Cropmate Co. v. Industrial Comm'n

Case Date: 04/25/2000
Court: Industrial Commission
Docket No: 4-99-0377WC

25 April 2000

NO. 4-99-0377WC

IN THE APPELLATE COURT OF ILLINOIS



FOURTH DISTRICT

Industrial Commission Division



CROPMATE COMPANY, d/b/a UAP RICHTER,
Appellant,
v.
THE INDUSTRIAL COMMISSION et al.
(Jeffrey Pinkerton, Appellee).
Appeal from
Circuit Court of
Greene County
No. 98MR29

Honorable
James W. Day,
Judge Presiding.

JUSTICE RARICK delivered the opinion of the court:

Claimant, Jeffrey Pinkerton, sought benefitspursuant to the Workers' Compensation Act (Act) (820 ILCS305/1 et seq. (West 1994)) for injuries sustained while inthe employ of Cropmate Company (Cropmate). Claimant workedfor his uncle, William Pinkerton (Pinkerton), who waserecting a pole building for Cropmate. On August 15, 1994,while working on the roof of the building, claimant slippedand sustained a severe laceration to his right forearm.

Pinkerton contracted with Cropmate to erect achemical containment building on Cropmate's property inWhitehall, Illinois, as required by the EnvironmentalProtection Agency (EPA) and the Illinois Department ofAgriculture. The building was to be used for the storing,loading, and unloading of materials utilized by Cropmate inits business. Cropmate was in the business ofmanufacturing, selling, delivering, and applying pesticidesand insecticides.

Cropmate solicited bids for the erection of thestructure and received a bid from Pinkerton of $7,000. Halfwas to be paid when Pinkerton began the work and half wouldbe paid upon completion. Initially, the agreement wasverbal. Several weeks after starting the project, Pinkertonrequested the first $3,500. At that time, Pinkerton wasasked to sign a written contract. He was provided a formcontract by Marla Droves, Cropmate's secretary. Althoughthe contract contained various boilerplate clauses, none ofthe particular terms were filled in. Pinkerton went aheadand signed the contract. Included in the boilerplatelanguage was a provision that the contractor, Pinkerton,would obtain workers' compensation insurance. The contractappears to be dated August 3, 1994, but it is unclear.

Cropmate obtained the funds to erect the buildingfrom its parent company, ConAgra. Cropmate hired LarryHouston, an environmental coordinator, to provide plans andblueprints, which were approved by ConAgra. Larry Meyer,comanager of Cropmate, testified that the building would beconsidered a capital asset and that Cropmate receivedbenefits from the building. He further testified thatCropmate would not be in compliance with environmental andDepartment of Agriculture regulations unless the buildingwas built. He also testified that the materials to bestored in the containment building were not toxic, but somewere hazardous.

Pinkerton testified that both Meyer and RichardMeaks, Cropmate's other comanager, inquired as to whether hehad workers' compensation insurance. He told them that hedid not. Meyer and Meaks told him he had to obtain workers'compensation insurance before they would tender finalpayment to him. Pinkerton further testified that at no timedid any agent of Cropmate tell him to stop erection of thestructure. Pinkerton stated that, at the time of theaccident, he was in the process of obtaining workers'compensation insurance but had not done so.

Meyer testified that he knew Pinkerton did not haveworkers' compensation insurance at the time Cropmateaccepted Pinkerton's bid, and Meyer made no attempt duringthe erection of the structure to verify that Pinkerton hadobtained workers' compensation insurance. Meaks testifiedthat he discussed insurance, but not necessarily workers'compensation insurance, with Pinkerton. He stated that atno time prior to or during the erection of the structure didhe make any attempt to verify whether Pinkerton had workers'compensation insurance. Both Meyer and Meaks denied tellingPinkerton that he would not receive final payment until heobtained workers' compensation insurance.

Pinkerton testified that Cropmate provided thematerials to build the structure, consisting of aprefabricated building, and that Meyer and Meaks provided afloor plan for the structure and were present at theworksite on a daily basis, conferring with Pinkerton on theprogress on erecting the structure and on compliance withEPA and Department of Agriculture regulations.

On August 15, 1994, claimant, who was right-handed,fell from the top rafters of the structure, nearly severinghis right arm. He was taken to Passavant Hospital and thento Memorial Medical Center, where he came under thetreatment of Dr. Richard Brown. Claimant underwentextensive reconstructive surgery, including the reattachmentof the totally severed radial nerve and brachial artery. Hesubsequently underwent 18 months of follow-up care,including physical therapy. Claimant also saw Dr. K.Buescher, who treated him for nightmares and copingproblems. On September 30, 1994, Dr. Brown told claimant heshould seek other employment. Claimant was released fromDr. Brown's care in December 1995, with instructions toreturn as needed. Claimant undertook a job search. Although unsuccessful at first, he ultimately found work asa general laborer on December 15, 1995.

A functional capacity evaluation revealed asignificant loss of grip strength, sensation, and motion. Dr. Brown testified that this condition was permanent. Claimant testified that the loss of sensation has resultedin his inability to use various tools.

The arbitrator ruled that claimant was a statutoryemployee of Cropmate pursuant to section 3 of the Act (820ILCS 305/3 (West 1994)). The arbitrator found that Cropmateowned the building in question, the building was required byenvironmental regulations, and it was a necessary andessential enterprise from which Cropmate derived substantialrevenue. The arbitrator further found that Pinkerton was anuninsured contractor and that agents of Cropmate knew priorto and during the erection of the building that Pinkertondid not have workers' compensation insurance.

The arbitrator also concluded that claimant'scondition of ill-being was causally connected to his work-related accident. This conclusion was based upon Dr.Brown's testimony to that effect and the lack of any priorinjuries to the arm.

The arbitrator found that claimant had sustained apermanent loss of use of the right arm to the extent of 70%thereof. The arbitrator also found that claimant wasentitled to 69 5/7 weeks of temporary total disability (TTD)benefits, for the period from August 15, 1994, throughNovember 6, 1997. The arbitrator's decision was affirmedand adopted by the Industrial Commission (Commission). TheCommission's decision was confirmed by the circuit court ofGreene County.

On appeal, Cropmate argues first that theCommission erred as a matter of law in determining thatclaimant was its "statutory employee." Cropmate maintainsthat it was not in the business of erecting buildings or anyof the other activities listed in subsection 1 and 2 ofsection 3 of the Act.

Section 3 of the Act provides in pertinent part:

"The provisions of this Acthereinafter following shall applyautomatically and without election to theState, county, city, town, township,incorporated village or school district,body politic or municipal corporation, andto all employers and all their employees,engaged in any department of the followingenterprises or businesses which aredeclared to be extra hazardous, namely:

1. The erection, maintaining,removing, remodeling, altering[,] ordemolishing of any structure.

2. Construction, excavating[,] orelectrical work." 820 ILCS 305/3 (West1994).

Cropmate contends that if it is found to be a statutoryemployer under these circumstances, then any owner havingwork done on its property by a contractor would be liablefor injuries to the contractor's employees.

In determining that claimant was a statutoryemployee of Cropmate, the Commission relied on Fefferman v.Industrial Comm'n, 71 Ill. 2d 325, 375 N.E.2d 1277 (1978). In Fefferman, the Feffermans, owners of a building,contracted with Dixon Wrecking Company, an uninsuredcontractor, to demolish the structure. An employee ofDixon's, Otha Butts, was injured as a result of a fall. Theissue on appeal was whether Fefferman was engaged in thebusiness of maintaining or demolishing a structure asenumerated in section 3 of the Act (Ill. Rev. Stat. 1973,ch. 48, par. 138.3 (now 820 ILCS 305/3 (West 1994))). Thecourt concluded that Fefferman was an employer engaged inthe extrahazardous business of maintaining a structure andwas therefore liable under section 3 of the Act for Butts'injuries. The court held that Fefferman was in the businessof general merchandise, textiles, government surplus, andhospital supplies; the building was a capital asset used forstorage of its goods; and it figured prominently, even ifindirectly, in the revenue Fefferman received from itsbusiness.

Cropmate attempts to distinguish Fefferman byarguing that, in Fefferman, the court found that Feffermanwas maintaining a structure "by virtue of the nature of thestorage business." Nothing in the facts in Feffermansupports Cropmate's characterization of Fefferman's businessas a "storage" business. Rather, the building was used forstorage of Fefferman's mercantile goods. Further, thedetermining factor in Fefferman was not the nature of thebusiness, but the fact that the structure contributed to therevenue Fefferman derived from his business.

The court in Fefferman relied on Pulliam v.Industrial Comm'n, 43 Ill. 2d 364, 253 N.E.2d 448 (1969). In Pulliam, the owner of a funeral home was found to bemaintaining a structure within the purview of section 3 ofthe Act. An employee was injured in a fall from a ladderwhile painting the funeral home. The court reasoned thatthe use of the building figured prominently in the revenuesthe owner received from his business. The court inFefferman also noted that Pulliam effectively overruled aprevious line of cases insofar as those cases held thatmaintaining a building as an incident to a business did notconstitute maintaining a structure under the Act.

In another similar case, Graphic Group & KLW, Inc.v. Industrial Comm'n, 167 Ill. App. 3d 1041, 522 N.E.2d 128(1988), Graphic Group engaged William Dorsch to paint andplaster its office. Dorsch subsequently employed MarkLondinski, the claimant, to do one day's worth of painting. While so engaged, claimant sustained a fracture to his lowerleft leg. Dorsch did not carry workers' compensationinsurance. The Commission determined that Graphic Group wasa statutory employer and liable for workers' compensationbenefits. On appeal, Graphic Group argued that it was notthe statutory employer of the claimant because it was notengaged in the business of maintaining a structure. Thecourt rejected this argument, finding that Graphic Group'soffices indirectly contributed to the revenue received bythe business and that Graphic Group was thereforemaintaining a structure within the meaning of section1(a)(3) of the Act.

Both Fefferman and Graphic Group are directlyon point. The facts in those cases are identical to thosein the present case in all meaningful aspects. The buildingbeing erected for Cropmate was to be used for the storage ofmaterials it used in its business. Indeed, the erection ofthe building was required by the EPA for storage of suchmaterials. Once built, Cropmate would derive revenue,albeit indirectly, from the building. Meyer testified thatthe building would be a capital asset of Cropmate.Cropmate's argument that section 3 does not apply becauseerection or maintenance of a structure was not its principalbusiness was specifically rejected by our supreme court inFefferman. The Commission correctly determined thatclaimant was a statutory employee of Cropmate pursuant tosection 3 of the Act.

Cropmate next argues that the Commission'sdetermination that claimant sustained a 70% permanent partialdisability (PPD) is contrary to the manifest weight of theevidence. Cropmate contends that as of claimant's last visitto Dr. Brown on September 27, 1996, his complaints wereminimal and Dr. Brown felt that he had made a good recovery. Claimant has some use of his right hand, is able to drive anautomobile, and is not on any restricted duty. Cropmateurges us to reduce claimant's PPD award to 30%.

It is well settled that the extent of a claimant'sdisability is a question of fact to be determined by theCommission, and its decision will not be set aside unlesscontrary to the manifest weight of the evidence. Bryant v.Industrial Comm'n, 250 Ill. App. 3d 659, 662, 621 N.E.2d 198,200 (1993). In the present case, claimant, who was right-hand dominant, now must use his left hand to perform even themost routine functions. His grip strength and sensation inhis right hand and arm are all significantly diminished. Indeed, claimant's loss of sensation was so significant thatDr. Brown testified that it would be considered a total lossof sensation pursuant to American Medical Associationguidelines. The Commission's decision is well supported bythe evidence.

Finally, Cropmate argues that the Commission's awardof 69 5/7 weeks of TTD benefits was contrary to the manifestweight of the evidence. Cropmate contends that claimant'scondition had stabilized as of September 30, 1994, when Dr.Brown told him that he should start thinking about othertypes of work. Cropmate maintains that statements made toDrs. Brown and Buescher demonstrate that claimant was capableof working, but chose not to so as not to damage his workers'compensation case.

To be entitled to TTD benefits, a claimant must shownot only that he did not work, but that he was unable towork, and the duration for which he was unable to work. Ingalls Memorial Hospital v. Industrial Comm'n, 241 Ill. App.3d 710, 716, 609 N.E.2d 775, 780 (1993). Whether a claimantwas unable to work and the duration for which he was unableto work are questions of fact for the Commission, and itsdetermination thereon will not be set aside on review unlesscontrary to the manifest weight of the evidence. City ofGranite City v. Industrial Comm'n, 279 Ill. App. 3d 1087,1090, 666 N.E.2d 827, 828-29 (1996).

In the present case, claimant's arm was nearlysevered in the August 15, 1994, accident. Although Dr. Browntold claimant on September 30, 1994, that he should "startthinking about other work," he did not release him to work. Dr. Brown testified that claimant was totally disabled fromthe date of the accident through September 26, 1995, and thathe was not at maximum medical improvement until that date. Cropmate produced no evidence, medical or otherwise, to thecontrary. Claimant testified that he had sought work, but,because of his physical limitations, was unable to findemployment until December 15, 1995. The Commission's TTDaward is not contrary to the manifest weight of the evidence.

For the foregoing reasons, the judgment of thecircuit court of Greene County is affirmed.

McCULLOUGH, P.J., and COLWELL and HOLDRIDGE, JJ.,concur.

RAKOWSKI, J., specially concurs.

JUSTICE RAKOWSKI, specially concurring:

While the majority correctly follows Fefferman, Iassert that the Fefferman holding is a misstatement of theprecedent that it is purportedly based on as well as aperverse interpretation of section 3 of the Act (820 ILCS305/3 (West 1994)). Accordingly, I write separately.

The language at issue in section 3 is clear andunambiguous. It states:

"The provisions of this Acthereinafter following shall applyautomatically and without election to ***all employers and all their employees,engaged in any department of the followingenterprises or businesses which aredeclared to be extra hazardous, namely:

1. The erection, maintaining,removing, remodeling, altering[,] ordemolishing of any structure." (Emphasisadded.) 820 ILCS 305/3 (West 1994).

Prior to Fefferman, the supreme court hadconsistently assigned a commonsense interpretation to theabove-emphasized language. In fact, the court in Walsh v.Industrial Comm'n, 345 Ill. 366, 178 N.E. 82 (1931),extensively considered the language of section 3, although ithad already established the basic principles upon which thiscase is based. In Walsh, the court defined "business" as "anemployment which occupies a substantial portion of the timeand attention of one engaged in it." Walsh, 345 Ill. at 369,178 N.E. at 83; accord Iowa-Illinois Gas & Electric Co. v.Industrial Comm'n, 407 Ill. 360, 366, 95 N.E.2d 482, 486(1950) (following and quoting Walsh). It defined "maintain"as "'the act of holding or keeping in any particular state orcondition.'" Walsh, 345 Ill. at 369, 178 N.E. at 83; accordIowa-Illinois Gas & Electric Co., 407 Ill. at 366, 95 N.E.2dat 486 (following and quoting Walsh). Under thesedefinitions and prior case law, the court held:

"The line of demarcation betweenmaintaining a structure as an incidentrather than as a business, and thebusiness of maintaining a structure, isnot readily defined, but we are of theopinion that a safe rule is, that whereone maintains buildings or structures forprofit, whether that profit be ascompensation for his services or by way ofrentals received, and such maintenancerequires a substantial portion of his timeand attention, he must be said to beengaged in the business of maintaining astructure within the contemplation of theWorkmen's Compensation [A]ct." Walsh, 345Ill. at 370, 178 N.E. at 84.

Accord Iowa-Illinois Gas & Electric Co., 407 Ill. at 366-67,95 N.E.2d at 486.

Under these principles, the supreme court hasrepeatedly held employers whose principal business is tomaintain structures as rental properties accountable underthe Act pursuant to section 3. See Walsh, 345 Ill. at 370,178 N.E. at 84 (concluding that employer who rented andmaintained 10 buildings was liable under the Act when aworker was injured while repairing a roof of one of theproperties); Rogalski v. Industrial Comm'n, 342 Ill. 37, 39-40, 173 N.E. 813, 814 (1930) (concluding that employer whoowned, rented, and maintained property as well as a hotel wasliable under the Act where claimant was injured whileassisting in remodeling one of employer's buildings); Jacobiv. Industrial Comm'n, 342 Ill. 210, 213-14, 173 N.E. 748, 749(1930) (owner of a three-unit apartment building who lived inone unit, but rented the remaining, was liable under the Actwhere a painter fell from a ladder and suffered a fracturedskull); Davis v. Industrial Comm'n, 297 Ill. 29, 30-32, 130N.E. 333, 334 (1921) (owner of apartment buildings liableunder the Act where claimant was injured while washing one ofthe owner's buildings); Storrs v. Industrial Comm'n, 285 Ill.595, 597, 121 N.E. 267, 267-68 (1918) (owner of rentalproperties liable under the Act where claimant was paintingand calcimining one of the buildings and received a blindinginjury to one of his eyes); Johnson v. Choate, 284 Ill. 214,220, 119 N.E. 972, 974 (1918) (concluding that the defendant,who maintained and leased a large building, was liable underthe Act to a worker injured while making plumbing repairs). Conversely, the court had held that employers who areperforming maintenance work to their structures that isincidental to conducting their principal businesses are notsubject to the Act pursuant to section 3. Iowa-Illinois Gas& Electric Co., 407 Ill. at 367, 95 N.E.2d at 486 (althoughelectric and gas company leased some space in itsheadquarters to another tenant in the same building, thecompany was not liable under the Act for injuries to a windowwasher because rental of space was "so trifling" as not toconstitute a business of the company); T. Johnson Co. v.Industrial Comm'n, 306 Ill. 197, 201, 137 N.E. 789, 791(1922) (a cooperage company that entered into contract forthe painting of its smokestacks at its factory was not inbusiness of maintaining a structure because its "buildingswere only a necessary incident or means as a place ofcarrying on the business"); see also 1 T. Angerstein,Illinois Workmen's Compensation