Kinney v. CSB Construction, Inc.

Opinion

Plaintiff Michael Kinney brought this action to recover damages for personal injuries he sustained when he fell from the scaffolding of a steel building he was employed by PB Erectors (PBE) to help construct. He contends that the general contractor on the project, defendant CSB

Background

For purposes of CSB’s motion for summary judgment it was undisputed that plaintiff was injured when he fell approximately 15 feet while working as an ironworker employed by PBE. PBE in turn had been engaged by defendant CSB, the general contractor on a project to erect several steel buildings at the Bay Meadows racetrack in San Mateo County.

The contract between the owner and CSB declared the latter to be “solely and completely responsible for working conditions and the safety of all persons and property” on the site. It required CSB to “initiate, maintain, and comply with all safety and loss prevention precautions and programs required by the nature and performance of the work ... [or by] applicable provisions of federal, state, and local safety laws,” and to “eliminate or abate safety hazards created by or otherwise resulting from performance of the Work whether created by or resulting from it or one of its own subcontractors or vendors.” The contract also called upon CSB to “require each of its subcontractors to agree in writing ... to be bound to Contractor by the terms of this Contract . . . and to assume toward Contractor all of the obligations and responsibilities that Contractor . . . assumes toward Owner 55

The subcontract between CSB and PBE expressly referred to the contract between CSB and the owner as one of certain “General Documents” by which PBE’s work was governed. The subcontract required PBE to “supply at [PBE’s] cost all labor, equipment, scaffolding, new materials, supervision, power and other things necessary to complete [PBE’s] Work in the best

Here the evidence was sufficient to at least raise a triable issue of fact as to whether CSB retained sufficient control to trigger section 414. CSB employed a site superintendent, McDonald, who testified that he considered himself empowered to “eliminate or abate safety hazards created by or otherwise resulting from performance of the work, whether created by or resulting from it or one of its subcontractors.” Thus if he saw an unsafe condition, he “had a right to do whatever [he thought was] appropriate.” In the event of a disagreement over safety procedures, CSB could suspend work while discussing the matter with the subcontractor. In resolving such a situation, CSB “would have the final say.” Mr. McDonald agreed that “[i]f a subcontractor was working without adequate fall protection and [he] felt that fall protection was required, [he] would . . . tell them that they needed fall protection” and “would . . . stop the work until they had good fall protection.” He agreed that “[o]ne of the jobs of the general contractor is to have an attitude of safety comes first, and if you see an unsafe condition, you tell the subcontractor to alleviate it.” That was the way the job in question was run.

We have no doubt that this evidence would be sufficient to preclude summary judgment if the underlying claim against CSB rested on PBE’s creation of a hazard that injured a stranger to the construction work, such as a neighbor, a bypasser, or perhaps a person lawfully on the premises for another purpose. In such a case CSB would fall squarely within the scope of the cited exception, so as to be subject to liability, even though the injuries might have been more immediately caused by the negligence of a subcontractor. The question here, however, is whether such liability can be extended in favor of an injured employee of the subcontractor—one who has received compensation under the workers’ compensation law, thereby clothing his own employer, the more immediate tortfeasor, with immunity from further liability. Given the holdings and rationales of recent California Supreme Court cases, we must answer this question in the negative.

In Privette, supra, 5 Cal.4th 689 , the employee of a roofing contractor brought an action against the owner of an apartment building who had hired the plaintiff’s employer to repair the building’s roof. The plaintiff contended

The court then observed that these rationales lose most or all of their force when the claimant is injured while employed by the contractor to perform the contracted-for work. Such a claimant is “automatically entitled to recover benefits” under the workers’ compensation laws, which serve essentially the same purposes as the peculiar risk doctrine. (Privette, supra, 5 Cal.4th at pp. 696, 697, 701; see S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 , 354 [ 256 Cal.Rptr. 543 , 769 P.2d 399 ].) Therefore the imposition of what amounts to vicarious liability on the hirer “advances no societal interest that is not already served by the workers’ compensation system.” (Privette, supra, at p. 692.) Moreover the hirer cannot obtain equitable indemnity from the contractor, because the contractor’s payment of workers’ compensation bars all liability in tort for on-the-job injuries to its own employees. (Id. at pp. 698, 701-702; see Lab. Code, § 3864.) This immunity from liability produces “the anomalous result that a nonnegligent person’s liability for an injury is greater than that of the person whose negligence actually caused the injury.” (Privette, supra, at p. 698.) Considering that the purposes of the doctrine are duplicated by the system of workers’ compensation, of which the injured plaintiff has presumably taken full advantage, the notion that the doctrine should extend to employees of the contractor “does not withstand scrutiny.” (Id. at pp. 701-702, overruling Woolen v. Aerojet General Corp. (1962) 57 Cal.2d 407 [ 20 Cal.Rptr. 12 , 369 P.2d 708 ].)

In Toland v. Sunland Housing Group, Inc. (1998) 18 Cal.4th 253 [ 74 Cal.Rptr.2d 878 , 955 P.2d 504 ] (Toland), the court reaffirmed and illuminated its reasoning in Privette, which it summarized as follows: “Because the

The court in Toland expressly reserved the question whether this reasoning would apply to claims brought under section 414. (Toland, supra, 18 Cal.4th at p. 264, fn. 2.) However, both it and Privette relied on portions of a tentative draft of the Restatement indicating that the entire chapter of the Restatement at issue there (and here) has limited application, if any, to employees of a hired contractor. As the court wrote in Toland, “Privette relied in part on the reasoning expressed in a tentative draft to the Restatement Second of Torts that workplace injuries are covered by workers’ compensation insurance, ‘the cost of which is “included by the contractor in his contract price” and “ultimately . . . borne by the defendant who hires him.” ’ (Privette, supra, 5 Cal.4th at p. 699, quoting Rest.2d Torts (Tent. Draft No. 7, Apr. 16, 1962) ch. 15, special note, pp. 17-18.) The tentative draft also stated that ‘when the Sections in this Chapter speak of liability to “another,” or “others,” or to “third persons,” it is to be understood that the

We are persuaded that the holdings of Privette and Toland should also apply to employees’ claims under section 414 at least where, as here, (1) the sole factual basis for the claim is that the hirer failed to exercise a general supervisory power to require the contractor to correct an unsafe procedure or condition of the contractor’s own making, and (2) there is no evidence that the hirer’s conduct contributed in any way to the contractor’s negligent performance by, e.g., inducing injurious action or inaction through actual direction, reliance on the hirer, or otherwise. The fairness rationale at the core of Privette and Toland applies equally to preclude imposition of liability on a hirer for mere failure to exercise a general supervisory power to prevent the creation or continuation of a hazardous practice, where such liability would exceed that imposed on the injured plaintiff’s immediate employer, who created the hazard.

We find support for this conclusion in Zamudio v. City and County of San Francisco (1999) 70 Cal.App.4th 445 [ 82 Cal.Rptr.2d 664 ] (Zamudio), where Division Five of this court rejected an attempt to fix liability on a general contractor on a theory, among others, that it had negligently exercised control retained by it under its contracts with the property owner and plaintiff’s employer, a concrete subcontractor. The court declined to reach the issue whether section 414 involved a form of “direct” liability to which a hirer remained subject after Privette and Toland. (Zamudio, supra, at p. 452.) Instead it affirmed summary judgment against the plaintiff because the facts were insufficient to establish a duty under that section running toward the plaintiff. The court noted that there was no evidence of “any affirmative act by [the owner or contractor] which contributed to appellant’s fall” (ibid,. italics in original), or of “direct management over the means and methods of the.independent contractor’s work” (id. at p. 453), or of “the provision of the equipment which caused the injury” (ibid.). Evidence that the defendants “m[ight] have participated in discussions about the general subject of workplace safety” did not support an inference that they “undertook responsibility for appellant’s safety at the jobsite, or that there was any nexus between these general discussions and the failure to secure the plank from which he fell.” (Ibid.) Nor was the imposition of liability warranted by “the right to inspect premises for unsafe structural conditions,” “efforts undertaken to increase public safety,” “inspections and generalized exhortations in favor of a safe workplace,” or “the presence of a provision in the main contract delegating [the owner’s] safety responsibilities to [the defendant].” (Ibid.)

Our reasoning is also consistent with the result, though it may be somewhat at odds with some of the broader dicta, in Grahn v. Tosco (1997) 58

On the other hand, the Grahn court’s analysis of the theory now before us is largely if not entirely consistent with our own approach. First we note that the specific issue we address was not before the court, because the defendant did not “contest the legal efficacy of [the plaintiff’s] theory of liability premised on allegations that [the hirer] retained control over the details by which the insulation work was performed by [the contractor].” (Grahn, supra, 58 Cal.App.4th at p. 1393.) Instead it challenged the sufficiency of the evidence and the accuracy of the jury instructions concerning that theory. (Ibid.) The court in Grahn found the evidence sufficient to support imposition of liability under section 414. (Grahn, supra, at pp. 1394-1395.) On the evidence there we would have done likewise: Comparably to CSB here, the defendant had “retained an active role in site safety, including reserving the authority to stop [the] work in order to effectuate asbestos abatement at the jobsites.” (58 Cal.App.4th at p. 1394.) But the evidence went considerably further, supporting findings that the hirer also “retained responsibility for conducting industrial/hygiene monitoring.” Most tellingly, the hirer “issued permits” to the contractor that “list[ed] the safety equipment [the hirer] required [the contractor’s] workers to wear,” and these permits “never carried any asbestos warnings or restrictions, or required that the workers wear respirators.” (Ibid., italics added.)

The evidence in Grahn thus supported an inference that the hirer affirmatively contributed to the safety hazard by assuming “responsibility” for the specific hazard at issue and dictating (inadequate) safety measures to deal with it. The hirer’s pervasive exercise of control over safety practices and equipment might have been found to have induced reliance by the contractor and its employees making the contractor’s failure to warn a contributory factor in the plaintiff’s injuries. In both respects the contractor’s conduct consisted of more than a mere failure to exercise a retained supervisory

We also note that while the analysis in Grahn assumes the applicability of section 414 to claims by an injured contractor’s employee against the contractor’s hirer, much of its discussion supports our conclusion that mere inaction by the hirer cannot establish such a claim where the immediate cause of the injury is the contractor’s own failure to take appropriate precautions. The court held that the jury was erroneously instructed with respect both to liability under section 414 and to liability as a landowner for dangerous conditions of its property. The error lay in the instructions’ failure to focus “on the control by the hirer of the methods or details of the work and not simply the hirer’s inherent right otherwise to control the premises.” (Grahn, supra, 58 Cal.App.4th at p. 1396.) While this reasoning parallels ours, and springs from similar concerns over the scope of liability, it differs in one critical respect in that it would also limit the hirer’s liability to persons outside the relationships of hirer-contractor and contractor-employee. We thus draw support from the underlying concern, while departing somewhat from the ramifications found by the court.

The distinction is better illustrated by other cases that have attempted to rationalize limitations on the liability of hirers by restricting the kind of “control” held to trigger liability under section 414. For example, in Candelaria v. BC Gen. (1999) 236 Mich.App. 67 [ 600 N.W.2d 348 , 354], the hirer was held not liable, in part because “the evidence did not permit a finding that the control retained by BC had any effect on the manner or environment in which the work was performed.” While we agree that such a failure of evidence should preclude liability to an employee of a subcontractor, we are less certain that it should preclude recovery by a stranger to the work such as an unrelated invitee, neighbor, or bypasser. The question is when should a hirer’s failure to exercise control expose it to liability for damages. The answer is at least arguably different depending on whether the plaintiff is an employee of the primary tortfeasor, thus bringing the case within the rationale of Privette and Poland, or is a complete stranger to that relationship. In the latter case, the injured person has no other certain remedy, the immediate employer is not immune from civil liability, and the hirer, if held liable, is presumptively entitled to equitable indemnity from the immediate employer. Holding both hirer and employer liable presumably provides both with a powerful incentive to act with due care towards neighbors, bypassers, and visitors to the site. Such strangers to the work appear to fall squarely within the original rationale for the “retained control” doctrine: they have no assured remedy from any other source; if the subcontractor is primarily responsible, the hirer is entitled to equitable indemnity; it