Flores v. Westmont Eng'g Co.

2021 IL App (1st) 190379

183 N.E.3d 188

451 Ill.Dec. 142

Juanita FLORES, Plaintiff-Appellant,

v.WESTMONT ENGINEERING COMPANY a/k/a Morey Industries Inc., VVF Illinois Services LLC, and VVF Illinois LLC, Defendants

(VVF Illinois LLC, Defendant-Appellee).

No. 1-19-0379

Appellate Court of Illinois, First District, Fourth Division.

Filed January 28, 2021

Rehearing denied February 24, 2021

Matthew A. Saltzman, of Sherwood Law Group, LLC, of Chicago, for appellant.

Kurt E. Olsen, of Krakar & Olsen, of Chicago, for appellee.

PRESIDING JUSTICE GORDON delivered the judgment of the court, with opinion.

¶ 1 Plaintiff, Juanita Flores, was injured when storage racks collapsed on her while she was operating a forklift in the course of her employment with VVF Illinois Services LLC (VVF Illinois Services). Plaintiff filed suit against VVF Illinois Services, Westmont Engineering Company (Westmont Engineering), and VVF Illinois LLC (VVF Illinois), the appellee in the instant appeal. VVF Illinois filed a motion for summary judgment, claiming that it was only the landlord of the building from which VVF Illinois Services operated and had no control over the storage racks that injured plaintiff while she was working.

The trial court granted the motion for summary judgment, and plaintiff appeals. For the reasons that follow, we reverse.

¶ 2 BACKGROUND

¶ 3 On March 10, 2017, plaintiff filed a complaint against VVF Illinois, VVF Illinois Services, and Westmont Engineering; the complaint was amended several times, and it is the second amended complaint, filed on March 20, 2018, that was the subject of VVF Illinois's motion for summary judgment.¹ Plaintiff alleged that she was hired by VVF Illinois Services as a forklift operator and worked from a building located in Montgomery, Illinois, that was owned by VVF Illinois (the property). On March 13, 2015, plaintiff was operating a forklift when a storage rack filled with merchandise collapsed, causing her injuries.

¶ 4 Counts II (negligence) and V (willful and wanton conduct) of the second amended complaint, the counts aimed at VVF Illinois, alleged that VVF Illinois had a duty to maintain a safe property for its invitees, employees, and licensees and breached that duty by permitting the property to remain in a dangerous condition. The second amended complaint alleged that VVF Illinois was responsible for the maintenance of the storage racks located on the property and that, at the time of plaintiff's injury, the storage racks were not secured and in disrepair and created an unnecessarily dangerous working environment for plaintiff. The second amended complaint further alleged that VVF Illinois knew, or should have known, that the storage racks had been installed and maintained in a negligent manner and that it was foreseeable that an individual such as plaintiff would be working near the storage racks. Count V also alleged that VVF Illinois knowingly and intentionally violated safety standards and regulations.

¶ 5 On May 10, 2018, VVF Illinois filed a motion for summary judgment, claiming that, while it was the owner of the property, it was not in possession or control of the property because it had leased the property to VVF Illinois Services, a separate entity. VVF Illinois claimed that VVF Illinois Services was obligated to keep the property in good condition and that VVF Illinois did not assume any maintenance obligations under the lease, other than maintaining the structure of the property and the underground utility lines and sewer pipes. VVF Illinois further claimed that there was no evidence that any issues with the storage racks were latent defects that VVF Illinois was aware of and concealed.

Accordingly, VVF Illinois contended that it did not owe plaintiff any duty and was entitled to judgment as a matter of law.

¶ 6 In response to the motion for summary judgment, plaintiff claimed that VVF Illinois and VVF Illinois Services were "intertwined," that VVF Illinois had control over the storage racks, and that it had an obligation to maintain the racks. Plaintiff further contended that VVF Illinois was the owner of the racks and had notice of their dangerous condition prior to leasing them to VVF Illinois Services.

¶ 7 Attached to the motion for summary judgment and plaintiff's response were several documents, including (1) the affidavit and deposition testimony of Kurussh Amrolia, (2) the deposition testimony of Curt Konrardy, (3) the lease between VVF Illinois and VVF Illinois Services, and (4) documents purporting to be from the Occupational Health and Safety Administration (OSHA) concerning plaintiff's injury.

¶ 8 Amrolia testified that he was the manager of VVF Intervest, LLC (VVF Intervest), the sole member of VVF Illinois, and testified to the organizational structure of the similarly named companies at issue: there was a parent company in India,² which owned a company called VVF America, Inc. VVF America, Inc., owned VVF Intervest. VVF Intervest was the holding company for VVF Illinois and VVF Illinois Services, among others, and VVF Intervest was manager of both entities; Amrolia was the manager of VVF Intervest. Amrolia testified that VVF Illinois was created solely to hold title to the property and that neither VVF Intervest nor VVF Illinois had any employees, while VVF Illinois Services did. As manager of VVF Intervest, Amrolia acted on behalf of both VVF Illinois and VVF Illinois Services.

¶ 9 Amrolia testified that, prior to the acquisition of the property at issue, there was already a functioning business operating inside, operated by Henkel, owner of the Dial and Right Guard brands, which were involved in manufacturing soap and deodorant sticks. VVF Intervest, the holding company, acquired the business lock, stock, and barrel, including all equipment and employees; VVF Intervest did not make any changes to the property or its employees, and the employees remained with the business after the acquisition.

¶ 10 In connection with VVF Intervest's purchase, Amrolia had several meetings with Henkel, and visited the property once. When he visited the property prior to its acquisition, he did not inspect the property "for its adequacy" and merely walked through the property. Amrolia was interested in the financials, and "[t]he general cleanliness, if the lines are humming, producing the product, how is the product looking? Things like that. General condition." Amrolia testified that he was "not really" searching for safety issues because he knew that the existing staff would be staying on, including the "safety and environmental people." He further testified that "nothing stood out or glaringly came across that needed any attention" during his visit. Amrolia did not inspect the storage racks that were present and visible at the property.

¶ 11 Amrolia testified that after VVF Intervest purchased the property and its business, he "turned around and made VVF Illinois the landlord, and then VVF Illinois leased the building and the premises to VVF Illinois Services."³ Amrolia testified that VVF Illinois acquired the property from VVF Intervest on January 26, 2009, and entered into the lease with VVF Illinois Services on the same day. Amrolia testified that he signed the lease on behalf of both VVF Illinois and VVF Illinois Services.⁴ As noted, VVF Illinois was created solely to hold title to the property operated by VVF Illinois Services, making them a tenant and giving them the control over the equipment in the factory, including the storage racks in question.

¶ 12 The lease provided that it was between VVF Illinois and VVF Illinois Services and was for the lease of the property and all of the equipment located therein. The lease provided that VVF Illinois Services was to pay VVF Illinois rent in the amount of $221,000 per month, plus additional rent consisting of property taxes, an administrative fee, and sums for insurance and repairs. Under the terms of the lease, VVF Illinois was obligated to "maintain the roof, foundation and the structural soundness of the exterior walls of the Premises in good repair. [VVF Illinois] shall also maintain, and keep in good repair, the underground utility and sewer pipes outside the exterior walls of the building on the Premises." In turn, VVF Illinois Services was obligated to "keep and maintain all parts of the Premises (except those for which Landlord is expressly responsible under the terms of this Lease) in good condition, promptly making all necessary repairs and replacements."

¶ 13 With respect to the running of VVF Illinois Services, Amrolia testified that there were approximately 325 employees at the time of plaintiff's injury and that he had no role in the hiring of employees. Amrolia was not involved with the day-to-day operations of VVF Illinois Services, but in his capacity as manager of VVF Intervest, he had communications on a daily basis with VVF Illinois Services’ vice president, Konrardy, about "the P&L financials, our big customers, banking relationships, and details the parent company in India would like to see."

¶ 14 Amrolia testified that, after the property had been leased to VVF Illinois Services, he would visit the property annually or, at most, quarterly. During his visits, he would be looking to "[a]gain, the general G&P, the upkeep of the equipment, the product quality that they are running on the lines, things like that." Amrolia did not pay any particular attention to the forklifts or storage racks. When he walked through the property, he would be accompanied by several managers from VVF Illinois Services. Amrolia testified that VVF Illinois Services was responsible for maintaining the storage racks, and VVF Illinois never had any communication with VVF Illinois Services about the racks prior to plaintiff's injury, to his knowledge.

¶ 15 Amrolia testified that if there was a potential violation of OSHA regulations, he would be included on such communications. Amrolia testified that he was aware that there had been an OSHA...