Recently, the Nebraska Supreme Court, in Gaytan v. Wal-Mart, et al., 289 Neb. 49 (2014), concluded that there were genuine issues of material fact with respect to the general contractor's liability for claims brought by a special administrator for a deceased worker's estate. The claims against the general contractor, Graham Construction, Inc. (the "GC"), were premised on the theory that it retained control over the roofing subcontractor's, D & BR Building Systems, Inc. (D&BR), safety practices on the jobsite, and specifically its workers use (or non-use) of personal protection equipment (PPE), and the manner in which the decking was secured to the roof.
The special administrator argued that both Wal-Mart and the GC retained control over the work and thus could be held liable for claims relating to the death of the worker. In its analysis, the Court noted two of its previous rulings: (1) "[I]f an owner of premises retains control over an independent contractor's work, the owner has a duty to use reasonable care in taking measures to prevent injury to those who are working on the premises."Parrish v. Omaha Pub. Power Dist., 242 Neb. 783, 496 N.W.2d 902 (1993). (2) "[T]o fall within this exception to the general rule of nonliability, the owner's involvement in overseeing the construction process must be substantial." Dellinger v. Omaha Pub. Power Dist., 9 Neb. App. 307, 611 N.W.2d 132 (2000). It summarized that the "control of the work" exception "is based on the premise that the entity that controls the work should be responsible for ensuring it is done safely."
The Court confirmed "we see no reason why the exception as applied to owners and general contractors should differ... ." "[T]o impose liability on an owner for injury to an independent contractor's employee based upon the owner's retained control over the work, the owner must have (1) supervised the work that caused the injury, (2) actual or constructive knowledge of the danger which ultimately caused the injury, and (3) the opportunity to prevent the injury." It acknowledged that "[w]hile this necessarily means that the control exerted by the owner must be substantial, it also necessarily means that the control must directly relate to the work that caused the injury." "[C]ontrol over the work by the general contractor or the owner must manifest in an ability to dictate the way the work is performed, and not merely include powers such as a general right to start and stop work, inspect progress, or make suggestions which need not be followed." When examining whether such control was exercised, both the language of any applicable contract and the actual practice of the parties should be considered.
With respect to Wal-Mart: (1) Wal-Mart and D&BR had no contract; (2) even though Wal-Mart and the GC were in contract, the contract specifically states that Wal-Mart has no right to exercise control over the GC, the GC's employees, or the GC's agents; (3) there was no evidence that any Wal-Mart representative "actually exercised any control over the construction site." The Court confirmed that "[e]ven assuming Wal-Mart had an authorized representative on the jobsite, on this record, there is no reasonable inference that such representative controlled the roofing work performed by D&BR... And the contractual provisions relied upon ... demonstrate no more than a general power to stop and start work." The Court found no "genuine issue of material fact as to whether Wal-Mart exercised control over the work which resulted in the injury to Dominguez."
With respect to the GC, the Court considered two premises for liability (1) the use (or non-use) of safety equipment by workers on the roof and (2) the manner in which the decking was secured to the roof. With respect to the GC's role: (A) the subcontract between it and D&BR gave the GC "the general right to supervise D&BR's work and require D&BR to resolve safety issues. In addition, D&BR was required to comply with all applicable federal, state, and local safety regulations, including Graham's own safety programs and rules;" (B) the Occupational Safety and Health Administration (OSHA) penalized the GC because the controlled decking zone (CDZ) had been improperly designated with cones meant to be used as a warning line instead of using a guardrail, and OSHA noted that even though the GC had no employees of its own exposed to the roofing hazard, it was 'the controlling employer for the site, and ha[d] explicit control over the overall safety and health of the site;'" (C) the record showed that the GC had supervisory personnel on the jobsite and that after the accident, it both held a meeting with D&BR about roof safety and warned a D&BR foreman that a D&BR worker was seen not using PPE while on the roof; (D) prior to the accident, the GC monitored whether D&BR employees were wearing PPE while on the roof and developed a fall protection plan for D&BR; and (E) the GC orientated the worker, and the orientation checklist noted he was instructed about safe work practices. The Court concluded that "evidence in the record that the contract authorized Graham to monitor and control the use of safety equipment by D&BR workers on the roof and that it actually did so."
The Court further recognized that, even if the GC controlled the work which caused the injury, "it can be liable only if it had actual or constructive knowledge of the danger which ultimately caused the injury and the opportunity to prevent the injury." With respect to the lack of use of safety equipment, the Court found that there was no evidence that the GC "had actual knowledge prior to the accident that Dominguez or any other D&BR worker was working without his PPE." However, a question remained whether it had constructive knowledge that D&BR workers were not using PPE. It confirmed that "[c]onstructive knowledge is generally defined as '[k]nowledge that one using reasonable care or diligence should have... .'" There was evidence that supported "an inference" that despite the fact that they did not have access to the roof, the GC's employees were able to observe whether or not D&BR workers on the roof were using PPE, as required. The GC's evidence reflected that it monitored D&BR employees on several days to determine whether they were properly wearing their PPE and, on each of these occasions, all D&BR employees were complying with the PPE requirements. However, there was also evidence that after the worker fell, three unused sets of PPE were found on the roof, suggesting "the failure to use PPE was so widespread that [the GC] should have known of it." Ultimately, the Court concluded that there was a genuine issue of material fact as to whether the GC had constructive knowledge that D&BR employees were not using PPE prior to the accident. In closing, the Court noted that the GC "had the contractual authority to require D&BR to comply with safety requirements, which reasonably includes the proper use of PPE," and thus the GC "had the ability to require D&BR employees to wear PPE while on the roof and the opportunity to prevent the injury to Dominguez to the extent it was caused by his failure to use his PPE."
With respect to the manner in which the decking was secured to the roof, the Court noted that nothing in the subcontract gave the GC" the authority to dictate the manner in which D&BR installed the roof decking, and the record shows that Graham employees did not do so." Rather, the GC's employees were not allowed to be on the roof at all. It went on to find that the GC "did not dictate or control the actual methods by which D&BR installed the roof decking." It ultimately found that the District Court "correctly determined, as a matter of law, that [the GC] did not oversee or supervise the manner in which the roof decking was installed and that thus, it cannot as a matter of law be liable for injuries caused ... by the improper installation of the roof decking on the theory that it controlled the work."
The Court further considered whether the GC "breached a nondelegable duty to provide a safe place to work." It agreed that the GC "had a duty to provide a safe place to work" because the "record fully supports that [the GC], as a matter of law, was the entity in possession and control of the premises." But, it also found it clear that the worker's injury as a matter of law was not proximately caused by any breach of this duty. "The duty owed by one in possession and control to an employee of a subcontractor is 'to exercise reasonable care to keep the premises in a safe condition while the contract is in the course of performance.'" Accordingly, "[t]he possessor can be liable only when the employee is injured because the workplace premises were not safe." It found that the worker "was not injured because there was something unsafe about the premises he was working on. Instead, he was injured due to specific actions or inactions involved in the construction process." Ultimately, it recognized that any breach of the GC's duty to provide a safe place to work did not cause the accident and the worker's injuries, and that there was no genuine issue of material fact with respect to this allegation of negligence.
The Court confirmed that it was joining the "majority of jurisdictions which hold that the principle as articulated in § 416 of the Restatement (Second) of Torts does not apply to personal injury claims by employees of subcontractors against general contractors or owners." To the extent that Parrish and subsequent cases hold to the contrary, the Court confirmed that they are disapproved, and held that "as a matter of law, the peculiar risk exception affords no legal basis for Gaytan's claims against either Wal-Mart or Graham" because the worker "was not injured because there was something unsafe about the premises he was working on. Instead, he was injured due to specific actions or inactions involved in the construction process. Thus, any breach of [the GC's] duty to provide a safe place to work did not cause the accident and [the worker's] injuries."