Jerri Bush v. Seco Electric Company and Jack Satkamp

Citations: 118 F.3d 519; 1997 U.S. App. LEXIS 16222; 1997 WL 365367Docket: 96-2875

Court: Court of Appeals for the Seventh Circuit; June 25, 1997; Federal Appellate Court

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Indiana law establishes that once a property owner accepts construction work from an independent contractor, the owner assumes full responsibility for the work, thereby terminating the contractor's duty of care to third parties. This principle, known as the "acceptance rule," indicates that the contractor is no longer liable for personal injuries to third parties, as there is no privity between the contractor and those third parties.

In this case, defendants SECO Electric Company and Jack Satkamp argue that the acceptance rule absolves them of liability for plaintiff Jerri Bush's injuries. Bush, a temporary employee at an Indianapolis recycling plant, was tasked with cleaning a pit where aluminum cans were processed. SECO had been contracted to install the conveyor system used in this operation. On her first day in the pit, Bush was unaware of safety protocols and began shoveling cans onto a running conveyor, which lacked a safety guard and emergency shut-off button. As a result, the conveyor snagged her clothes, leading to the loss of her arm.

Bush filed a lawsuit against SECO, claiming negligence and product liability, while another defendant, Wymer Construction Company, which installed the conveyor, was later dismissed from the case. The lawsuit was subsequently removed to federal district court based on diversity jurisdiction.

SECO filed for summary judgment, invoking the acceptance rule as a defense against Bush's claims. It was undisputed that Rumpke accepted the wiring job and had control over the conveyor that had been operational for four weeks prior to Bush's injury. Bush contended that the acceptance rule did not apply due to a "humanitarian" exception, which allows for claims despite lack of privity if the contractor's work is dangerously defective or poses an imminent risk of personal injury; mere negligence does not qualify. Bush argued that the absence of an emergency stop-button constituted such a dangerous condition, but the district court disagreed, ruling that SECO had no duty of care to Bush and granting summary judgment in its favor. Bush subsequently appealed. 

While the appeal was pending, the Indiana Supreme Court's decision in Blake v. Calumet Construction Corp. modified the acceptance rule but ultimately retained it. Bush anticipated the court would abolish the privity-based acceptance rule in favor of a foreseeability standard, which did not occur. However, Blake introduced language suggesting a potential shift towards a negligence standard based on foreseeability, akin to the principles established in Palsgraf v. Long Island Railroad Co. 

Blake expanded the humanitarian exception, proposing that if a contractor delivers work in a defective or dangerous state, an ongoing duty of care may apply, emphasizing foreseeability of harm. The definitions provided in Blake classify a contractor's work as "dangerously defective" if it poses a risk of physical harm to foreseeable users or "imminently dangerous" if it significantly threatens life or limb. The court noted that SECO's wiring could be considered dangerously defective under these definitions.

In the case of Blake, a contractor failed to install a guardrail on a loading dock, leading to the plaintiff, Blake, falling four feet and sustaining a hip injury after exiting onto the dock in darkness. The trial court granted summary judgment to the contractor based on the acceptance rule, a decision affirmed by the Court of Appeals. However, the Indiana Supreme Court later ruled that the absence of safety measures on a dark construction site warranted a jury's consideration of whether the loading dock constituted an imminently dangerous condition. 

In a related case involving Bush, the district court ruled against him based on pre-Blake law. The current applicability of Indiana law raises uncertainties regarding whether a jury could find that the lack of an emergency stop-button in a pit posed a significant danger. The acceptance rule's changes complicate the district court's earlier decision, suggesting a need for reevaluation. Consequently, the district court's opinion is vacated, and the case is remanded for further proceedings, potentially leading to a new summary judgment or a trial.