Opinion
No. 97 C 8709.
December 7, 2000.
MEMORANDUM OPINION AND ORDER
This is a product liabilities case pending before this Court on the basis of diversity jurisdiction. The plaintiffs are Arthur J. Rogers Company ("Rogers"), the owner of certain real estate and Armstrong Industries, Inc. ("Armitage"), the lessee of that property. On October 22, 1996, Armitage was mixing certain chemical components in an effort to perfect an adhesive compound for use in repairing concrete. The mixture erupted in smoke and flame, which damaged the building belonging to Rogers and the inventory and equipment of Armitage. Rogers and Armitage have brought this action for damages against Remarc Chemicals Corporation ("Remarc"), the supplier of one of the chemical components used in its mixture (Plastichlor), and Dover Chemical Corporation ("Dover"), the manufacturer of that same product under the name "Paroil."
In essence, Armitage claims that Dover's product under any name is dangerous, and that although it purchased the product from Remarc, Remarc was Dover's agent and as such Dover is responsible for Remarc's failure to adequately warn of the reactive qualities of its product when mixed with certain other chemicals. Armitage also contends that Dover's own warnings were also inadequate.
Facts
Included in Dover Chemical Corporation's reply materials is a "Local Rule 56.1 Reply Statement" which appears to consist of additional undisputed facts. Because Local Rule 56.1 does not provide for additional undisputed statements of fact to be included in reply materials, these statements were not considered in assessing Dover Chemical Corporation's motion for summary judgment.
The following facts are undisputed unless otherwise noted. Armitage manufactures polymer-based products used for the repair and maintenance of concrete. (Pl.s' 56.1(b)(3)(B) Stmt. ¶ 1.) Floyd Dimmick Sr. ("Dimmick"), an employee of Armitage, had been involved in the development of concrete polymers and repair products for over thirty years. (Id. ¶ 4.) In 1996, Dimmick was attempting to formulate a new adhesive system to be used to repair concrete runways at O'Hare Airport. (Id. ¶ 6.)
Dimmick began a search for a chemical component that would give additional flexibility to his compound, and that search eventually led to Harry Cramer, the president of Remarc. Cramer and Dimmick discussed the possibility of using a product marketed by Remarc under the name "Plastichlor," and Cramer sent Dimmick a copy of the Material Safety Data Sheet ("MSDS") for Plastichlor. The MSDS explains the nature of the product, the proper manner of use, and warns in clear, obvious, and unambiguous terms in at least two places that Plastichlor should not be used in combination with strong oxidizers or reducers (Section 3, "Avoid contact with strong oxidizers and reducers"; Section 10, "Incompatability: strong oxidizing and reducing agents"). It is uncontested that Dimmick's experimental formula contained AEP and DETA, which are chemicals known as amines. Amities are oxidizing and reducing agents.
The MSDS also contained so-called reactivity ratings that predicted the strength of certain chemical reactions. In one section of the MSDS, Dimmick noted the reactivity rating was shown as "1" while in another section that same rating was shown as "0." Concerned about the discrepancy, Dimmick called Cramer, who assured him the "0" rating was correct and the "1" was a typographical error. As Dimmick later testified in his deposition, Cramer was "exactly wrong."
The rest of the story is fairly predictable. Dimmick ordered a fifty-five gallon drum of Plastichlor and after some tests using small amounts directed his son to mix a large batch combining the Plastichlor with the amines AEP and DETA. A fire broke out damaging the property of both plaintiffs. In Dimmick's opinion, the "exothermic reaction" was caused by the combination of the three chemicals.
These facts make a rather clear case of liability against Remarc, but what of Dover? As noted above, Dover is the manufacturer of the chemical compound in question. Dover calls it "Paroil." Remarc simply buys the product Paroil from Dover, puts its own label "Plastichlor" on the drum and sells it as its own product. Like Remarc, Dover has its own manufacturing safety data sheet (virtually identical to Remarc's) but without the typographical error. Dover uniformly refers to the reactivity as "1." Dover also repeatedly warns of mixing its compound with oxidizers or reducing agents. It is undisputed that Dimmick never saw the MSDS prepared by Dover but instead relied entirely on the MSDS of Remarc.
The Legal Standard
Federal Rule of Civil Procedure 56(c) allows the Court to grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." In considering the evidence submitted by the parties, we do not weigh it or determine the truth of asserted matters. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). All facts must be viewed and all reasonable inferences drawn in the light most favorable to the non-moving party. Transamerica Ins. Co. v. South, 975 F.2d 321, 327 (7th Cir. 1992). "If no reasonable jury could find for the party opposing the motion, it must be granted." Hedberg v. Indiana Bell Tel. Co., Inc., 47 F.3d 928, 931 (7th Cir. 1995) (citingAnderson, 477 U.S. at 248).
Discussion
Plaintiff has alleged negligence and strict liability (failure to warn) against Dover. In order to withstand Dover's motion for summary judgment, Armitage must show a genuine issue of material fact that either: (1) Dover, as the manufacturer of Plastichlor/Paroil, had a duty to warn Armitage and other end users of the product of its dangerous propensities and failed in that duty; or (2) Remarc was an agent of Dover and Remarc's oral and written statements misled Armitage about the dangerous properties of Dover's product.
1. Did Dover as the manufacturer of Plastichlor/Paroil, fail in its duty to warn Armitage of the dangerous propensities of its product?
Dover, as the manufacturer of Plastichlor/Paroil, normally had a duty to warn of a product's dangerous propensities. Under Illinois law, a supplier has a duty to supply adequate warnings and may be held liable for its failure to do so. Venus v. O'Hara, 127 Ill. App.3d 19, 25-26, 468 N.E.2d 405, 409, 82 Ill.Dec. 143, 147 (1st Dist. 1984). However, this "duty will rarely extend beyond the communication of warnings to the immediate vendee, since, as a practical matter, the vendor has neither the means of controlling the vendee's subsequent actions nor the opportunity to provide warnings directly to the ultimate user. Id. In addition, "if the record establishe[s] [a retailer's] failure to pass on any warnings, the sufficiency of the [manufacturer's] warnings would be immaterial, since under those circumstances they were not relied upon downstream and would not have been a proximate cause of the injury."Venus, 127 Ill. App. 3d at 29, 486 N.E.2d at 411, 82 Ill. Dec. at 149.
Generally, according to Venus, 127 Ill. App. 3d at 25-26, 468 N.E.2d at 409, 82 Ill.Dec. at 147, a manufacturer only has a duty to warn the immediate vendee of the dangerous propensities of a product. The record demonstrates that Dover supplied warnings to Remarc concerning the dangerous propensities of Paroil/Plastichlor. As Plaintiffs correctly state, "with the exception of the typographical error . . . [i]t is clear that Remarc relied upon Dover for its information about the product, and that Dover was Remarc's source of knowledge regarding Paroil/Plastichlor. (Pl.s' Resp. at 9).
The only issue remaining is whether the warnings provided to Remarc were sufficient. Ordinarily, the sufficiency of a warning would be a question of fact left for the jury to decide. Venus, 127 Ill. App. 3d at 29, 486 N.E.2d at 411, 82 Ill. Dec. at 149. However, the record is clear that had Dimmick had the Dover Paroil MSDS in his possession he would have known that Paroil/Plastichlor was a reactive product. (See Ex. E to Dover's 56.1 Stmt. at 132.) As a result, Dimmick would not have used the Paroil/Plastichlor in the way he did thus avoiding an exothermic reaction. Id. Therefore, the warnings given by Dover to Remarc were adequate and would have prevented the damages that Plaintiffs now seek against Dover. In any event, because Remarc failed accurately to pass on the product safety warnings provided to it by Dover, "the sufficiency of [Dover's] warnings is immaterial." Venus, 127 Ill. App.3d at 29, 486 N.E.2d at 411, 82 Ill.Dec. at 149.
2. Was Remarc an agent of Dover?
Plaintiffs argue that while Dimmick did not rely upon the Dover Paroil MSDS in determining whether to combine Plastichlor with AEP and DETA, he did rely upon the erroneous information of Dover's supplier and agent, Harry Cramer/Remarc. Clearly, Remarc's MSDS was misleading with ratings of both "1" and "0" in the reactive rating. Further, Cramer's advice that "0" was the proper rating was wrong. Thus, the second issue is whether Remarc's errors are attributable to Dover as its agent.
Generally, the existence of an agency relationship is a question of fact, and the party asserting the agency has the burden of proving the agency's existence by a preponderance of the evidence. Raclaw v. Fay, Conmy Co., 282 Ill. App.3d 764, 767, 668 N.E.2d 114, 117, 217 Ill.Dec. 929, 932 (1st Dist. 1996). However, if the agency relationship is so clear as to be undisputed, the issue may be decided as a matter of law.Lydon v. Eagle Food Center, Inc., 297 Ill. App.3d 90, 93, 696 N.E.2d 1211, 1214, 231 Ill.Dec. 640, 643 (2nd Dist. 1998).
Under Illinois Law:
A principal-agent relationship is a legal concept founded upon a consensual and fiduciary relationship between two parties. The test of agency is whether the purported principal has the right to control the manner and method in which the work is carried out by the agent and whether the agent is capable of subjecting the principal to personal liability. Ordinarily, the key consideration in determining whether an agency relationship exists is whether the principal had the right to control the activities of the agent.Knapp v. Hill, 276 Ill. App.3d 376, 380, 657 N.E.2d 1068, 1071, 212 Ill.Dec. 723, 726 (1st Dist. 1995); See also Chemtool, Inc. v. Lubrication Technologies, Inc., 148 F.3d 742, 745 (7th Cir. 1998) (Under Illinois law, test to determine whether a principal-agent relationship exists is whether the alleged principal has the right to control the agent).
In support of its contention that an agency relationship existed between Dover and Remarc, Plaintiffs submit that Remarc's Plastichlor is the exact same product as Dover's Paroil except for the Remarc label; Remarc's MSDS for Plastichlor is exactly the same as Dover's MSDS for Paroil with the exception of a typographical error; the drum of the product in question was never within the control of Remarc, packaged by Remarc, or inspected by Remarc; the drum of Plastichlor was sent directly to Armitage by Dover; and the concerted manner in which Remarc and Dover responded to Armitage's communication to Remarc that Armitage may file a claim against Remarc.
Dover does not dispute these facts. However, Dover contends that these facts do not give rise to a principal-agent relationship. We agree. Plaintiffs have failed to allege that Dover, the purported principal, had the right to control the actions of Remarc, the purported agent. In essence, we have a situation where a dealer is buying goods from a manufacturer for resale to the public. Under these facts, the Seventh Circuit has held that no agency relationship exists. Bushendorf v. Freightliner Corp., 13 F.3d 1024, 1026 (7th Cir. 1993). In Bushendorf, Judge Posner held that "[a]n agent can of course bind his principal with representations made within the scope of his employment, but an automobile dealer or other similar dealer, who like River States merely buys goods from manufacturers or other suppliers for resale to the consuming public, is not his supplier's agent." Id. Just like River States, Remarc merely bought a product from Dover for resale to the public. The fact that the product was shipped from Dover, Ohio instead of being shipped to Remarc and then to Armitage demonstrates efficiency on the part of Remarc with regard to cost and time, not the existence of an agency relationship. Dimmick also argues that Dover and its legal counsel assisted Remarc in responding to plaintiff's notice of possible legal action. Suffice it to say that we find these facts to be irrelevant to the existence of an agency relationship. It is hardly noteworthy that a small supplier asks the manufacturer to assist it in responding to threats of a lawsuit. Such help does not an agency make. Dover is entitled to summary judgment.
Conclusion
For the reasons stated herein, defendant Dover is entitled to judgment as a matter of law on Plaintiffs' claims against it. Accordingly, Dover's motion for summary judgment is granted.