DTCI: Opinion clarifies construction manager liability on job sites

By Mark D. Gerth
 

Gerth

In its recent opinion in the case of Hunt Construction Group, Inc. v. Garrett, No. 49S02-1106-CT-365 (Ind. 2012), the Indiana Supreme Court provided some needed clarity concerning liability of construction managers for injuries suffered by employees of contractors on a construction site. A construction manager exercises overall management of a construction project. The construction manager undertakes a variety of responsibilities pursuant to a contract with the project owner, some of which relate to job-site safety. Unlike a general contractor, a construction manager normally does not enter into contracts with other contractors on the project, each of which generally contracts directly with the owner.

The case arose out of injuries suffered by the plaintiff, Shannon Garrett, during the construction of Lucas Oil Stadium. At the time she was injured, Garrett was employed by Baker Concrete Construction, Inc., which had entered into a contract with the Indiana Stadium and Convention Building Authority (“Stadium Authority”) to perform concrete work on the stadium. She was injured when one of her coworkers dropped a piece of wood while removing forming material from the concrete. The wood struck Garrett and injured her head and left hand.

The plaintiff subsequently filed suit against the defendant, Hunt Construction Group, Inc., which had entered into a contract with the Stadium Authority as the construction manager for the building of the Lucas Oil Stadium. Hunt had no contractual relationship with Baker Concrete or any of the other contractors involved in the construction of the stadium.

In its contract with the Stadium Authority, Hunt undertook certain duties with reference to safety on the project, including the establishment of a safety program and monitoring the safety practices of contractors on the project. However, the contract documents also clearly stated that Hunt was not assuming the safety obligations and responsibilities of other contractors on the project, which those contractors owed to their own employees, pursuant to their own contracts with the Stadium Authority and pursuant to their statutory duties under IOSHA. Moreover, the contract between Hunt and the Stadium Authority contained the following provisions:

2.4.2. Contract Administration: …services provided by the Construction Manager during the Construction Phase are rendered solely for the benefit of the Owner and not for the benefit of the Contractors, the Architect, or other parties performing Work or services with respect to the Project.

12.7 No Third Party Benefit: …the parties do not bestow, nor do they intend to bestow, any rights, privileges or interest in favor of any persons or entities who are not signatories to the Agreement and nothing contained in this Agreement shall be construed to create a contractual relationship with (express, implied, third party beneficiary or otherwise) or a cause of action in favor of any persons or entities who are not signatories to this Agreement.

Notwithstanding the quoted contract provisions, the plaintiff filed a motion for partial summary judgment in the trial court requesting the court declare that Hunt was vicariously liable, as a matter of law, for any safety violations on the part of Baker Concrete or its employees that proximately caused the plaintiff’s injuries. Hunt responded to the motion for partial summary judgment and filed its own motion for summary judgment, arguing that (1) Hunt could not be held vicariously liable for any negligence of Baker Concrete; and (2) Hunt was not liable to the plaintiff because it had not assumed a duty to the plaintiff by way of contract or by conduct.

The trial court granted the plaintiff’s motion for partial summary judgment and denied Hunt’s cross-motion for summary judgment. Hunt then appealed. In December 2010, the Court of Appeals issued its opinion in which it reversed the partial summary judgment for the plaintiff and held that Hunt could not be held vicariously liable for any negligence of the plaintiff’s employer, Baker Concrete. However, the Court of Appeals affirmed the trial court’s denial of Hunt’s motion for summary judgment, holding that Hunt had assumed a duty of care to the plaintiff by contract. The plaintiff filed petition for rehearing, which was denied. Hunt filed a petition to transfer.

On transfer, the Supreme Court summarily affirmed the unanimous decision of the Court of Appeals reversing the trial court’s judgment on the issue of vicarious liability. In its opinion on that issue, the Court of Appeals held that the plaintiff had failed to establish any contractual or other relationship between Hunt and Baker Concrete that would justify imposing liability upon Hunt, without fault, for the alleged negligence of Baker Concrete. The Supreme Court obviously agreed with that conclusion.

The court then reversed the trial court’s denial of Hunt’s motion for summary judgment on the issue of duty. First, the court held that Hunt’s contracts do not impose upon it a legal duty of care for job-site safety to contractor and subcontractor employees. (Opinion at pg. 10) The court rejected the plaintiff’s argument that Hunt had assumed by contract a duty to ensure the safety of everyone on the project in light of the contract language limiting Hunt’s duties and liability. The court opined that “Hunt did not undertake in its contracts a duty to act as the insurer of safety for everyone on the project. Rather, Hunt’s responsibilities were owed only to the Stadium Authority not to workers like Garrett.” (Opinion at pg. 8).

The court observed that its resolution would promote safety at construction sites. It noted that an owner of property has no duty to provide independent contractors with a safe work place. Thus, the Stadium Authority’s contract with Hunt delegating some specific responsibilities related to job-site safety to Hunt was an effort to promote safety on the construction site beyond that required by law. The court observed that had it adopted the rule urged by Garrett, the only way for Hunt to avoid liability would be to disavow any responsibility for safety in its contract documents. Instead, Hunt and the Stadium Authority adopted a method to promote safety without exposing Hunt to the role of an insurer of safety for workers of other contractors on the job site. (Opinion at pgs. 9-10).

Next, the court turned to the question of whether Hunt assumed by its actions or conduct a legal duty of care for job-site employee safety. The court observed that, although Garrett argued that Hunt had engaged in a number of activities relating to safety, none of the actions alleged were beyond those actions contemplated by the contract between the Stadium Authority and Hunt. The court concluded that because the contract itself did not impose upon Hunt any legal duty of care for job-site employee safety and because Hunt did not undertake any actions beyond those required by that contract, it did not assume by its conduct or actions any legal duty of care for job-site employee safety.

Thus, under the Supreme Court’s opinion in Hunt, a construction manager cannot be held vicariously liable for the alleged negligence of a contractor on the site with which the construction manager has no contractual relationship. In addition, a construction manager may limit its duties with reference to safety on the job site, as to both the scope of those duties and the parties to whom those duties are owed. Finally, in instances in which the construction manager has limited its duties by contract, any actions undertaken by the construction manager pursuant to the contract do not give rise to an assumption of duty by conduct or action.

While the court’s decision rests on sound tort and contract principles, the opinion does not establish a general rule of nonliability of construction managers for work-site injuries in all instances. A construction manager can still assume by contract a duty for job-site safety. In addition, to the extent the construction manager undertakes duties beyond those stated in its contract with the owner, it may be found to assume a duty by conduct. It is also important to note the rules adopted by the court with reference to construction managers do not necessarily apply to general contractors with reference to a general contractor’s duties and obligations as to job-site safety for employees of its subcontractors.

Nevertheless, the decision does stand for the proposition that by the careful use of appropriate contract language, an owner and construction manager can enter into a relationship which encourages the construction manager to monitor safety on the job site without becoming an insurer of the safety of the employees of all contractors on the site. In that instance, the primary duty for safety of employees on the site remains where it has been placed by IOSHA, upon each employee’s own employer.•

Mr. Gerth is a partner in the Indianapolis office of Kightlinger & Gray and is a member of the Defense Trial Counsel of Indiana. The opinions expressed in this article are those of the author.