July 30, 2018
I. INTRODUCTION
A. Is the Company liable for his injuries?
1. Oscar, an owner of a contracting company, is heading out of the office at about 10 a.m. He has just completed the paper work for the day and is heading out to one of his job sites. Shortly after getting in his truck the cellular phone rings. Unfortunately, it is one of his foremen calling to report an injury at one of the company’s job sites. Worried about the financial ramifications, before long Oscar calls his attorney and asks if the company is liable for the injuries to the man. Before the attorney can give any kind of preliminary opinions, the attorney will ask Oscar a series of questions. Some of the first questions will help the attorney decide what relationship the injured man had to the company. Once this is determined, the attorney will have a better handle on how to analyze the question. The relationship of injured parties to general contractors usually breaks into four categories.
B. The categories of potential exposure for injuries to third parties:
1. Injuries to the company’s own employees.
2. Injuries to others caused by the company’s employees.
a. An example of this situation is if one of one of the company’s vehicles, driven by an employee on a business trip, causes a wreck and causes property and personal injury to others.
b. The analysis of this scenario is more fully explained below.
3. Injuries to employees of subcontractors.
a. An example is an employee of a sub is injured when pipe falls on head.
b. The analysis of this scenario is more fully explained below.
4. Injuries to trespassers at the company’s job site.
a. An example of this situation is if a salesman comes on the property and is injured.
b. The analysis of this scenario is more fully explained below.
c. Classification of person on the job site.
(1) Business invitee – person who enters premier in response to an invitation from owner/occupant for business purpose or mutual benefit of both parties (e.g., employees of a subcontractor).
(2) Licensee – enters the premises with permission of the owner or person in control of premises on business for someone other than the owner.
(3) Trespasser – enters the premises for his own purpose, pleasure, and convenience without any right or invitation or permission.
II. INJURIES TO THE COMPANY’S OWN EMPLOYEES
A. One of Oscar’s employees could have hurt himself at the job site.
1. Liability for such injuries usually fall under the Worker’s Compensation
Act (the “Act”), but this paper will not go into detail into the Act. In general, however, the Act covers “death or injury for which compensation is sought to be wholly or partly the result of some work or activity connected with employment and not the mere result of disease which operating in its ordinary and natural course and without regard to the employment and its activities brings about the employee's death.”
B. Definitions:
1. The term "Employer" means, unless otherwise specified, a person who makes a contract of hire, employs one or more employees, and has worker’s compensation insurance coverage. The term includes a governmental entity that self-insures, either individually or collectively. Tex.Labor Code § 401.011(18).
2. The term "Employee" includes:
a. an employee employed in the usual course and scope of the employer's business who is directed by the employer temporarily to perform services outside the usual course and scope of the employer's business;
b. a person, other than an independent contractor or the employee of an independent contractor, who is engaged in construction, remodeling, or repair work for the employer at the premises of the employer; and
c. a person who is a trainee under the Texans Work program established under Chapter 308.
3. The term "course and scope of employment" means, in pertinent part, an activity of any kind or character that has to do with and originates in the work, business, trade, or profession of the employer and that is performed by an employee while engaged in or about the furtherance of the affairs or business of the employer. The term includes an activity conducted on the premises of the employer or at other locations.... Texas Labor Code § 401.011(12).
C. While some employers have chosen to opt out of the Workers Compensation Act coverage, this paper will not address that situation.
D. The main advantage of the Worker’s Compensation Act (Texas Labor Code Section 401.001 et. seq.) is:
1. Exclusive Remedy Doctrine - The exclusive remedy provision of the Act says, "Recovery of worker’s compensation benefits is the exclusive remedy of an employee covered by worker’s compensation insurance coverage or a legal beneficiary against the employer or an agent or employee of the employer for the death of or a work-related injury sustained by the employee." But if an employer, i.e., "a person who employs one or more employees," elects not to obtain worker’s compensation insurance, that employer is subject to common-law negligence claims and may not assert certain defenses, including contributory negligence, assumed risk, or that the injury or death was caused by a fellow employee.
2. § 408.001. Exclusive Remedy; Exemplary Damages (a) Recovery of worker’s compensation benefits is the exclusive remedy of an employee covered by worker’s compensation insurance coverage or a legal beneficiary against the employer or an agent or employee of the employer for the death of or a work-related injury sustained by the employee. (b) This section does not prohibit the recovery of exemplary damages by the surviving spouse or heirs of the body of a deceased employee whose death was caused by an intentional act or omission of the employer or by the employer's gross negligence. (c) In this section, "gross negligence" has the meaning assigned by Section 41.001, Civil Practice and Remedies Code. Except for wrongful death actions seeking exemplary damages for an employer's gross negligence, the Act exempts employers from common law liability based on negligence or gross negligence. See TEX. CONST. ART. XVI, § 2b (Damages for Homicide); Texas Labor Code Ann. § 408.001(a)-(c) (Vernon 1996). The Act provides the exclusive remedy for injuries employees sustain in the course of their employment. Dickson, 880 S.W.2d at 788; Tex. Lab.Code Ann. __408.001(a) (Vernon 1996).
3. The Personal Animosity Exception
a. Walls Regional Hospital v. Bomar, 9 S.W.3d 805 (Tex. 1999). In Walls, the Court explained as follows:
The Worker's Compensation Act provides the exclusive remedy for employees' injuries sustained in the course of their employment, at least if the injuries are compensable under the Act. Some injuries are not compensable, among them one that "arose out of an act of a third person intended to injure the employee because of a personal reason and not directed at the employee as an employee or because of the employment"--the so-called "personal animosity exception." In Nasser v. Security Insurance Co. the Court stated the purpose of the "personal animosity" exception is to exclude from coverage of the Act those injuries resulting from a dispute which has been transported into the place of employment from the injured employee's private or domestic life, at least where the animosity is not exacerbated by the employment. Nonetheless, whenever conditions attached to the place of employment or otherwise incident to the employment are factors in a catastrophic combination, the consequent injury arises out of the employment.
b. The personal animosity exception is very limited. In Nasser, a restaurant manager was stabbed by a customer's jealous boyfriend. The personal animosity exception did not apply, and thus the manager was entitled to compensation benefits, because his duties included interaction with the customers. Nasser v. Sec. Ins. Co., 724 S.W.2d 17, 19 (Tex.1987). Likewise, the exception did not apply in Bomar. There, two nurses alleged that they were sexually harassed at work by one of the doctors. In reviewing the case, the court noted that "all the incidents described in the summary judgment record occurred while plaintiffs were doing their job and Boyett was doing his." And, the court pointed out that the nurses did not contend that the doctor ever accosted them privately outside the hospital or that he came to the hospital because they were there.
c. Certain defenses are waived if the employer has opted out of the
Worker’s Compensation Act coverage. Under the Worker’s Compensation Act, an employer choosing to opt out of the Act remains vulnerable to litigation brought by injured employees, and during such litigation, employers are barred from asserting the defenses based on the employee's negligence or assumption of risk. Williams v. Razor Enterprises, Inc. 70 S.W.3d 274 (Tex. App – San Antonio 2002, no pet.)
4. The Access Doctrine:
a. Dickson v. Silva, 880 S.W.2d 785, 788 (Tex. App – Houston [1st Dist.] 1993, writ denied) - Employer told Dickson to take lunch break. Dickson clocked out, got on his motorcycle, and collided with a truck while going through access point. While coming and going to work is usually not covered by the Act, the Access Doctrine is an exception. Here, the Act applied because the employer designated a particular access route.
III. INJURIES TO OTHERS CAUSED BY THE COMPANY’S EMPLOYEES/AGENTS
A. Respondeat Superior
1. Respondeat Superior is a legal concept that states that a master is liable for the torts of his servant committed in the course of the servant's employment. Newspapers, Inc. v. Love, 380 S.W.2d 582, 589 (Tex.1964).
2. The elements of liability of an employer for an employee's actions under a theory of respondeat superior are that 1) the employee was acting within his general authority, 2) in furtherance of the employer's business, and 3) to accomplish an objective for which the employee was employed. Bruno's Inc. v. Arty Imports, Inc., 119 S.W.3d 893 (Tex.App.- Dallas, 2003 no pet.).
3. Employee/Agent v. Independent Contractor.
a. One of the first questions is to determine whether the company is liable for the acts of the person who caused the injury. Many employers assume that if they simply call the worker an independent contractor that he is an independent contractor. This is not true. The courts, while considering the parties intentions, will perform its own analysis to determine if the company is liable for the acts of the person causing the injuries. "In determining whether a principal is vicariously responsible for the conduct of an agent, the key question is whether the principal has the right to control the agent with respect to the details of that conduct. State Farm Mut. Auto. Ins. Co. v. Traver, 980 S.W.2d 625, 627 (Tex.1998)(citing Newspapers, Inc. v. Love, 380 S.W.2d 582, 590 (Tex.1964)). Malone v. Ellis Timber, Inc., 990 S.W.2d 933, 935 (Tex.App.-Beaumont 1999, no pet.).
b. Independent Contractor designation alone is insufficient to insulate the company from liability for the acts of others. (1) Generally, an employer or owner is not liable for the acts of its independent contractors. See Abalos v. Oil Dev. Co., 544 S.W.2d 627, 631 (Tex.1976); Scott Fetzer Co. v. Read, 945 S.W.2d 854, 859 (Tex.App.-Austin 1997), aff'd, 990 S.W.2d 732 (Tex.1998); see also Lee Lewis Const., Inc. v. Harrison, 70 S.W.3d 778, 783 (Tex.2001). For a general contractor to be liable for its independent contractor's acts, it must have the right to control the means, methods, or details of the independent contractor's work. Lee Lewis Const., 70 S.W.3d at 783; Elliott-Williams Co. v. Diaz, 9 S.W.3d 801, 804 (Tex.1999); Redinger v. Living, Inc., 689 S.W.2d 415, 418 (Tex.1985) (contractor responsible for physical harm caused by independent contractor if contractor retained control of work). The control must relate to the injury the negligence causes, and the contract must grant the contractor at least the power to direct the order in which work is to be done. Elliott- Williams, 9 S.W.3d at 804. In Cage Brothers v. Friedman, 312 S.W.2d 532, 533 (Tex.Civ.App.-San Antonio 1958, writ ref'd n.r.e.), Friedman sued Cage Brothers for trespass and damages to his property. Cage Brothers had contracted with the State as general contractor to maintain a segment of highway. Workers mistakenly destroyed a fence and cut trees on Friedman's property. Friedman sued, and Cage Brothers claimed the workers were employed by an independent subcontractor and, therefore, Cage Brothers was not responsible. In holding Cage Brothers liable, the court reviewed the evidence indicating Cage Brothers' level of control over the workers. The court observed that: (1) the State required contractors to seek approval of any subcontractors, which Cage Brothers failed to do; (2) all the employees were on Cage Brothers' payroll, tax, social security, and workman's compensation lists; (3) all were paid by Cage Brothers; (4) the person who signed the employees' checks was a partner of the subcontractor company; and (5) this partner and another partner of the subcontractor directed the employees on the job and were paid salaries by Cage Brothers. The court concluded its review of the evidence by observing that: "[W]e think there is more than slight testimony, and that the evidence is sufficient to meet the test of master and servant relationship."
c. See Exhibit A for test for independent contractor/employee for Texas Workforce Commission.
4. Limitations on liability
a. An employer may be held liable for the negligent acts of its employee if the employee's actions were within the “scope of the employee's general authority in furtherance of the employer's business and for the accomplishment of the object for which the employee was hired.” Minyard Food Stores, Inc. v. Goodman, 80 S.W.3d 573, 577 (Tex.2002).
b. Generally, employers are not liable for injuries an employee causes while commuting to and from work, unless the employee is on a “special mission.” The special mission doctrine is an exception to the general rule that an employer is not liable for its employees' negligent acts while traveling from home to a work site. Wilie, 65 S.W.3d at 359; Smith, 30 S.W.3d at 439-40. In order to be on a special mission, the employee must undertake a specific errand at the specific request of the employer. Wilie, 65 S.W.3d at 359; Upton v. Gensco, Inc., 962 S.W.2d 620, 621 (Tex.App.-Fort Worth 1997, pet. denied). The mission must involve “work or a workrelated activity apart from the employee's regular job duties,” Upton, 962 S.W.2d at 622, and the employee must be under the control or acting in furtherance of the employer. Direkly v. ARA Devcon, Inc., 866 S.W.2d 652, 654 (Tex.App.-Houston [1st Dist.] 1993, writ dism'd w.o.j.). The employee is not on a special mission when the employer neither requires a particular means of travel nor directs the employee to take a particular route. Wilie, 65 S.W.3d at
359; Soto v. Seven Seventeen HBE Corp., 52 S.W.3d 201, 206 (Tex.App.-Houston [14th Dist.] 2000, no pet.). Likewise, being on call is not by itself sufficient to make an employee in the course and scope of employment. J & C Drilling Co. v. Salaiz, 866 S.W.2d 632, 637 (Tex.App.-San Antonio 1993, no writ) (fact employee required to be on call twenty-four hours a day insufficient to raise issue of fact on whether employee was acting within course and scope of employment at time of accident).
c. The employer is not liable if the employee deviates from his duties for his own personal reasons. For an employee's acts to be within the scope of employment, “the conduct must be of the same general nature as that authorized or incidental to the conduct authorized.” Smith v. M Sys. Food Stores, Inc., 156 Tex. 484, 297 S.W.2d 112, 114 (1957). In other words, if an employee deviates from the performance of his duties for his own purposes, the employer is not responsible for what occurs during that deviation.
ITT Consumer Fin. Corp. v. Tovar, 932 S.W.2d 147, 158.(Tex.App.-El Paso 1996, writ denied) (Chavira, an employee of ITT, was employed as a branch manager. He was authorized to make loans up to $2,500, sign loan checks, submit loan modifications, defer late payments, handle customer complaints, select personnel, institute collection procedures, and conduct loan closings. These were his authorized duties. When Chavira devised a scheme to embezzle money from ITT by creating fictitious loans, he was not acting in the furtherance of ITT’s business and was not in the course and scope of his employment).
d. Borrowed Servants
(1) Borrowed Servants can protect an employer pursuant to the Exclusive Remedy provision to the Worker’s Compensation Act. Under the Exclusive Remedy provision, if an employer has the right to control the employee and the detail of his work, the employer may be immune from common law liability pursuant to the exclusive remedy effect of the Worker’s Compensation Act.
(2) Texas Courts recognize that the general employee of one employer may become the special employee or “borrowed servant” of another employer. Ortiz v. Furr’s
Supermarkets, 26 S.W.3d 646, 651-52 (Tex. App. – El Paso 2000, no pet.). The borrowed servant doctrine is implicated when the nominal or general employer loans or supplies an employee to another, who is termed the special employer. The issue of the “right of control” is critical under the borrowed servant doctrine because the employer who has the right of control at the time of injury is exempted from common law liability. The test for determining whether a person is the employee of the original employer or the borrowing employer is whether the employee is subject to the specific direction and control of the loaning or the borrowing employer. See Texas Worker’s Compensation Insurance Fund v. Del Industrial, Inc., 35 S.W.3d 591, 595 (Tex. 2000); Thompson v. Travelers Indemnity Co., 789 S.W.2d 277, 278 (Tex. 1990). Where the general employer and the special employer enter into a contract assigning control to one party, that contract is a relevant factor but not determinative of the issue of control. Exxon Corp. v. Perez, 842 S.W. 2d 629, 630 (Tex. 1992).
(3) Some examples of control an employer typically exercises include when and where to begin and stop work, the regularity of hours, the amount of time spent on particular aspects of work, the tools and appliances used to perform the work and the physical method or manner of accomplishing the end result. Ortiz at 652. Important factors in determining the right of control include: the nature of the general project, the nature of the work to be performed by the employees furnished, length of the special employment, and acts representing an exercise of actual control. Thus, if an employer has the right to control the employee and the details of his work, the employer is immune from common law liability pursuant to the exclusive remedy provision of the Worker’s Compensation Act. Richmond v. Brickman & Co., 36 S.W.3d 903, 905
(Tex. App. – Dallas 2001, pet. denied).
(4) In Ortiz, the plaintiff was employed by a cleaning company that provided nightly floor mopping, buffing and waxing services at several of the Furr’s Supermarkets. During one night shift, the plaintiff was assaulted by two of the Furr’s night stockers. This assault allegedly resulted in injuries to the plaintiff and plaintiff sued Furr’s. At trial, the jury found that plaintiff was the borrowed servant of Furr’s. Among other issues, plaintiff appealed the finding that he was a borrowed servant so as to support recovery under a non-subscriber negligence theory brought under the Worker’s Compensation Act.
At trial, plaintiff had testified that he was employed by the cleaning service and that service provided the buffing machine and tools used in performing his cleaning duties, paid his wages, and that all tax information came from that service. He also testified he never received a paycheck from Furr’s. Further, plaintiff testified that his supervisor at the cleaning service provided instructions on how to perform the detail of this job and routinely checked on his performance. He further testified that “he told Furr’s employees that they weren’t his boss and could not tell [him] what to do.” The defendant failed to rebut this testimony.The relevant portion of the jury charge read “Do you find from the preponderance of the evidence that on the occasion in question the plaintiff was acting as a borrowed employee of the defendant?”. The court focused on the restrictive language “on the occasion in question” and held that while evidence was introduced that on other occasions and at other Furr’s stores employees of the cleaning service were directed to perform certain, tasks, there was no evidence that on the night in question, plaintiff was acting at the direction or under the control of a Furr’s employee.
Therefore, the court concluded that there was no evidence supporting the jury’s conclusion that Ortiz was a borrowed employee of Furr’s on the occasion in question.
e. Co-Employer:
(1) If an employee is the employee of two employers, both the employers may be immune from common law liability pursuant to the exclusive remedy effect of the Worker’s Compensation Act. A person may be the servant of two employers simultaneously as to a particular act if the service to one does not involve an abandonment of the service to the other. Wingfoot Enterprises v. Alvarado, 111 S.W.2d 134 (Tex. 2003)
(2) In Alvarado, Tandem hired Marleny Alvarado and, shortly thereafter, assigned her to do manual assembly work at Web's manufacturing facility. Web, however, assigned Alvarado to operate a staking or stamping machine. It was against Tandem's policy for its workers to operate industrial machinery, a policy of which Alvarado was aware. Alvarado did not notify Tandem about this job assignment or that the job was unsuitable or unsafe, as she was required to do, but there was evidence that Tandem's on-site supervisor knew Alvarado was operating the machine.
About two days after Alvarado began working at Web's facility, the tips of three of her fingers were severed while she was operating the machine. At the time of Alvarado’s injury, Tandem maintained worker’s compensation insurance coverage for Alvarado and its other employees. Web also had worker’s compensation insurance coverage for its employees. Alvarado applied for and received worker’s compensation benefits under Tandem’s policy, but she subsequently sued Tandem, claiming that it was negligent and grossly negligent in a number of ways, alleging generally that Tandem failed to properly train and supervise her, warn her of dangers, and provide her with a safe workplace. Alvarado also sued Web.
The question the Court had to decide was whether, for purposes of Worker’s Compensation Act (the “Act”), a general employer like Tandem remains an “employer” within the meaning of the Act and thus whether the exclusive remedy provision can apply to both the general employer and one who has become an employer by controlling the details of a worker's work at the time of injury.
The Labor Code provides that a written agreement to provide coverage “makes the general contractor the employer of the subcontractor and the subcontractor’s employees only for purposes of the worker’s compensation laws of this state.” The Court noted the Labor Code recognizes that a general contractor may procure worker’s compensation coverage for subcontractors and subcontractors’ employees. Similar provisions were contained in prior legislation. That legislation was construed to mean that when a premises owner agreed to procure worker’s compensation coverage for its general contractor and the general contractor’s subcontractor, a negligence suit by the subcontractor’s employee against both the general contractor and the subcontractor was barred by the exclusive remedy provision of the worker’s compensation legislation in effect in 1991. TEX. LABOR CODE § 406.123(a).
The Texas Supreme Court held there can be more than one employer for the Worker’s Compensation Act, and Ms. Alvarado’s claims were barred by the exclusive remedy provision of the Act.
Other Texas courts have not interpreted the co-employer doctrine to provide for dual simultaneous employment. See Garza v. Excel Logistics, Inc., 100 S.W.3d 280, 284 (Tex. App. – Houston [1st Dist.] 2002, no pet.) (stating that the entity with the right to control the employee at the time of the accident is the employer for worker’s compensation purposes and the right of control test applies in both a borrowed servant situation and a dual employer situation). Most Texas courts, in addressing the dual employer situation, cite section 226 of the Restatement of Agency.
This section provides that “a person may be the servant of two masters, not joint employers, at one time as to one act, if the service to one does not involve abandonment of the service to the other”. RESTATEMENT (SECOND) OF AGENCY
§ 226 (1958).1 Most courts that have addressed this issue appear to agree that under the dual employer theory, a person may in fact be the servant of two masters if the service to one does not involve the abandonment of the service to the other. See Hoffman v. Trinity Industries, 979 S.W.2d 88, 90 (Tex. App. – Beaumont 1998, pet. dism’d); Ingalls v. Standard Gypsum, 70 S.W.3d 252, 255-56 (Tex. App. – San Antonio 2001, pet. denied); Garza, 100 S.W.3d at 284.
(3) The Wingfoot case does not apply to a “staff leasing services company” as defined and regulated by the Staff Leasing Services Act. See Tex. Lab.Code § 91.001 et seq. The Texas Labor Code recognizes that an employer may be in the business of providing temporary workers to others. The Code defines “Temporary common worker employer” as “a person who provides common workers to a user of common workers. The term includes a temporary common worker agent or temporary common worker agency.” The Code defines “common worker” as follows:
an individual who performs labor involving physical tasks that do not require: (A) a particular skill; (B) training in a particular occupation, craft, or trade; or (C) practical knowledge of the principles or processes of an art, science, craft, or trade. Tex.
Lab. Code § 92.002.
(4) Etie v. Walsh & Walsh, 2004 WL 97717 (Tex. App.- Houston [1st Dist.] no pet.) - Facts - after recovering workers’ compensation benefits for work related injury, laborer brought negligence action against subcontractor that employed individual who allegedly improperly attached plenum to ceiling that fell and struck the laborer. Holding - The general contractor’s purchasing workers’ compensation insurance that covered all workers on site transformed subcontractor into “deemed employee” that was immune from suit brought by the laborer.
IV. INJURIES TO NON-EMPLOYEES/NON-AGENTS OF THE GENERAL CONTRACTOR AT THE JOB SITE
A. Generally no liability for third parties injured by employees of a subcontractor. A general contractor is not liable for injuries to third parties caused by the acts or omissions of a subcontractor or the subcontractor’s employees, UNLESS the task the subcontractor is hired to perform is inherently dangerous work. In such cases, the general contractor may be liable to third parties for the negligence of a subcontractor.
B. Must determine category of injured person.
1. Trespasser: Person who enters the premises for his own purpose, pleasure, a convenience, without any right, authority, or permission, and not in performance of duties for owner. For a trespasser to recover, he must prove that his injury was caused by the willful, wanton, or grossly negligent conduct of the general contractor.
2. Business Invitee: Person who enters the premises in response to invitation of owner or occupant, either on the business of the owner/general contractor or for the mutual benefit of both parties.
An injured invitee may recover only if the general contractor knows or has reason to know of an unreasonable risk of harm on the premises and fails to exercise reasonable care to either protect the invitee from the harm or warn the invitee of the harm. The invitee must prove the general contractor breached its duty of reasonable care to keep the premises safe.
3. Licensee: person who enters the premises with permission for his own convenience or for the business for someone other than the owner/general contractor.
An injured licensee may recover if the general contractor had actual knowledge of the dangerous condition on the premises and failed to repair the condition or adequately warn the licensee. Further, the licensee must have not have known, or had reason to know of, the dangerous condition. The licensee must prove the general contractor breached its duty of reasonable care to keep the premises safe.
4. If the GC is in control of the premises, the GC owes the same duty as the owner of the premises.
C. General Contractor – no duty to ensure sub performs work safely
1. A general contractor has no duty to ensure that a subcontractor performs its work safely. Subcontractors are responsible for safely performing the work for which they were hired. Further, Subcontractors are also required to provide a safe workplace for their employees. A general contractor is generally not liable for injuries of subcontractor
employees as long as the work is conducted and controlled by the subcontractor, and where the danger arises from the manner in which the subcontractor’s employees perform that activity. The main exception to this rule is where If a general contractor controls or directs the details of a subcontractor’s work. In such a case, the general contractor may be liable for injuries sustained by the independent contractor and the employees of the independent contractor. If the general contractor assumes such supervisory control, he has a duty to exercise reasonable care in providing for the safety of the employees of the subcontractor.
A general contractor can retain the right to control an aspect of an independent contractor’s work so as to give rise to a duty of care to that independent contractor’s employees in two ways: (1) by contract or (2) by actual exercise of control. The Texas Supreme Court has held that the right to control the independent contractor’s work may be retained by contract alone, even when the general contractor does not actually exercise any control over the independent contractor’s work.
For liability to attach, “[t]he employee's role must be more than a general right to order the work to start or stop, to inspect progress or receive reports.” For a duty to arise, the control must be over the manner in which the independent contractor performs its work. Lee Lewis Constr., Inc. v. Harrison, 70 S.W.3d 778, 783 (Tex. 2001).
D. Liability in General
1. The two theories to impose liability on the general contractor or premises owner fall into the following areas: 1) premises liability theory; and 2) negligent activity theory.
a. To prove a premises liability theory, the plaintiff must show:
(1) Actual or constructive knowledge of some condition on the premises by the owner/operator;
(2) That the condition posed an unreasonable risk of harm;
(3) That the owner/operator did not exercise reasonable care to reduce or eliminate the risk; and
(4) That the owner/operator’s failure to use such care proximately caused the plaintiff’s injuries. Corbin v. Safeway Stores, Inc., 648 S.W.2d 292, 296 (Tex. 1983).
b. To prove liability on a negligent activity theory, the plaintiff must show injury “by or as a contemporaneous result” of negligent activity rather than by a condition created by the activity. Keetch v. Kroger, 845 S.W.2d 262, 264 (Tex. 1992).
c. General contractor is only liable if the activity control caused the injury
d. In Bright, the Texas Supreme Court stated “we have never concluded that a general contractor actually exercised control of a premise where, as here, there was no prior knowledge of a dangerous condition and no specific approval of any dangerous act.” Instead, a general contractor has actually exercised control over a premise when the contractor knew of a dangerous condition before an injury occurred and approved acts that were dangerous and unsafe. To constitute a finding of actual control, “[t]here must be such a retention of a right of supervision that the contractor is not entirely free to do the work in his own way.
e. The employer's duty “is commensurate with the general control it retains over the independent contractor's work.” Also, “[t]he supervisory control retained or exercised must relate to the activity that actually caused the injury . . . .” Coastal Marine Serv. of Tex., Inc. v. Lawrence, 988 S.W.2d 223, 226 (Tex. 1999) (per curiam).
f. TEX. CIV. PRAC. & REM. CODE § 95.003 states that a property owner is not liable for personal injury, death, or property damage to a contractor, subcontractor, or an employee of a contractor or subcontractor who constructs, repairs, renovates, or modifies an improvement to real property arising from the failure to provide a safe workplace unless: 1) the property owner exercises or retains some control over the manner in which the work is performed, other than the right to order the work to start or stop or to inspect progress or receive reports, and 2) the property owner had actual knowledge of the danger or condition resulting in the personal injury, death, or property damage and failed to adequately warn.
E. Premises Defect Liability Theory
1. A premises defect theory consists of two subcategories: “(1) defects existing on the premises where the independent contractor-invitee entered; and (2) defects the independent contractor created by its work activity.” Lawrence, 988 S.W.2d at 225. See Dow Chemical Co. v. Bright, 89 S.W.3d 602, 606 (Tex. 2002). Where the defects existed on the premises when the contractor entered, the premises owner must inspect the premises and warn of dangerous conditions that are not open and obvious and that the owner knows or should know exist. Lawrence, 988 S.W.2d at 225. In cases involving defects created by the independent contractor, the premises owner normally owes no duty to the independent contractor’s employees because the owner generally has no duty to ensure “that an independent contractor performs its work in a safe manner.” Id. Se Olivo, 952 S.W.2d at 527. The premises owner, however, may incur liability by retaining the right of supervisory control over the subcontractor’s work.
2. Defects already existing when the Third Party enters the site.
a. “A general contractor owes the same duty as a premises owner to an independent contractor’s employee.” Koch Refining Co. v. Chapa, 11 S.W.2d 153, 155 n.1 (Tex. 1999). Like the general contractor, the owner or occupier of land must use reasonable care “to keep the premises under his control in a safe condition.” Redinger, 689 S.W.2d at 417.
b. Employers can be liable for injuries to persons injured by the criminal acts of others.
(1) San Benito Bank and Trust Co. v. Landair Travels, 31 S.W.3d 312, 318 (Tex.App.-Corpus Christi 2000, no pet.) (one who controls premises has duty to use ordinary care to protect invitees from criminal acts of third parties if he knows or has reason to know of unreasonable and foreseeable risk of harm to invitee; duty to protect arises from defendant's power of control or expulsion over third person)._
3. Defects created by an Independent Contractor
Control Test:
a. A party can prove a right to control in two ways: first, by evidence of a contractual agreement that explicitly assigns the employer a right to control; and second, in the absence of a contractual agreement, by evidence that the employer actually exercised control over the manner in which the independent contractor performed its work. If a written contract assigns the right to control to the employer, then the plaintiff need not prove an actual exercise of control to establish a duty. However, if the contract does not explicitly assign control over the manner of work to the employer, then the plaintiff must present evidence of the actual exercise of control by the employer.
b. Courts generally look at the control exercised or contractually retained by the general contractor to determine whether the general contractor is liable for the injuries of a non-employee at the job site.
c. The control necessary may either arise from actual control or contractual control.
d. The general rule provides that the owner or occupier has no duty to ensure that an independent contractor performs its work safely. Koch Refining Co. v. Chapa, 11 S.W.3d 153, 155 (Tex. 1999); Redinger v. Living, Inc., 689 S.W.2d 415, 418 (Tex. 1985). That same rule has been applied to general contractors. Elliott-Williams Co. v. Diaz, 9 S.W.3d 801, 803 (Tex. 1999). Hoechst-Celanese Corp. v. Mendez, 967 S.W.3d 354, 356 (Tex. 1998). “However, when the general contractor exercises some control over a subcontractor’s work, he may be liable unless he exercises reasonable care in supervising the subcontractor’s activity.”
Redinger, 689 S.W.2d at 418. The Texas courts have adopted the Restatement rule, which provides:
One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care. RESTATEMENT (SECOND) OF TORTS § 414 (1977).
e. Redinger v. Living, Inc., 689 S.W.2d 415 (Tex. 1985). In Redinger, the plaintiff was an employee of a subcontractor who was injured by another subcontractor. At the time of the injury, the general contractor was attempting to coordinate the work of the two subcontractors. The court began its analysis by noting that a general contractor on a construction site who is in control of the premises “is charged with the same duty as an owner or occupier.” See also Smith v. Henger, 148 Tex. 456, 464, 226 S.W.2d 425, 431 (1950).
The employee of a plumbing subcontractor, Redinger, was injured during construction. While preparing the construction site for a concrete pour, the general contractor’s superintendent discovered that piles of dirt placed by the dirt subcontractor blocked the work traffic. The superintendent ordered the dirt subcontractor to move the dirt, and while the dirt was being moved, Redinger had a finger crushed by the dirt subcontractor’s tractor. Here, the general contractor owed a duty to the subcontractors’ employees to ensure that supervisory control was exercised in a reasonable manner. The dirt to be moved was very close to the work area in which Redinger and other subcontractors’ employees were working. Because moving the dirt required the subcontractor to operate a back-hoe within one to five feet of Redinger and the other subcontractors’ employees, the court held that the superintendent was negligent in allowing the dirt to be moved in such a manner and by failing to warn Redinger and the other subcontractors’ employees. Thus, the general contractor did not exercise control reasonably, and was liable for the injury to Redinger, the subcontractor’s employee. The Redinger court held that the general contractor exercised “some control” in two ways: (1) by retaining the power to direct the order in which the subcontractor’s work was to be performed; and (2) by forbidding work to be done in a manner which he determined was dangerous. The GC exercised control by providing directions to both the dirt-hauling sub and the concrete sub.
The Redinger court suggested that the Restatement rule “applies when the employer retains some control over the manner in which the independent contractor’s work is performed, but does not retain the degree of control which would subject him to liability as a master. The employer’s role must be more than a general right to order the work to start or stop, to inspect progress while receiving reports.” (citations omitted). Because the Redinger court found that Living retained control over the work of the subcontractor, the court found a duty to exercise that control in a reasonable manner and further found that Living negligently exercised that control.
f. Generally, an employer of an independent contractor does not owe a duty to ensure that the independent contractor performs its work in a safe manner. Redinger v. Living, Inc., 689 S.W.2d 415, 418 (Tex. 1985). However, “one who retains a right to control the contractor's work may be held liable for negligence in exercising that right.” See Redinger, 689 S.W.2d at 418 (adopting Restatement (Second) of Torts § 414 (1965)).
g. The Texas courts have adopted the Restatement rule, which sets out the amount of control necessary to create a duty:
[T]he employer must have retained at least some degree of control over the manner in which the work is done. It is not enough that he has merely a general right to order the work stopped or resumed, to inspect its progress or to receive reports, to make suggestions or recommendations which need not necessarily be followed, or to prescribe alterations and deviations. Such a general right is usually reserved to employers, but it does not mean that the contractor is controlled as to his methods of work or as to operative detail. There must be such a retention of a right of supervision
that the contractor is not entirely free to do the work in his own way. RESTATEMENT (SECOND) OF TORTS § 414 cmt. c (1977).
h. The test for determining this control is rather narrow. “The right to control must be more than a general right to order work to stop and start, or to inspect progress. The supervisory control must relate to the activity that actually caused the injury, and grant the owner at least the power to direct the order in which work is to be done or the power to forbid it being done in an unsafe manner.” Lawrence, 988 S.W.2d at 226. A mere possibility of control constitutes no evidence of the right of control actually retained or exercised. The duty of care borne by the general contractor is commensurate with the level of control retained over the subcontractor’s work. Lee Lewis Construction, Inc. v. Harrison, 70 S.W.3d 778, 783 (Tex. 2001); Diaz, 9 S.W.3d at 803; Mendez, 967 S.W.2d at 355. Further the control inquiry focuses on the right to control the details of the work to be performed. Exxon Corp. v. Tidwell, 867 S.W.2d 19, 21 (Tex. 1993); Newspapers Inc. v. Love, 380 S.W.3d 582, 591 (Tex. 1964). Thus, where a general contractor has no
control over the subcontractor’s work, no legal duty arises. Abalos v. Oil Development Co., 544 S.W.2d 627, 631 (Tex. 1976). A party can demonstrate the control necessary to create a duty through two methods: the contractual retention of control over the subcontractor’s work or the actual exercise of control. Lee Lewis, 70 S.W.3d at 783 (general contractor); Chapa, 11 S.W.3d at 155 (premises owner); Olivo, 952 S.W.2d at 528 (general contractor).
4. Contractual Control
a. Contracts between the owner of the site and the general contractor can contractually assign the right to control of the job site.
b. Elliot Williams Co. v. Diaz, 9 S.W.3d 801, 803 (Tex. 1999). In Diaz, the contract between the owner and the general contractor required the general contractor to assume full responsibility for the acts of “all employees and contracted representatives.” The court stated that such language “does not require [the general contractor] to retain control over the means, methods or details of [the subcontractor’s] work. It only requires [the general contractor] be responsible to [the owner] for [the subcontractor’s] work.”
Holdings of interest in Diaz:
(1) A contract imposing control over a party creates a duty of care on the party accepting the control.
(2) Where the contract provides the right of control over the details of the work, the absence of the actual exercise of control will not absolve the general contractor of liability.
(3) “For a general contractor to be liable for its independent contractor’s acts, it must have the right to control the means, methods, or details of the independent contractor’s work. Further, the control must relate to the injury the negligence causes and the contract must grant the contractor at least the power to direct the order in which work is being done.”2
5. Dow Chemical v. Bright, 89 S.W.3d 602 (Tex. 2002). In Bright, the contract required that the subcontractor comply with the Dow safety rules and regulations and Dow’s loss prevention manual. The contract also contained the following provision:
CONTRACTOR shall be an independent contractor under this Contract and shall assume all of the rights, obligations and liabilities, applicable to it as such independent
contractor hereunder and any provisions in this Contract which may appear to give DOW the right to direct CONTRACTOR as to details of doing the work herein covered or to exercise a measure of control over the work shall be deemed to mean that CONTRACTOR shall follow the desires of DOW in the results of the work only.
The court found this contract did not impose a duty of care on Dow. As the court held, “The agreement does not delegate to Dow the right to control the means, methods, or details of Gulf States’ work, nor does it grant Dow the power to direct the order in which Gulf States’ work should be done.” The court thus concluded that Dow did not retain the right to control the means, methods and details of the subcontractor’s work.
The court further noted, control cannot be founded upon the mere fact that the contractor or premises owner has the right to order that the work be stopped. Dow employed a safe work permit system under which it required contractors to, in essence, become pre-certified on safety issues prior to beginning their work. The court found that a “safe work permit system” which precludes work from beginning in the first instance will not establish a right of control.
This safe harbor serves the policy purpose of encouraging contractors to have certain safety standards. As the court noted in Mendez, “‘We do not believe that a general contractor or an employer is required to stand idly by while another is injured or killed in order avoid liability. Nor do we believe that the liability rules contemplate putting those who employ independent contractors in that position.’” Mendez, 967 S.W.2d at 358 (quoting Welsch v. McDougall, 876 S.W.2d 218, 223 (Tex. App. –
Amarillo 1994, writ denied)).
6. Actual Control
a. One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care. Redinger, 689 S.W.2d at 418 (citing Restatement (Second) of Torts § 414 (1977)).
b. A general contractor’s retention of the right to control how specific items were to be lifted and handled, including specific instructions on how to lift a railroad switch to prevent it from being damaged, was determined to be sufficient to expose the general contractor to liability for injuries to the subcontractor’s employee.
A general contractor may be liable for refusing to require corrective measures when he is aware of recurring safety violations by a subcontractor. Section 414 of the Restatement (Second) of Torts requires the plaintiff to “establish a nexus between the employer’s duty of care and its right to control.”
This duty of care is may result from a contract provision requiring compliance with safety practices, but the general contractor ignores non-compliance by a subcontractor. Thus, a general contractor who promulgates safety rules and retains the right to control the subcontractor’s adherence to those rules may owe a duty of reasonable care to a subcontractor’s employees to enforce the rules and protect the employees from work-related hazards and not disregard unsafe or non-compliant practices.
7. Items Found Not to Constitute Exercise of Control
a. An employee’s testimony that he was willing to follow a general contractor’s instructions even though none were given does not constitute evidence of control. Chapa, 11 S.W.3d at 156; Lawrence, 988 S.W.2d at 224.
b. The mere fact that a general contractor has a safety representative present who might have intervened and prevented the unsafe conduct does not constitute evidence of actual control. Chapa, 11 S.W.3d at 156. Such evidence does not constitute proof that the independent contractor and its employees were not free to perform their work in their own way and constitutes no evidence of the control of the method of work or the operative details of that work. Id.
The mere promulgation of safety policies does not establish actual control. The presence of safety representatives or other attempts at creating a safe work site does not establish actual control. GC’s insistence that subcontractor observe and promote compliance with federal laws, general safety guidelines, and other safety precautions does not establish actual control, EXCEPT the GC owes the subcontractor’s employees a duty that any safety requirements and procedures it promulgated did not unreasonably increase, rather than decrease, the probability and severity of injury.
GC’s retention of the power to either direct the order in which the subcontractor’s work will be done, or to forbid the work being done in a manner likely to be dangerous to the subcontractor and/or its employees, will not alone establish actual control.
GC’s right to ensure that the subcontractor’s work is performed properly and the right to fire the subcontractor have both been excluded from the types of control that will expose the general contractor to liability.
GC’s requirement that subcontractors comply with: (1) reasonable safety precautions during performance of all subcontract work; (2) all laws, ordinances, rules, regulations, and orders of public authorities relating to the work of the subcontract; and (3) the requirement that insurance be provided for the duration of the job, was found to be insufficient retention of control by the general contractor over the means, methods, or details of the subcontractor’s work for a duty to arise.
F. Contractor’s Responsibility for Ensuring a Safe Job Site
1. In Lee Lewis Construction, Inc. v. Harrison, 70 S.W.3d 778 (Tex. 2001), the court upheld a $12.5 million dollar jury verdict in favor of the survivors of a subcontractor’s employee against the general contractor for the project. Lee Lewis Construction (LLC) was hired as the general contractor to remodel and add two floors to Methodist Hospital in Lubbock. Harrison worked for KK Glass, a subcontractor on the job. Harrison suffered fatal injuries after falling from the 10th floor where he was working.
Testimony by LLC employees and experts indicated that if a lifeline had been used, it would have prevented the fatal injuries Harrison suffered. Testimony also indicated that “an effective fall protection system would have mandated using independent lifelines.” Lee Lewis at 4. LLC hired one of its superintendents to supervise the work, and to ensure that the proper safety procedures were being followed. The superintendent observed KK Glass employees using a bosun’s chair (a wooden board suspended from the roof by a rope) and lanyard system but failing to use lifelines or safe work platforms. The superintendent did not require the employees to use an independent lifeline, even though such lifelines were mandatory for all LLC employees. There was also ample evidence to prove that LLC was aware of the extreme danger involved in the job. The court restated the rule that a general contractor does not owe a duty to ensure the work is performed in a safe manner unless the contractor retains control over the work. If the contractor does exercise control over the work, the contractor could be liable for failing to use reasonable care in supervising the activity. The court held that the evidence in the case was sufficient to conclude that LLC had retained control over the safety procedures used by KK Glass and other subcontractors, and could therefore be held liable for failing to exercise reasonable care in supervising the safety procedures. The finding that LLC was grossly negligent was also upheld based on LLC’s awareness of the extreme risks involved, and their absolute failure to take the proper safety precautions and ensure that they were followed. Although the facts involved in Lee Lewis show a clear failure to properly follow and enforce safety procedures on the job, contractors and their attorneys should remain aware of the decision, as it is an excellent reminder of the severe liability that could result from failing to properly follow safety procedures.
According to Justice Hecht, the use of bosun’s chair without more was itself grossly negligent, and combined with LLC’s retention of control over safety, was more than sufficient to impose liability on LLC. Justice Hecht’s concurrence does offer some guidance to the contractor. According to his concurring opinion, the retention of control of safety on the job site is necessary to impose liability, but is not sufficient standing alone.3 There must be other facts present to impose liability on the contractor. Such facts were easily proven in Lee Lewis. The combination of gross negligence in addition to the retention of control by LLC was more than sufficient to impose liability.
2. The control exercised must have a nexus to the injury that the negligence causes. Bright, 89 S.W.3d at 607; Diaz, 9 S.W.3d at 804. Further, where a general contractor “exercises control by requiring a subcontractor to comply with its safety regulations, the [general contractor] owes the subcontractor’s employees a narrow duty of care that its safety requirements and procedures do not unreasonably increase the probability and severity of injury.” Bright, 89 S.W.3d at 607. See also Mendez, 967 S.W.2d at 358; Traylor Bros. Inc. v. Garcia, 49 S.W.3d 430, 435 (Tex. App. – San Antonio 2001, pet. denied).
G. OSHA Regulations
1. In Supreme Beef Packers v. Maddox, 67 S.W.3d 453 (Tex. App. – Texarkana 2002), the court held it was reversible error to the trial court to submit jury instructions stating that an employer’s failure to comply with certain OSHA regulations constituted negligence per se. The court held that the OSHA regulations at issue did not establish a mandatory standard of care, but a standard of care that is reasonable under the circumstances involved, a determination best left to the jury. Therefore, the OSHA regulations at issue (relating to dry working conditions and electrical equipment) could not form the basis of a negligence per se action since compliance with the regulations was not mandatory.
2. Certain cases suggest, however, that OSHA regulations may be admissible to show the standard of care in the industry. Wal-Mart Stores, Inc. v. Seale, 904 S.W.2d 718, 720-21 (Tex. App. – San Antonio 1995, no pet.). See Lyondell Petrochemical Co. v. Fluor Daniel, Inc., 888 S.W.2d 547, 554-55 (Tex. App. – Houston [1st Dist.] 1994, writ denied); Kraus v. Alamo Nat’l Bank, 586 S.W.2d 202, 208 (Tex. Civ. App. – Waco 1979), aff’d on other grounds, 616 S.W.2d 908 (Tex. 1981). The Seale court found that OSHA standards were relevant to establish a standard of care and could be admitted beyond the context of an employer-employee dispute. The court concluded: “[w]hile OSHA was written to protect employees, an unsafe practice for an employee applies equally well to a customer who legitimately finds himself in the same geographic space as the employee. Safety principles don’t change depending on whether the victim is an employee, a customer, or a passerby. Therefore it has relevance to the standard of care.” If there is any comfort to be taken from the Seale decision, the court expressly notes that a violation of an OSHA standard does not constitute negligence per se nor does it give rise to a separate cause of action. Id.4 Rather, the Seale court merely found that the OSHA standards are admissible evidence and relevant as to the duty of care. Other courts have also taken this view. Baker Marine Corp. v. Herrera, 704 S.W.2d 58, 61 (Tex. App. – Corpus Christi 1985, writ denied).
3. In Melerine v. Avondale Shipyards, 659 F.2d 706 (5th Cir. 1981). Melerine involved a claim by a welder and pipe fitter against a crane operator which was not his employer. The Fifth Circuit began its analysis by noting that the OSHA statute neither enlarges nor diminishes “common law or statutory rights, duties, or liabilities. 19 U.S.C. § 653(b)(4). The Court further prohibited the use of OSHA regulations to show negligence per se unless the plaintiff was an employee of the defendant. The Fifth Circuit therefore concluded that “neither its express provision nor the regulations adopted pursuant to its authority create a civil cause of action against either a plaintiff’s employer or a third party who is not the plaintiff’s employer. Melerine, 659 F.2d at 709. Because the plaintiff contended that the OSHA violation created a cause of action for negligence per se, the court noted that any negligence per se action must be founded upon a violation of the statute intended to protect the class of persons to whom the plaintiff belongs again the sort of injury that has occurred. Id. The Fifth Circuit further concluded that OSHA regulations protect only an employer’s own employees and not all employees who may be harmed by a violation of the regulation. Id. At 710-11.
4. Outside of the exceptions noted above, a general contractor should owe no duty to employees of a subcontractor to ensure that those employees comply with OSHA regulations regarding safety at a construction site. For example, in Richard v. Cornerstone Constructors, Inc., 921 S.W.2d 465, 468 (Tex. App. – Houston [1st Dist.] 1996, writ denied). In Richard, the plaintiff sued a general contractor after sustaining injuries resulting from a fall from a scaffold on a construction site. The plaintiff argued that the alleged violation of OSHA regulations was some evidence of the general contractor’s negligence. The court disagreed and held that the general contractor owed no duty to ensure that employees of a subcontractor comply with OSHA regulations because the OSHA regulations were “not applicable as a matter of law.” Id. at 468; See also Southeast Contractors, Inc. v. Dunlop, 512 F.2d 675, 675 (5th Cir. 1975) (noting the general rule that a contractor is not responsible for the acts of his subcontractors or their employees which meant the OSHA regulation relied upon by the plaintiff did not apply); M-T Petroleum, Inc. v. Burris, 926 S.W.2d 814, 818 (Tex. App. – El Paso 1996, no writ) (holding that the alleged OSHA violations by a defendant did not expand the duty owed to the plaintiff because it was the independent contractor – i.e., the plaintiff’s employer – who owed the duty to the plaintiff).
1 One court, however, has stated its opinion that § 226 expressly does not apply to joint employers pointing out the language in that section appearing to provide an exception to that rule for joint employers. See Coronado v. Schoemann Produce, 99 S.W.3d 741, 748-49 (Tex. App. – Houston [14th Dist.] 2003, no pet.)
2 The Bright court, indicated that retaining the authority over the timing and sequence of work being done by various independent contractors does not constitute evidence of actual control. Bright, 89 S.W.2d at 609.
3 Justice Hecht’s concurring opinion contains a detailed analysis of Section 414 of the
Restatement (Second) of Torts, which was adopted by the Texas Supreme Court in Redinger v. Living, Inc., 689 S.W.2d 415 (1985). Section 414 states: One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care.
4 Other cases have similarly concluded that OSHA regulations cannot constitute the basis of a negligence per se claim. Supreme Beef Packers v. Maddox, 67 S.W.3d 453, 457-59 (Tex.App. – Texarkana 2002, pet. denied).