The First District of the Illinois Appellate Court recently upheld a $1.8 million verdict in favor of the Plaintiff, Anthony Grillo, an employee of a subcontractor, and against Yeager Construction, the general contractor. Grillo v. Yeager Construction, No. 1-07-2335 ( Ill. App. 1st Dist., December 31, 2008). Yeager Construction based their appeal on three issues; the most significant being the trial court’s denial of their motion for judgment notwithstanding the verdict. The motion alleged that the plaintiff was unable to prove a prima facie case of negligence as he failed to establish that Yeager Construction owed a duty of care pursuant to Section 414 of the Restatement (Second) of Torts, Section 414, 1965.
The basis of the claim and facts of the accident are simple and straightforward. The plaintiff, Anthony Grillo, (Grillo) was injured while working on the construction of a home for the third party defendants, Rubina and Solhail (Sam) Shakir. He sustained injuries as a result of a 12 ft. fall from scaffolding. The scaffolding tipped and he and it fell upside down into an open hole. He suffered injuries to his neck and back which required surgery to relieve pressure on the spinal cord. Also, he had permanent metal screws and plates placed on his lower spine. According to his doctor, he has a permanent disability and he would likely develop additional degenerative changes.
The facts that establish and define the relationships, however, are as clear as mud. The three parties’ testimony differed greatly and was contradictory.
The following is a brief synopsis of the relevant details of their testimony: Grillo testified that he was contacted by David Yeager of Yeager Construction to give an estimate for masonry work on the construction of a home for the Shakirs. He met with David at the project site multiple times and they orally agreed to price for services. Upon inquiry by Grillo, David indicated that he would not be paid by him rather by Yeager Construction. However, there was no written document memorializing their conversation. Grillo submitted his bills to David but they were paid by the Shakirs.
David Yeager testified that he was introduced to the Shakirs by Scott Yeager, the president of Yeager Construction. He was not an employee or agent of Yeager Construction. He was hired by the Shakirs to act as a construction consultant as Rubina Shakirs, one of the owners, was going to be her own general contractor. In fact, she was listed as the general contractor on the permit issued by the City of Northbrook. He was paid by the Shakirs a monthly salary plus expenses and his duties included assisting the Shakirs in hiring sub-contractors. Their agreement was not reduced to writing.
Sam Shakir testified that the general contractor was Yeager Construction. He had hired them to build his house because he has worked with them in the past. They had built many gas stations for him. During the course of the initial planning for this project, he met with both David and Scott to discuss the details. As the project progressed he would ask for updates from Scott. Further, during the initial consultation Scott told him that David would be assigned to the project. Again, of course, there was no writing relating to their agreement.
Scott Yeager, the president of Yeager Construction, testified that Yeager Construction did not enter into contract with Grillo or with the Shakirs and that David, his brother, was not an employee or on the payroll of Yeager Construction. He admitted, however, that he prepared various invoices for David on Yeager Construction letterhead directed to the Shakirs. Additionally, many correspondences pertaining to the project were on Yeager Construction letterhead. Furthermore, he assisted the Shakirs in obtaining a bank loan to fund the construction by indicating on their loan form that Yeager Construction was the general contractor on the job.
The crux of Yeager Construction’s argument was that Grillo was unable to prove that they were the general contractor and, thus, they had no duty of care with respect to Grillo. The court concluded that, conversely, the plaintiff sufficiently established an agency relationship between David Yeager and Yeager Construction. Agency is fiduciary relationship in which the principle has the right to control the agent’s conduct and that the agent has the power to act on the principle’s behalf. The authority may either be actual or apparent and may be expressed or implied. The court employed a three part test to determine that apparent authority existed. The plaintiff had to show apparent authority by demonstrating that: (1) the principal consented to or knowingly went along with the agent’s exercise of authority; (2) the third person reasonably concluded that the party was an agent of the principal; and (3) the third person justifiably relied on the apparent authority to his detriment.
The Defendant’s next argument that Section 414 of the Restatement was not applicable as the plaintiff was an independent contractor, rather than an employee, was meritless. Section § 414 provides that:
One who entrusts work to an independent contractor, but who retains control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care.
The court found that the exception to general rule that one who employees an independent contractor is not liable for the acts or omissions of the independent contractor was inapplicable in this matter. There was evidence to indicate the Anthony Grillo was not an independent contractor - rather he was an employee of Anthony Grillo Construction, Inc. In fact, the defendant in his third party alleged the relationship in his complaint.
This is case is evidence of the necessity to establish clearly defined roles with respect any project. As the old saying going, “an ounce of prevention is worth a pound of cure.”
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Thomas Condon, an associate in our Chicago office, concentrates his practice in auto and premises liability. Tom also has experience in the areas of commercial, construction, liquor liability and municipal litigation and has successfully tried multiple cases to verdict. Prior to joining Querrey & Harrow, Tom was the Assistant Department Counsel for the City of Chicago Department of Buildings. There, Tom prosecuted violations of the City of Chicago Building Code, drafted and analyzed proposed legislation and amendments to the Building Code and advised management on legal issues related to departmental operations. Additionally, Tom served as the Director of the City of Chicago’s Fast Track demolition program.
If you have any questions regarding this article, please contact Tom via tcondon@querrey.com, or via 312-540-7606.
