CONTRACTORS NOT LIABLE FOR NEGLIGENT HIRING
This motion is made on the grounds that a hiring party, such as Parsons, owes no duty arising under the tort of negligent hiring to the independent contractors employees, such as plaintiff.
Employees of independent contractors, injured during the performance of their work, cannot maintain vicarious liability claims against those hiring the independent contractors for injuries attributable to the contractors negligence, irrespective of whether those injuries resulted from the activities of plaintiff's own employers or from the activities of other independent contractors on the job site. Privette v. Superior Court (1993) 5 Cal.4th 689; Toland v. Sunland Housing Group, Inc. (1998) 18 Cal.4th 253; Smith v, ACandS, Inc. (1994) 31 Cal.App.4th 77.
Parsons anticipates that plaintiff will argue that he should be allowed to proceed to trial on a claim that various defendants, including Parsons, negligently hired certain contractors whose activities supposedly resulted in plaintiffs alleged injuries. Parsons expects that plaintiff will base this argument on the following:
1. Certain dicta in Smith to the effect that the jury "could" have found that one of the defendants, PG & E, breached its duty to exercise ordinary care in the management of its premises by failing to hire careful and competent insulators. 31 Cal.App.3d at 87.
2. The conclusion in Grahn v. Tosco Corporation (1997) 58 Cal.App.4th 1373, that the Restatement Second of Torts' exception to the general rule of non-liability of the party hiring an independent contractor for the contractor's negligence, where that party has "negligently hired the negligent contractor" (Section 411) survived Privette. 598 Cal.App.4th at 1389-1392.
But, as will be shown below, neither the Smith dicta nor the Grahn discussion can withstand scrutiny. First, the Smith dicta are not the result of careful analysis. The Smith court cited no legal authority for this proposition, discussed no facts in support of it, and did not even discuss, much less explain, how it reached this conclusion.
Second, three of the cases cited in Grahn in support of this proposition -- Gettemy v. Star House Movers, (1964) 225 Cal.App.2d 636, Chevron USA Inc. v. Superior Court, (1992) 4 Cal.App.4th 544, and Holman v. State of California, (1975) 53 Cal.App.3d 317 -- have either been effectively overruled by Privette or are themselves unsupported by legal authority and analysis. The other two cases cited in Grahn -- Roman Catholic Bishop v. Superior Court (1996) 42 Cal.App.4th 1556 and Evan F. v. Hughson United Methodist Church (1992) 8 Cal.App.4th 828 -- simply do not stand for the proposition for which they were cited: they had nothing to do with the employees of a negligent contractor; rather, they both involved minor children claiming sexual abuse by parish priests.
Even a cursory analysis of the law can lead to only one conclusion: a contractor's employee cannot state a cause of action for the negligent hiring of his employer (or any other contractor on the job), not only because of the holdings in Privette and Toland, but because the policy reasons on which these cases -- collectively referred to as Privette -- were based compel such a conclusion.
A. Employees of Independent Contractors
Are Not "Third -Persons " Under
Restatement Second of Torts 411
California courts long ago adopted Section 411 of the Restatement of Torts, Second, as the basis for a "negligent hiring" cause of actions_. That section belongs to a series of provisions, cited in Privette, that codify exceptions to the general rule that "the 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. Section 411 provides:
An employer is subject to liability for physical harm to third persons caused by his failure to exercise reasonable care to employ a competent and careful contractor
(a) to do work which will involve a risk of physical harm unless it is skillfully and carefully done, or
(b) to perform any duty which the employer owes to third persons.(Emphasis added.)
As the section makes clear, the employers duties under Section 411 is to "third persons," not to "the contractor or his servants." The hiring party is liable for harm resulting from the independent contractor's negligence to innocent bystanders, not to the contractor's own employees. Indeed, as many courts in other jurisdictions have observed in refusing to extend such a cause of action to employees of contractors, not one of the Section 411s eight illustrations involves liability of the hirer to the independent contractor's employees_.
In fact, the development of the negligent hiring cause of action in California parallels that of the peculiar risk doctrine, recounted in Privette. In all of the early negligent hiring cases, plaintiffs were "third persons," that is, innocent bystanders having no contractual or other connection with either the hiring party or the independent contractor itself. Plaintiffs were not the employees of allegedly negligent contractors.
In Skelton v. Fekete, supra, 120 Cal.App.2d 401, plaintiff was the husband of a woman injured in an accident between a passenger car and a lumber truck. The truck driver, employed as an independent contractor by defendant trucking company, was a co-defendant, not a plaintiff. Likewise, in Risley v. Lenwell, supra, 129 Cal.App.2d 608, plaintiffs suffered injuries from an accident between a passenger car and a lumber truck. The truck driver was a co-defendant, along with his allegedly negligent employer, not a plaintiff. In Golden v. Conway, supra, 55 Cal.App.3d 948, a tenant sued his landlord for negligently hiring an incompetent heating contractor. In Henderson Bros. Stores v. Smiley, supra, 120 Cal.App.3d 903, a property owner sued a neighbor who hired a roofing contractor, who was also made a defendant.
The first California case permitting an independent contractors employee to sue the hirer of his own employer for negligent hiring was Gettemy v. Star House Movers (1964) 225 Cal.App.2d 636. In expanding Section 411s concept of "third persons" to include a contractor's employees, the court expressly relied on the interpretation given in Woolen v. Aerojet General Corp. (1962) 57 Cal.2d 407 to the term "others" as found in Sections 413 and 416 of the Restatement. 57 Cal.2d at 410, cited at 225 Cal.App.2d at 643-644. Noting that Woolen held that "others" who could sue a landowner for injuries caused by a contractor included the contractor's own employees, the Gettemy court reasoned that it made no sense to treat the concept of "third persons" in Section 411 differently from that of "others" in Sections 413 and 416.11, given the cohesiveness of Chapter 15 of the Restatement.
Two other California cases permit a contractor's employee to sue the hiring party for negligent hiring. Neither rests solidly on authority. Holman v. State of California (1975) 53 Cal.App.3d 317, 336, incorrectly cited Risley and Section 411 as authority for permitting a negligent contractor's employee to sue the hirer for "negligently hiring his employees." But, as noted above, plaintiffs in Risley were not contractors' employees, while Section 411 expressly speaks only of "third persons" and does not include a contractor's employees among its illustrations of negligent hiring claims. In Chevron USA, Inc. v. Superior Court (1992) 4 Cal.App.4th 544, 549, the court (again without discussion) cited as authority only Risley and Gettemy which, as noted above, was premised on Woolen's interpretation of the term "others" in Sections 413 and 416.
With Privettes express overruling of Woolen's expansion of the concept of "others" to include employees of contractors Privette v. Superior Court, supra, 5 Cal.4th at 702, n.4), the legal support for Gettemy v. Star House Movers, supra, 225 Cal.App.2d 636 -- and thus Chevron USA Inc. v. Superior Court, supra, 4 Cal.App.4th 544, and Holman v. State of California, supra, 53 Cal.App.3d 317 -- evaporates.
In light of Privette's detailed discussion of vicarious liability, the peculiar risk doctrine, worker's compensation, and Sections 409 through 429 of the Restatement, it would be erroneous to regard Woolens interpretation of "others" as having been preserved solely to furnish a basis for interpreting Section 411s term "third persons" to include an independent contractors employees. As Privette decided that "others" under Sections 413 and 416 did not include an independent contractors employees, there can be no doubt that, had the Privette plaintiff not abandoned his negligent hiring claim, Privette v. Superior Court, supra, 5 Cal.4th at 692, n. 1, the Supreme Court would have ruled that "third persons" under Section 411 did not include such employees either.
As the Court of Appeal stated in Smith v. ACandS, supra, "[a] hired contractor's employee is not a bystander, whether judged in relation to his own work or in relation to another contractor's activities on a joint project." 31 Cal.App.4th at 95. He is not a "bystander;" he is not an "other;" and he is not a "third person." When a plaintiff is not a "third person" as to a hiring party, he cannot state a claim for negligent hiring as a matter of law.
B. The Policy Reasons Adopted in Privette
Apply Equally To Liability For Negligent Hiring
The Supreme Court's reasoning in Privette and Toland as to Sections 413 and 416 of the Restatement applies with equal force to a negligent hiring claim under Section 411. In fact, courts have given these same reasons in formulating the majority rule for application of Section 411: the hirer of an independent contractor is not liable to contractors' employees for negligently hiring the contractor_. Applying Privettes analysis of the policy considerations supporting the exclusion of contractors' employees from the definition of "others" in Sections 413 and 416 to an analysis for Section 411's "third persons," one can conclude the following:
First, because the independent contractor's liability is limited to workers' compensation, the hiring party who "negligently hires" the contractor could end up with having greater liability than the contractor who negligently caused the injury. The hiring party would be unable to obtain equitable indemnity, even if the contractor's negligence is greater. This makes the hiring party an insurer for the contractor's employees. Anderson v. Marathon Petroleum Co., supra, 801 F.2d at 941; Valdez v. Cillessen & Sons, Inc., 734 P.2d 1258, 1263 (N.M. 1987).
Second, the hiring party negligently hiring a contractor has already paid to protect workers from the contractor's negligence by paying the contract price, which includes the cost of the contractor's workers' compensation insurance. Anderson v. Marathon Petroleum Co., supra, 801 F.2d at 941. If the hiring party then also has to pay tort liability to an injured worker, it is paying twice for the same injury. Ray v. Schneider, 548 A.2d 461, 466-67 (Conn. App. 1988). As the hiring party has paid workers' compensation costs to all contractors, it makes no difference whether the harm results from the incompetence of the employee's own employer or that of another contractor on the job, Tort liability in either case means double damages for the hiring party and a double recovery for the employee.
Third, liability to the contractor's employees for negligently hiring the contractor penalizes a hiring party for not using its own workers to do the work. Valdez v. Cillessen & Son, Inc., supra, 734 P.2d at 1263; Ray v. Schneider, supra, 548 A.2d at 466-67. This contravenes the established public policy of encouraging the use of independent contractors to perform potentially dangerous work because of their expertise, skill, and ability. Id., at 467. If a hiring party faces potential tort liability to employees of a negligent contractor on the ground that it should have discovered the contractors carelessness or somehow prevented it, the hiring party would be better off using its own employees, no matter how unskilled they might be. Again, this reasoning applies even if the worker suffers harm from the incompetence of another contractor rather than from that of his own employer. Either way, the financial risk to the hiring party would discourage it from hiring independent contractors.
Finally, the goal of compensating work-related injuries is served by the workers compensation system and need not be furthered by imposing negligent hiring liability on the hiring party in favor of the contractors employee. Cassano v. Aschoff, 543 A.2d 973, 977 (N.J. Super. A.D. 1988) (employee of independent contractor could not sue landowner for negligently hiring contractor); Anderson v. Marathon Petroleum Co., supra, 801 F.2d at 942; Ray v. Schneider, supra, 548 A.2d at 465, 467. Workers compensation is awarded without regard to fault, compensating the worker whether the injury results from his own negligence, his employers negligence, or that of another contractor.
For just these reasons, the Supreme Court in Privette (reaffirmed in Toland) adopted the majority rule that a party who hires an independent contractor is not liable to the contractors employees for job-related injuries merely because the work involves a special or peculiar risk or because one could argue that the hiring party was "directly" negligent for failing to warn the contractor and the contractors employees of the hazards of the job:
Thus, contrary to plaintiff Tolands assertion, our decision in Privette bars employees of a hired contractor who are injured by the contractors negligence from seeking recovery against the hiring person, irrespective of whether recovery is sought under the theory of peculiar risk set forth in section 416 or section 413 of the Restatement Second of Torts. In either situation, it would be unfair to impose liability on the hiring person when the liability of the contractor, the one primarily responsible for the workers on-the-job injuries, is limited to providing worker's compensation coverage. Toland, supra, 18 Cal.4th at 267.
. The same reasoning dictates limiting a Section 411 negligent hiring cause of action to innocent third parties -- parties who have no control over or knowledge of the work, who do not have workers compensation, who are not receiving any financial benefit from the work, and for whose injuries the property owner can seek equitable indemnity from the negligent contractor. To extend Section 411 liability to encompass a negligent contractors employee, who may very well be negligent himself, results in precisely the scenario that the Supreme Court has expressly rejected on two separate occasions: the situation in which the hiring party, labeled "negligent" because it hired the negligent plaintiff and his employer, is exposed to much greater liability than the employer itself.
C. Privette and Toland Eliminated a Hiring Party's
Vicarious Liability for Injuries to an
Independent Contractor's Employees
Caused by the Contractor's Own Negligence
In Privette, the Supreme Court noted that the peculiar risk doctrine was a form of vicarious liability, even where the party hiring the contractor was supposedly "directly at fault" for failing to provide for safety measures in the contract. Privette v. Superior Court, supra, 5 Cal.4th at 695, n.2; Toland v. Sunland Housing Group, supra, 18 Cal.4th at 265-266. Liability for negligent hiring is also a form of vicarious liability. The hiring party be "at fault" for hiring a negligent contractor, but any liability is vicarious in that it derives from the acts and omissions of the contractor because it is the contractor -- not the hiring party -- who has caused the injury by failing to use reasonable care in performing the work. See, Rest.(2d) Torts, 411, com. b.; Dillard v. Strecker, 861 P.2d 1372, 1376 (Kan.App. 1993) (a masonry worker employed by a subcontractor could not sue a landowner for negligently hiring the general contractor, because the landowner's liability for injuries caused by contractor's negligence in such a situation is simply a form of "vicarious" liability otherwise rejected)_; Levy v. Currier, 587 A.2d 205, 211-12 (D.C. App. 1991) (plaintiffs must prove that fire resulted from contractor's negligence without which the property owner who hired him cannot be "at fault" for hiring him).
Indeed, even if the negligent hiring doctrine could be expanded to encompass a contractor's employees -- which, under Privette, it cannot -- a party charged with negligently hiring a contractor can be deemed liable to the contractor's employee only where the hiring of the contractor was a substantial factor in causing the employee's injury. Where, as here, a plaintiff testifies that all of his employers were negligent every day on every job for at least thirty years -- no matter who hired them -- it is difficult to fathom how one defendant's refusal to employ one of plaintiff's employers would have prevented plaintiff's claimed injuries.
In Privette and Toland, the Supreme Court decided that imposing vicarious liability under the peculiar risk doctrine for an injury covered by workers' compensation could not be justified in the face of the resulting inequities. The goals of enhancing workplace safety and assuring compensation are adequately served by the workers' compensation program. Privette v. Superior Court, supra, 5 Cal.4th at 701-702; Toland v. Sunland Housing Group, supra, 18 Cal.4th at 269-270. The Privette rule applies even where the hirer is "at fault" for not taking adequate precautions against the peculiar risk. Id., at 695 n.2. As liability under Section 411 is also a form of vicarious liability, although characterized in terms of the hiring party's fault, it should be subject to the same restrictions. Employees of an independent contractor, who are covered by workers' compensation and who are injured as a result of the contractor's negligence, should not be allowed to recover from the hiring party under the rubric of "negligent hiring."
For the reasons set forth above, Parsons respectfully asks this court to dismiss any and all of plaintiff's negligent hiring claims.
SACK ROSENDIN, LLP