U.S. Court of Appeals Affirms in Part Dismissal of Product Defect Case at Construction Site, Spoliation Claim

Matthew Schaefer’s employer, Brand Energy, was putting in place a scaffold at the Dynegy Power Plant. Brand Energy had complete control over the scaffold construction and had acquired the scaffold components from Universal Scaffolding & Equipment LLC. Dynegy paid for the scaffolding and owned it.

Brand Energy workers had difficulty with the Universal Scaffolding components because faulty components would not lock. While working on the assembly, a bar popped loose and struck Schaefer on the head.

Schaefer suffered serious injuries. In addition to bringing an Illinois workers’ compensation claim against Brand Energy, his employer, Schaefer also brought a lawsuit against Universal Scaffolding. Schaefer’s wife joined the lawsuit with a claim for loss of consortium.

Because the piece of scaffolding that hit Schaefer was lost, Schaefer added a claim for negligent spoliation of evidence against Brand Energy and Dynegy.

He also alleged construction negligence and a failure to warn claimed against Dynegy.

The United States District Court for the Southern District of Illinois in East St. Louis, Ill., granted summary judgments for the defendants holding that without the missing component piece, Schaefer could not prove his product liability claims. In addition, it was held that Dynegy was not liable for any of the claimed scaffold defects or for negligence. And finally, it was found that Schaefer could not prove spoliation claims because without proof that the missing product piece was defective, it was not possible to prove that its loss caused any damage and its subsequent serious injuries.

Schaefer appealed in the U.S. Court of Appeals for the 7th Circuit in Chicago ,which affirmed in part but reversed as to the spoliation count. The 7th Circuit Court of Appeals found that Illinois law does not require a plaintiff to prove that he or she would have won his or her case but for the spoliation.  The law requires only that a plaintiff show a “reasonable probability” of success.

Schaefer adduced evidence from which a jury could make this finding. The batch of scaffolding had a large number of defective pieces. At the core of this case was the fact that the missing piece of scaffolding had been lost while in Dynegy’s possession, before anyone had tested it for defects. It was the district court that held that without the missing piece, Schaefer could not prove his product liability claims against Universal.

The district court relied on the case of Schramek v. General Motors Corp., Chevrolet Motor Division, 69 Ill.App. 2d 72, 216 N.E. 2d 244 (1966), and its progeny, in that the district court judge concluded that product liability claims fail under Illinois law when the plaintiff does not present the allegedly defective product itself or at least other permissible evidence that the product was defective.

Schaefer relied on the “retained control” exception to the general rule, as articulated in ¶414 of the Restatement (Second) of Torts which Illinois has adopted.  Section 414 provides:

One who entrusts work to an independent contractor, but who retains control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care.

In this case, Dynegy had as its safety program a right to inspect and required general safety on the job site, but it did not retain in those general rights such to give rise to liability under the retained control exception.

The Illinois Supreme Court recognized a cause of action for negligence spoliation of evidence in Boyd v. Travelers Insurance Co., 166 Ill.2d 188, 193, 652 N.E. 2d 267, 270 (1995), as modified on denial of rehearing, (June 22, 1995).  In that case, the plaintiff, Boyd was injured in an explosion that the alleged was caused by a defective propane heater.  While the heater was in the hands of insurance company employee, it was lost but had been tested for defects.  Boyd brought spoliation claims against the insurance company which the insurance company moved to dismiss. The case was certified to the Illinois Supreme Court holding for the first time that Illinois recognizes a claim for negligent spoliation and that Boyd had stated such a claim even though he would not be able to prove that the heater was actually defective.

Illinois law imposes no general duty to preserve evidence but a duty arises if two conditions are satisfied.  First, a “relationship” condition:  the duty must “arise by agreement, contract, statute, special circumstance, or voluntary undertaking.” Dardeen v. Kuehling, 213 Ill.2d 329, 336 (2004). Second, a “foreseeability” condition:  the duty to preserve must “extend to the evidence at issue – i.e., whether a reasonable person should have foreseen that the evidence was material to a potential civil action.” A plaintiff must satisfy both the relationship condition and the foreseeability condition to prove that a duty to preserve evidence existed.

In this case, the federal magistrate judge held the Schaefers to the wrong standard as to the spoliation claims.  Applying the proper standard in viewing the record in the light most favorable to the Schaefers (as he must on the defense motions for summary judgment), the Schaefers have adduced sufficient evidence to put the issue of causation into genuine dispute.

It was a basic problem with the scaffolding at the Dynegy jobsite and workers were having ongoing problems with the horizontal bars popping out of the cups.  The court of appeals concluded that the Schaefers have raised a genuine issue of fact as to whether, with the missing scaffolding, they would have had a reasonable probability of success on their underlying claims.

The district court’s grant of summary judgment on this issue is reversed.  For the foregoing reasons, the Court of Appeals affirmed the entry of summary judgment on all claims against Universal, and the entry of summary judgment on Schaefer’s negligence claim and Cynthia Schaefer’s related loss of consortium claim against Dynegy.  The court reversed the grant of summary judgment on Schaefer’s spoliation claims against Dynegy and Brand.  The case was sent back to the trial court for further consideration consistent with the 7th Circuit Court of Appeal’s opinion.

Matthew Schaefer, et al. v. Universal Scaffolding & Equipment, LLC, et al., No. 15-2393, U.S. Court of Appeals for the 7th Circuit, October 7, 2016.

Kreisman Law Offices has been handling construction site injury cases, catastrophic injury cases, security injury and death cases, wrongful death cases, product liability cases, pharmaceutical defect cases and nursing home abuse cases for individuals and families who have been harmed, injured or died as a result of the carelessness or negligence of another for more than 40 years in and around Chicago, Cook County and its surrounding areas, including Bolingbrook, Romeoville, Joliet, Aurora, St. Charles, Geneva, Hinsdale, Rosemont, Naperville, New Lenox, Chicago (Logan Square, Bucktown, Bronzeville, South Shore, Jackson Park, Lincoln Square, East Side), Lockport, Bensenville, Schaumburg, Schiller Park and Park Forest, Ill.

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