No. 2--99--1462

February 09, 2001

______________________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT

______________________________________________________________________________________

______________________________________________________________________________________

JUSTICE BOWMAN delivered the opinion of the court:

On April 6, 1993, Steven Rogers was killed when the Clarkforklift he was operating overturned and landed on top of him.Pamela Rogers, individually and as administrator of the estate ofSteven Rogers, sued Geraghty Industrial Equipment, Inc. (Geraghty),and Clark Equipment Company (Clark). Geraghty was a distributor ofClark equipment and was the predecessor company of MaterialHandling Services, Inc. (MHS). The parties refer to defendantdistributor as MHS, so we will do the same.

Plaintiff's complaint contained claims of strict liability andnegligence. The strict liability claim was dismissed pursuant tothe statute of repose (735 ILCS 5/13--213 (West 1998)). Bothdefendants filed motions for summary judgment on the remainingnegligence count. The trial court denied Clark's motion forsummary judgment but granted summary judgment in favor of MHS. Thecourt made a determination pursuant to Supreme Court Rule 304(a)(155 Ill. 2d R. 304(a)) that there was no just reason to delayenforcement of or appeal from the summary judgment order. Plaintiff appeals the summary judgment order in favor of MHS,arguing that (1) a genuine issue of material fact existed as towhether MHS voluntarily undertook to notify the forklift owner ofthe availability of a safety seat for the forklift; and (2) thiscourt should recognize a common-law duty to notify of postsalesafety improvements.

In 1971, Clark manufactured the forklift involved in thedecedent's accident and sold it to the Illinois Department ofTransportation (IDOT). The accident happened during the course ofthe decedent's employment with the Illinois Department of CentralManagement Services.

When the forklift was manufactured, it was not equipped witha seatbelt or any type of restraining device. In the early 1980s,Clark developed an operator restraint system (ORS) consisting of awinged back seat and a seat belt that could be retrofitted ontoolder forklifts to help prevent injury in the event of a lateraloverturn. The ORS only fit on forklift models C300 and C500. Theforklift at issue in this case was a model CFY20.

In 1983 and 1984, Clark undertook a retrofit campaign, calledthe Phase I campaign, to provide customers who owned C300 and C500model forklifts with the ORS. To that end, Clark sent letters tocustomers believed to own the C300 and C500 forklifts. The lettersinformed the forklift owners that Clark would provide the ORS forfree and bear the cost of installing the ORS on qualifying forkliftmodels. Clark's dealers, such as MHS, performed the ORSinstallation and Clark reimbursed the dealers. The dealers wererequired to participate in the Phase I campaign.

IDOT received a letter from Clark informing it of the retrofitprogram. IDOT sent a reply card to Clark identifying twoforklifts, one of which was the one involved in the decedent'saccident. Clark informed IDOT by letter that it had receivedIDOT's reply card. The letter stated in relevant part:

"You submitted a reply to Clark, listing your equipment. A printout of your equipment that is not included in thisoffer is attached. Older model internal combustion andelectric powered lift trucks are being reviewed byengineering. No disposition has been made and your recordswill be kept on file for any future announcements.

* * *

If you have any questions regarding the equipment yousubmitted or operation safety needs, contact your local Clarkdealer."

By 1992, Clark had developed a "universal seat ORS" (universalseat) that would fit on all models of Clark forklifts. The programfor informing customers of the availability of the universal seat was known as Phase II. Unlike Phase I, Clark did not contactcustomers directly to inform them of the universal seat'savailability. Instead, Clark told its dealers, including MHS, toinform customers that the universal seat was available. Alsounlike Phase I, the customer was responsible for paying for theinstallation of the universal seat. MHS did not notify IDOT thatthe universal seat was available for the forklift involved inSteven Rogers's accident.

In its motion for summary judgment, MHS argued that it owed noduty to plaintiff's decedent. Plaintiff responded that MHSvoluntarily undertook a duty to notify IDOT of the availability ofa safety seat for the forklift. Plaintiff also raised the argumentthat the trial court should recognize a common-law duty to notifyof postsale improvements under the facts of this case. Bothplaintiff and the trial court recognized, however, that the trialcourt was bound by Modelski v. Navistar InternationalTransportation Corp., 302 Ill. App. 3d 879 (1999), in which thecourt declined to recognize a common-law duty to retrofit a tractorwith a safety device that would have eliminated the hazard thatcaused the decedent's accident. The trial court ruled that MHSdid not voluntarily undertake a duty to notify and, consequently,granted summary judgment for MHS. Plaintiff filed a timely noticeof appeal.

According to section 2--1005(c) of the Code of Civil Procedure(735 ILCS 5/2--1005(c) (West 1998)), a court should enter summaryjudgment if the pleadings, depositions, admissions, and affidavitsshow that there is no genuine issue of material fact and that themoving party is entitled to judgment as a matter of law. Areviewing court should reverse an order granting summary judgmentif the evidence shows that a genuine issue of material fact existsor if the judgment is incorrect as a matter of law. AmericanFamily Mutual Insurance Co. v. Hinde, 302 Ill. App. 3d 227, 231(1999). We apply a de novo standard of review to the trial court'sdecision to grant summary judgment. Hinde, 302 Ill. App. 3d at231. When evaluating the facts, we construe the evidence strictlyagainst the movant and liberally in favor of the nonmoving party. Logan v. Old Enterprise Farms, Ltd., 139 Ill. 2d 229, 234 (1990).

Summary judgment in favor of a defendant is proper when aplaintiff has not established an essential element of a cause ofaction. Lavazzi v. McDonald's Corp., 239 Ill. App. 3d 403, 408(1992). One of the essential elements of a negligence action isthe existence of a duty that the defendant owed to the plaintiff. Lavazzi, 239 Ill. App. 3d at 408.

Here, plaintiff claims that MHS voluntarily undertook the dutyto notify its customer, IDOT, of the availability of the universalseat. Apparently, plaintiff contends that MHS's alleged dutyextended to the decedent as a foreseeable user of the forklift. Whether a defendant has voluntarily undertaken a legal duty to aplaintiff is a question of law. Lavazzi, 239 Ill. App. 3d at 409. Any duty imposed on a defendant under this theory is limited to theextent of the undertaking. Frye v. Medicare-Glaser Corp., 153 Ill.2d 26, 32 (1992). With these principles in mind, we considerwhether MHS voluntarily undertook a duty to notify.

Plaintiff asserts that she established a voluntary undertakingbased on (1) the dealer sales agreement between MHS and Clark, (2)Clark's instructions to MHS to notify customers that the universalseat was available, and (3) custom and practice between Clark andMHS. For the reasons that follow, we reject each of plaintiff'sassertions.

We begin by addressing the dealer sales agreement. Plaintiffmaintains that MHS undertook a duty to notify by agreeing to thefollowing provisions:

"CLARK expects that DEALER will use its best efforts topromote the sale of the products in its trade area and to meetor exceed established sales performance goals. Honestdealing, competent employees and prompt and efficient serviceat fair and reasonable prices to the customer are the basicrequirements which DEALER will be expected to provide in orderto create and maintain goodwill for the DEALER and CLARK.

* * *

DEALER will perform special policy adjustments and fieldcampaign adjustments requested by CLARK for all products inDEALER's APR regardless of where or by whom sold and willcooperate fully with CLARK in identifying and notifying ownersof products subject to any such adjustments.

* * *

DEALER will at all times maintain an inventory of partsin such quantity and variety as is reasonably necessary toenable DEALER to fulfill its responsibility to provide promptservice and availability of parts to all customers in the APRin accordance with policies established by CLARK from time totime."

Plaintiff also argues that MHS generally agreed to followClark's instructions on a number of matters including providingwarranty and installation service to customers, maintaining itsservice area, maintaining an inventory of parts, keeping a customerlist, and training employees.

Generally speaking, the only way for one who is not a party toa contract to assert rights pursuant to the contract is to claimthat she is a third-party beneficiary of the contract. Here,plaintiff concedes that she cannot sustain a claim that thedecedent was a third-party beneficiary of the dealer salesagreement. Consequently, plaintiff attempts to create the newconcept of voluntary undertaking based on a contract. We cannotagree with an approach that combines and obfuscates the separateconcepts of voluntary undertaking in tort and third-partybeneficiary to a contract.

In our view, plaintiff cannot escape the third-partybeneficiary issue. If signing the contract created a duty, and theplaintiff who claims the benefit of the duty was not a party to thecontract, then the plaintiff must demonstrate that he or she was athird-party beneficiary of the contract. Here, the terms of thedealer sales agreement did not establish that MHS intended toundertake a duty to treat plaintiff's decedent as a third-partybeneficiary or that MHS intended to undertake a duty to makereasonable attempts to notify IDOT of its postsale safetyimprovements. Thus, the act of entering into the dealer salesagreement does not establish that MHS voluntarily undertook a duty to notify.

Plaintiff relies on Berg v. Allied Security, Inc., 297 Ill.App. 3d 891 (1998), vacated on other grounds, 193 Ill. 2d 186(2000), for the proposition that through contract one canvoluntarily undertake a duty to a person who was not a party to thecontract. The plaintiff in Berg was assaulted in the parking lotof the building where she worked. She sued the property owner,Podolsky, and the company with which Podolsky contracted to providesecurity services for the property, Allied Security, Inc. (Allied). The court found that the contract between Podolsky and Alliedshowed that Podolsky and Allied jointly agreed upon the activitiesAllied was to perform. Berg, 297 Ill. App. 3d at 900. Among otherthings, Allied's orders to its guards stated that one of theguards' primary functions was to "[k]eep unauthorized people fromthe property to reduce the risk of theft, vandalism and assault."(Emphasis in original.) Berg, 297 Ill. App. 3d at 900. Afterconsidering all of the relevant facts, the court in Berg concludedthat "Podolsky and Allied voluntarily entered into a contract, theterms of which constituted a voluntary assumption on the part ofboth defendants to protect plaintiff from the criminal acts ofthird parties on the premises." Berg, 297 Ill. App. 3d at 901.

It appears to us that the court in Berg essentially held thatthe plaintiff was an intended beneficiary of the contract betweenthe defendants without characterizing the plaintiff as a third-party beneficiary or applying a third-party beneficiary analysis. In our view, this approach muddies the waters of voluntaryundertaking in tort by failing to distinguish between the twoseparate concepts of voluntary undertaking and assuming a duty toa third party through contract. Thus, we decline to follow thecommingled rationale of Berg. We further conclude that, even if wedid agree with the court's analysis in Berg, that case would befactually distinguishable from the case before us.

The defendants in Berg expressly agreed in their contract toprovide security services that included the protection of thirdparties. There was no similar express agreement between Clark andMHS that MHS would notify customers of safety improvements to theClark forklifts or that the parties in any way intended to assumea duty toward plaintiff's decedent. In the case before us, theportions of the dealer sales agreement plaintiff relies upon do notshow any intent to benefit the equipment user or owner.

We also find distinguishable the cases plaintiff citesinvolving construction contracts in which a defendant agreed to begenerally responsible for construction site safety. No analogousagreement existed in the contract between MHS and Clark. Certainly, MHS did not agree to be responsible for the safety ofits customers' employees. Nor did MHS agree to transmitinformation from Clark to its customers. The evidence did not showthat MHS always communicated information from Clark to itscustomers. To the contrary, when Clark wanted to make sure itscustomers obtained the first phase of safety seats, Clark contactedthe customers directly. For these reasons, we hold that the termsof the dealer sales agreement did not impose a duty upon MHS as toplaintiff's decedent as a third-party beneficiary under thecontract.

Plaintiff also argues that Clark's specific instructions toMHS established a voluntary undertaking. This argument fails fortwo reasons. First, the essential element of the voluntaryundertaking doctrine is an "undertaking." Bailey v. Edward HinesLumber Co., 308 Ill. App. 3d 58, 66 (1999). Our research has notrevealed any Illinois authority that defines "voluntaryundertaking." Black's Law Dictionary defines "undertaking" as "[a]promise, pledge, or engagement." Black's Law Dictionary 1528 (7thed. 1999). It defines "undertake" as:

"1. To take on an obligation or task ***. 2. To give aformal promise; guarantee ***. 3. To act as a surety for(another); to make oneself responsible for (a person, fact, orthe like) ***." Black's Law Dictionary 1527-28 (7th ed.1999).

These definitions suggest that voluntarily undertaking a dutyrequires some sort of affirmative acknowledgment or recognition ofthe duty by the party who undertakes the duty; in other words,there must be a showing of the party's intent to undertake theduty. The argument that Clark issued instructions to MHSimproperly focuses on Clark's actions. Even if Clark did instructMHS to inform all of its customers about the universal seat,plaintiff has not established that MHS accepted the responsibilityof carrying out Clark's instructions. The passive receipt ofClark's "instructions," without more, is not enough to establishthat MHS voluntarily undertook the obligation of notifying itscustomers regarding the universal seat.

Plaintiff next contends that evidence regarding custom andpractice between Clark and MHS established a voluntary undertaking. MHS responds that the cases plaintiff cites hold that custom andpractice are relevant to the question of what standard of care adefendant owes, but that custom and practice do not create a duty. In her reply brief, plaintiff cites the following language fromDarling v. Charleston Community Memorial Hospital, 33 Ill. 2d 326,331 (1965):

"Strictly speaking, the question is not one of duty, for '***in negligence cases, the duty is always the same, to conformto the legal standard of reasonable conduct in the light ofthe apparent risk. What the defendant must do, or must notdo, is a question of the standard of conduct required tosatisfy the duty.' [Citation.] 'By the great weight of modernAmerican authority a custom either to take or omit aprecaution is generally admissible as bearing on what isproper conduct under the circumstances, but is notconclusive.' [Citation.] Custom is relevant in determiningthe standard of care because it illustrates what is feasible,it suggests a body of knowledge of which the defendant shouldbe aware, and it warns of the possibility of far-reachingconsequences if a higher standard is required." Darling, 33Ill. 2d at 331.

Plaintiff misconstrues the court's holding in Darling. In thatcase the court did not address the issue of whether the defendantowed a duty to the plaintiff. Rather, the issue was what evidencewas proper on the standard of care required on the part of thedefendant hospital. As the quote above indicates, the supremecourt held that evidence of custom and practice is relevant indetermining the applicable standard of care. In the case beforeus, the question is not whether MHS met the standard of care, butwhether MHS owed a duty to the plaintiff. One does not reach thestandard of care question until a duty has been established. Thus,we cannot agree with plaintiff that the supreme court has held thatevidence of custom and practice may establish a duty.

Moreover, the custom and practice evidence plaintiff reliesupon does not demonstrate any undertaking by MHS with respect toplaintiff's decedent. Plaintiff cites memos from Clark to MHSinforming MHS that disseminating information about the universalseat would provide MHS with a good opportunity to sell equipment,parts, and services to existing customers. Plaintiff argues thatit would be illogical to conclude that MHS would have disregardedClark's recommendations. Plaintiff's argument misses the point,however. The issue is whether MHS did anything that demonstratedan intent to undertake a duty to notify, not whether MHS shouldhave done something as a good business practice. Plaintiff has notpresented evidence of any act, conversation, or writing thatestablishes an undertaking.

Plaintiff's last argument is that this court should recognizea common-law duty to notify of postsale safety improvements limitedto the facts of this case. Plaintiff acknowledges that, inModelski v. Navistar International Transportation Co., 302 Ill.App. 3d 879 (1999), the court rejected a similar suggestion.

In Modelski, the plaintiff's decedent was killed in anaccident involving a tractor manufactured by Navistar. One of theplaintiff's allegations, which the trial court struck, was thatNavistar was negligent for failing to retrofit the tractor afterits sale with a safety device that would have eliminated the hazardthat caused the accident. The trial court held:

"If the plaintiff meant to charge Navistar with negligence forfailing to retrofit the tractor to remedy a hazard of which itdid not know, nor should it have known, until after thetractor was sold, then the allegation failed for want of dutyand was properly stricken." Modelski, 302 Ill. App. 3d at889.

The court noted that, absent a statutory obligation or voluntaryundertaking to retrofit, no Illinois case has imposed upon amanufacturer a duty to retrofit or recall where the allegedlydangerous condition was not discovered until after the product wassold. Modelski, 302 Ill. App. 3d at 889. The court then commentedon the significant burden such a duty would impose onmanufacturers:

"The consequences of imposing upon manufacturers anextrastatutory duty to recall and retrofit used products toincorporate postsale state-of-the-art designs would be theequivalent of mandating that manufacturers insure that theirproducts will always comply with current safety standards. This we are unwilling to do. If such a continuing duty is tobe imposed, it is the legislature that is better suited to thetask. In a legislative setting, due consideration can begiven to the type of products to which such a duty would applyand to whether a statute of repose should be enacted to limitthe potentially infinite duration of the duty." Modelski, 302Ill. App. 3d at 889.

We agree with the court's reasoning in Modelski. The dutyplaintiff urges this court to create would impose upon distributorsa continuous duty to inform customers of manufacturers' safetyimprovements for products that are not defective or unreasonablydangerous as built. Contrary to plaintiff's assertion, this wouldbe a heavy burden. The court in Modelski correctly determined thatthe decision whether to impose such a duty is better left to thelegislature.

Accordingly, we affirm the trial court's award of summaryjudgment for MHS because MHS did not have a duty and did notvoluntarily undertake a duty to notify forklift owners or operatorsthat a universal safety seat was available for the CFY20 forklift. Affirmed.

HUTCHINSON, P.J., and McLAREN, J., concur.