January 2016 Case Notes & Comments

"Opportunities multiply as they are seized" ~ Sun Tzu (544 BC - 496 BC)

MONTHLY QUIZ: While working at a theater, Stagehand-Employee is struck by a pipe that falls from the ceiling. Stagehand stumbles off stage and falls into an uncovered orchestra pit, sustaining injury. Stagehand sues multiple defendants (including Landlord and Tenant), alleging that each defendant operated, possessed, maintained, or controlled a certain portion of the theater where Stagehand was working. At the time of the incident, Landlord and Tenant both have responsibility for certain structural elements of the theater. Stagehand's Employer, however, is in charge of the theater's day-to-day operations and has control over the net protecting the orchestra pit. Landlord and Tenant argue that they do not owe Stagehand a duty of care because neither occupied, possessed, or controlled the theater at the time of the fall, nor did they cause or create the allegedly dangerous condition (e.g. the uncovered pit). Do Landlord and Tenant owe Stagehand a legal duty of care because they retained responsibility over certain structural elements in the theater? (Answer below)


WORKERS' COMPENSATION - EMPLOYER PENALIZED FOR WITHOLDING BENEFITS BASED ON CLAIMANT'S NOTICE, FILED 6 DAYS AFTER ACCIDENT: Claimant-Employee filed an application for adjustment of claim pursuant to IL Workers' Compensation Act (Act) seeking benefits for injuries he sustained while working for Employer, a construction company. Employer did not dispute liability, but denied benefits based on the fact that Employee did not report the accident until six days after it occurred. Under Sections 19(l), 19(k), and 16 of the Act, an employer can be penalized if it unreasonably, or in bad faith, delays or withholds compensation due an employee. The claim proceeded to a hearing and the arbitrator filed a decision awarding Employee TTD benefits, medical expenses and permanent partial disability (PPD). The arbitrator also assessed penalties against Employer under Sections 19(l) and 19(k), finding that the Employer's refusal to pay Employee TTD benefits and medical expenses, on the basis of the notice, was unreasonable and vexatious. The award of penalties was ultimately affirmed on appeal on a finding that Employee's notice after six days clearly fulfilled the purpose of the Act's "notice requirement and was not a legitimate basis for [Employer to withhold] benefits." Oliver v. Illinois Workers' Compensation Comm'n, 2015 IL App (1st) 143836WC (Dec. 18, 2015).   


construction law - Duty to Defend constructors where 'other property' is damaged: General Contractor (GC) retained Subcontractor-Insured to perform all painting work in connection with a 24-story condominium Building project, owned by Developer. Pursuant to its contract, Subcontractor procured a commercial general liability (CGL) policy with Insurer, which named Subcontractor, Developer and GC as additional insureds by endorsement. Developer sued GC, Subcontractor and others for faulty workmanship that allegedly caused cracking and damage to the interior and exterior walls and ceilings, leakage through exterior walls, balconies and windows, defects to the common elements of the Building and other damage to the floors, interior painting, drywall and furniture. Insurer filed a declaratory action seeking a determination as to whether Insured owed a duty to defend Subcontractor, GC and others. The District Court found that under Illinois law, because the alleged damages were beyond the scope of Subcontractor's work, the allegations constituted an "occurrence" under the CGL policy. As such, Insurer owed a duty to defend as some, though not all, of the alleged damages were covered. Westfield Ins. Co. v. Nat'l Decorating Serv., Inc., et al., Case 1:14-cv-01572 (N.D. Ill. Nov. 25, 2015).  


LEF WINS COMMERCIAL CALENDAR ARBITRATION: Beginning in 2015, the Law Division of the Circuit Court of Cook County, Illinois, instituted a new mandatory arbitration program for cases valued above $50,000. On November 16, 2015, Roland S. Keske, prevailed on behalf of his client, an Insurer, in a breach of contract / wrongful cancellation/ bad-faith lawsuit filed by Insureds. Insured's alleged that Insurer's failure to pay in connection with a hit-and-run automobile accident was a breach of contract; and, that Insurer's cancellation of the insurance policy was wrongful under IL law. Through cross-examination of the Insureds, Mr. Keske successfully convinced the arbitrator that the policy was properly cancelled and was not in effect at the time of the accident. The arbitrators returned an award in favor of the Insurer, awarding the Insureds nothing.  Risper v. American Family Insurance Company, 14 L 6921 (Cook County, IL, Nov. 16, 2015)


LEAHY, EISENBERG & FRAENKEL, LTD. PARTNERS DESIGNATED ILLINOIS SUPER LAWYERS: Leahy, Eisenberg & Fraenkel, Ltd. is pleased to announce that two of its partners, Robert Ostojic and Scott Wing, were recently included on the 2016 Illinois Super Lawyers® list.


ANSWER TO QUIZ: Stagehand loses. In Illinois, a legal duty may arise through common law, statute or contract. On review, both the trial and appellate courts determined that under the terms of the lease, Landlord retained no control over any of the instrumentalities that led to Stagehand's injury, and thus did not owe Stagehand a duty of care. Since a landlord is not liable for injuries caused by a defective or dangerous condition on premises that the landlord leases to a tenant and are under the tenant's control, Landlord was not liable as a matter of law. As for Tenant, there was no evidence that it occupied or controlled the premises, or directed Employer's operations there. Accordingly, neither Landlord nor Tenant owed Stagehand a duty of care. Richard v. Nederlander Palace Acquisition, LLC, 2015 IL App (1st) 143492 (Dec. 10, 2015).