Lacount v. Hensel Phelps Construction Co.

Facts

Appellant was employed by the Bay Area Rapid Transit District (hereinafter BART) as the general contractor for the construction of the Daly City BART station under BART contract 1M0071. In furtherance of that project appellant entered into a subcontract dated May 27, 1971, with Ben C. Gerwick Company (hereinafter Gerwick), a wholly owned subsidiary of Santa Fe Pomeroy, Inc. Under this subcontract Gerwick agreed to fabricate, deliver, and install 27 prestressed concrete girders, each weighing approximately 100 tons. The 100-ton girders were constructed at the Gerwick yard in Petaluma.

The enormous weight of the girders required special handling procedures for the loading of the girders on barges for delivery in San Francisco. Two separate gantry cranes, each with a capacity of 70 tons were used in tandem for lifting of the girders. Using these huge cranes mounted on tracks, the girders were carried to the barges where they were loaded.

In order to properly balance the barges for the trip down the Petaluma River to San Francisco, it was necessary to use ballast to “trim the barge.” For this purpose other concrete girders were used. These weighed approximately eight tons each.

On February 16, 1972, the last of the 100-ton girders were being loaded. Respondent, an employee of Gerwick, was helping with the loading under the supervision of Gerwick’s rigging foreman. One of the gantry cranes was being used to place ballast on the barge. The ballast selected for this particular operation was two girders each weighing eight tons. The ballast girders were hooked to slings (heavy wire cables) which were then attached to trolleys which rolled along a track on the underside of the overhead gantry crane. The load capacity of the trolleys was not properly marked as required by the California Administrative Code. At the time of loading the barge, there was a controversy as to the exact weight of the ballast girders. The Gerwick yard superintendent told the rigging foreman that the combined weight of the two girders was less than ten tons. It was later determined that the actual combined weight of the ballast girders was approximately 16 tons.

Respondent based his case against appellant on two theories. He contended that the general contractor, appellant, would be liable to him under the Restatement Second of Torts sections 413 and 416, which set forth the liability of the employer of an independent contractor under certain situations where there is a peculiar risk of harm involved.

In addition, respondent contended that, because of appellant’s contract with BART, appellant assumed a nondelegable duty to insure the compliance by all “subcontractors” with all safety regulations and orders. Respondent contended that, under the terms of the BART contract and the May 27, 1971, contract between appellant and Gerwick, Gerwick became a subcontractor within the meaning of that term in the BART contract, thus creating a duty on the general contractor, appellant, to insure Gerwick’s compliance with all safety regulations.

Appellant contends on appeal that as a matter of law the peculiar risk doctrine and the nondelegable duty doctrine are inapplicable to the instant case. Appellant also contends that the trial court improperly construed the contracts in question when it determined Gerwick was a subcontractor of appellant.

The Peculiar Risk Doctrine

Appellant first argues as a matter of law that sections 413 and 416 of the Restatement Second of Torts have no application to the instant case and therefore as a matter of law, it is not liable for the injuries sustained to an employee of an independent contractor.

The general rule is that an “employer of an independent contractor is not liable for physical harm caused to another by an act or omission of the contractor or his servants.” (Rest.2d Torts, § 409.) But as acknowledged in the comment to section 409, there are so many exceptions to the “ ‘general rule’ ” that it is applied only “where no good reason is found for departing from it.” The question this court faces is whether as a matter of law it can be said that none of the exceptions are applicable in the instant case.

It is unnecessary to look to other definitions of “peculiar risks” or “inherently dangerous” activity because appellant concedes that “the construction of 100-ton girders may be inherently dangerous, ...” That is, appellant does not ask this court to rule as a matter of law that the construction of 100-ton girders is not inherently dangerous. However, appellant argues that the injury in the instant case, as a matter of law, resulted from the collateral or casual negligence of Gerwick in the performance of the operative details of the work, and, therefore, it cannot be liable. Appellant is asserting that the risk which was in fact realized was not one inherent in the nature of the construction of 100-ton girders.

The employer of an independent contractor is not liable for the “collateral” or “casual” negligence by an employee of the independent contractor. (Smith v. Lucky Stores (1976) 61 Cal.App.3d 826 , 830 [ 132 Cal.Rptr. 628 ].) The Restatement’s rule concerning collateral negligence in section 426 reads in relevant part as follows: “[A]n employer of an independent contractor, unless he is himself negligent, is not liable for physical harm caused by any negligence of the contractor if [If] (a) the contractor’s negligence consists solely in the improper manner in which he does the work, and [1f] (b) it creates a risk of such harm which is not inherent in or normal to the work, and [If] (c) the employer had no reason to contemplate the contractor’s negligence when the contract was

The court in Snyder v. Southern Cal. Edison Co., supra, 44 Cal.2d 793 , 801, speaking of the liability of the employer of an independent contractor, stated as follows: “ ‘. .. Such liability does not ordinarily extend to so-called “collateral” or “casual” negligence on the part of the contractor or his servants in the performance of the operative detail of the work. The negligence for which the employer is liable, as general entrepreneur, must be such as is intimately connected with the work authorized and such as is reasonably likely from its nature. Negligence in the doing of ordinary acts, not necessarily incidental, but only accidentally connected with the work, do not fall within the policy of the law which imposes the extraordinary liability upon the employer.’ ”

The “collateral” negligence exception to the peculiar risk doctrine has also been stated in terms of foreseeability or direct consequences. “In all of the cases which have imposed a vicarious liability under section 416, there is a direct causal relationship between a peculiar risk inherent in the work to be performed and the plaintiif’s injuries. It is the foreseeability of that special risk which justifies the imposition of liability.” (Holman v. State of California, supra, 53 Cal.App.3d 317 , 330.) “A concomitant of the ‘direct consequences’ approach to the problem is the rule that liability of the employer of an independent contractor does not extend to the collateral negligence on the part of the independent contractor in the performance of the operative details of the work.” (Anderson v. Chancellor Western Oil Dev. Corp., supra, 53 Cal.App.3d 235 , 241.)

Because the above distinctions between “collateral” or “casual” negligence and negligence of the contractor “intimately connected” with a peculiar risk are elusive, it may be helpful to look at an example. In Smith v. Lucky Stores, supra, 61 Cal.App.3d 826 , the defendant hired an independent contractor to remove a sign from a store named “Ardens.”

The work to be performed by Gerwick under its subcontract with appellant involved the movement of 100-ton girders from the construction yard where they were fabricated to the barges upon which they were to be transported to place of installation. Appellant knew the loading operations would involve the lifting of the aerial girders and the ballast girders. A major inherent risk in any crane operation is certainly the overloading of the crane. Since it was necessary to use ballast to balance the barges that were to transport the girders, the use of the ballast was an integral part of the loading procedure. The loading of the ballast was “ ‘intimately connected with the work authorized.’ ” (Snyder v. Southern Cal. Edison Co., supra, 44 Cal.2d 793 , 801.) There is a direct causal relationship between a peculiar risk inherent in the work of loading for proper transportation of 100-ton girders and the material necessary to balance the load (8-ton girders) and respondent’s injuries which were sustained when a crane which was being used to load the ballasts was overloaded.

Appellant further attempts to support his argument that the peculiar risk doctrine is inapplicable to the instant case by citing Anderson v. Chancellor Western Oil Dev. Corp., supra, 53 Cal.App.3d 235 , and Elder v. Pacific Tel. & Tel. Co. (1977) 66 Cal.App.3d 650 [ 136 Cal.Rptr. 203 ].) Anderson stands for the proposition that because of the strong public and legal policy favoring exclusivity of the workmen’s compensation remedy and where the risk was solely to the independent contractor’s employees who were the persons who were negligent, “strict interpretation of the concept of ‘peculiar risk’ and adherence to the basic rule of nonliability is indicated.” (Anderson v. Chancellor Western Oil Dev. Corp., supra, at

In Elder v. Pacific Tel. & Tel. Co., supra, 66 Cal.App.3d 650 , two employees of a subcontractor brought an action against a building proprietor and its general contractor. Plaintiffs were injured during the removal of an exterior fire escape platform at second story level. The platform, and both plaintiffs, had fallen to the ground when one of them, departing from the demolition plan and assuming that a steel U-beam surrounding the concrete slab was sufficient to support it, cut the last of the supporting rods before a shiploader was moved into place to take the weight. The court in Elder, citing Anderson v. Chancellor Western Oil Dev. Corp., supra, 53 Cal.App.3d 235 , stated: “This concept of‘peculiar risk’ is strictly interpreted, however, in cases in which the party injured is an employee of the independent contractor. ...” (Id., at p. 659.) The court then held that as a matter of law section 416 of the Restatement Second of Torts had no application to the facts presented in Elder. The court reasoned that the rule of nonliability may be properly applied where there is evidence that the independent contractor departed from the method contemplated and therefore created a risk not inherent in the work. (Id., at pp. 659-661.) In reaching this conclusion, the court quoted from Addison v. Susanville Lumber, Inc. (1975) 47 Cal.App.3d 394 , 402 [ 120 Cal.Rptr. 737 ], as follows: “ ‘[i]t is axiomatic that every person who employs any contractor may anticipate that if the contractor hires untrained or otherwise incompetent employees, they will do their work unsatisfactorily, thus perhaps endangering themselves and third persons. Such a risk is ever present. But there is nothing peculiar or special about it; on the contrary it is common and general, and applicable to virtually every activity.’ ” (Id., at p. 660.)

However, in Western Contracting Corp. v. Southwest Steel Rolling Mills, Inc. (1976) 58 Cal.App.3d 532 [ 129 Cal.Rptr. 782 ], a case which has a similar fact situation as that presented in the instant case, the court refused to hold as a matter of law that the peculiar risk doctrine was inapplicable. Western Contracting Corporation (Western), acting as a general contractor, entered into a written contract with the Department of Water Resources of the State of California for the construction of a dam near Castaic. Thereafter Western entered into a written subcontract with Southwest Steel Rolling Mills, Inc. (Southwest Mills) under which

The court in Western noted that the “motion for summary judgment was grounded upon the supposition that Western could not be vicariously liable for negligence on the part of Southwest Mills because Southwest Mills was an independent contractor.” (At p. 541.) The court then stated: “Because Southwest Mills was not an employee of Western, the doctrine of respondeat superior was inapplicable. However, there are a number of exceptions to the general rule that one who employs an independent contractor is not liable for that contractor’s negligence. Particularly significant to the immediate case is the exception which recognizes that the employer is liable when the contractor is employed to do ‘work in which there is a high degree of risk in relation to the particular surroundings, . ..’ (Prosser on Torts (4th ed.) p. 473; see also Rest.2d Torts, § 416.) In Woolen v. Aerojet General Corp., 57 Cal.2d 407 [ 20 Cal.Rptr. 12 , 369 P.2d 708 ], the Supreme Court held that an employer’s liability under this exception can extend to employees of the independent contractor. While the record in the case at bar does not establish that this exception is definitely applicable in the immediate case, the facts suggest that it could be applicable. Such an inference is ‘reasonably deducible’ (Code Civ. Proc., § 437c) from the fact that the decedent was fatally injured on the dam jobsite when a crane dropped reinforced iron mat upon him.” (Id.)

In Western, Southwest Mills contended that Anderson v. Chancellor Western Oil Dev. Corp., supra, 53 Cal.App.3d 235 , prevents Western

Appellant asks this court to rule as a matter of law that the peculiar risk doctrine is not applicable in light of the fact that an employee of the independent contractor was injured. Although Anderson and Elder stand for the proposition that concept of peculiar risk is strictly interpreted when an employee of the independent contractor is the injured party, these cases do not stand for the proposition that every time an employee is injured the peculiar risk doctrine is inapplicable. Under the authority of Western Contracting Corp. this court cannot state as a matter of law that the use of a crane to lift girders and ballasts weighing from eight to one hundred tons is not an inherently dangerous or peculiar risk activity.

Interpretation of Contract

Appellant contends on appeal that the interpretation of the contract between BART and appellant and between appellant and Gerwick is a question of law and that the trial court’s determination is not binding on the appellate court. Appellant asserts that the trial court erred in holding that Gerwick was a subcontractor within the meaning of the terms of BART contract 1M0071. Appellant wishes to have this court determine that Gerwick was not a subcontractor because a provision of the contract between BART and appellant provides that the compliance with the applicable safety rules, laws, regulations and orders by a subcontractor will be the responsibility of appellant.

In appellant’s points and authorities in support of its motion for new trial and for judgment notwithstanding the verdict, it argues that the trial court improperly allowed testimony concerning the meaning of the contract. It appears from a letter to the trial judge from respondent’s counsel that the extrinsic evidence concerned the custom and practice within the industry.

If the interpretation of the contract turns upon the credibility of extrinsic evidence, the interpretation of the contract is not a question of law, but one of fact and it will not be overturned unless not supported by substantial evidence. (Brawthen v. H & R Block, Inc. (1972) 28 Cal.App.3d 131 , 138 [ 104 Cal.Rptr. 486 ]; Kaufman & Broad Bldg. Co. v. City & Suburban Mortg. Co. (1970) 10 Cal.App.3d 206 , 210 [ 88 Cal.Rptr. 858 ].) Custom and usage of words in a certain trade are admissible to explain the meaning of the terms used in a contract. Custom and usage may not be used to vary the terms of the contract, but may be used as an aid in the interpretation of contracts. (Verdugo Highlands, Inc. v. Security Ins. Co. (1966) 240 Cal.App.2d 527 , 532 [ 49 Cal.Rptr. 736 ]; see also Peiser v. Mettler (1958) 50 Cal.2d 594 , 609-610 [ 328 P.2d 953 , 74 A.L.R.2d 1 ]; Ermolieff v. R.K. O. Radio Pictures (1942) 19 Cal.2d 543 , 550 [ 122 P.2d 3 ].)

Appellant contends that under BART contract 1M0071, Gerwick is only to be considered a subcontractor for part of its work, namely, the work done at the Daly City station and cannot be regarded as a subcontractor for the fabrication and loading of the girders which were done in Petaluma. Appellant relies on the following definition of subcontractor in BART’s contract book: “Subcontractor means any person or persons, partnership, joint venture, corporation, or other entity which has an employee or employees at jobsite who fall within one or more of the classifications contained in the general, prevailing rate of wages and employer payments for health and welfare, vacation, pension and similar purposes in the locality identified in the applicable San Francisco Bay Area Rapid Transit District Notice to Contractors Requesting Bids. Subcontractor shall not mean District’s Contractor or those whose only employee or employees at jobsite are engaged solely in the delivery or storage of materials.” Appellant also relies upon the following definition of jobsite: “Jobsite means those areas where work expressly required under the applicable Contract Documents of the District must be performed.”

There is no indication from the language of the definition of “jobsite” that the word “must” means that a particular place shall be designated specifically for the performance of work under the contract. It is clear that the fabrication of the 100-ton girders could not be done at the Daly City BART station. Since the contract called for Gerwick to fabricate, transport and to install the girders, it seems clear that the fabrication of the girders which was expressly required under the contract “must” be

Nondelegable Duty Doctrine

Appellant argues that the trial court erred in giving the following instruction to the jury: “Testimony has been given that a trolley hoist was being used for lifting at the time of the alleged incident. California Administrative Code, Title 8, § 3913(g) states: A trolley suspension hoist means a hoist whose upper suspension member is a trolley for the purpose of running the hoist below a suitable runway. It may be either floor or cage-operated.

“California Administrative Code, Title 8, General Safety Order §3999, provides that: ... a crane, derrick, or hoist shall not be loaded beyond the rated capacity or safe working load, whichever is smaller.

“California Administrative Code, Title 8, §3941 (a) provides as follows: The maximum rated capacity of all cranes shall be plainly marked on each side of the crane, and if the crane has more than one hoisting unit, each hoist shall have marked on it or its load block its rated capacity; and this should be clearly legible from the ground or floor.

“At the time of the incident in question, Defendant Hensel Phelps Construction Company had a non-delegable duty to the plaintiff to have the work of its independent subcontractor Ben C. Gerwick performed in accordance with the safety orders just read to you. Such duty is to exercise ordinary care to take the required precautions.”

Appellant contends that under California law one cannot be vicariously liable for the failure of another to comply with safety orders unless one can be classified as a statutory “employer” rather than an employer of an independent contractor. However, in the instant case appellant as the employer of an independent contractor had under the terms of its contract with BART a nondelegable duty to see that safety orders were complied with. Appellant’s contract with BART provides: “A7.6 Safety

The case of Delgado v. W. C. Garcia & Associates (1963) 212 Cal.App.2d 5 [ 27 Cal.Rptr. 613 ], is applicable to the instant case. In Delgado appellants were the owners of a subdivision which had contracted with the City of San Jose to install a sewer system within the subdivision. Appellants subcontracted the work to another. One employee of the subcontractor was killed, another injured, when an unshored excavation built in violation of Industrial Accident Commission rules caved in. Appellant’s contract with the city provided for compliance with the applicable safety orders. Appellants asserted in Delgado that it was not their responsibility to assure compliance with all applicable safety orders because they did not control the premises, instrumentality or employees of the subcontractor. The court rejected this argument and found where a contract with a public authority provides for compliance with safety orders, a general contractor may not delegate to an independent contractor the duties imposed upon him by the public authorities.

The same analysis is applicable to the instant case. Appellant contracted with BART, a public entity, and the contract provided that the responsibility of compliance with all safety orders will be that of appellant. Under the case of Delgado such duty was nondelegable.

Appellant contends that this court should follow the case of West v. Guy F. Atkinson Constr. Co. (1967) 251 Cal.App.2d 296 [ 59 Cal.Rptr. 286 ]. In West, Atkinson was a general contractor under a contract with the state to build a section of a freeway in Placer and Nevada Counties. Included in the contracted work was an overpass or bridge where the