author: PENCE, District Judge.

text:
    Glenn K. ORADA, William E. Takabayashi, and Richard A. Cooke, Jr., Plaintiffs, v. MGIC INDEMNITY CORPORATION, also known as Ambac Indemnity Corporation, Defendant.
    Civ. No. 84-1318.
    United States District Court, D. Hawaii.
    April 30, 1985.

      John S. Edmunds, Ronald J. Verga, Alan van Etten, B. Regina Green, Honolulu, Hawaii, for plaintiffs.
    Goodsill, Anderson, Quinn & Stifel, John Rapp, Honolulu, Hawaii, for defendant.
    Damon, Key, Char & Bocken, Steven H. Levinson, Diane D. Hastert, Honolulu, Hawaii, for amicus curiae, Federal Sav. & Loan Ins. Corp.
   DECISION AND ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT

PENCE, District Judge.

Plaintiff insureds Okada, Takabayashi, and Cooke are defendants in two pending underlying cases: FLSIC v. Alexander, 590 F.Supp. 834 (Hawaii 1984), and First Hawaiian Bank v. Alexander, 558 F.Supp. 1128 (D.C.Hawaii 1983). As directors and officers of First Savings & Loan, plaintiffs, along with other directors and officers, are alleged to have negligently caused First Savings to become insolvent.

MGIC is an insurance company which issued a Directors’ and Officers’ (D & 0) liability insurance policy to plaintiffs and some of the other officers and directors of First Savings. Plaintiffs seek a declaratory judgment construing the terms of the policy. They move for summary judgment on the issues set forth below.

I

The first issue is whether MGIC must pay the attorneys’ fees which the directors and officers incur in defending the underlying FSLIC and FHB cases, when those fees are billed.

Section 1(d) of the policy (Plaintiffs’ Exhibit 1) defines a “loss” as follows:

The term “Loss” shall mean any amount which the Directors and Officers are legally obligated to pay or for which the Association is required to indemnify the Directors or Officers, or for which the Association has, to the extent permitted by law, indemnified the Directors and Officers, for a claim or claims made against the Directors and Officers for Wrongful Acts and shall include but not be limited to damages, judgments, settlements, costs (exclusive of salaries of officers or employees), and defense of legal actions, claims or proceedings and appeals therefrom, and cost of attachment or similar bonds; provided however, such Loss shall not include fines or penalties imposed by law or matters which may be deemed uninsurable under the law pursuant to which this policy shall be construed.

Thus, a “loss” includes “defense of legal actions, claims or proceedings.” The policy does not say when such claims are to be paid, but section 1(d) also defines a “loss” as “any amount which the Directors and Officers are legally obligated to pay____” MGIC argues, however, that legal fees are not to be paid when billed, which is when the legal obligation to pay arises, but only after final judgment or settlement.

MGIC advances five reasons in support of this argument. These will be discussed seriatim.

First, MGIC points out that nowhere does the policy state that the insurer must defend lawsuits against the insureds. However, the absence of policy language explicitly imposing a duty to defend does not mean that the policy does not require the insurer to pay defense costs. Like liability arising from a judgment or settlement, attorneys’ fees are compensable “losses” under section 1(d) of the policy, quoted above. The only difference is that such fees come due earlier than any possible adverse judgment.

The general rule is that a duty to defend arises when a third-party claim presents a potential for recovery under the policy. Gray v. Zurich Ins. Co., 65 Cal.2d 263, 54 Cal.Rptr. 104, 419 P.2d 168, 54 (1966).

The rule was adopted in this jurisdiction in Standard Oil of California v. Hawaiian Ins. & Guaranty Co., 65 Haw. 521, 527, 654 P.2d 1345, 1349 (1982) (dictum).

MGIC argues, however, that section 5(c) of the policy relieves it of a duty to pay defense costs. This section states:

The Insurer may at its option and upon request, advance on behalf of the Directors and Officers, or any of them, expenses which they have incurred in connection with claims made against them, prior to disposition of such claims, provided always that in the event it is finally established the Insurer has no liability hereunder, such Directors and Officers agree to repay to the Insurer, upon demand, all monies advanced by virtue of this provision.

This section provides for a refund of expenses to the insurer in the event the insurer is ultimately found not liable. Although its application is not wholly clear, this section may have been meant to cover payment and recovery of defense costs in cases where the initial claim rested on dubious grounds and the facts ultimately established indicated that coverage did not exist, as where the insureds’ acts were held to be intentional rather than negligent.

This court holds that the above-quoted language does not apply in this case. Section 1(d) indicates that legal fees are “losses” incurred in connection with (alleged) negligent acts and, when they become due, the insurer must pay. As applied to these facts, this is inconsistent with section 5(c), creating an ambiguity in the policy which, under settled case law, especially in Hawaii, is construed against the drafter-insurer, even where the insured is a commercial entity, not an individual. E.g., Hurtig v. Terminix Wood Treating & Contracting Co., Haw., 692 P.2d 1153, 1154 (1984); Sturla, Inc. v. Fireman’s Fund Ins. Co., 67 Haw. 203, 210, 694 P.2d 960 (1984).

An additional ambiguity is found by comparing section 5(a) with 5(c). Section 5(a) (“No costs, charges and expenses shall be incurred or settlements made without the Insurer’s consent____”) mentions “costs” and “charges” as well as the “expenses” mentioned in 5(c). If the insurer had meant to include attorney’s fees, i.e., “defense of legal actions”, in section 5(e), it could have done so explicitly as was done in section 1(d). As stated above, ambiguities should be construed against the insurer.

Third, MGIC agreed under reservation of rights to advance attorney’s fees, subject to 60-day notice of discontinuance, the exercise of which gave rise to this suit. This agreement, MGIC urges, constituted a waiver of any right the insureds had to require it to advance their attorneys’ fees.

However, the so-called waiver merely was the insureds’ consent to MGIC’s advancement of fees under reservation of rights and cannot be construed as a waiver of any substantive right. MGIC is now duly exercising its reservation of right to contest liability and the insureds are litigating the matter.

Fourth, MGIC asserts that the no-action clause, section 7(c), bars any attempt to make MGIC advance attorney’s fees. This section reads:

Action Against Insurer Clause — No action shall be taken against the Insurer unless, as a condition precedent thereto, there shall have been full compliance with all of the terms of this policy nor until the amount of the Directors’ or Officers’ obligation to pay shall have been finally determined either by judgment against the Directors and Officers after actual trial, or by written agreement of the Directors or Officers, the claimant and the Insurer.
No person or organization shall have any right under this policy to join the insurer as a party to any action against the Directors or Officers to determine the Directors’ or Officers’ liability, nor shall the Insurer be impleaded by the Directors or Officers or their legal representative____

The no-action clause merely bars actions against the insurer by third parties before final judgment or settlement. It does not apply to these facts. Paul Holt Drilling v. Liberty Mutual Ins. Co., 664 F.2d 252 (10th Cir.1981); Kielb v. Couch, 149 N.J. Super. 522, 374 A.2d 79 (1977) (insurer may not raise a no-action clause to bar a declaratory judgment action to adjudicate coverage and defense issues).

Fifth, MGIC has cited cases and academic opinion in support of its position that D & 0 policies such as the instant one, which do not contain the typical language requiring the insurer to defend suits against the insured, do not impose a duty to advance fees. However, all but one of the cited cases can be distinguished.

The one case in point construed the same policy on the same issue. The court held for MGIC and dismissed the suit for failure to state a claim. Clandening v. MGIC, C.D.Cal., Civil No. 83-2432-LTL, (May 23, 1983, Lydick, J.).

The Clandening court, however, had no occasion to consider the arguments and cases presented by plaintiffs herein. The Clandening plaintiffs raised only token opposition (one page) to MGIC’s motion to dismiss, and the court relied on section 5(c) of the policy, quoted above, without mentioning (in transcript of oral ruling, MGIC’s Exhibit N) the arguably conflicting section 1(d).

From the record it appears that the reasoning of the Clandening court was cursory and incomplete. MGIC has a duty to fund the insureds’ defense. As noted, section 5(c) of the policy conflicts with section 1(d) defining “loss”, creating a fatal ambiguity which is construed against the drafter-insurer, even though the insureds were presumably sophisticated corporate directors and officers.

A directors’ and officers’ policy which did not provide, in the event of suit, for payment of the insureds’ attorneys’ fees until final judgment — when such suits can last for years and cost astronomical sums to defend — would be virtually impossible to sell to reasonable officers and directors, for it would not truly protect the insureds from financial harm caused by suits against them. An insurance policy should be construed according to the reasonable expectations of the insured. Sturla, supra.

II

The next issue is whether MGIC must pay for multiple losses, or whether there was only one loss caused by many negligent acts.

The policy provides $1 million of coverage per director or officer for losses they caused, subject to a ceiling of $1 million per loss. Only if there were multiple losses would MGIC be liable for multiple millions in coverage.

In the underlying cases herein, the directors and officers allegedly committed such distinct negligent acts as:

(1) voting at separate times to authorize spot loans to home buyers;
(2) authorizing five separate, unrelated large condominium project loans;
(3) ordering the move and renovation of corporate headquarters without having sufficient funds therefor.

In support of their position that more than one “loss” occurred, the insureds cite St. Paul Fire & Marine Ins. Co. v. Hawaiian Ins. & Guaranty Co., 2 Haw.App. 595, 637 P.2d 1146 (1981), in which separate medical malpractice claims were brought for. separate acts causing one death. The separate claims eventuated in the entry of one judgment. The policy provided a ceiling on liability for “each claim”. It was held that each “claim” for a negligent act was separate, due to the legal definition of the word “claim”.

This case illustrates that one overall result — in the instant case, the collapse of First Savings — can result from several distinct acts or sets of acts, each of which gives rise to a separate claim. The failure of First Savings was not itself a “loss” under the policy, but rather was caused by one or more separate financial “losses” over time.

By its policy, MGIC offered more than one coverage option to the officers and directors. The directors could have chosen an option with a ceiling of $1 million overall, rather than one affording $1 million coverage per loss, as they did. Therefore, it must have been contemplated that there could be more than one loss. Coverage should be no less merely because several losses together caused the collapse of the institution. If the same losses had occurred, but had not resulted in the collapse of the institution, coverage should be no greater. The amount of coverage was not so written as to vary depending on the effect of the losses. Several “losses” do not become one “loss” solely because the business suffering the losses failed.

The policy states in section 4(d):

Claims based on or arising out of the same act, Interrelated acts, or one or more series of similar acts, of one or more of the Directors or Officers shall be considered a single Loss____

This court holds that First Savings suffered more than one separate “loss” within the meaning of section 4(d). As an example, the directors and officers waived or eliminated the 90% participation requirement on the Likini West condominium loan, immediately obliging First Savings to fund the entire $3.8 million loan commitment. This caused the corporation’s net worth to decline.

The acts which allegedly caused this loss were plainly separate from and unrelated to those losses which allegedly arose out of the directors’ spot lending policy of making loans to individual home buyers, or to the losses allegedly arising out of the directors’ decisions on expenditure of funds on the renovation and move of corporate headquarters. Nor did those separate acts form part of a series of similar acts. They were distinct and dissimilar business decisions by the directors and officers. Thus, the several declines in net worth allegedly caused thereby were separate “losses” under the policy.

There is coverage under section 4(d), quoted above, for unrelated acts not part of a series which gave rise to separate losses, each of which contributed to the bank’s failure.

This court’s holding that the institution suffered more than one “loss” is all that is needed to require MGIC to begin paying the insureds’ attorneys’ fees out of the “second” million dollar coverage.

III

MGIC has refused to state whether it believes the above-quoted section 4(d) of the policy applies. Instead, it seeks to have this court dismiss the suit as premature, arguing that the court is in no position to decide coverage because it does not know what negligent acts the insureds did, and when. This will not be established, it argues, until the underlying FSLIC and FHB cases proceed to judgment or settlement. It cites as precedent this court’s decision in Alexander v. MGIC, Civil No. 80-0155, May 11, 1981.

However, as outlined above, the issue of coverage can be determined to the extent needed at this time by examining the factual allegations in the underlying cases against the insureds. Healy Tibbits, supra, 482 F.Supp. at 837.

In Alexander v. MGIC, this court dismissed a suit by two of the other insured directors. It was dismissed without prejudice, apparently because the issues were held to be unripe.

However, there was only token response to the motion to dismiss: a one-page memorandum, citing no cases, simply noting that the underlying suit against the two insured directors had been dismissed. Thus, there was no resolution of the issues presented here.

MGIC argues, further, that there is no justiciable case or controversy here. However, that argument was answered in ACandS v. Aetna Casualty & Surety Co., 666 F.2d 819, 823 (3d Cir.1981). The court in that case held that the issue of whether liability insurance coverage existed constituted a justiciable case or controversy before the insured’s liability was determined in an underlying suit, due to the constant possibility of a settlement, which the insurer would have been obligated to pay. The live case or controversy was not mooted by the fact that a judgment for defendant insured in the underlying suit would moot the coverage issue. In dictum, the court implied into the policy a good faith obligation on the part of the insurer to attempt settlement.

IV

MGIC next argues that indispensable parties — the remaining officers and directors — are not before the court, raising the possibility of inconsistent adjudications binding MGIC. MGIC maintains that even if it won on the merits, the nonjoined insureds, First Hawaiian, or the FSLIC, could then force relitigation of the very issues involved here.

MGIC cites Ranger Ins. Co. v. United Housing of New Mexico, 488 F.2d 682, 683-84 (5th Cir.1974), in which the court dismissed an insurer’s declaratory judgment action against insureds involved in a fatal airplane crash because a judgment for the insurer would prejudice the nonjoined claimants’ interests by, for example, forcing them to contend with the effect of stare decisis.

The insureds respond by pointing out that they would have no adequate remedy if their suit were dismissed for nonjoinder of indispensable parties. They suggest that the court make other officers and directors, First Hawaiian, or FSLIC parties to this action; that is, involuntary plaintiffs. So long as diversity is not affected, plaintiff insureds do not object to joinder. MGIC states in its opposition memorandum, at 18, that diversity would not be affected.

Further, FSLIC has filed an amicus brief supporting a broad construction of the insurance policy. The remaining directors and officers are on notice that this suit has been brought.

As this is a declaratory judgment action, this court has great flexibility in framing its relief so as to avoid prejudice to absent parties.

This court need not reach the issue of whether joinder of the other insured directors, First Hawaiian, and the FSLIC would be preferable to dismissal, for these parties are not indispensable.

The other insured directors were not injured because MGIC has continued to pay their defense costs while declining to pay plaintiffs’. Also, the other directors may have participated in different acts, requiring separate determination of coverage based on different factual allegations in the underlying suits.

Nor are plaintiffs in the underlying FHB and FSLIC cases indispensable parties. The presence of the injured claimant is not required in a suit to determine an alleged tortfeasor’s insurance coverage. Connolly v. Great Basin Ins. Co., 6 Ar.App. 280, 431 P.2d 921, 927 (1967).

V

Finally, the insureds seek a ruling that MGIC has breached its duty of good faith and fair dealing. Such a covenant is implied into each insurance contract.

Here, MGIC has refused to affirm or deny coverage, tender defense costs when due, or enter into settlement negotiations. The insureds argue that MGIC at least has a duty to ascertain, from the allegations in the underlying cases as they develop, the number of separate causes of action or distinct underlying sets of factual circumstances therein (for purposes of the multiple loss issue discussed above) and conduct settlement negotiations with the resulting coverage in mind.

An insurance company has a duty implied in law to conduct good faith settlement negotiations whether or not the policy explicitly requires it to defend. MGIC has violated this duty.

For the above reasons, it is hereby ORDERED that Plaintiffs’ motion for summary judgment is GRANTED.

      . MGIC has cited Healy Tibbits Construction Co. v. Foremost Insurance Co., 482 F.Supp. 830 (N.D.Cal.1979); Signal Companies v. Harbor Insurance Co., 27 Cal.3d 359, 165 Cal.Rptr. 799, 612 P.2d 889 (1980); Gribaldo, Jacobs, Jones & Assoc. v. Agrippina Versicherunges, Ag., 3 Cal.3d 434, 91 Cal.Rptr. 6, 476 P.2d 406 (1970); and Continental Casualty Co. v. Phoenix Construction Co., 46 Cal.2d 423, 296 P.2d 801 (1956).
      In Healy Tibbits, the court decided that the policy did not provide coverage. Therefore, the insurer had no duty to defend. 482 F.Supp. at 837. The policy in Signal Companies was for excess liability, so that the insured would receive the protection of a defense from the primary carrier in any event; the policy was differently worded; and the insured had not obtained the excess carrier’s consent to incur costs. 165 Cal.Rptr. at 804, 612 P.2d 904. Agrippina involved an indemnity, not a liability policy. The facts of Continental Casualty are not in point at all.

      . Accord, Johnston, "Corporate Indemnification and Liability Insurance for Directors and Officers,” 33 Business Lawyer 1993, 2023 (1978) (Lloyd’s policy similar in pertinent part to MGIC policy).

      . Arthur Young report, plaintiffs’ Exhibit 9; supplemental affidavit of Jerrold Guben, Exhibit 10, paragraphs 5-7; plaintiffs’ supplemental memorandum, appendices 1 and 2.

      . See also Kent Ins. Co. v. Capitol Maintenance, 433 So.2d 1295 (Fl.App.1983) (damage to each of several vehicles in a paint-spraying operation constituted separate loss); Burlington County Abstract Co. v. QMA Assoc., 167 N.J.Super. 398, 400 A.2d 1211 (App.1979) (per loss deductible applied to each of 84 condominium owners' separate claims where title abstractor’s many omissions over two-year period damaged each separately).

      . Plaintiffs’ Exhibits 4 and 5.

      . Appendix 2 to plaintiffs’ supplemental memorandum, at 4.

      . It does not preclude a future finding of other distinct "losses", an issue this court need not now reach.

      . See generally 7 Wright & Miller, Federal Practice & Procedure (1972) section 1616, & 1983 supp.

      . Affidavit of Jerrold Guben, attached to plaintiffs’ supplemental memorandum.

      . E.g., Crisci v. Security Ins. Co., 66 Cal.2d 425, 58 Cal.Rptr. 13, 426 P.2d 173 (1967).

      . ACandS, supra.


source: Caselaw Access Project

author: DAVID V. O’BRIEN, District Judge.

license: Public Domain

text:
    Calvert GIBSON, Plaintiff, v. SULLIVAN TRAIL COAL COMPANY and Virgin Islands Port Authority.
    Civ. No. 1981/354.
    District Court, Virgin Islands, D. St. Thomas and St. John.
    April 30, 1985.
    Desmond Maynard, St. Thomas, V.I., for plaintiff.
    Britain H. Bryant, Stacy L. White, St. Croix, V.I., for defendant Virgin Islands Port Authority.

      James L. Hymes, III, St. Thomas, V.I., for defendant Sullivan Trail Coal Co.
   MEMORANDUM OPINION

DAVID V. O’BRIEN, District Judge.

We decide in this opinion whether, in the U.S. Virgin Islands, an employee of an independent contractor can, if injured while at work, bring an action against the entity which hired the independent contractor in the first place. We reaffirm previous case law in this territory and hold with the vast majority of jurisdictions that such an employee is not part of the protected class for whom such an action is available under Chapter 15 of the Restatement of Torts, (Second), Sections 409 through 429.

I. FACTS

The plaintiff Calvert Gibson, (“Gibson”), at all times pertinent was an employee of an independent contractor. The contractor, Excavation Construction, Inc. No. 1, (“EC-1”), had won the bid at the Harry S. Truman Airport expansion project and was doing the site preparation work. The Virgin Islands Port Authority, (“VIPA”), was the owner of the land. It had retained Parsons-Panamerican, Inc., (“Parsons”), to do the design, engineering, construction management and supervision of the entire runway extension project.

It was Parsons which recommended that VIPA retain EC-1 on the strength of a bid evaluation of all site preparation bidders. This recommendation was based on EC-l’s past experience and qualifications to do the work.

While he was working as an EC-1 employee on site preparation, Gibson was injured. He subsequently filed this action against VIPA as the entity which retained EC-1 and owned the land, and also against Sullivan Trail Coal Co. The latter defendant was a heavy equipment leasing company which leased the piece of equipment involved in the injury to EC-1, which supplied the operator.

On the date of jury selection, April 29, 1985, each of the defendants had moved for summary judgment, but the ten days’ notice required by Fed.R.Civ.P. 56(c) had not elapsed. However, Gibson’s attorney stated his readiness to have the motion heard on the basis of his oral argument, thus waiving the full ten days’ notice to which he was entitled.

After argument on the Sullivan Trail Coal Co. motion, the Court entered Findings of Fact and Conclusions of Law and dismissed the complaint as against that defendant with prejudice.

Argument was then held on the VIPA motion. Again, plaintiff’s counsel waived the full notice time and stated his intention to present oral argument only, though he also cited certain excerpts from a deposition.

That he chose to do this, and not file any affidavits under Fed.R.Civ.P. 56(e) should not be considered either surprising or lax. The issue was more one of law than of facts, since there were no facts of a material nature in dispute. And, except for brief references to the degree of supervision and control retained by VIPA over the work in progress, the argument proceeded from an essentially legal foundation. After argument, we entered Findings of Fact and Conclusions of Law on the VIPA motion, and dismissed Gibson’s complaint as against that defendant, and the case was ended. Counsel were informed that a written opinion would accompany the judgment dismissing the complaint.

II. DISCUSSION

It was just over ten years ago that Chief Judge Almeric L. Christian was called on to decide the very question before the Court at this time. He held, in Munson v. Duval, 11 V.I. 615 (D.V.I.1975) that an owner of property who hires a qualified independent contractor to work on his property is not vicariously liable to an employee of such contractor who is injured while working at that site. Such an employee, he ruled, was not among those intended to be covered by Chapter 15, Restatement of Torts (Second).

But, he noted:

It is probable that once there has been more litigation on the definition of “others” used in the relevant sections of the Restatement, in the course of which more varied factual patterns must emerge, an appropriate case, at another time, will present an opportunity to hold otherwise.

Id. at 633.

Time has proven the wisdom of Chief Judge Christian’s holding in Munson, supra, as jurisdiction after jurisdiction issued a ruling to the same effect. The net result is that today, ten years later, the overwhelming number of jurisdictions are uniform in their interpretation of the word “others” in Chapter 15 of the Restatement of Torts, (Second), as excluding employees of independent contractors. For a comprehensive review of the various jurisdictions holding each way as of 1981, see Tauscher v. Puget Sound Power & Light Co., 96 Wash.2d 274, 635 P.2d 426, 429 (1981).

Most of the cases which form the overwhelming majority of jurisdictions holding as we do have relied heavily on language which was found in the American Law Institute’s Tentative Draft No. 7 as a special note to Chapter 15 of the Restatement of Torts (Second). The language, in pertinent part, is as follows:

“[T]he workman’s recovery is now, with relatively few exceptions, regulated by workmen’s compensation acts, the theory of which is that the insurance out of which the compensation is to be paid is to be carried by the workman’s own employer, and of course premiums are to be calculated on that basis. While the workmen’s compensation acts not infrequently provide for third-party liability, it has not been regarded as necessary to impose such liability upon one who hires the contractor, since it is to be expected that the cost of the workmen’s compensation insurance will be included by the contractor in his contract price for the work, and so will in any case ultimately be borne by the defendant who hires him.”

This special note was not included in the final publications of the Restatement of Torts (Second). But Courts have viewed the language as persuasive authority of an intent by the authors of the Restatement to clearly delimit the parameters of the exception while allowing each jurisdiction to interpret the provision according to its own case law and workmen’s compensation statutes.

There is only one case in the Third Circuit of consequence on this subject. Draper v. Airco, 580 F.2d 91, 101-102 (3d Cir.1978) held that under the peculiarities of Pennsylvania law, an employee of an independent contractor in similar circumstances would have a cause of action against the entity which retained the independent contractor, which makes it contrary to our ruling herein. But this is not circuit-wide law and we are not bound by such a decision.

III. CONCLUSION

We reaffirm the rule in this territory that an employee of an independent contractor is not included in the class of persons protected in Chapter 15, Restatement of Torts, (Second). Judgment will enter dismissing the complaint of the plaintiff against VIPA.


author: WEBER, District Judge.

text:
    Robert GRUBER, Theresa Penza, on behalf of themselves and all others similarly situated including their dependents Glenwood Beer Distributors, Inc., on behalf of themselves and all other employers similarly situated, Plaintiffs, v. HUBBARD BERT KARLE WEBER, INC., John Gordon, J. Patrick Karle, Richard M. McClure, Ronald D. Maxwell, and Timothy Mehl, Defendants.
    Civ. A. No. 85-63 Erie.
    United States District Court, W.D. Pennsylvania.
    April 30, 1985.

      Harry D. Martin and Joseph T. Messina, Ted J. Padden, Erie, Pa., for plaintiffs.
    J. Patrick Karle, Erie, Pa., for defendants Hubbard Bart Karle Weber, Inc. and J. Patrick Karle.
    James D. Morton, Buchanan Ingersoll, Pittsburgh, Pa., for defendants Gordon, McClure, Maxwell and Mehl.
   OPINION

WEBER, District Judge.

Plaintiffs are employers and employees who sue the individual members of the Board of Directors and the administrative agent of a medical insurance plan which has failed and has been involuntarily placed in bankruptcy. They allege jurisdiction under ERISA, 29 U.S.C. 1001 et seq. The cause of action is an asserted failure of the directors and the administering agent to observe the standard of care and the reporting requirements of ERISA and breach of obligations of due care and fiduciary duties under state law.

While we have a separate motion to dismiss the action for want of ERISA jurisdiction due to the nature of the plan involved, that motion is not ripe for decision because it must await the production of evidence. For the purpose of the present motion we must assume that the complaint presents a well pleaded claim of ERISA at least as to some of the plaintiffs. An adverse finding there may give rise to a re-examination of the conclusions reached herein, under U.M.W. v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966).

The present motion which we address here is defendants’ motion to dismiss two of the named plaintiffs, Glenwood Beer Distributors and Beechwood Industries, because they are employers and the ERISA statute limits suits under the act to participants, beneficiaries, the Secretary of Labor, and a fiduciary (29 U.S.C. § 1132 Civil Enforcement). A “participant” is defined in 29 U.S.C. § 1002(5) as:

The term “participant” means any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer. ..

A “beneficiary” is defined in § 1002(8) as:

The term “beneficiary” means a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder.

There is no express authority in the statute allowing employers to sue; on the other hand nothing in the act evidences an intent to prohibit the right in all circumstances. The only judicial authority we have found to support this right is Fentron Industries, Inc. v. The National Shopmen Pension Fund, 674 F.2d 1300 (9th Cir.1982) where the court found the allegations of the Complaint sufficient to support injury to the employer to constitute a case or controversy under Article III of the Constitution, but also found no bar in the statutory language to a suit by the employer.

However, other cases from a variety of jurisdictions have denied standing to employers to bring suit under ERISA. Tuvia Convalescent Center, Inc. v. National Union of Hospital and Health Care Employees, 717 F.2d 726 (2 Cir.1983); Pressroom Unions Printers League Income Sec. Fund v. Continental Assurance Co., 700 F.2d 889 (2 Cir.1983); Modern Woodcrafts, Inc. v. Hawley, 534 F.Supp. 1000 (D.Conn. 1982); Blue Cross and Blue Shield v. Bell, 596 F.Supp. 1053 (D.Kan.1984); R.M. Bowler Contract Hauling Co. v. Central States, S.E. and S.W., Areas Pension Fund, 547 F.Supp. 783 (S.D.Ill.1982); Wong v. Bacon, 445 F.Supp. 1177 (N.D.Cal.1977).

In our own Circuit the same rule was applied in Crown Cork & Seal v. Teamsters Pension Fund, 549 F.Supp. 307 (E.D.Pa.1982), aff’d. 720 F.2d 661 (3 Cir.1983). The district court so held because the list of categories of parties specifically entitled to bring suit did not include employers. It also found that the type of relief sought by the employer would violate the underlying statutory scheme. A factual distinction between the relief sought there and the damages sought here may well indicate a different result. In Crown the result of the suit might impair the integrity of the fund; here the suit is not against the fund but against the individual directors and the administrative agent for damages suffered because of their breach of fiduciary duties. Plaintiff employers claims here appear to fall within the zone of interests sought to be protected by the statute which they invoke. Association of Data Processing Service Organizations, Inc. v. Camp., 397 U.S. 150, 153, 90 S.Ct. 827, 829, 25 L.Ed.2d 184 (1970).

Nevertheless, we do find the exercise of pendent jurisdiction very appropriate here. The employer’s claims arise from the same facts as the employees claims. If the employees’ claims for medical expenses cannot be paid because of the exhaustion of the fund the employer may be liable to indemnify the employee. There is clearly present here the common nucleus of operative facts required by United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966).

Another U.M.W. v. Gibbs factor that speaks for pendent jurisdiction is the ordinary expectation that all claims could be tried in one judicial proceeding (p. 725). The situation here is compelling by reason of the fact that the employee claims could not be tried in any other forum because of the exclusive jurisdiction conferred upon the federal district courts to try ERISA claims (29 U.S.C. 1132(e)(1). Judicial economy, convenience and fairness require the exercise of pendent jurisdiction here. See Trustees of the Retirement Benefit Plan, etc. v. Equibank, 487 F.Supp. 58 (W.D.Pa.1980).

We therefore find it proper and appropriate to exercise pendent jurisdiction of the employer plaintiff claims.

ORDER

It is ordered that the motion of defendants to dismiss the claims of Plaintiffs Glenwood Beer Distributors, Inc. and Beechwood Industries, Inc., is DENIED.

      . The authority for employers suits conferred in 29 U.S.C. 1451(c) does not apply here because it is limited to the Special Provisions for Multiemployer Plans added to the act by the Multiemployer Amendments of 1984.


author: SWEET, District Judge.

text:
    WASHINGTON HEIGHTS—WEST HARLEM—INWOOD MENTAL HEALTH COUNCIL, INC., Plaintiff, v. DISTRICT 1199, NATIONAL UNION OF HOSPITAL AND HEALTH CARE EMPLOYEES, RWDSU, AFL-CIO, Defendant.
    No. 83 Civ. 2495 (RWS).
    United States District Court, S.D. New York.
    May 1, 1985.
    Epstein, Becker, Borsody & Green, P.C., New York City (Robert Borsody, New York City, of counsel), for plaintiff.
    Sipser, Weinstock, Harper, Dorn & Liebowitz, New York City (Richard Dorn, New York City, of counsel), for defendant.
   OPINION

SWEET, District Judge.

Plaintiff Washington Heights — West Harlem — Inwood Mental Health Council, Inc. (the “Council”) has moved pursuant to Fed.R.Civ.P. 15(a) and 15(d) to amend and supplement its complaint. Defendant District 1199, National Union of Hospital and Health Care Employees, RWDSU, AFL-CIO, (“1199”) has moved to enforce an arbitration award requiring the Council to rehire and restore back pay to Edward Lane (“Lane”), a mental health worker and union delegate. The Council’s motion to amend was granted at oral argument, and the case will proceed as set forth below.

Prior Proceedings

In an opinion of April 27, 1984 I granted the Council’s motion for summary judgment vacating a January 7, 1983 arbitrator’s award ordering the reinstatement of Lane with back pay. On November 15, 1984 the Second Circuit reversed the grant of summary judgment and remanded the action. The parties have now brought the pending motions.

Discussion

The facts of this case have been fully set forth both in my opinion of April 27, 1984, reported at 586 F.Supp. 1251 (S.D.N.Y.) and in the Second Circuit’s opinion of November 15, 1984, reported at 748 F.2d 105 (2d Cir.1984). No new facts have been presented, and the contentions of the parties, both disputed and undisputed, remain as set forth in those opinions. Two issues are now presented: was a contract requiring arbitration formed by the parties to this action, and, in light of the answer to the first issue, how should the prior arbitration award and new elements of the complaint be dealt with.

The Contract

Based upon the undisputed material facts set forth in my earlier opinion, and the guidance in the Circuit’s remand, I find that there was an oral understanding on a successor collective bargaining agreement, even if there was not a meeting of the minds on all the details of that accord. The parties had agreed, at least, to be bound by the grievance and arbitration provisions of the contract while reducing the agreement to writing. This finding would require the affirmance and enforcement of the arbitrator’s award were it not for the new charges in the amended complaint.

The allegations in the new complaint, if established, independently provide a sufficient basis for discharging Lane. Although discovery of new evidence relating to earlier arbitrated issues does not provide a reason for vacating or remanding an arbitration award, Shearson Hayden Stone Inc. v. Liang, 653 F.2d 310, 313 (7th Cir.1981); Wilks v. American Bakeries Co., 563 F.Supp. 560, 563 (W.D.N.C.1983), the new allegations by the Council are entirely distinct claims which can be arbitrated in accordance with the agreement, even after the expiration of the contract. Nolde Brothers, Inc. v. Local No. 358, Bakery & Confectionary Workers Union, AFL-CIO, 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977).

While the arbitration of the new issues in the amended complaint is pending, moreover, the Council need not reinstate Lane. In Ford v. Civil Service Employees Ass’n., Inc., 94 A.D.2d 262, 464 N.Y.S.2d 481 (1st Dept.1983), the Court recognized a strong countervailing public policy as a reason for vacating an arbitration award that required reinstatement of a doctor who had induced state mental patients to have sexual intercourse with him. See also Diapulse Corp. of America v. Carbon Ltd., 626 F.2d 1108 (2d Cir.1980) (recognizing public policy limits on enforceability of arbitration awards). Although the allegations against Lane have not been established, as had the charges against Dr. Ford, in Ford, supra, there is nonetheless a powerful public policy against requiring a hospital to reinstate a mental health worker who has been charged with sexually molesting mental patients. Moreover, even if the arbitration award were enforced and Lane were reinstated, the Council could immediately discharge him, pending arbitration of these new charges. See SEIU Local 144 v. Metropolitan Jewish Geriatric Center, 94 LRRM 3151 (S.D.N.Y.1977) (finding compliance with arbitrator’s order of reinstatement when the employee was lawfully discharged immediately after being reinstated). Consequently, the Council need not reinstate Lane.

However, the Council must comply with the arbitrator’s award of back pay. Unlike the reinstatement, there is no powerful public policy that will be violated by payment of the back wages. Although the result of the new arbitration may be to determine that the initial firing of Lane was justified, and that payment of back pay was not required, this alone is not enough to refuse compliance with the arbitrator’s award.

Conclusion

The Council is ordered to comply with the arbitrator’s award of back pay. Reinstatement will be stayed pending the resolution of arbitration of the issues raised by the Council’s amendments.

IT IS SO ORDERED.


author: SHADUR, District Judge.

text:
    UNITED STATES of America ex rel. Ronald THOMAS, Petitioner, v. Michael O’LEARY, Respondent.
    No. 85 C 01139.
    United States District Court, N.D. Illinois, E.D.
    May 1, 1985.
    Ronald Thomas, pro se.
    Neil F. Hartigan, Atty. Gen., Mark Rotert, Asst. Atty. Gen., Chicago, Ill., for respondent.
   MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

Ronald Thomas (“Thomas”) sues under 28 U.S.C. § 2254 (“Section 2254”) for habeas corpus relief from his Illinois state court conviction for murder after a bench trial. For the reasons stated in this memorandum opinion and order, Thomas’ petition is denied and this action is dismissed with prejudice.

Facts

On the evening of May 14, 1981 Thomas walked to a liquor store on Chicago’s south side. When he neared the store’s front door he was growled at by a German shepherd dog — one he recognized as belonging to Ray Townsend (“Townsend”) (R. 91, 93). According to Thomas’ testimony he had encountered the dog before on visits to Thomas’ uncle, who lived next door to Townsend. On two occasions, Thomas said, the dog had jumped the fence separating Townsend’s backyard from the uncle’s and tried to attack Thomas (R. 93-94).

When the dog began to growl at Thomas in front of the liquor store, Thomas pulled a butcher knife from his waistband and waved it at the dog (R. 95). At that point Townsend and a companion, Walter Berry, walked out of the store. Townsend confronted Thomas and ordered him to stop menacing the dog (R. 97). Thomas then put the knife back in his waistband (id.).

Up to that point Thomas’ story is consistent with Berry’s, but the two accounts differ markedly as to the events that followed. Because the trial judge obviously credited Berry’s version (a fact whose legal significance is discussed later), this opinion will turn first to Berry’s story and then to Thomas’.

According to Berry, once Thomas put the knife away the dog ran home (R. 19, 44, 45). Witness Deborah Baggette confirmed the dog arrived at home some 5-10 minutes before Townsend (R. 58-59). Thomas and Townsend continued to argue, and Berry urged them to stop (R. 10-22, 39, 40). All three men then shared a drink of the wine Berry and Townsend had purchased (R. 22, 33-34, 43, 45, 50).

Next Berry said the three men began walking side-by-side toward Townsend’s home, with Berry between the other two (R. 40-41). Townsend and Thomas continued to argue (R. 41). Townsend said to Thomas:

Well, it must be more than the dog: Thomas replied:

It doesn’t really have to be the dog. Because, hey, if I don’t like you, I don’t like you (R. 22-23).
It doesn’t have to be the dog. Because if I want to stab you, all I have to do is this (R. 23, 53).

At that point Thomas pulled the knife from his waistband, reached around Berry and fatally stabbed Townsend in the chest (R. 24-25).

It is undisputed Townsend was unarmed when he was stabbed. Berry said Townsend did not provoke the attack by making any sort of threatening move toward Thomas (R. 29). After the stabbing Townsend ran home and collapsed on his porch (R. 26, 59, 134).

Thomas gave a significantly different story, arguing the stabbing was both an accident and in self-defense. According to him the dog remained with Townsend during the entire incident (R. 97, 100). When Thomas began walking back to his uncle’s house, Berry walked beside him. Townsend and the dog followed about three feet behind Thomas (R. 99-100, 113). Thomas continued to argue about the dog with Townsend, who Thomas claims was drunk (R. 99-100). Thomas was afraid both Townsend and the dog would attack him (R. 102).

According to Thomas, Townsend then asked “what did I want to do and then he made a move to come toward me” (R. 101). Because Thomas thought Townsend was “fixing to jump on me,” Thomas drew the knife and tried “to push him back off me,” when “accidentally the knife hit him” (R. 102). After Townsend ran home Thomas “walked away” (id.).

After the lawyers had finished interrogating each of Berry and Thomas, Judge Robert Massey questioned them. His inquiries of Berry were brief, clarifying a few details about the stabbing (R. 52-53). Judge Massey questioned Thomas at greater length, probing weaknesses in Thomas’ story and pressing Thomas about his reasons for carrying a butcher knife (R. 128-35).

Judge Massey found Thomas guilty of murder and armed violence and sentenced him to a term of 20 years’ imprisonment. Thomas appealed, and the Illinois Appellate Court affirmed the murder conviction but vacated the armed violence conviction (Complaint Ex. A). Then the Illinois Supreme Court denied leave to appeal (Complaint Ex. B). Thus Thomas’ state court remedies have been exhausted.

Issues Before This Court

Thomas’ petition urges two grounds for relief:

1. He was not proved guilty of murder beyond a reasonable doubt.

2. He was “denied his right to a fair and impartial trial where the trial judge abandoned Ms role of neutral finder of fact and assumed the role of the prosecutor.” This opinion will deal with those arguments in turn.

1. Sufficiency of the Evidence

United States v. Koopmans, 757 F.2d 901, 907 (7th Cir.1985) has recently reconfirmed (albeit in the criminal appeal context) the standard defined in Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979) for habeas corpus cases:

The standard we apply is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.

Jackson, 443 U.S. at 324, 99 S.Ct. at 2791 put the same concept in slightly different words:

We hold that in a challenge to a state criminal conviction brought under 28 U.S.C. § 2254 — if the settled procedural prerequisites for such a claim have otherwise been satisfied — the applicant is entitled to habeas corpus relief if it is found that upon the record evidence adduced at the trial no rational trier of fact could have found proof of guilt beyond a reasonable doubt.

By that standard — however phrased — the evidence was clearly sufficient to support a conviction for murder. Illinois law defines murder to include a killing without lawful justification, where the killer (1) voluntarily and wilfully commits the act resulting in death, (2) knowing the act creates a strong probability of death or bodily harm to the victim or another person. Ill.Rev.Stat. ch. 38, ¶ 9-1(a)(2); see People v. Bartall, 98 Ill.2d 294, 306-07, 74 Ill.Dec. 557, 563, 456 N.E.2d 59, 65 (1983). Berry’s testimony established all those elements: wilfulness, lack of justification and knowledge of a strong probability of death or bodily harm.

Berry’s testimony was unquestionably more than adequate to disprove self-defense. People v. Kyles, 91 Ill.App.3d 1019, 1021-22, 47 Ill.Dec. 494, 496, 415 N.E.2d 499, 501 (1980) (quoting People v. Williams, 56 Ill.App.2d 159, 165, 205 N.E.2d 749, 752 (1st Dist.1965)) stated the elements of a self-defense claim:

(1) that force is threatened against a person; (2) that the person threatened is not the aggressor; (3) that the danger of harm is imminent; (4) that the force threatened is unlawful; (5) that the person threatened must actually believe: (a) that a danger exists, (b) that the use of force is necessary to avert the danger, (c) that the kind and amount of force which he used is necessary; and (6) that the above beliefs are reasonable.

Berry’s version of the events, credited by Judge Massey, belies any notions (1) Townsend was the aggressor or even threatened force, (2) harm was imminent or (3) the force employed was in any way necessary. Indeed, even Thomas’ own testimony negates his self-defense claim by establishing the force used was excessive.

Judge Massey’s function as trier of fact was to judge the credibility of the witnesses and the weight to be given their testimony. That judgment is of course accorded the same respect as a jury’s determination. People v. Cozzi, 93 Ill.App.3d 94, 99-100, 48 Ill.Dec. 670, 675-76, 416 N.E.2d 1192, 1196-97 (1st Dist.1981). Obviously Judge Massey credited Berry’s testimony — corroborated by that of Baggette — and disbelieved Thomas, as he was assuredly entitled to do. Because Berry’s testimony squarely supports the murder conviction, this Court may not second-guess Judge Massey.

2. Assertedly Improper Questioning by the Court

United States v. Kidding, 560 F.2d 1303, 1314 (7th Cir.1977) teaches a trial judge may question witnesses as long as he or she remains impartial. In a jury trial the judge must take special care to examine witnesses in a manner that does not communicate a bias to the jury (id.); United States v. Hill, 332 F.2d 105, 106 (7th Cir.1964). Because that danger is not present in a bench trial, the judge is free to take a more active and aggressive role.. In that event trial-judge questioning is grounds for reversal only where it is so partial as to indicate the court prejudged the case before hearing all the evidence. Kidding, 560 F.2d at 1314; see United States v. Cassiagnol, 420 F.2d 868, 878 (4th Cir.), cert. denied, 397 U.S. 1044, 90 S.Ct. 1364, 25 L.Ed.2d 654 (1970).

Judge Massey’s questioning gives no hint of prejudgment. His inquiries of Berry were neutral and quite brief. His examination of Thomas (though understandably revealing skepticism) seemed primarily intended to clarify details and to give Thomas an opportunity to explain weaknesses in his story. Judge Massey’s questions were not sharp, chiding questions but rather more neutral inquiries that elicited full-sentence answers. Admittedly Judge Massey’s question whether Thomas was a butcher was an ironic reference to his carrying a butcher knife in his waistband, but that question alone does not give rise to an inference of prejudice.

Most importantly, Judge Massey’s examination of Thomas occurred at the close of the defense case, after the judge had heard all of the evidence save the state’s brief rebuttal testimony. Having heard the entire defense case, Judge Massey was entitled to have a perspective on the issues. It is difficult to imagine how anything he asked Thomas at that point — save making an explicit admission of bias — could have indicated prejudgment, as contrasted with (at worst) a judgment in the process of formulation. In fact, had Judge Massey already made up his mind, there would really have been no purpose in his asking Thomas any questions, for the record before he asked the questions was ample to support a guilty verdict.

Conclusion

Because Thomas’ contentions are wholly predicated on claimed legal defects in his trial, no evidentiary hearing is required (Rule 8(a) following Section 2254). Unquestionably there was more than sufficient evidence to convict Thomas of murder, and there is no indication Judge Massey prejudged Thomas’ guilt. Therefore Thomas’ petition for a writ of habeas corpus must be — and is — denied.

      . That statement is squarely at odds with the testimony of Ms. Baggette as well as with Berry’s version. And as the rest of this paragraph reflects, it is critical to Thomas’ account of what happened. Though a trier of fact need not believe the testimony of a larger number of witnesses (that is not what "weight of the evidence” conveys), it is clearly impossible to say a factfinder who does so is irrational.

      . Although Thomas' petition said he would file a memorandum of law on or before March 23, 1985, he has not done so. Nonetheless, because he had raised the same issues before the Illinois Appellate Court, his principal arguments may be gleaned from that court's thorough opinion.


author: WALTER L. NIXON, Jr., Chief Judge.

text:
    Jimmy YELVERTON, Plaintiff, v. MOBILE LABORATORIES, INC., Defendant.
    Civ. A. No. H79-0127(R).
    United States District Court, S.D. Mississippi, Hattiesburg Division.
    May 2, 1985.

      Charles W. Dittmer, Jr., New Orleans, La., J. Larry Walters, Laurel, Miss., for plaintiff.
    Louis Ruffin, Thomas W. Tyner, Dorrance Aultman, Hattiesburg, Miss., for defendant.
   FINDINGS OF FACT AND CONCLUSIONS OF LAW

WALTER L. NIXON, Jr., Chief Judge.

The bench trial of this Jones Act and general maritime action was commenced and finished on February 11, 1985. We now make our findings of fact and conclusions of law as required by Rule 52(a), Fed.R.Civ.P.

Background

This action arises from a two-vehicle accident which occurred near Diamond, Louisiana, on Louisiana Highway 23, a two-lane paved highway. It is stipulated that the plaintiff was employed by the defendant and was in the course and scope of his employment when the accident occurred. The accident resulted in the tragic death of the plaintiffs passenger and co-worker, Charles Lambert, and relatively minor injuries to the plaintiff in comparison. The plaintiffs chief complaints at trial were an injured right knee, an injured left wrist, and certain chest, neck and back pains, all of which he alleges he suffered as a result of the accident. Yelverton contends that he was a seaman, both under the Jones Act, 46 U.S.C. § 688, et seq., and the general maritime law. As a seaman, Yelverton seeks to take advantage of the “featherweight” burden of proving negligence under the Jones Act and his absolute entitlement to “maintance and cure” under the general maritime law. From the outset, Mobile Laboratories, Inc. (Mobile) has denied Yelverton’s status as a seaman, which would necessarily deny Yelverton the benefits of the Jones Act or his right to maintenance and cure. Alternatively, the defendants contend they were guilty of no wrongful act or omission which contributed to the accident.

Yelverton’s Employment Status: Seaman or not?

Since this Court’s jurisdiction and Yelverton’s entitlement to relief turns, in the first instance, on whether he may be characterized to be a seaman, under the facts and law, we detail our findings with respect to his status.

On August 16, 1977, Yelverton was returning to Venice, Louisiana, to catch a crew boat to take him to a spud-type pipe-laying barge, owned and operated by Berry Brothers, Inc. (Berry). Berry was under contract with Shell Oil Company to lay a pipeline from an oil well to a production platform, and Berry had contracted with Mobile to perform the weld inspections. The plaintiff was employed by Mobile as a radiographer (X-ray technician) with the primary duty of conducting radiographic examinations of welds on pipelines being laid by companies that had contracts with Mobile.

This pipelaying activity was taking place in what is referred to as East Bay, which is located in the southeastern inland waters off the coast of Louisiana. Yelverton had worked on this particular assignment for three to six weeks preceding the accident. Joe Clements, General Operating Manager of Berry, testified that the jobs performed by Berry often lasted a month or longer and that the crew, including Mobile’s employees, remained on the barge until completion of the project, although they occasionally had a two- or three-day shore leave to allow repositioning of the barge. This particular lay barge was not equipped with sleeping quarters but the crew members of the barge, including Yelverton, slept on an offshore platform in quarters provided by Shell Oil.

In the year preceding the accident, the plaintiff spent approximately 95 percent of his time working offshore on pipe-laying barges. Some of these barges were equipped with living quarters and Yelverton often remained out to sea for 60 days. But most importantly, the plaintiff’s relation to the barge to which he was assigned at the time of the accident was not transitory — neither in the work he did nor the time of its duration. Yelverton’s work on the offshore barge was not incidental to some shore-based employment but, rather, as testified to by Richard Walker, it was what Yelverton was employed to do.

We find from the evidence that the plaintiff was both permanently attached to the vessel and, further, that he performed a substantial part of his work on vessels of a very similar nature.

The mission of the lay barge is quite simple — to lay pipeline. On the basis of the record, Yelverton’s job onboard the barge contributed to its mission. All witnesses concurred that the pipeline would not have been laid without the welds being inspected by the plaintiff or one in his position. In this sense, the plaintiff was essential to the function of the vessel.

The Accident

As set out infra, to justify a damage recovery from this defendant, the plaintiff must show that, in addition to being a seaman, his employer committed some negligent act or omission that was a legal producing cause, however slight, of the collision. To shoulder the defendant with such liability, the plaintiff attempted to prove the defendant’s awareness of a brake problem on the vehicle which Yelverton was driving. This defect, it is contended, prevented Yelverton from avoiding the accident or mitigating its consequences. He argues that the defendant’s failure to provide him with a company truck for transportation, after request, and allowing or demanding that he proceed in a vehicle with faulty brakes constituted negligence.

Of course, to be meritorious, this argument presumes the defendant’s knowledge of the problem. The testimony on this point is in conflict. Yelverton was adamant that he told Fred Hogue, the defendant’s dispatcher, that his brakes were bad and that he needed to use a company vehicle. Hogue testified, by deposition, that he did not recall Yelverton’s telling him about the brakes being faulty but did remember some discussions about the car experiencing mechanical problems. He also remembers Yelverton’s request for a company truck. It is undisputed that no company vehicle was available for use at the time.

It is noteworthy that the plaintiff did not mention any brake problems in a statement he gave the day after the accident (Exhibit D-4); rather, he stated therein that he had no need for a company truck. Nor did Yelverton mention faulty brakes to Deputy Sheriff Carnie Burcham, the investigating officer at the accident scene. We note these omissions not to imply that Yelverton did not have a brake problem, but only as support for the inference that they were not as faulty as claimed at trial. Had Yelverton’s brakes been as bad as he claimed, it seems reasonable to expect that he would have mentioned such in statements made so contemporaneous to the accident.

It is more plausible, in our view, that Yelverton told Fred Hogue about general car problems only in an effort to explain his extreme tardiness in reporting for work that day. When Yelverton arrived in Harvey, Louisiana, the site of the defendant’s offices, he was already some five hours late, a fact that obviously irritated Fred Hogue and Richard Walker and one that delayed the barge crew from departing from Venice. Thus, we do not accept Yelverton’s testimony that he expressly told Fred Hogue about his brakes. His concerns at the time were to explain his lateness and “to get on down to Venice.” While Yelverton may have requested a truck, he did not preface it by apprising the defendant of an unsafe condition on his car. Allowing him to use his own vehicle was a traditional company policy. Without notice of the defect and an order to proceed notwithstanding it, such a policy is not unreasonable under all the circumstances.

Even assuming that Yelverton did tell Fred Hogue about his alleged brake problems, we further find that the sole proximate cause of this accident was the act of a third party for whom the defendant is not responsible — Donna Boone, the driver of the car that collided with Yelverton’s. Based on the testimony, particularly that of Burcham and Willferd Doss, we find that the collision was unavoidable from Yelverton’s standpoint. Miss Boone was driving north on Louisiana Highway 23; she had just successfully negotiated passing an over-width tractor/trailer truck when she apparently lost control of her automobile, swerving into the southbound lane, which was being traveled by Yelverton. Miss Boone and Yelverton were estimated as traveling in excess of 60 miles per hour and 40 to 55 miles per hour, respectively. From all the testimony, Miss Boone’s vehicle had returned to the northbound lane after passing the tractor/trailer truck when it suddenly began to swerve. The physical evidence and eye-witness testimony indicates that the accident was very nearly a headon collision in the southbound lane. Given the combined speed the two vehicles were traveling, Yelverton was most probably afforded precious little time to respond to the situation. Paraphrasing Willferd Doss, even had Yelverton stopped, a headon collision would have still occurred. Under our view and interpretation of the facts, the brakes had no causal effect one way or the other with the collision and its attendant injuries. Unfortunately, Yelverton had no time for any effective evasive or preventive actions.

Facts Relative to the Maintenance and Cure Claim

Assuming Yelverton to be a seaman and notwithstanding a finding of no fault or causation which can be attributed to the defendant, certain other facts must be found. We will make them serially: (1) The plaintiff admitted that the defendant has paid all medical bills except for three for which he produced no documentation. (2) The plaintiff reached maximum medical recovery on July 11, 1978, after being given a reasonable amount of time to lose enough weight to safely allow reconstructive knee surgery. (3) At some point in the future, after Yelverton loses an appropriate amount of weight, he will be in need of knee surgery, which can reasonably be expected to cost approximately $3,500.00. (4) Surgery on the left wrist would not appreciably improve the medical conditions. (5) The accident did not result in the plaintiff’s back condition or any aggravation of a pre-existing condition. (6) After leaving the hospital, Yelverton returned to Ellis-ville, Mississippi, to live at home with his wife. No documentation was produced at trial to substantiate any lodging or food expenses. No probative evidence was offered to show the value, if any, of food provided to the plaintiff while working offshore.

Conclusions of Law

As alluded to earlier in this opinion, in order to be entitled to recover, the plaintiff has the burden of proof on the issue of his status as a seaman. Ordinarily, this issue is a question of fact to be resolved by the jury, Tullos v. Resource Drilling, Inc., 750 F.2d 380 (5th Cir.1985); however, it has also been characterized as a mixed question of law and fact, Holland v. Allied Structural Steel Corp., Inc., 539 F.2d 476, 479 (5th Cir.1976). We think the more correct view is that the issue is “one whose resolution requires ‘the application of legal principles to specific underlying facts about what the parties did or did not do.’ ” Ardoin v. J. Ray McDermott & Co., 641 F.2d 277, 280 (5th Cir.1981) (quoting Longmire v. Sea Drilling Corp., 610 F.2d 1342 (5th Cir.1980)). The legal principles to be applied have been set out in countless cases but most decisions have used as their starting point for analysis the Fifth Circuit’s decision in Offshore Company v. Robison, 266 F.2d 769, 779 (5th Cir.1959). Under Robison:

[T]here is an evidentiary basis for a Jones Act case to go to the jury: (1) if there is evidence that the injured workman was assigned permanently to a vessel (including special purpose structures not usually employed as a means of transport by water but designed to float on water) or performed a substantial part of his work on the vessel; and (2) if the capacity in which he was employed contributed to the function of the vessel or to the accomplishment of its mission or to the operation or welfare of the vessel in terms of its maintenance during its movement or during anchorage for its future trips.

Id. at 779 (footnote omitted) (emphasis added).

Although Robison deals with whether the status issue should go to the jury, it has been made clear that it is also to be used in delimiting the power of the fact-finder to deny or confer such status. Bertrand v. International Mooring & Marine, Inc., 700 F.2d 240, 244 (5th Cir.1983) (quoting McDermott, 679 F.2d at 457). The conjunctive test of Robison remains in force with minor modifications in this circuit. Its application is as varied as the facts presented under it, but the central requirement is that the claimant have more than a transitory connection with a vessel in order to recover under the Jones Act. Davis v. Hill Engineering, Inc., 549 F.2d 314, 326 (5th Cir.1977).

We first note that it has never been a requirement that the Jones Act employer be the owner or operator of the vessel of which the claimant is alleged to be a crew member. See, e.g., Tullos, 750 F.2d at 384; Buras v. Commercial Testing and Engineering Co., 736 F.2d 307, 311 (5th Cir.1984); Wallace v. Oceaneering Intern., 727 F.2d 427, 433 (5th Cir.1984); Parks v. Dowell, 712 F.2d 154, 156 (5th Cir.1983); Bertrand v. International Mooring & Marine, Inc., 700 F.2d 240, 245 (5th Cir.1983); Roberts v. Williams-McWilliams Co., 648 F.2d 255, 262 (5th Cir.1981); Welch v. J. Ray McDermott & Co., 336 F.Supp. 383, 384 (W.D.La.1972).

At least two judges of the Fifth Circuit have recently noted the dilution of the requirement to meet seaman’s status, see Barrett v. Chevron, USA, Inc., 752 F.2d at 136, 137 (5th Cir.1985) (Jolly, J., dissenting and Gee, J., specially concurring) (reh’g en banc granted April 9, 1985). The facts of this case do not require such an expansive application of the Robison test. In fact, Welch v. J. Ray McDermott & Co., 336 F.Supp. 383 (W.D.La.1972), is directly on point. In Welch, the district judge had no difficulty in holding that a welding inspector who performed the same duties under the same work arrangements as the plaintiff herein was a seaman under the Robison test. Id. at 384. Likewise, we have little difficulty in concluding that Yelverton was indeed a seaman. However, given the defendant’s strong position on the issue, we take the time to detail our conclusion more fully.

To begin with, the Robison test is not to be given mechanical applications and its conjunctive elements are more often seen as an analytical starting point rather than a self-executing formula. See, e.g., Davis v. Hill Engineering, 549 F.2d at 327.

We have previously found, and it is really undisputed, that the plaintiff’s work on board the lay barge contributed to the function of the vessel and the accomplishment of its mission. There is no legal principle whatsoever that would dictate a contrary finding.

Turning next to the question of permanency, we note that it has been recognized that the word permanent has not been assigned a literal interpretation under the Jones Act. Roberts v. Williams-McWilliams Co., Inc., 648 F.2d at 261. The outer reaches of the word’s meaning seem to be bounded by the courts’ desire to deny such status to those workers who are injured while on board vessels for an isolated piece of work. See Buras, 736 F.2d at 310; Bertrand, 700 F.2d at 247. In this sense, the Court has generally taken a “totality of the circumstances” approach. Numerous factors have been outlined, the aggregation of which in a particular case dictate a particular result. Generally, the factors are used to weed out those claimants that have a transitory connection with a vessel or group of vessels. But the duration of the connection with the vessel is not the key; rather, the focus is on the permanency of the assignment with the vessel during that particular job and not the actual duration of the assignment. Davis v. Hill Engineering, Inc., supra. (Plaintiff spent 85 percent of his working time on shore, but was still found to be a seaman where he was injured while assigned to a vessel for 20. or more days.) Most of the cases in which the courts have found the permanency requirement lacking have involved land-based workers who were fortuitously connected with the vessel or who had a random and sporadic relationship with vessels. See comparison of cases in Davis v. Hill Engineering, Inc., supra, and Buras v. Commercial Testing & Engineering Co., supra. See also Wallace v. Oceaneering Intern., 727 F.2d at 433; Bouvier v. Krenz, 702 F.2d 89 (5th Cir.1983) (comparing and contrasting cases).

The defendant’s reliance on Jones v. Mississippi River Grain Elevator Co., 703 F.2d 108 (5th Cir.1983), is misplaced. The plaintiff, Jones, was a bargeman employed by a grain elevator, whose duties were to ensure that proper procedures for unloading were carried out. These duties took approximately 15 minutes to complete, and were performed on six to seven barges a day. His assignments were random and he never ate, slept or performed any other duties on the vessel in connection with his employment. Jones, 703 F.2d at 109.

In contrast, Yelverton’s assignment with the lay barge was coextensive with that of other crew members of the barge who are, undoubtedly, seamen. See Porche v. Gulf Marine Corp., 390 F.Supp. 624 (E.D.La.1975). Yelverton was expected to begin the job with the other crew members on the barge and remain to its completion, taking only those breaks that the other crew members took. Yelverton was also as subject to the perils of the sea as were other crew members. Yelverton’s assignment was certainly not sporadic, spasmodic or transitory. We find it irrelevant that Yelverton and other crew members did not sleep on this particular barge. They still remained at sea at night and sleeping quarters were provided on a fixed platform. The fact that the Berry Brothers barge was not equipped with living quarters does not dictate a different result. This is not a case comparable to those where the Fifth Circuit has emphasized that land-based shore workers, who eat and sleep at home but due to the nature of their work fortuitously find themselves at sea, are not Jones Act seamen. We think it quite obvious that Jimmy Yelverton was a seaman and so conclude.

Jones Act Liability

As a seaman, Yelverton has the right to recover damages from his employer if the employer was guilty of some negligence and such negligence played any role, no matter how slight, in producing the injury. E.g., Theriot v. J. Ray McDermott & Co., Inc., 742 F.2d 877 (5th Cir.1984). Of course, the plaintiff bears the burden of proof on this issue, but it has often been characterized as “featherweight.” Comeaux v. T.L. James & Co., Inc., 702 F.2d 1023, 1024 (5th Cir.1983); Davis v. Hill Engineering, 549 F.2d at 331. Since we have found as fact that the defendant, through its agents, was unaware of any brake problem with Yelverton’s car, we fail to discern any basis upon which to draw a conclusion of actionable negligence on the defendant’s part. Yelverton’s entire theory of negligence is premised on the failure of the defendant to offer alternative transportation in light of its knowledge of the brake problem. (See Pretrial Order, Exhibit A.)

We have alternatively found that the acts of Donna Boone were the sole legal causes of the collision; therefore, even assuming notice, such had no causal connexity with the accident. This finding would totally exonerate the defendant in any event. Since Yelverton had no opportunity to take any evasive or mitigating action, the acts of the defendant, negligent or otherwise, cannot be an efficient producing cause of the consequences of the accident.

Maintenance and Cure Liability

Unlike Jones Act liability, a seaman’s entitlement to maintenance and cure is not predicated on fault or negligence of the employer. Aguilar v. Standard Oil Co. of New Jersey, 318 U.S. 724, 730, 63 S.Ct. 930, 934, 87 L.Ed. 1107 (1943); Calmar S.S. Corp. v. Taylor, 303 U.S. 525, 527, 58 S.Ct. 651, 653, 82 L.Ed. 993 (1938). “The ‘maintenance’ exacted is comparable to that to which the seaman is entitled while at sea, and ‘cure’ is care including nursing and medical attention during such period as the duty continues.” Calmar, 303 U.S. at 528, 58 S.Ct. at 653. This duty extends until the point of “maximum cure,” which has been characterized as being reached “when it appears probable that further treatment will result in no betterment of the seaman’s condition.” Pelotto v. L & N Towing Co., 604 F.2d 396, 400 (5th Cir.1979). See also, Farrell v. United States, 336 U.S. 511, 69 S.Ct. 707, 93 L.Ed. 850 (1949). “It has been the merit of the seaman’s right to maintenance and cure that it is so inclusive as to be relatively simple and can be understood and administered without technical considerations. It has few exceptions or conditions to stir contentions, cause delays and invite litigation.” Id. at 516, 69 S.Ct. at 709-710.

The absoluteness of Yelverton’s entitlement to maintenance and cure does not dispense with the requirement that there be an evidentiary basis upon which to determine a justifiable amount. In the instant case, Yelverton admitted that the defendant had paid for all medical bills except for three for which he produced no documentation. This Court cannot speculate as to their amounts and refuses to base an award for cure on purely conjectural amounts. However, we have previously found that Yelverton is in need of surgery on his right knee, albeit not until he loses weight. The reasonable cost of this surgery will be approximately $3,500. Since this surgery will be needed in the future and its cost can be definitely ascertained, see Calmar, 303 U.S. at 531, 58 S.Ct. at 654, we conclude Yelverton is entitled to that amount.

We conclude that Yelverton’s wrist injury has reached maximum medical cure since surgery would only relieve pain and discomfort. See Pelotto, 604 F.2d at 400.

There is absolutely no basis for any award of maintenance in this case. A seaman is not entitled to maintenance unless he incurs costs. Marine Drilling, Inc. v. Landry, 302 F.2d 127 (5th Cir.1962); Stankiewicz v. United Fruit Steamship Corp., 229 F.2d 580, 581 (2d Cir.1956); Field v. Waterman S.S. Corp., 104 F.2d 849 (5th Cir.1939); O’Neill v. United States, 157 F.Supp. 193, 202 (E.D.Pa.1957). See also, Harper v. Zapata Offshore Co., 741 F.2d 87, 91 (5th Cir.1984) (no evidence to justify award over the value of food seamen testified he received); Johnson v. United States, 333 U.S. 46, 68 S.Ct. 391, 92 L.Ed. 468 (1948) (no maintenance awardable where minor lived at home with parents).

Punitive Damages

Recent case law has made it clear that there may be a punitive damage claim in addition to a claim for attorney’s fees where the defendant willfully and arbitrarily refuses to pay maintenance and cure. Harper, 741 F.2d at 88; Holmes v. J. Ray McDermott & Co., 734 F.2d 1110, 1118 (5th Cir.1984). This Court concludes that this certainly is not a case containing willful, wanton and callous conduct on the part of the defendant herein to justify an award of punitive damages.

Conclusion

Based on all the foregoing, the defendant is entitled to a judgment in its favor on the plaintiff’s Jones Act claim and punitive claim. The plaintiff is entitled to a judgment, awarding him thirty-five hundred dollars ($3,500), under the maintenance and cure count of his complaint subject to any setoff stipulated to at trial by counsel. Counsel are to submit a judgment conforming herewith within the time allowed by the local rules.

      . Yelverton was using his own vehicle pursuant to Mobile’s policy allowing employees to be reimbursed for mileage and travel time rather than provide a fleet of company vehicles. It is not suggested that this policy is per se unreasonable.

      . The distance an object traverses when traveling at a rate of 60 miles per hour is approximately 86 feet per second. When coupled with the speed of an oncoming object, the time it takes the two objects to reach a common point progressively decreases. No doubt the eye witnesses to this accident were affected in their recollected observations by the sheer physics of the situation. Yelverton may well have experienced that "flash” that seemed like an "eternity." We are fortunately able to view the accident and its physical aspects from a much more enviable position.

      . With the recent expansive concept of “seaman” and the underlying purposes of maintenance and cure which pre-date by at least a century the changes in maritime employment, we question the continued validity of the above quotation. Anomalies may inevitably result, and this case may well represent one.


text:
    INTAMIN, INC., Plaintiff, v. FIGLEY-WRIGHT CONTRACTORS, INC., et al., Defendants.
    No. 83 C 9387.
    United States District Court, N.D. Illinois, E.D.
    May 3, 1985.
    Thomas F. Tobin, Michael J. Wagner, Baker & McKenzie, Chicago, for defendants.

      D. Patterson Gloor, Mary K. Finley, Cassiday, Schade & Gloor, Chicago, for third party defendant.
   MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

Intamin, Inc. (“Intamin”) has asserted several claims — breach of contract, breach of express and implied warranties and breach of contractual indemnity — against Figley-Wright Contractors, Inc. (“FigleyWright”) and related parties, stemming from construction of a roller coaster at Marriott’s Great America Theme Park (“Great America”) in Gurnee, Illinois. Figley-Wright has in turn filed a Third Party Complaint against Curtis D. Summers, Inc. (“Summers”), seeking recovery via contractual indemnity. In response Summers has counterclaimed, charging Figley-Wright with negligence.

Figley-Wright now moves under Fed.R. Civ.P. (“Rule”) 12(b)(6) to dismiss Summers’ counterclaim. For the reasons stated in this memorandum opinion and order, the motion is granted.

Background

On June 2, 1980 Intamin contracted with Marriott Corporation (“Marriott”) to provide a roller coaster for Marriott at Great America (Complaint Ex. A). Intamin in turn contracted with Summers to provide most of the professional engineering design services (Complaint Ex. C, Art. 2) and with Figley-Wright to construct the roller coaster (Complaint Ex. B, Art. 2). No contractual relationship existed between Figley-Wright and Summers.

After the roller coaster had been built and put into operation, Marriott discovered design and construction defects and required Intamin to make repairs under the warranty terms of the Marriott-Intamin contract. Intamin in turn sought compensation from Summers and Figley-Wright. On July 10, 1984 Intamin entered into a settlement agreement with Summers by which Intamin released all present and future claims against Summers in return for Summers’ payment of $203,820.49.

In the meantime Figley-Wright has engaged in battle with both Intamin and Summers. In August 1984 Figley-Wright filed its Third Party Complaint seeking both contribution and indemnity from Summers for any liability of Figley-Wright to Intamin as determined in this action. On February 12, 1985 (in the “Opinion”) this Court (1) dismissed Figley-Wright’s contribution claim but (2) held its indemnity claim stated a cause of action for any liability of Figley-Wright to Intamin resulting from Summers’ negligence. 605 F.Supp. 707 (N.D.Ill.1985).

Summers’ counterclaim against FigleyWright asserts Summers’ settlement payment to Intamin covered damages caused by Figley-Wright’s negligence. Summers seeks to recover that payment — or at least the portion that represents damages attributable to Figley-Wright’s negligence.

Figley-Wright advances three independent grounds for dismissal:

1. Moorman Manufacturing Co. v. National Tank Co., 91 Ill.2d 69, 61 Ill. Dec. 746, 435 N.E.2d 443 (1982) prohibits recovery in tort for purely economic losses of the type claimed by Summers.
2. Figley-Wright owed no duty of care to Summers.
3. Summers’ counterclaim is an attempt to obtain indemnification for its own negligent acts.

Only the second of those has any possible merit, and it will be dealt with last. Though the last of the three is so empty as to require no real discussion at all, the first reflects such a total disregard of this Court’s prior ruling and the case law as to call for extended treatment at the outset. Maybe Figley-Wright will get the message this time.

Recovery of Economic Losses under Moorman

Just three months ago Figley-Wright urged a distorted reading of the Moorman line of cases in an effort to save its contribution claim against Summers. Opinion, 605 F.Supp. at 710 explained how FigleyWright’s analysis went off the track. Oblivious to that explanation, Figley-Wright now invokes the same incorrect reading of Moorman to attack Summers’ third party counterclaim.

Figley-Wright Mem. 3-10 argues Moorman and its progeny erect a flat bar to the recovery of economic losses in tort, with the sole exception of professional malpractice suits against architects and engineers. That contention focuses on the nature of the claim and the identity of the defendant, to the exclusion of other relevant factors. But Opinion, 605 F.Supp. at 710 explained the Moorman analysis turns on both the nature of the claim and the total relationship among the parties. Ferentchak v. Village of Frankfort, 121 Ill.App.3d 599, 607-08, 76 Ill.Dec. 950, 956-57, 459 N.E.2d 1085, 1091-92 (3d Dist.1984) teaches Moorman bars the recovery of purely economic losses in tort only when the plaintiff has recourse to contractual remedies.

Moorman itself involved claims sounding in both contract and tort against a manufacturer that had sold plaintiff a defective storage tank. As the Illinois Supreme Court put it, the claims involved nothing more than “a purchaser’s disappointed expectations” remediable in the realm of contract (91 Ill.2d at 86, 61 Ill.Dec. at 753, 435 N.E.2d at 450):

Plaintiff suffered a commercial loss of the type that the law of warranty is designed to protect.

In affirming dismissal of the tort claims, the Supreme Court stressed the parties’ relationship of contractual privity and the availability of contract remedies. Indeed, a principal basis of the court’s decision was its stated desire not to interfere with the system of warranty remedies established by the Uniform Commercial Code (91 Ill.2d at 88, 61 Ill.Dec. at 755, 435 N.E.2d at 452):

As discussed above, the UCC provides the proper framework for a purchaser’s recovery of economic losses. Allowing an aggrieved party to recover under a negligence theory for solely economic loss would constitute an unwarranted infringement upon the scheme provided by the UCC.

Moorman is not the last word from the Illinois Supreme Court. Twice since then that Court has barred recovery of purely economic losses in tort, and in each case the Court held plaintiff should have invoked warranty rather than tort remedies. Redarowicz v. Ohlendorf, 92 Ill.2d 171, 65 Ill.Dec. 411, 441 N.E.2d 324 (1982) affirmed dismissal of the plaintiff homeowner’s tort claim against the builder for construction defects but left intact plaintiff's warranty claim (92 Ill.2d at 178, 65 Ill.Dec. at 414, 441 N.E.2d at 327) (quoting Crowder v. Vandendeale, 564 S.W.2d 879 (Mo.1978), emphasis in original):

[W]here mere deterioration or loss of bargain is claimed, the concern is with a failure to meet some standard of quality. This standard of quality must be defined by reference to that which the parties have agreed upon.

Similarly Foxcroft Townhome Owners Association v. Hoffman Rosner Corp., 96 Ill.2d 150, 70 Ill.Dec. 251, 449 N.E.2d 125 (1983) barred a condominium owners’ association’s tort claim against the condominium builder for construction defects, where the owners could have invoked warranty remedies had they not waived those remedies through a procedural default.

Neither in Moorman nor in the later cases has the Supreme Court considered a tort claim for purely economic loss by a plaintiff whose lack of interrelationship with the defendant precludes contract or warranty remedies. But the Illinois Appellate Court faced just such a claim in Ferentchak and concluded it was not barred by Moorman (121 Ill.App.3d at 606, 76 Ill.Dec. at 955-56, 459 N.E.2d at 1090-91):

We read Moorman and subsequent cases to establish that economic losses are not recoverable in tort against a defendant where the injuries caused by that defendant relate directly to plaintiffs reasonable commercial expectations respecting the defendant’s actions and where plaintiff has or had appropriate and adequate contract or warranty actions as against the defendant for such harm. In such circumstances, and where the injury is to the item supplied or produced by that defendant, contractual benefit-of-bargain expectations damages are the appropriate measure of recovery. However, the same economic losses are recoverable in tort, as against defendants who by their own negligence, as measured by traditional tort analysis, have caused the injuries and against whom no contract or warranty remedy is available. As to these defendants, when unconnected with the contract-warranty defendant, the harm caused by them is not related to the plaintiff’s commercial expectations, but to traditional societal expectations and conduct.

All relevant post-Ferentchak Appellate Court cases have cited it with approval and adopted its rule that tort claims for economic loss may be pursued when no contract or warranty remedy is available. Scott and Fetzer Co. v. Montgomery Ward & Co., 129 Ill.App.3d 1011, 1017, 85 Ill.Dec. 53, 58-59, 473 N.E.2d 421, 426-27 (1st Dist.1984) (“economic loss doctrine also does not bar recovery here because there were no commercial dealings between [defendant] and the [plaintiff] adjacent tenants [quoting at length the same Ferentchak language quoted in this opinion] ... and thus there are no contractual nor warranty remedies available to the tenants”); Reeder v. Old Oak Town Center, 124 Ill. App.3d 1045, 1048-49, 80 Ill.Dec. 322, 325-26, 465 N.E.2d 113, 116-17 (3d Dist.1984) (also quoting and following the same Ferentchak rationale); Rosos Litho Supply Corp. v. Hansen, 123 Ill.App.3d 290, 295-96, 78 Ill.Dec. 447, 452-453, 462 N.E.2d 566, 571-72 (1st Dist.1984).

Bates & Rogers Construction Corp. v. North Shore Sanitary District, 128 Ill.App.3d 962, 84 Ill.Dec. 149, 471 N.E.2d 915 (2d Dist.1984) is not — as Figley-Wright would have it — to the contrary. Bates & Rogers outlawed a contractor’s tort claim against an architect with whom the contractor was not in privity, but the court emphasized the contractor could seek warranty relief against the project owner who hired the architect (128 Ill.App.3d at 972-73, 84 Ill.Dec. at 156, 471 N.E.2d at 922).

Figley-Wright does not seem to understand that it is not “the mere fortuity of contractual relief’s unavailability” (Mem. 7) that renders Moorman inapplicable. Moorman was not an arbitrary decision by the Illinois Supreme Court to wipe out a remedy — one allowing tort recovery for economic losses — for the sheer sake of doing so. Rather Moorman reflected a judgment that parties who have shaped an economic transaction in contractual terms should not be permitted to shift their voluntarily-assumed risks by imposing an overlay of tort law concepts (with their quite different allocations of risk). Post-Moorman cases have equated the availability of warranty remedies with contract rights for that purpose. And the several Appellate Court decisions discussed in this opinion have sensibly allowed tort recovery where that critical ingredient of contractual or warranty remedies was lacking.

In this diversity action, this Court is controlled by the accurate reading of Moor- man reflected in Ferentchak and those succeeding Illinois Appellate Court decisions. Under those readings Moorman clearly poses no bar to Summers’ counterclaim. Summers and Figley-Wright have no direct contractual relationship, and no system of warranties is available to Summers by virtue of Summers’ and Figley-Wright’s independent relationships with Intamin. That asserted basis for Figley-Wright’s motion is no better now than it was when first rejected by the Opinion.

Existence (or Lack) of Elements of a Negligence Claim

Summers has not, however, dodged Figley-Wright’s third bullet. Though the counterclaim asserts (in the most conclusory terms) a Figley-Wright duty of care running to Summers in connection with Figley-Wright’s performance of its contract with Intamin, it has not identified just how that duty would arise. Moreover it has also not identified just how (even assuming such a duty of care) Figley-Wright’s negligence could be a proximate cause of Summers’ claimed injury.

Summers cites Normoyle-Berg & Associates, Inc. v. Village of Deer Creek, 39 Ill.App.3d 744, 350 N.E.2d 559 (3d Dist. 1976) for the proposition that FigleyWright owed Summers a duty of care. In Normoyle-Berg the court held a supervising engineer on a construction project owes a duty to the general contractor to avoid causing the contractor extra expenses in the completion of the project. That duty exists because of the foreseeability of harm to the contractor from the engineer’s negligence (39 Ill.App.3d at 746, 350 N.E.2d at 561):

A supervising engineer must be held to know that a general contractor will be involved in a project and will be directly affected by the conduct of the engineer. This relationship of supervising engineer and general contractor gives rise to a duty of care on the part of each party to the other.

While that language could support the existence of a duty owed by Summers to Figley-Wright, it does not necessarily run the other way (as it did in the Normoyle-Berg situation).

It is axiomatic that no legal duty can arise unless harm to the plaintiff resulting from defendant’s actions is reasonably foreseeable. Renslow v. Mennonite Hospital, 67 Ill.2d 348, 354-55, 10 Ill.Dec. 484, 487, 367 N.E.2d 1250, 1253 (1977). Normoyle-Berg recognizes it is not only foreseeable but likely that a contractor’s performance will be detrimentally affected when an architect or engineer errs in drafting plans or supervising construction.

But Summers must establish the converse, and it has not essayed to do so either in its counterclaim or in its supporting memorandum. Ordinarily the performance (and hence the exposure to liability) of an architect responsible only for design (and not ongoing supervision), or a design engineer (as contrasted with the supervising engineer dealt with in Normoyle-Berg), depends on no one else. They represent the first links in the construction chain. Others implement their plans, but if the plans are properly prepared no negligence in their execution by the contractor can reflect back and impose liability on the professional who generated the plans.

It is true (or at least Summers’ counterclaim, which must be accepted as true, says) part of the design responsibility here was undertaken by Figley-Wright. But Summers has offered no hint of how Figley-Wright’s flawed performance could have impacted Summers. In conventional tort-law duty-of-care terms, it has not indicated how Figley-Wright could have foreseen any economic harm to Summers from Figley-Wright’s negligence.

Relatedly, Summers has also not suggested how Figley-Wright's negligence could be a proximate cause of Summers’ damages, as represented by Summers’ settlement payment to Intamin covering the cost of repairs. Neither Intamin nor Figley-Wright could force Summers to pay for Figley-Wright’s negligence (except of course to the extent, if any, such negligence caused Summers to breach its duty to Intamin). Certainly Summers cannot recover from Figley-Wright to the extent Summers may have voluntarily undertaken to pay damages to Intamin in excess of Summers’ own share. In that event Summers’ opting to shoulder more than its share of damages, rather than to assert its defense in a court of law, would appear to be a self-inflicted wound — again in conventional tort-law terms, would be an intervening cause of Summers’ own injury sufficient to cut off Figley-Wright’s liability for those damages.

That issue need not however be resolved here. Because Summers has not demonstrated some rational basis for its conclusionary duty-of-care allegations, its counterclaim cannot survive in its present form.

Conclusion

Although Summers’ negligence counterclaim is clearly not barred by Moorman, it is rendered defective by the absence of any showing of a duty of care owed by FigleyWright to Summers. Summers’ counterclaim is therefore dismissed.

      . Summers says although it was responsible for the design of structural, mechanical and electrical systems (Third Party Complaint Ex. B), Figley-Wright was responsible for the design of the “dynamic portions” of the roller coaster (Counterclaim ¶ 2).

      . Ironically Summers initially levelled against Figley-Wright’s Third Party Complaint — and this Court found meritless — the identical attack now tendered by Figley-Wright’s third argument (Opinion, 605 F.Supp. at 712). But FigleyWright's current argument is even less worthy of consideration, for Summers' counterclaim — although concededly cast in very broad terms— alleges Fegley-Wright’s negligence in three respects for which Figley-Wright rather than Summers was responsible:
      1. faulty construction of the track and supports;
      2. knowing installation of defective materials; and
      3. improper design of dynamic components.

      . As Figley-Wright pointed out, the Illinois Supreme Court took Ferentchak on appeal, but its resolution of the case made it unnecessary to decide the question posed here. 105 Ill.2d 474, 479, 86 Ill.Dec. 443, 475 N.E.2d 822 (1985). Absent authoritative word from the Supreme Court, this Court is constrained to follow the just-completed exegesis.