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Bush v. SECO Elec. Co. - 118 F.3d 519 (7th Cir. 1997)


Where a contractor hands over work in a defective or dangerous state, important considerations of deterrence and prevention militate in favor of imposing an ongoing duty of care. The possibility of harm from the condition is foreseeable by the contractor. The spirit of Palsgraf is evident as well in an elaboration of the humanitarian exception. The exception applies to contractors' work that is (1) dangerously defective, (2) inherently dangerous, or (3) imminently dangerous.


The law of Indiana has long held that once an owner accepts a piece of construction work from an independent contractor, the owner takes full responsibility for it. The contractor's duty of care to a third party for personal injury thereby ceases, for the contractor and the third party are not in privity. And with the contractor's duty goes its liability as well. In embracing this "acceptance rule," Indiana has not been alone. In the related area of warranties in sales of personal property, American courts many years ago shed a requirement of privity between injured parties and manufacturers. But, in the world of construction contracts, courts have been much slower to relax the privity strictures of the nineteenth-century common law.


Defendants SECO Electric Company and Jack Satkamp (collectively,”SECO”) argue that the acceptance rule remains potent in Indiana and that it blocks any liability to plaintiff Jerri Bush. Bush was a temporary employee at an Indianapolis recycling plant owned by Rumpke Recycling, Inc. (“Rumpke”). The plant recycled aluminum cans; Bush's main job was "densifying" the cans inside the plant building. Delivery trucks would drop cans into a deep pit, and a giant conveyor contraption would pick them up and deposit them in a hopper. (Rumpke had hired SECO to install the wiring of the conveyor.) The conveyor sometimes failed to gather all the aluminum cans, which then needed to be cleaned up. The proper way to do this was to go down into the pit, pick the cans up, dump them in big garbage bins and haul the bins out. The safety protocol called for shutting off the conveyor with controls located outside the pit. A yellow safety guard was supposed to be fitted on the conveyor's mouth, making it impossible to feed cans into the conveyor. There was no emergency shut-off button actually in the pit. Bush was picked to go clean the pit. Bush says she knew nothing of the safety protocol, and it was her first day on pit duty. She began shoveling cans onto the conveyor while it was still running. The safety guard was not on, apparently taken off to be cleaned or repaired. The conveyor snagged her clothes and Bush lost her arm. Bush sued, asserting liability under negligence and product liability theories. SECO's co-defendant was Wymer Construction Company (“Wymer”), which had installed the conveyor (and which was later dismissed from the suit by stipulation). At the behest of Wymer, Bush's suit was removed to federal district court under the diversity jurisdiction. 

SECO moved for summary judgment, raising the acceptance rule as its defense. That Rumpke had accepted the wiring job was not in dispute: the conveyor had been operating for four weeks when Bush was injured, and Rumpke's control over the conveyor was beyond doubt. Bush argued that the acceptance rule did not defeat her action, because she fitted into a narrow "humanitarian" exception.  Under this exception, lack of privity could be overlooked if a contractor produced "a product or work in a condition that was dangerously defective, inherently dangerous or imminently dangerous such that it created a risk of imminent personal injury"--but mere negligence would not suffice. The absence of an emergency stop-button in the pit itself constituted such a condition, Bush argued. The district court thought not. Because SECO therefore owed no duty of care to Bush, the district court granted summary judgment to SECO. Bush appeals. 


Did Rumpke’s acceptance of the work that SECO completed on which Bush based her claim justify the grant? 




The court vacated that grant on appeal and remanded the case. The court held that, although Rumpke accepted the work that SECO completed that contributed to Bush’s injury, an opinion that was handed down while Bush's appeal was pending shifted the applicable acceptance rule enough to make extrapolating from the trial court's decision that SECO had no duty of care as to Bush little more than divination. The court also reasoned that a trial would have been appropriate if additional submissions did not lead to summary judgment.

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