Construction Manager Who ‘Controls’ Site Can Be Liable For Subcontractor Employee’s Injury

Calloway v. Bovis Lend Lease, Inc., 2013 WL 4428894 (1st Dist. 2013) examines a construction manager’s negligence liability to a subcontractor’s employee where the construction manager entrusts work to the subcontractor but still exercises some control over its work.

Facts: A father and son were piping installers for a subcontractor on a construction project managed by the defendant.  They sustained fatal (father) and permanent (son) injuries when a trench wall collapsed. The father’s estate sued the defendant for wrongful death and the son sued for negligence.

Held: The First District upheld the jury verdict of over $8M for the son and just over $1M for the Estate (after a 49% damages reduction for contributory negligence) against the defendant.

Reasoning:

Affirming the jury verdict, the court held that the defendant construction manager entrusted the underground piping work to the subcontractor (the father and son’s employer).  However, it also exercised a sufficient amount of supervisory control over the subcontractor and was responsible for overall project safety.  These rules were integral to the court’s decision:

one who employs an independent contractor is not liable for the independent contractor’s acts or omissions;

– If the employer retains control over the operative detail of the contractor’s work, the employer is liable under agency law principles (i.e. respondeat superior);

– if the employer retains only supervisory control – such as power to direct timing of the work or to forbid the work from being done in a potentially harmful way – the employer can be liable unless he exercises that control with reasonable care to prevent injury to others;

– when a contractor entrusts part of work to a subcontractor but superintends the entire job through a foreman, the entrusting contractor can be liable if  he (1) fails to prevent the subcontractor from jeopardizing the safety of others; (2) knows or should know that the subcontractor is engaging in unreasonable dangerous activity; and (3) has the opportunity to prevent the dangerous activity by exercising his retained power of control;

– a principal contractor’s right to order work stopped or started, to inspect its progress or receive reports, or make recommendations is not enough – standing alone – to confer liability on the principal contractor;

– the key inquiry in determining whether a contractor owes a duty of care under negligence rules turns on whether the contractor retains control or the right to supervise the contractor.

¶¶ 47-50; Restatement (Second) of Torts, Section 414

The court found that defendant entrusted the underground piping work to plaintiffs’ employer and did more than just administrative work on the job.  The contract documents gave defendant the authority to act as the owner’s agent and afforded it wide latitude in bidding and choosing contractors on the project.  ¶¶ 60-63.

The court cited as support for its findings the evidence that defendant was in charge of overall project safety and even produced safety videos and published safety protocols.  Several witnesses also testified that defendant had day-to-day control over the project and actively monitored its progress.  ¶¶ 68-75.

Witness Discovery Deposition Admitted Into Evidence As A Party Admission

The court affirmed the trial court’s allowing defendant’s former employee’s discovery deposition to be read to the jury.  Rule 212(a)(5) allows a discovery deposition to be used at trial where the deponent isn’t a retained expert, his evidence deposition hasn’t been taken and he can’t testify due to death or infirmity.  SCR 212(a)(5).

The First District found that Rule 212(a)(5) didn’t apply since the deponent wasn’t dead or sick. He was just out of the country.  However, under Rule 212(a)(2) and (3), the discovery deposition was properly read to the jury as a party admission.  These sections specifically allow discovery depositions to come into evidence as party admissions.  A statement is not hearsay if (1) it’s a statement offered against a party; (2) is a statement by the party’s agent (3) concerning a matter within the scope of the agency and (4) is made during the existence of the relationship.  ¶ 88.

The court found that the deposition met all of the rule’s requirements for a party admission and was properly read to the jury.  ¶ 89.

Conclusion: Calloway discusses an entire gamut of important and recurring substantive, procedural and evidentiary topics including compensable damages, contributory negligence, the Dead Mans’ Act, the hearsay rule and exceptions, proper discovery sanctions and the importance of jury instructions.  The case is especially instructive on the entrustment rule – derived from Section 414 of the Restatement (Second) of Torts.  Calloway makes clear that regardless what the contract documents say, if a construction manager retains a sufficient level of supervisory or “superintending” control over a project, it can be subject to negligence liability to third parties if it fails to exercise reasonable care.