Fan v. Auster Company, Inc.

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State: Illinois

Court: 1st District Appellate

Docket No: 1-07-2604 Rel

Case Date: 03/30/2009

Preview:FIRST DIVISION MARCH 30, 2009

No. 1-07-2604

JENNY FAN, Special Administratrix of the Estate, of Ru Hai Liu, Deceased, Plaintiff-Appellant, v. AUSTER COMPANY, INC., and AUSTER TRUST, Defendants-Appellees.

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Appeal from the Circuit Court of Cook County.

No. 03 L 12935

Honorable Diane J. Larsen, Judge Presiding.

PRESIDING JUSTICE ROBERT E. GORDON delivered the opinion of the court: On April 22, 2003, Ru Hai Liu fell down an open elevator shaft, and died. Liu worked for Yong Shing Wholesale Trading Company, which subleased the premises from defendant Auster Company. Defendant Auster Company had leased the premises from the owner of the building, defendant Auster Trust. Plaintiff Jenny Fan, who is the special administratrix for Liu's estate, sued defendants Auster Company and Auster Trust alleging that they negligently allowed an unguarded opening to exist, failed to provide elevators with an interlock to prevent the doors from opening if the elevator was not present, and failed to inspect the elevator doors to assure that the interlocks were operating. The employer, Yong Shing, 1 was not named as a defendant,
1

The sublessee, Yong Shing, is not a party to this appeal. Defendants Auster Company

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since the deceased's exclusive remedy against his employer was that provided by the Workers' Compensation Act. 820 ILCS 305/1 et seq. (West 2006); Wright v. Mr. Quick, Inc., 109 Ill. 2d 236, 237 (1985) (employer "could not be named as a defendant"). Defendants Auster Trust and Auster Company moved for summary judgment on the ground that the sublease placed the responsibility for maintaining the elevator on Yong Shing, the sublessee. On August 20, 2007, the circuit court of Cook county entered summary judgment in favor of defendants. On September 13, 2007, plaintiff filed a notice of appeal, and this appeal followed. For the reasons discussed below, we reverse the trial court's order and remand for further proceedings consistent with this opinion.

BACKGROUND The Parties Plaintiff Jenny Fan was appointed as the special administratrix for the estate of Ru Hain Lin Fan for the purpose of bringing this lawsuit. The deceased, Ru Hai Lin, was working on April 22, 2003, at 51 West South Water Street as an employee of the Yong Shing Wholesale Trading Company, when he fell down an elevator shaft and died. Lin, who was 45 years old at the time of the accident, was survived by a wife and daughter, age 42 and 19 respectively, who

and Auster Trust had filed third-party complaints against Young Shing. However, on April 11, 2007, the circuit court entered an order dismissing their complaints with prejudice due to a goodfaith settlement made by Yong Shing. 2

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live in China. The deceased earned $450 per week and sent approximately $1,000 per month back to his wife in China. 2 Defendant Auster Trust owned the building at 51 South Water Market Street in Chicago, where the accident occurred. Defendant Auster Trust leased this premises to defendant Auster Company, pursuant to a lease dated October 19, 1998. Defendant Auster Company was in

the business of distributing produce to grocery stores, and it conducted its business on this premises from October 18, 1998, until shortly before December 1, 2002, when it moved to a new location at 2404 South Walcott Street. Thomas Bastounes testified that he is the president of defendant Auster Company and that he was on the premises on a daily basis, prior to December 2002. In a lease dated November 15, 2002, defendant Auster Company subleased the premises to the Yong Shing Wholesale Trading Company. The sublease stated that the "term of lease"

2

In her interrogatory answer, plaintiff stated that decedent earned approximately $450 per

week. The Illinois Industrial Commission's order, which settled the deceased's worker's compensation claim, stated that the deceased earned $450 per week. In a telephonic discovery deposition, Ming Zhen Yan, the deceased's wife, testified that, the day before his death, the deceased called her and said that he was earning $1,800 per month, which computes to $450 per week. She also testified that he sent her approximately $1,000 every month.

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began on "12/1/02." 3 Yong Shing was in the business of providing produce and other supplies to Chinese restaurants in the midwest. Bastounes, at his discovery deposition, described the premises as a "1920 vintage" building. The building, on Chicago's Near South Side, has since been converted to condominiums and townhouses, as reported by Bastounes When Bastounes decided to move his company and its workers out of the old warehouse, he still had the lease to pay.4 Around the time that the Auster Company decided to move, Yong Shing was created,5 with Bastounes as an investor. From the record before us, the timing of Yong Shing's creation and demise appears to coincide approximately with the beginning and end of its stay in the premises. According to

3

The sublease also stated that the term ended on "8/31/02" which is puzzling. Thomas

Bastounes, president of defendant Auster Company, raised the issue of this date during his discovery deposition.

4

The primary lease did not end until October 31, 2003. It required Bastounes' company

to pay $144,000 per year, with upward adjustments linked to the Consumer Price Index.
5

Lim testified that John Zhu, an Auster Company salesman who reported to Bastounes,

first approached Lim about Yong Shing in November 2002. Lim testified that he (Lim) was supposed to be one of the people "who start up the company *** but something happened and [sic] I did not go according to plan." Lim never explained whose "plan" it was. 4

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Bastounes, Yong Shing moved out of the premises "soon after" the accident, and Yong Shing ceased to exist within six months of moving out. Although the sublease gives the appearance of an arm's-length transaction between two different companies, it was actually entered by Bastounes and Lim, whom Bastounes both hired for and later fired from Yong Shing.6 While the sublease contains a signature line with the words "Qin Fu Huang" printed beneath it and a purported signature of "Qin Fu Huang" above it, Bastounes testified that it was actually Lim who entered the sublease on behalf of Yong Shing; Bastounes, of course, signed on behalf of Auster Company. Bastounes must have had a strong financial interest in Yong Shing, because according to his testimony, he stopped by several times a week, just to check on finances. Bastounes could not recall whether he invested in Yong Shing as an individual or as part of Auster Company; however, it appears that he was certainly involved with the company. Bastounes hired Yong Shing's two principal employees, De Caire and Lim. According to Bastounes, DeCaire was the Auster Company's bookkeeper, but she stayed on the premises even after Auster Company moved out. According to DeCaire, Bastounes offered her the job as bookkeeper for Yong Shing. Lim, who spoke both English and Chinese, was described as the

6

Lim testified that he was hired by John Zhu, but that he understood that Zhu's boss was

Bastounes, and Bastounes was present at the final interview. Lim testified that Bastounes was the person who later fired him from Yong Shing. 5

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"boss" of Yong Shing by the deceased's wife.7 DeCaire and Lim were the only two Yong Shing employees who spoke English, according to Bastounes, DeCaire and Lim. Other than DeCaire and Lim, there were approximately six or seven Chinese men who worked in the warehouse, according to Lim While we do not know for certain the legal status or residence of the other five or six men, we do know that the deceased was an illegal alien, who not only worked but also lived at the warehouse, according to his wife. DeCaire testified that she did the payroll. However, when she was asked whether the warehouse workers had social security numbers, or worked 40 hours per week, or had home addresses, she repeatedly answered: "I don't recall." She also could not recall whether she prepared W-2s for them, or whether they lived on the premises. After the Auster Company moved out and the Chinese workers moved in, there is no evidence in the record of any major repairs made to the building or its elevators. After the deceased died, Bastounes testified that Yong Shing moved out, "soon after," and the warehouse was sold and converted to condominiums and townhouses. Bastounes testified that the building was "gutted," with only the walls left standing. Yong Shing went out of business within six months of the accident, according to Bastounes.

7

In essence, Bastounes agreed that Lim was the boss of Yong Shing, when he testified

that Lim's job was "to manage the business and operate the company and be the liaison between the Asian folks that were running the company and the investors." 6

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Language of the Lease and Sublease Paragraph 14 of the primary lease was entitled "Repairs and Maintenance," and it described the lessee and the lessor's respective obligations for both "non-structural" elements and "structural elements." It stated, in full, as follows: "A. Lesee shall keep all non-structural portions of the Leased Premises and appurtenances thereto in a clean, sightly and healthy condition, and shall maintain all portions of the Leased Premises (except to the extent the Lessor is obligated to maintain the same, as provided in Section 14.B) in good repair, all according to the statutes and ordinances in such cases made and provided, and the directions of public officers thereunto duly authorized, all at its own expense, and shall yield the same back to Lessor upon the termination of this Lease, whether such termination shall occur by expiration of the term, or in any other manner whatsoever, in the same condition of cleanliness, repair and sightliness as at the date of the execution hereof, loss by insured casualty and reasonable wear and tear excepted. Lessee shall make all necessary non-structural repairs and renewals upon Leased Premises and shall replace broken globes, glass and fixtures with material of the same size and quality as that broken.

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B. Lessor shall be solely responsible, at Lessor's sole cost and expense, to maintain the roof, foundation and structural elements of the building in which the Leased Premises is located. Notwithstanding the foregoing, Lessee covenants, throughout the term of this Lease, to take good care of all portions of the Leased Premises' interior and exterior, structural and non-structural, including without limitation, all gas, electric and plumbing fixtures, systems or equipment, other equipment and/or fixtures located upon the Leased Premises, motors, machinery, roof, ceiling and parking lot, and shall promptly repair at Lessee's sole cost and expense, any damages to the Leased Premises or the building in which the Leased Premises is located, which is caused by Lessee or Lessee's agents, representatives or contractors. The term 'repairs' shall include replacements or renewals when necessary, and all such repairs made be Lessee shall be equal in quality and class to the original work and/or item being repaired. At the termination of this Lease, Lessee shall surrender the Leased Premises in the same condition as when received, reasonable wear and tear excepted." The 2002 sublease to Yong Shing stated that the "Lessee shall keep the Premises and appurtenances in a clean, sightly, orderly and healthy condition and in good repair, and shall

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perform all acts required to maintain Premises in accordance with applicable statutes, ordinances and other governmental requirements." The sublease also allowed the lessor "free access to the Premises at all reasonable hours *** to make any repairs or alterations on the Premises which Lessor may deem fit to make." At the end of the sublease, just above the signatures and added by hand, were the following two sentences: "The Lessee assumes all payment and performance terms of the lease attached hereto. In the event, there is an inconsistency between this and the attached, the attached shall control." Although the lease and the sublease did not state whether the elevators, or specifically the elevator doors and gates, were considered structural or nonstructural, the deposition of Thomas Bastounes, president of defendant Auster Company, shed some light on that issue. Bastounes testified that between 1998 and 2002, when defendant Auster Company occupied the premises, John Cusimano performed "regular maintenance and repair" on the elevators, and that "for anything beyond his scope, we would go through an elevator company," named All-Types Elevators. Cuisamano was an Auster Company employee who performed general maintenance throughout the building. At some point between 1998 and 2002, defendant Auster Company had all the elevator doors replaced. Bastounes paid the bill for the repair work on the elevators and did not forward the bill to defendant Auster Trust. Bastounes testified: "I considered that to be my responsibility." Bastounes described, as follows. what his company had replaced at its own expense:

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"New doors, gates, hardware, sheaves, chains, posts, install electrical gate switches, pipe, wire, et cetera. I mean, it's detailed on their invoice. But essentially all new

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