Landowner Liability to Employees of Independent Contractors: A Graphic Restatement

A number of recent Missouri cases have involved the question of a landowner's duty to an employee of an independent contractor who has been injured while performing work on the land. Each of the cases examines one or more of the myriad of rules and exceptions thereto which have developed in this area — to the point of bewilderment. Some clarity is, however, achievable at this point. At the risk of alienating those nonvisual learners among us, a flow chart is utilized to examine the varying fact patterns that correspond to the legal rules which have developed (or are developing) in this complex area.

Prior to beginning the flow chart analysis, it is important to recognize that landowner liability in the present context is an amalgam of premise liability law and standard negligence law. It is very important to clearly identify whether it was a condition of the premises, as opposed to negligent conduct, which caused the injuries. For example, was the employee injured as a result of a bare electrical wire (a condition of the premises) or as a result of a co-employee dropping a piece of wood on his head (negligent conduct)? Second, it is important to identify the temporal nature of the dangerous condition of the premises. Did it exist before the worker came onto the premises or was it created during the work? This distinction is vital if the landowner no longer has possession of the premises when the injury occurs. Now to the general rules.

Having stated the general rules, it is time to refer to the flow diagram presented in Figure 1 in order to elucidate the numerous exceptions, and exceptions to exceptions. The first question to consider is whether the worker's injuries result from a condition of the premises as opposed to the negligent conduct of another unassociated with the landowner. This is the graphical representation of the distinction between premises liability and ordinary negligence. If the injury did result from a condition of the premises, then the issue is whether the owner is in actual physical possession of the premises during the period of the construction, renovation or repair work. The Restatement (Second) of Torts, § 328E, and case law3 make it clear that possession in this context is used strictly in a factual sense.4 If the owner is in possession, a duty arises.5

This result is simply a graphic representation of General Rule 1, which states the owner of land has a duty to business invitees, including independent contractor's employees on the premises. In this context, the rule has been called the safe workplace rule.6 It also, however, captures the retained possession doctrine as articulated in § 422 of the Restatement, which states:

Thus, as stated and graphically represented, the landowner in possession has a duty to an injured worker for injuries sustained on the job resulting from an unsafe condition of the premises, whether such unsafe condition was created during the construction job or not.7 A Missouri court has observed that there is no meaningful difference between General Rule 1, represented by § 343 of the Restatement, and the retained possession doctrine, § 422 of the Restatement.8 The flow chart reflects this view.

If the injury did not result from a condition of the premises, per se, the collateral or casual negligence rule comes into play.9 In general, a landowner is not responsible for injuries to third persons caused by the negligent conduct of an independent contractor, so long as the injury is not the result of an unsafe condition of the premises. This is, of course, General Rule 2 stated above. Determining whether the injury was caused by an unsafe condition of the premises, as opposed to the collateral negligence of the contractor, can be tricky, however. Illustration 1 to § 422 of the Restatement highlights the point:

If, however, instead of the monitor falling (an unsafe condition of the premises), the worker dropped his hammer on the customer's head while installing the monitor (collateral negligence), the landowner would not be liable to the customer — at least in the absence of other circumstances.

What if the injury is premise-related but the owner is not in possession? This is the common situation where the landowner relinquishes possession and control of the premises to an independent contractor during the construction period. In this instance the landowner is no longer deemed the possessor of the land and liability for premise-related injuries during the construction period shifts to the independent contractor.11 This exception to General Rule 1, however, also has exceptions. Suppose the unsafe condition of the premises was in existence at the time possession was turned over to the independent contractor. If so, the landowner may be responsible, even after transferring possession, under the theory articulated in § 353 of the Restatement:

This makes sense. A landowner ought to be responsible, even after relinquishing possession and control of the premises, to an employee of an independent contractor who is injured by a hidden, undisclosed hazard.13

Thus, if the injury is caused by the contractor's collateral negligence, the landowner is not responsible irrespective of possession. And even if the injury is caused by a premise-related problem, the landowner is not responsible if the problem arose after possession was delivered. These general conclusions must be tempered, however, by some limited exceptions.

First, consider the issue of control. Did the landowner maintain control over some part of the work being done by the independent contractor — irrespective of the landowner's possession and control of the premises? Missouri courts have, for the most part, blurred the distinction between control of the premises and control of the work. Halmick v. SBC Corporate Servs., Inc.14 is illustrative. There the court stated the rule that where a landowner relinquishes control of the premises to an independent contractor during the period of construction, the landowner is no longer the possessor of the land for purposes of liability. With this there can be no dispute. The court then, however, went on to discuss the control issue in more detail:

This passage highlights the dual use of the control concept. Control over the premises and control over the work, however, are distinct concepts and should not be confused or used interchangeably. A non-possessor of the premises can be in control of part of the work on the premises (e.g., a subcontractor controls his own workers) and a possessor of the premises need not be in control of the work (e.g., general contractor (possessor of the premises) does not control a subcontractor's employees).15 Thus, one in control of the premises need not be in control of the work and vice versa. Keeping this distinction in mind makes the analysis much crisper.

The essential question with respect to control is whether the landowner has exerted enough control over the work to impose liability for the landowner's failure to exercise his control with reasonable care. The concept is captured in § 414 of the Restatement:16

At first blush the control test articulated in Halmick, and repeated in Matteuzzi v. Columbia Partnership, L.P.,17 would appear to transform the independent contractor's employee into an actual employee of the landowner. Indeed, the test for independent contractor status focuses on the right to control the details of the work. Thus, Halmick and Matteuzzi, taken literally, would appear to transform the landowner liability issue into a workers' compensation case.17 A

The control envisioned by the Restatement, on the other hand, stops short of that necessary to establish agency. Comments a. and c. to § 414 attempt to add insight:

The control of the work issue is obviously fact intensive. For the most part, however, the landowner must take an active role in order to be held accountable. How active a role, short of that necessary to establish agency, has yet to be clearly delineated by the Missouri courts. As said, the literal pronouncements of the courts to date on this issue suggest a rather complete control of the details of the work is necessary. The final word on this issue, however, may not have been written.

If control of the wor has not been established, the next issue to address is that of volunteer liability as articulated in § 324A of the Restatement and refined in Plank v. Union Elec. Co.18 The Restatement provision reads as follows:

The Plank refinement relates to subsection b of § 324A. The plaintiff in Plank asserted that Union Electric, the landowner, had undertaken the general contractor's duty to provide a safe work environment during the construction of the Callaway nuclear power plant. The court, however, disagreed with the plaintiff's superficial reading of § 324A(b). It held that liability can be established under § 324A(b) only if it is shown that the landowner intended to become the primary provider of a service for the protection of a third person, and not merely a showing of an intent to assist or supplement the service provided by the general contractor. The Plank refinement obviously limits the landowner's liability in virtually all cases. It is a rare case where the landowner has been active enough to completely supplant the general contractor. If such were the case, one would expect liability to attach under the control of work theory, as well.

Finally, what remains in Missouri of the inherently dangerous activities doctrine must be addressed. The doctrine holds that a landowner who commissions inherently dangerous work to an independent contractor has a nondelegable duty to take precautions to prevent injury from such activity.19 Thus, the initial question is whether the activity is inherently dangerous. Operations involving blasting, electricity and great heights are generally the types of activities considered to be inherently dangerous, but it is not necessary that the work involve an ultra-hazardous activity. "It is sufficient that it is likely to involve a peculiar risk of physical harm unless special precautions are taken, even though the risk is not abnormally great."20

The inherently dangerous activity doctrine, as it applies to employees of independent contractors, has been virtually eliminated by recent case law. Zueck v. Oppenheimer Gateway Properties, Inc.21 was the first nail in the coffin. The Supreme Court held that the inherently dangerous activities doctrine would not apply to hold a landowner vicariously liable for the negligence of the independent contractor if the injured employee was covered by workers' compensation. The reasons were twofold. First, the inherently dangerous activities doctrine encourages landowners to limit their liability by using their own nonexpert employees to perform inherently dangerous work rather than hire independent contractors with expertise in the field. Thus, the doctrine distorts sound tort policy by increasing the risks to innocent third parties and punishing landowners who seek expert assistance in an effort to avoid liability for injury.22 The second reason articulated by the Court was more practical. A landowner who hires an independent contractor indirectly pays for the contractor's workers' compensation insurance through the contract price. "It is unfair, therefore, to subject a landowner to what is, in effect, double liability — workers' compensation coverage and liability under the inherently dangerous activity doctrine."23

As said, Zueck involved application of the inherently dangerous doctrine to establish vicarious liability on the part of the landowner. The possibility remained, however, after Zueck that the landowner may be liable to an injured employee of an independent contractor under the doctrine for his own direct negligence, regardless of workers' compensation. Matteuzzi v. Columbus Partnership, L.P.24 closed this gap. The Court held that the policy reasons justifying the Zueck holding were no less compelling in the case of direct liability. Thus, after Zueck and Matteuzzi, "[t]he inherently dangerous activity/non-inherently dangerous activity dichotomy has been abolished in cases where the employee of an independent contractor is injured and is covered by workers' compensation."25

After Zueck it was generally accepted that an employee covered by workers' compensation insurance could not invoke the inherently dangerous activity doctrine. However, if no insurance was in place, it was thought the doctrine would apply. This presumption was based, in part, on the Court's second policy rationale — it was unfair to charge the landowner for workers' compensation insurance (through the contract price) and yet subject him to tort liability, as well. Scott v. Edwards Transp. Co.,26 however, ended any conjecture on this point. Scott held workers' compensation insurance is irrelevant to the Zueck and Matteuzzi holdings. The only issue is whether the workers' compensation law applies to the worker.

Now that the dust has settled on the inherently dangerous activity doctrine, at least as applied to employees of independent contractors, perhaps it is time to take a critical look at what the courts have wrought. First, the rationale. Zueck discussed the bias created by the inherently dangerous activities doctrine for landowners to use their own unskilled workers to do dangerous jobs rather than hire expert independent contractors. This bias was, of course, created by the workers' compensation law, which shields the landowner from common law liability to his own employees. Thus, the Zueck Court reasoned, imposing a nondelegable common law tort duty on the landowner for injuries occurring during the progress of dangerous work causes more accidents in that the expertise of the independent contractor is eschewed. A major premise adopted by the Zueck Court to distinguish a landowner's liability to an injured employee from that to an innocent third party was:

Stated alternatively, if the landowner had the right to be indemnified for the contractor's negligence, the landowner could protect himself by contracting with financially responsible independent contractors and, accordingly, there would be no need to abolish the inherently dangerous activity doctrine. The landowner would naturally choose the expert independent contractor because the landowner would suffer no financial exposure and, additionally, he would not expose his own employees to danger (and himself to workers' compensation claims).

The fact is, in Missouri a landowner does have the right to be indemnified by the independent contractor for injuries suffered by the contractor's employees — notwithstanding the existence of workers' compensation. Contrary to the Court's statement in Zueck, § 287.120.128 does not shield an employer from liability for breach of an independent contractual duty to indemnify a third party. A long line of cases, beginning with McDonnell Aircraft Corp. v. Hartman-Hanks-Walsh Painting Co.,29 so hold.30 If the landowner can be indemnified (which he can), the "distortion of sound tort policy" lamented in Zueck evaporates. If anything, the abolition of the inherently dangerous activity doctrine distorts tort policy by encouraging the landowner to farm out all the really dangerous work to incompetent, underfunded contractors. So much for the best of intentions.

In any event, the current state of the law holds that a duty applies to an employee of an independent contractor involved in inherently dangerous work only if the employee is not "covered" under the workers' compensation law — i.e., the workers' compensation law does not apply to them. Such non-covered persons could include family members of the independent contractor, farm workers and a few others.31 The list, however, is extremely short.

It is now time to utilize the flow diagram to analyze the results reached in a number of recent landowner liability cases. This exercise will not only familiarize the reader with the analytical technique but will also help explain the results reached in the cases.

Facts. An employee of an independent contractor fell down an elevator shaft during the renovation of an old hotel in St. Louis. The theory of liability was that the elevator operator, another employee of an independent contractor, had moved the elevator but had left the elevator doors open. A bypass key had to be used to move the elevator with the doors open. The owners of the building had turned possession of the building over to the general contractor during the renovation period.

Analysis. The injury did not result from a defective condition of the premises. The injury resulted from the (collateral) negligence of a fellow employee. The landowner did not have control of that part of the work (the elevator operator) which caused the injury. The landowner was not primarily in charge of safety. The work was not claimed to be inherently dangerous. Utilizing the flow chart, we end up in the "No Duty" conclusion box. This is exactly the result reached by the court.

Facts. An employee of the Callaway nuclear power plant general contractor was injured when a piece of wood was kicked off a scaffold and hit him on the head. The wood was kicked off by a fellow employee. The plaintiff claimed the scaffold was defective in that it had no toe board to prevent objects from falling off the scaffold. The landowner had turned possession of the premises over to the general contractor during construction, although a number of the landowner's employees were on site to monitor progress of the work. The landowner had also reserved the right to stop work in the event it deemed the work was not being conducted safely.

Analysis. The best analysis is that the injury resulted from the collateral negligence of a fellow employee. An alternative analysis is that the injury was premise-related but did not exist when possession was turned over to the general contractor. Although the landowner did retain significant safety responsibilities, the general ability to stop work was not enough to establish that the landowner had retained control of that part of the work. This was a close question. The issue of assumption of duty was not raised in the case. It was not claimed the work was inherently dangerous. Following these steps through the flow chart leads to the "No Duty" conclusion box. This was the court's conclusion.

Facts. The owner of a hanger at the Spirit of St. Louis airport contracted with a general contractor to construct and remodel the hanger. Two employees of the owner were stationed at the construction site to observe the work and ensure it proceeded properly. The plaintiff, an employee of a steel subcontractor, fell 45 feet from a slick steel beam. The plaintiff claimed the owner was negligent for failing to ensure that adequate precautions were taken to avoid injury.

Analysis. The injury resulted from a condition of the premises. The owner was not in possession of the premises during construction. The defective condition of the premises did not exist when the owner turned control of the premises over to the general contractor. The owner did not control the details of the subcontractor's work. The fact the owner had stationed two employees on site to ensure contract compliance did not establish control. Assumption of duty was not claimed. The activity was inherently dangerous, but the employee was covered by workers' compensation. Again, following the path through the flow chart leads to the "No Duty" conclusion box. This was the court's holding.

Facts. Anheuser-Busch contracted to renovate a portion of its premises. The case is not clear as to whether Anheuser-Busch retained possession of the premises during the renovation. Plaintiff suffered an electrical burn when he came into contact with an energized electrical junction box. Plaintiff sued the electrical subcontractor for negligently installing the junction box. The electrical subcontractor, in turn, sued Anheuser-Busch, claiming that the defective junction box was on the premises in a defective condition prior to the work.

Analysis. The injury was premise-related. Assume that the owner was not in possession. The defective condition of the premises existed (or was alleged to exist) prior to the construction. The flow chart analysis would lead to the "Duty" conclusion box. This was not the court's holding. Rather, the court held that the owner did not have liability because it did not control the details of the contractor's work. This analysis confused control of the premises with control of the work. If the defect preexisted the relinquishing of possession, the owner is still liable for hidden dangers — irrespective of who controls the work.

Landowners who retain possession of the premises while repair or construction work is proceeding ought to be held responsible for injuries to employees of independent contractors who are injured as a result of unreasonably dangerous conditions of the premises. Recent Missouri cases, however, have analyzed the control of the premises issue using a control of the work test. Moreover, the control of the work test articulated in the cases appears to require a quantum of control tantamount to an employer-employee relationship. Thus, in order to hold the landowner liable for the injury, the injured worker must plead and prove that the landowner controlled the details of the independent contractor's employee's work. However, if the injured employee so pleads, he will plead himself out of court because of the workers' compensation immunity statute.32 The circle is complete.

The inherently dangerous activities doctrine, as applied to employees of independent contractors, is all but dead in Missouri. The theoretical underpinnings of its demise are, however, suspect. The distortions of the tort system discussed by the Supreme Court of Missouri do not exist if one recognizes a landowner's right to be indemnified by a negligent independent contractor. The Court incorrectly assumed this right did not exist. Further, if the existence of workers' compensation is to be the rule of decision, the only meaningful criteria would be the existence of workers' compensation insurance. The double liability argument applies only in this context.

Nonetheless, the state of Missouri law is what it is. Hopefully, the flow chart presented herein will help to clarify analysis in future cases.

17A Gass v. White Superior Bus Co., 395 S.W.2d 501, 504 (Mo. App. S.D. 1965) ("the test of the existence of that [master and servant] relationship is the right to control the means and manner of the service, as distinguished from controlling the ultimate results of the service.")

© 1997, James A. Burt