Barraza v. Tootsie Roll Industries, Inc.

First Division
December 22, 1997

No. 1-95-4199

MAURICIO BARRAZA and THERESA BARRAZA,

Plaintiffs-Appellants,

v.

TOOTSIE ROLL INDUSTRIES, INC.,

Defendant-Appellee.)
)
)
)
)
)
)
)
)Appeal from the
Circuit Court of
Cook County

No. 92 L 987

Honorable
Philip Bronstein,
Judge Presiding.


JUSTICE O'MARA FROSSARD delivered the opinion of the court:
In this personal injury case, Mauricio and Theresa Barraza
(plaintiffs) filed a complaint in negligence and strict product
liability against defendant Tootsie Roll Industries following
plaintiff Mauricio Barraza's injury at his workplace, the Sweets
Mix factory. Plaintiffs appeal from the trial court's grant of
summary judgment in favor of the defendant.
The trial court granted summary judgment on the basis that
defendant Tootsie Roll Industries was Mr. Barraza's employer as a
matter of law and thus immune from a common law action by
plaintiffs against it. The exclusive remedy available to an
injured worker against his employer is through the Illinois
Worker's Compensation Act. 820 ILCS 305/1(a)(4) (West 1994). The
issue on appeal is whether the trial court properly granted
summary judgment to defendant Tootsie Roll Industries on the
basis that it was Mr. Barraza's employer thereby barring
plaintiffs from pursuing a common law action against defendant.

I. FACTS
Plaintiff Mauricio Barraza began working at the Sweets Mix
factory after his cousin, a worker at the factory, informed him
of a job opening there. He applied for the job directly to
Sweets Mix and began work the same day. His job involved loading
sugar into bags using a machine called a "sugar bagging machine."
Sweets Mix, located at Lake Calumet Harbor, is a wholly owned
subsidiary of Tootsie Roll Industries. It purchases domestic and
foreign sugar and makes it into sweeteners for use by Tootsie
Roll Industries. The factory's location is designed to take
advantage of a "foreign trade zone," which offers financial
advantages by processing raw sugar before it is technically
admitted into the United States via customs.
Mr. Barraza was paid through a company called Bee Groth, a
temporary employment service. Bee Groth entered into a contract
with Sweets Mix and Tootsie Roll Industries to provide laborers
for the Sweets Mix plant, and agreed to provide workers'
compensation insurance covering both Sweets Mix and Tootsie Roll
Industries. Under the contract, Bee Groth agreed to indemnify
and hold harmless both entities for any workers' compensation
claim which could arise through the employment of workers under
the contract. Mr. Barraza applied for his job not at Bee Groth
or Tootsie Roll Industries, but at the Sweets Mix factory. He
testified he was unaware of what connection defendant Tootsie
Roll Industries had with the Sweets Mix operation.
The Sweets Mix factory is the sole source of sugar for candy
production by Tootsie Roll Industries. Though Sweets Mix is
actually a separate corporation, all of the officers of Sweets
Mix are also on the board of Tootsie Roll Industries, though the
same is not true vice versa. In addition, the two corporations
regularly file consolidated federal tax returns. The two
companies maintain operations at different locations, but share
the same corporate address. At the time of the incident
involving Mr. Barraza, Tootsie Roll Industries owned all of the
processing equipment in use at Sweets Mix, including the machine
which caused his injury.
Defendant claims that all of the direction and supervision
of Mr. Barraza at the plant was conducted by employees of Tootsie
Roll Industries. Plaintiffs, however, state these persons were
actually paid by entities other than Tootsie Roll Industries.
Defendant agrees that some of these individuals received their
paychecks through a "payroll subsidiary," though the benefit
plans for the employees came directly from Tootsie Roll
Industries. According to the injured plaintiff, he was unaware
of the relationship between Sweets Mix and Tootsie Roll
Industries and the record is silent as to whether Mr. Barraza
knew his supervisors were employees of Tootsie Roll Industries.
Mr. Barraza was severely injured while working on the sugar-
bagging machine. Plaintiffs initiated an action before the
Industrial Commission against Sweets Mix and Bee Groth for the
injuries sustained in the accident. The arbitrator determined
that Mr. Barraza "was loaned by Respondent Office Assistants,
Inc. a/k/a/ Bee Groth, Inc., to The Sweets Mix Company," and held
that Bee Groth was the party "primarily responsible" for payment
and liability. Plaintiffs then filed suit against Sweets Mix,
Tootsie Roll Industries, and the manufacturers of the machine,
Key West Metal Fabricators, Inc., and Screw Conveyor Corporation.
Since filing the lawsuit, plaintiffs have settled with defendants
Key West Metal Fabricators, Inc., and Screw Conveyer Corporation.
On September 17, 1993, defendant Sweets Mix obtained summary
judgment on the basis that it was one of Mr. Barraza's employers.
The strict liability counts against the defendant Tootsie Roll
Industries were dismissed on May 22, 1995, as defendant had not
been involved in selling the machine which caused Mr. Barraza's
injuries.
Finally, on November 7, 1995, the trial court granted
defendant Tootsie Roll Industries' summary judgment motion on the
basis that it was an employer of the injured plaintiff. It is
from this order that plaintiffs appeal.

II. ANALYSIS OF ISSUES
A. Summary judgment
The appellate review of a grant of summary judgment is de
novo. USG Corp v. Sterling Plumbing Group, Inc., 247 Ill. App.
3d 316, 318, 617 N.E.2d 69 (1993). Summary judgment is proper
only when there is no genuine issue of material fact and the
moving party is entitled to judgment as a matter of law. 735
ILCS 5/2-1005(c) (West 1994). The function of the appellate
court in reviewing the grant of summary judgment is not to decide
disputed issues of fact but rather to determine whether a factual
dispute exists. Kerr v. Illinois Central R.R. Co., 283 Ill. App.
3d 574, 583, 670 N.E.2d 759 (1996). The court must construe the
evidence strictly against the movant and liberally in favor of
the opponent. Quality Lighting, Inc. v. Benjamin, 227 Ill. App.
3d 880, 883, 592 N.E.2d 377 (1992). Summary judgment is a
drastic means of disposing of litigation and should be allowed
only when the right of the moving party is clear and free from
doubt. Zekman v. Direct American Marketers, Inc., 286 Ill. App.
3d 462, 467, 675 N.E.2d 994 (1997).

B. The Workers' Compensation Act
Section 1(a)(4) of the Workers' Compensation Act addresses
the concept of "loaning" and "borrowing" employers. The section
provides that, regarding workers' compensation benefits on
account of injuries to a borrowed employee, a covered borrowing
employer subject to the Act is jointly and severally liable with
a covered loaning employer. 820 ILCS 305/1(a)(4) (West 1994). In
addition, the section specifically provides that employers in the
business of furnishing employees to other covered employers and
of paying the employees for their services to the other employers
are to be deemed loaning employers. 820 ILCS 305/1(a)(4) (West
1994).
If covered under the Workers' Compensation Act, both
borrowing employer and loaning employer share the immunity
conferred by section 5(a) of the Act from any damage action,
except an Industrial Commission claim, for work-related injuries
to an employee. Saldana v. Wirtz Cartage Co., 74 Ill. 2d 379,
388, 385 N.E.2d 664 (1978).

C. The Borrowed Employment Relationship
It appears that the trial court is correct in its
determination that the present case is unique and that no
Illinois cases present the same factual scenario. The trial
court stated that because of the factual uniqueness of the case
at bar, the existing case law has only limited applicability
here. We find that several cases do offer guidance, however, as
far as the threshold determination which must be made for
purposes of summary judgment; that is, whether there exists a
material issue of fact.
In its decision, the trial court relied on Clark v.
Industrial Comm'n, 54 Ill. 2d 311, 297 N.E.2d 154 (1973), to
determine whether an employer-employee relationship existed
between plaintiff Mauricio Barraza and defendant Tootsie Roll
Industries. The Clark court said that no single facet of the
relationship in question is determinative, but many factors must
be considered, including the right to control the manner in which
work is done, the method of payment, the right to discharge, the
skill required in the work to be done, and the furnishing of
tools, materials and equipment. Clark, 54 Ill. 2d at 314. It is
significant, however, that the Clark court was making a
determination of employment in the context of an independent
contractor, a much different situation from that in the present
case.
The trial court applied the Clark analysis to the present
case and found that there was an employer-employee relationship
between Mr. Barraza and defendant Tootsie Roll Industries. The
court stated that the payment method was the "only one of the
five factors" that did not directly support this relationship,
but held that under the totality of the circumstances, Mr.
Barraza did have an employer-employee relationship with Tootsie
Roll Industries.
The trial court cited Dildine v. Hunt Transportation, Inc.,
196 Ill. App. 3d 392, 553 N.E.2d 801 (1990), as further
supporting its holding. Dildine involved a plaintiff who was
injured by making repairs on a Happy Cab automobile in a garage
owned by Hunt Transportation. Using the Clark analysis, the
court in Dildine determined that the two entities were joint
employers of the plaintiff. Like Clark, however, the Dildine
case did not deal with a borrowed employee situation.
The trial court's reliance on the Clark and Dildine analysis
is misplaced under Illinois case law. Both cases deal with the
existence of an employment relationship, but neither case
specifically addresses a borrowed employee situation. The
question in the present case is not whether an employment
relationship existed between Mr. Barraza and the defendant but
rather whether a borrowed employment relationship existed in
which Mr. Barraza was a loaned employee to defendant. Under
Illinois law, this determination requires a different analysis
from that set forth in Clark or Dildine.
In O'Loughlin v. Servicemaster Co. Ltd. Partnership, 216
Ill. App. 3d 27, 34, 576 N.E.2d 196 (1991), the court
specifically addressed the borrowed employment relationship.
Significantly, the O'Loughlin court found that an analysis of the
factors outlined in Clark was not appropriate for determining a
borrowed employment relationship. The court stated that the
Clark factors were enunciated for the purpose of determining
whether an individual was an employee or an independent
contractor, not for determining whether the individual was a
borrowed employee. O'Loughlin, 216 Ill. App. 3d at 34 n.2.
The O'Loughlin court did, however, note that Illinois courts
have identified several factors as bearing on whether a borrowed
employment relationship exists, including an employer's control
over a plaintiff, the power to discharge, whether a plaintiff
consented or acquiesced to the alleged loan of services, the
length of service, the identity of the party for whom the
employee's services are being performed, and the manner of
hiring. O'Loughlin, 216 Ill. App. 3d at 34.
Illinois courts have placed special emphasis on two of the
factors and have created a two-part test for determining the
existence of a borrowed employment relationship. In Trenholm v.
Edwin Cooper, Inc., 152 Ill. App. 3d 6, 7-8, 503 N.E.2d 1067
(1986), the court outlined this two-part test for determining
whether a plaintiff was a "loaned employee" under the Workers'
Compensation Act: (1) whether the borrowing employer had the
right to direct and control the manner in which plaintiff
performed the work, and (2) whether there existed a contract of
hire, either express or implied, between plaintiff and defendant.
See also A.J. Johnson Paving Co. v. Industrial Comm'n, 82 Ill. 2d 341, 347-48, 412 N.E.2d 477 (1980). Though not all cases
addressing the existence of a borrowed employment relationship
utilize a two-part analysis, they generally operate under the
premise that these two factors are of special significance. See
O'Loughlin, 216 Ill. App. 3d at 35-36; M&M Electric Co. v.
Industrial Comm'n, 57 Ill. 2d 113, 116-17, 31 N.E.2d 161 (1974).
The record clearly supports a finding that Tootsie Roll had
the right to direct and control the manner in which Mr. Barraza
performed the work, consistent with the first prong of the
Trenholm test. A variety of evidence from several different
sources supports this conclusion.
However, whether a contract or agreement of employment,
expressed or implied, existed between Mr. Barraza and defendant
Tootsie Roll Industries is much less evident. The issue of
whether an employee actually or impliedly consented to work for
the borrowing employer is a threshold inquiry for the court.
Crespo v. Weber Stephen Products Co., 275 Ill. App. 3d 638, 656 N.E.2d 154 (1995). In the present case, the record is generally
silent regarding the question of the express or implied consent
of Mr. Barazza to work for Tootsie Roll Industries.
While Illinois courts agree that the employee's express or
implied acquiescence is essential to a borrowed or loaned
employee relationship, this consent may be implied in the context
of a business which involves the hiring, procuring or furnishing
of employees for other employers. In Wasielewski v. Havi Corp.,
188 Ill. App. 3d 340, 544 N.E.2d 116 (1989), the court stated
that ordinarily the issue of loaned employee status is determined
by inquiry into whether the second employer had the exclusive
right to direct and control the manner in which the employee
performed his work, and whether there existed a contract of hire
between that employer and employee. However, the court said such
inquiry is unnecessary "where it otherwise appears that a
substantial part of the first employer's business involved
'hiring, procuring or furnishing employees'" to other employers.
Wasielewski, 188 Ill. App. 3d at 342, quoting Ill. Rev. Stat.
1985, ch. 48, par. 138.1(a)(4).
In Evans v. Abbott Products, Inc., 150 Ill. App. 3d 845, 502 N.E.2d 341 (1986), the issue of a plaintiff's assent to a loaned
employee relationship was addressed in a similar context. The
plaintiff was a temporary worker for Personnel Pool, which
furnished temporary workers to various companies. He was injured
while working for the defendant and claimed the lawsuit was
proper because there was no employer-employee relationship
between him and the defendant, as he had not agreed to the
relationship. The court found that by working for a business
that loaned its employees for work, the plaintiff had impliedly
consented to the loaned employment relationship. Evans, 150 Ill.
App. 3d at 849. The court further found that the plaintiff's
consent was indicated from his acceptance of defendant Abbott's
control and direction of his work activities. Evans, 150 Ill.
App. 3d at 849.
Likewise, defendant Tootsie Roll Industries argues that in
the present case, Mr. Barraza implicitly agreed to the borrowed
employment relationship through his employment with Bee Groth, an
employment service in the business of providing workers for other
employers. The defendant cites Wasielewski and Evans in support
of its assertion that there is no need to inquire as to whether
Mr. Barraza subjectively acknowledged a contract of hire with the
borrowing employer and states Mr. Barraza is an employee of
Tootsie Roll Industries as a matter of law.
We agree with the Wasielewski and Evans opinions that an
employee impliedly consents to a borrowed employment situation by
agreeing to work for an employment agency or service. However, a
careful review of the record raises questions not only about
whether the the injured plaintiff was a borrowed employee of
Tootsie Roll Industries, but also whether he was a loaned
employee of Bee Groth. The evidence is clear that a contract
existed between Bee Groth and Sweets Mix and Tootsie Roll
Industries to provide workers at the Sweets Mix factory and that
Mr. Barraza was on Bee Groth's payroll. However, Mr. Barraza
testified he applied for work directly at the Sweets Mix factory
and began work there the same day he applied. In his deposition,
he further testified he knew Bee Groth only as the source of his
paycheck and visited the Bee Groth office only once, after the
accident occurred. This evidence, uncontroverted in the current
record, creates a question of fact as to the nature of the
employment relationship between Mr. Barraza and Bee Groth. Bee
Groth, under the facts presented to the trial court, neither
provided, hired, procured nor furnished Mr. Barraza to Sweets Mix
or Tootsie Roll Industries.
Additionally Bee Groth, a third-party defendant in this
lawsuit, argued for summary judgment against third-party
plaintiff Key West on the basis that although Bee Groth was under
a contract with Sweets Mix and Tootsie Roll Industries to provide
laborers for the Sweets Mix plant, Mr. Barraza did not fall under
this employment relationship. In support of its motion for
summary judgment, Bee Groth argued that, unlike the employees
"loaned" to Sweets Mix and Tootsie Roll, Mr. Barraza applied for
work directly to the Sweets Mix Company at its facility and was
hired by Sweets Mix.
Moreover, if indeed Mr. Barraza is not a loaned employee of
Bee Groth, or at least not a loaned employee pursuant to Bee
Groth's contract with Sweets Mix and Tootsie Roll, then we cannot
say he impliedly consented to a borrowed employment relationship
under Wasielewski and Evans.
Whether Mr. Barraza agreed to work for the employment agency
Bee Groth and thereby impliedly consented to a borrowed
employment relationship with Tootsie Roll Industries is a factual
question unanswered in the record. While Bee Groth indicates it
provided workers for the Sweets Mix factory, Mr. Barraza was not
hired by Bee Groth, nor was he aware he was working for Bee
Groth. He was hired directly at the Sweets Mix factory and
believed he worked for Sweets Mix.
Further, there is a question of fact as to whether Mr.
Barraza knew he was working for Tootsie Roll Industries as a
loaned employee. Consent to the loaned employment relationship
can be implied by an employee's acceptance of the control and
direction of his work. Evans, 150 Ill. App. 3d at 849. However,
in this case, there is a factual dispute as to whether Mr.
Barraza knew of or accepted the control and direction of his work
by Tootsie Roll Industries and thereby consented to the loaned
employment relationship.
There are a number of factual questions surrounding the
nature of Mr. Barraza's relationship with Bee Groth and Tootsie
Roll Industries that remain unanswered by the record.
Accordingly, we find that a factual dispute exists presenting
triable questions of fact which demand further inquiry.

D. A Question of Fact
In several Illinois cases, the determination of whether an
employee is a "loaned employee" for purposes of the Workers'
Compensation Act is considered a question of fact, to be
determined by the jury or trier of fact.
In Emma v. Norris, 130 Ill. App. 2d 653, 264 N.E.2d 573
(1970), summary judgment was reversed because a factual issue
existed as to whether a hired management company had become the
plaintiff's employer. In addressing whether a borrowed
employment relationship existed, the Emma court questioned
whether a consensual relationship existed between the management
company and the plaintiff. Emma, 130 Ill. App. at 657. There
was also some question as to whether the management company had
authority to hire and discharge. The court found that these
issues of consent and authority were too murky for summary
judgment and needed to go before a jury. Emma, 130 Ill. App. 3d
at 658.
In A.J. Johnson Paving Co. v. Industrial Comm'n, 82 Ill. 2d 341, 412 N.E.2d 477 (1980), the court found that the existence of
a "loaned servant" situation is generally a question of fact to
be determined by the trier of fact; in that case, by the
Industrial Commission. The plaintiff, Johnson Paving, contended
that since the evidence was not in dispute, the question became
one of law which the court could determine. A.J. Johnson Paving,
82 Ill. 2d at 348. The court responded that although the facts
may be undisputed, if more than one inference can reasonably be
drawn from these facts, the question must remain one of fact and
not one of law. A.J. Johnson Paving, 82 Ill. 2d at 348-49. See
also Willfong v. Dean Evans Co., 287 Ill. App. 3d 1099, 679 N.E.2d 1252 (1997).
The court in Trenholm, 152 Ill. App. 3d 6, 503 N.E.2d 1067,
held that the determinations of whether an employer had the right
to control an employee and whether the employee consented to the
relationship were "questions of fact for the jury, which must
weigh such factors as the matter of hiring, the mode of payment,
the right to discharge, and the manner of direction." Trenholm,
152 Ill. App. 3d at 8. See also Palomar v. Metropolitan Sanitary
District of Greater Chicago, 225 Ill. App. 3d 182, 189, 587 N.E.2d 1067 (1992); Saldana v. Wirtz Cartage Co., 74 Ill. 2d 379,
389-90, 385 N.E.2d 664 (1978).
The function of the appellate court in reviewing the grant
of summary judgment is not to decide disputed issues of fact, but
rather to determine whether a factual dispute exists. Kerr v.
Illinois Central R.R. Co., 283 Ill. App. 3d 574, 583, 670 N.E.2d 759 (1996). In this case, the trial court, when analyzing the
facts which define an employer-employee relationship, noted that
the method of payment was the only one of several factors that
did not directly support finding an employer-employee
relationship.
However, we believe in this case that there are additional
questions surrounding the other factors that define the employer-
employee relationship which create a factual dispute.
There is a question of fact as to whether plaintiff
Mauricio Barraza agreed to work for the employment agency Bee
Groth; there are further questions regarding the precise nature
of his relationship with the employment agency Bee Groth. It is
also unclear whether Mr. Barraza accepted an employment
assignment with Tootsie Roll Industries by virtue of his
relationship with Bee Groth, which presents another factual
question. There are further questions of fact as to whether
there was a contract of hire either express or implied between
Mr. Barraza and defendant Tootsie Roll Industries, and whether he
knew he was under the direction and control of Tootsie Roll
Industries. Finally, there are questions of fact as to whether
Mr. Barraza accepted the direction and control of Tootsie Roll
Industries, and if such acceptance factually existed, whether he
thereby agreed to the loaned employee relationship. We believe
these disputed questions of fact are more appropriately addressed
by the trier of fact, particularly in light of the unique fact
situation presented by this case.
There is ample case law dealing with the borrowed employment
relationship; however, there are no cases that deal with the
complex fact pattern at issue here. Clearly, defendant Tootsie
Roll Industries is removed from the traditional loaned employee
analysis. Despite the voluminous trial record in this case, the
nature of the relationship between Tootsie Roll and plaintiff
Mauricio Barraza remains factually unclear and must be resolved
by the trier of fact.

III. CONCLUSION
The issue presented to the court in this case is whether the
defendant Tootsie Roll Industries is entitled to summary
judgement on the basis that it is an employer of the injured
plaintiff. Though it is clear that Tootsie Roll exercised
control and direction over Mr. Barraza's work activities, there
are unanswered questions about his consent to the loaned
employment relationship with Tootsie Roll.
Defendant argues that Mr. Barraza implicitly agreed to the
loaned relationship by accepting employment through the Bee Groth
employment service. Defendant further argues that this implied
consent eliminates the need to determine whether he subjectively
acknowledged a contract of hire with the borrowing employer.
Though defendant argues consent is implied based on the
Wasielewski and Evans line of cases, the disputed facts in this
case create a factual question as to whether Mr. Barraza accepted
employment through Bee Groth and thereby implicitly agreed to the
loaned employee relationship with Tootsie Roll Industries.
Without a clear answer to this question we cannot uphold the
trial court's grant of summary judgment. Additionally, we believe
Illinois case law indicates such questions are more appropriately
addressed by the trier of fact.
For the foregoing reasons, the decision of the trial court
granting the defendant's motion for summary judgment is reversed.
This cause is remanded for further consideration consistent with
this opinion.
Reversed and remanded.
RAKOWSKI and TULLY, JJ., concur.