
without direction from Area workers:
“Q. *** [W]hen you gave [the operator] hand signals, he performed to your
satisfaction, is that fair?
A. Like I said, not necessarily. Sometimes he wouldn’t be paying attention, and he
would do something else. Instead of coming out, he would boom up. They try to adjust.
That’s what he did a few times.”
While Windbiel testified that he followed the signals of Area’s ironworkers at all times when
he was at the controls, Windbiel also stated that he had discretion to refuse a lift based on his
view of wind conditions. Windbiel and Price agreed that Windbiel had a general right not to
perform an unsafe lift, whether based on wind conditions, improper rigging, or if the crane
was not functioning properly.
¶ 18 We acknowledge that nothing in the record suggests that Jefco representatives, beyond
the two crane operators, were consulted regarding any specific lift or task that the crane
operators performed at the jobsite on the day of the accident. But the testimony we have
reviewed above is consistent with the general expectation that the owner of a 90-ton crane
would want his operator to ensure safe operation of the crane:
“If the servant is expected only to give results called for by the temporary employer and
to use the instrumentality as the servant would expect his general employer would desire,
the original service continues. Upon this question, the fact that the general employer is
in the business of renting machines and men is relevant, since in such case there is more
likely to be an intent to retain control over the instrumentality.” Restatement (Second)
of Agency § 227, cmt. c (1958).
In other words, Jefco would expect Windbiel would safeguard the 90-ton crane he was
operating, even though Windbiel would not be expected to seek Jefco’s approval for each
lift.
¶ 19 We are similarly unconvinced that other testimony in the record establishes Area’s right
to direct Windbiel’s manner of work as a matter of law. Jefco points out that Area directed
the crane operators where to put the crane; Area dictated how long the crane and its operators
were to be at the jobsite and when the operators would take breaks; and Area’s ironworking
crew configured the crane, boom, and the jib for the work on-site. When viewing the
evidence in a light most favorable to Hastings, however, we cannot conclude that the
interaction between Area and Windbiel establishes Area’s right to control his work.
¶ 20 For example, as to the configuration of the jib, Windbiel testified that he, Mike Olson
(the other crane operator from Jefco), and “the ironworkers” decided together that a jib
would be added to the crane’s boom due to the distance and height needed to place the load
into the shake out site. As with Windbiel following hand signals from Area workers, some
level of cooperation and coordination could be expected between the crane operators and
Area’s ironworkers. Yet there are questions of fact as to who had the ultimate authority as
to the configuration of the jib. Windbiel stated that he would “have the final say in terms of
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whether or not the extra jib section is on the crane.” The Area ironworkers took a different
view: ironworker Tom Iverson stated that it would ultimately be the general contractor’s
decision (i.e., the decision of Roszak/ADC, LLC) whether the time would be taken to take
the crane apart and take off the jib; ironworker Florencio Irizarry testified that both the crane
operators and the general contractor wanted the jib left on, but he told the operators not to
put the jib on the crane.
¶ 21 To the extent that this evidence shows that Area exercised some level of control of
Windbiel, there are significant factual questions as to Windbiel’s ability to control the crane
as he saw fit on the day of the accident. And as noted above, there are significant factual
questions regarding Area’s ability to discharge Windbiel and Jefco’s ability to substitute
another of its employees to operate the crane. The evidence relied on by Jefco, viewed in a
light most favorable to Hastings, does not allow for a determination that Windbiel was
Area’s borrowed employee as a matter of law.
¶ 22 Terms of Written Contract Between the Employers
¶ 23 Apart from arguing that Jefco actually controlled Windbiel’s operation of the crane, Jefco
argues that a purported contract between Jefco and Area establishes that Area had a right to
control Windbiel. At issue is the following provision of a “standard short-term crane rental
agreement”:
“2. Indemnification: Lessee agrees that the equipment and all persons operating such
equipment including Lessor’s employees are under Lessee’s exclusive jurisdiction,
supervision and control and agrees to indemnify and save Lessor, its employees and
agents harmless for all claims *** arising in any manner out of the Lessee’s operation.
***
Lessee shall not be required to indemnify Lessor for its sole negligence, but Lessors
[sic] liability for damages caused by the sole negligence of Lessor, its agents and
employees hereunder shall be limited to the amount of Lessors [sic] liability insurance.”
Jefco focuses on the first clause of the first sentence reproduced above, arguing that because
Jefco’s employees and equipment were under Area’s “exclusive jurisdiction, supervision and
control,” Windbiel was Area’s employee as a matter of law.
¶ 24 Hastings initially responds that there are factual questions as to the “validity, finality, and
enforceability” of the lease agreement. The signature lines, indicating that Jefco and Area
understood and agreed to the terms and conditions of the agreement, were left unsigned. The
signature of an Area employee appears in a separate section, verifying the hours the crane
was on the jobsite for March 5 and 6, 2007. While Hastings acknowledges that a party may
become bound by an agreement through his acts and conduct, she argues that it is unclear if
the parties were operating under a separate agreement. Hastings contends that the lease
makes no mention of price, duration of the rental, acceptable methods of payment, or when
the payment is due, and it contains no signature from the parties’ representations “who would
be reasonably expected to negotiate and agree to the terms of such a lease.”
¶ 25 As Hastings acknowledges, assent to a written agreement may be demonstrated by the
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conduct of the parties. See Amelco Electronic Co. v. Arcole Midwest Corp., 40 Ill. App. 3d
118, 124 (1976); Compass Environmental, Inc. v. Polu Kai Services, L.L.C., 379 Ill. App.
3d 549, 554 (2008). In Amelco, this court held that although a subcontractor did not sign an
agreement with a general contractor, the subcontractor became bound by it because the
subcontractor had received the written agreement, expressed no objection to it, began to work
on the project, and acted consistent with the contract’s terms (e.g., submitting minority
employment documentation). Amelco, 40 Ill. App. 3d at 125. So too here. Area received the
lease agreement and used both the crane and the operators before and after the accident. An
Area representative verified the hours the crane operators worked, as well as the hours the
crane was on site, by signing in one section of the contract. Area’s workers used hand signals
to direct the crane, as contemplated by the agreement, which provided that they would use
standard hand signals “to direct the equipment at all times when applicable.”
¶ 26 While Hastings speculates that the parties had some other preexisting agreement,
Hastings points to no evidence of any other agreement between the parties, as in the case
relied upon by Hastings. See Lundin v. Egyptian Construction Co., 29 Ill. App. 3d 1060,
1064 (1975) (finding that where there was already an existing oral agreement between the
parties when defendant received a written contract, “it is just as logical to conclude that
defendant was performing pursuant to the oral agreement as to conclude that it was
performing pursuant to the [unsigned written contract]”). The lease here contains the dates
Jefco provided the equipment and personnel; the customer (Area); the job name and location
(Sienna Condos in Evanston); the type of crane leased; the operator and oiler names; and the
signature of Area’s foreman verifying the hours the crane was in operation on-site. The
agreement also provides that “[f]ull payment for all charges is due upon billing” and
establishes a monthly service charge for past-due accounts. The lease further provides “this
document is the complete agreement of the parties and supersedes all other agreements or
understandings, written or oral.” We agree with the trial court that the evidence on record
shows that the parties assented to the lease agreement through their conduct.
¶ 27 Contrary to Jefco’s claim, however, the lease’s indemnification language does not
operate to make Windbiel an employee of Area as a matter of law. Courts outside Illinois
considering nearly identical provisions in crane rental agreements have rejected arguments
that this indemnification language, by itself, establishes an employment relationship between
the lessor and the crane operator. While not binding, these cases are instructive as to the
significance of the indemnification provision here.
¶ 28 For example, the Indiana appellate court, considering an indemnification provision with
nearly identical language, “decline[d] to hold that this provision, by itself, establishe[d] that
[a contractor] had exclusive control and authority over [a crane operator] for purposes of
establishing an employment relationship.” Nowicki v. Cannon Steel Erection Co., 711 N.E.2d
536, 541 (Ind. Ct. App. 1999), abrogated on other grounds by GKN Co. v. Magness, 744
N.E.2d 397 (Ind. 2001). While concluding that such provisions might be relevant to the
belief of the parties, the court reasoned that “[b]ecause such provisions are used primarily
to allocate between the parties’ financial responsibility for damages claimed by a third party,
they cannot, by themselves, determine employment status.” Id. The court concluded that the
indemnification provision did “not establish that [the] crane operator [was] necessarily an
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employee of [the contractor].” Id.
¶ 29 Similarly, in Roderick v. Bugge, 584 F. Supp. 626 (D. Mass. 1984), a federal district
court confronting a similar agreement between a crane company and a lessee shipowner held
that “the indemnification provision proves of marginal relevance to the borrowed servant
issue notwithstanding its direct assignment of ‘exclusive ... control’ over the crane and
operator to [the lessee].” Roderick, 584 F. Supp. at 629. The court found that “other portions
of the indemnification provision belie any intention on the part of the parties to establish a
borrowed servant relationship.” Id. Specifically, the court noted that the lessee was “relieved
of its duty to indemnify [the crane company] whenever [it] is ‘sole[ly] negligen[t].’ Yet were
[the operator] to be deemed a borrowed servant, the percentage of the proven negligence that
is attributable to him should have no bearing on [the crane company’s] liability for his
misconduct.” Id. Further, “there would be no need in the first place for an explicit
indemnification agreement were a borrowed servant relationship to exist, since [the crane
company] would bear no legal responsibility for [the operator’s] conduct.” Id.; accord
Krzywicki v. Tidewater Equipment Co., 600 F. Supp. 629, 640 n.15 (D. Md. 1985) (agreeing
with Roderick court that “there would be no need for an indemnification provision in a lease
agreement *** if the crane operator were intended to be the borrowed servant of the lessee,”
and finding that servant was an employee of crane owner, not a borrowed employee of lessee,
before interpreting indemnification clause in crane rental agreement). We conclude that the
indemnification provision does not establish that Windbiel was a borrowed employee of
Area. The indemnification provision here does not speak to the employment status of Jefco’s
crane operators; rather, the agreement makes explicit reference to Jefco’s “employees,” in
stating that Area is under no duty to indemnify Jefco for its sole negligence or that of its
employees.
¶ 30 Jefco argues that apart from the indemnification provision, the lease establishes a right
to control because it provides that Area “agrees to provide competent and experienced
personnel to direct the operation of the equipment.” The very next clause in the contract,
however, shows that the directions at issue are standardized hand signals:
“Lessee agrees to provide competent and experienced personnel to direct the operation
of the equipment and further agrees that the Standard Crane and Derrick Signals in
accordance with American Standard B30:2-1943 shall be used to direct the equipment
at all times when applicable.”
Jefco also points to the contract’s requirement that Area “inspect and assume all liability for
the adequacy of design or the strength of any rigging or lifting apparatus.” Like the
indemnification language above, these contract provisions do not speak to Windbiel’s status
as a borrowed employee: the former simply impose specific requirements as to the use of
standard hand signals, and the latter allocate liability for certain defects in the equipment.
¶ 31 This is not to say that parties are not free to allocate risk by creating a borrowed
employment relationship by agreement. We note that courts have relied on crane rental
agreements in finding a borrowed employee relationship, where those agreements contain
explicit language regarding the crane operator’s employment status. See, e.g., Odum v.
Superior Rigging & Erecting Co., 662 S.E.2d 832, 835 (Ga. Ct. App. 2008) (relying on
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agreement to find borrowed employee relationship where contract provided that crane
operator was under “ ‘Lessee’s exclusive jurisdiction, supervision and control,’ ” but contract
further provided that “ ‘at all times while the Operator is on the job site that Lessee has the
right to exercise complete direction and control over the Operator, that Lessor will exercise
no control over the Operator and that Lessee has the exclusive right to discharge the Operator
from the work he is doing, that Lessee may require Lessor to replace the operator with
another of Lessor’s employees and that Lessee may put the crane operator to other work’ ”);
Estate of Bryant v. All Temperature Insulation, Inc., 916 P.2d 1294, 1297 (Kan. Ct. App.
1996) (finding that crane operator was employee of general contractor, not crane owner,
where crane rental agreement stated that “ ‘personnel furnished by [crane company] shall be
employees of [general contractor] and the laws of the state wherein this agreement is
executed shall govern the principal and agency relationship hereby created’ ” and “ ‘all
persons operating such equipment, including Lessor’s employees, become employees of, and
are under Lessee’s exclusive jurisdiction, supervision and control’ ” (emphases added)). By
contrast, the agreement here lacks specific language as to the crane operator’s employment
status. The contract allocates liability through indemnification, not by designating Area as
the employer of Jefco’s crane operators.
¶ 32 We emphasize that for the purposes of this appeal, Jefco does not rely on the lease
agreement to establish that Area has a duty to indemnify Jefco; rather, Jefco’s only argument
as to the agreement is that it establishes that Windbiel was Area’s employee. While we
express no opinion as to Area’s obligation to indemnify Jefco, we conclude that the lease
does not establish that Windbiel was a borrowed employee of Area as a matter of law.
¶ 33 Method of Payment; Who Deducts and Pays for Benefits
¶ 34 Jefco paid Windbiel’s wages, provided him with health benefits, contributed to his
pension, and was listed as his employer on his federal income tax form. Our supreme court
has held that “[t]he 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 Paving
Co. v. Industrial Comm’n, 82 Ill. 2d 341, 349 (1980) (concluding that decision that found
loaned-employee relationship was not against the manifest weight of the evidence, even
where employee received his wages from general employer). That holding has also been
applied in the summary judgment context. Prodanic v. Grossinger City Autocorp, Inc., 2012
IL App (1st) 110993, ¶¶ 6, 20 (concluding that summary judgment was proper, even where
employee received his wages from general employer, where evidence overwhelming showed
right to control).
¶ 35 While we agree that the identity of the party paying the employee does not control the
borrowed employee question, we find no support in the record for Jefco’s claim that Area
“indirectly paid Windbiel’s salary for the project,” such that this factor supports a finding
that Area controlled Windbiel. It is of course true that those paying Jefco for its services
“indirectly” pay the salaries of Jefco’s employees. Contrary to Jefco’s argument, however,
nothing in the record shows that Jefco was merely a conduit through which Windbiel was
paid. See Highway Insurance Co. v. Sears, Roebuck & Co., 92 Ill. App. 2d 214, 221-22
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(1968) (concluding that business supplying temporary labor to various firms was merely
“conduit” through which employees were paid, thus supporting finding of borrowed
employee relationship). While Jefco and Area recorded the number of hours the crane
operator worked on site, as well as the number of hours the crane was on site, nothing in the
record shows how Area was billed for Jefco’s services, whether Area was billed separately
for Windbiel’s time, or how Jefco paid Windbiel. It is these facts that would suggest that
Jefco merely passed money from Area to its employee, Windbiel. See Haight v. Aldridge
Electric Co., 215 Ill. App. 3d 353, 367 (1991) (“Although [the employee] received his wages
from [the general employer], [the general employer] would then bill [the borrowing
employee] for [the employee’s] time plus a bit of a premium.”); Russell v. PPG Industries,
Inc., 953 F.2d 326, 330 (7th Cir. 1992) (concluding that where the general employer billed
the borrowing employer for the number of hours the employee worked, and the amount
charged included the salary the general employer paid plus a profit factor, the billing
arrangement “militates in favor of a finding of control”). Thus, while not controlling, the fact
that Jefco paid wages and provided benefits to Windbiel weighs against a finding that
Windbiel was Area’s borrowed employee.
¶ 36 Length of New Employment; Level of Skill Required to Perform Work
¶ 37 Finally, Hastings asserts that the length of the employment was short (only several hours
over the course of two days), a factor that tends to show that Windbiel continued in his
general employment with Jefco. Hastings also contends that the level of skill required to
perform the crane operation was high, another factor supporting the determination that
Windbiel continued in his general employment. Hastings notes that Windbiel was a certified
crane operator by trade who had logged over 5,000 hours behind the controls of cranes
similar to the one he operated at the Sienna site. We agree with Hastings that these factors
support a finding that Windbiel was not a borrowed employee of Area.
¶ 38 Conclusion
¶ 39 Summary judgment is appropriate “when the right of the moving party is clear and free
from doubt.” Adams v. Sheahan, 233 Ill. 2d 276, 296 (2009). Here, when viewing the
evidence in a light most favorable to Hastings, we conclude that there are questions of
material fact as to Windbiel’s employment status that preclude summary judgment in Jefco’s
favor. The indemnification clause in the written lease agreement does not, as a matter of law,
establish that Windbiel was a borrowed employee. There are significant questions as to
Jefco’s right to discharge Windbiel, and the record shows that Jefco chose (and could
substitute) any of its crane operators for the Sienna site project. Finally, there are questions
of facts as to Area’s actual exercise of control of Windbiel’s work on the project.
Accordingly, we reverse the grant of summary judgment in Jefco’s favor and remand this
case for further proceedings.
¶ 40 Reversed and remanded.
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