Construction Law

Kenneth A. Slavens, Esquire

To answer the question of whether a subcontractor is an independent contractor, the relationships must be analyzed by the application of well-known employment law principles. Further, the mere breach of a contract does not provide a basis for tort liability. If an act or omission constitutes a tort, then liability exits in tort law regardless of the existence of a contract. Skabu, et al. v. Regency Contraction Co., Inc., No. 97934 (Mo. App. E.D., October 2, 2012), Cunningham, J.

Regency Construction (Regency) was the general contractor on a home renovation project. Regency subcontracted with Kirsch Plumbing (Kirsch) for the necessary plumbing work. While Kirsch was working on the project, sparks from its work started the home on fire. The fire resulted in damages to homeowners’ real and personal property.

The homeowners sued Regency alleging breach of contract and negligence. Regency moved for summary judgment on the basis that as the general contractor it could not be liable for the acts of the subcontractor because the subcontractor was an independent contractor. In addition, Regency claimed the acts of the alleged acts of negligence did not give rise to a tort duty independent of a breach of contract. The homeowners responded that though general contractors are not liable for the acts of independent contractors, the terms subcontractor and the term independent contractor are not synonymous.

Held:  Reversed.
The court of appeals held that the terms subcontractor and independent contractors are not synonymous.

In general, a subcontractor is defined as “one who is awarded a portion of an existing contract by a contractor.”  An independent contractor is “one who is entrusted to undertake a specific project but who is free to do the assigned work and to choose the method for accomplishing it.”  A person can meet the definition of a subcontractor, but if that person is subject to the control of his employer, he would not be an independent contractor.

To determine whether a subcontractor is an independent contractor or what the court called an employee, the court said that the analysis involves established employment law. Employees and independent contractors are distinguished primarily on the basis of the amount of control the alleged employer has over them. Some of the factors to consider are (1) the extent of control by agreement the employer may exercise over the details of the work, (2) whether the person employed is engaged in a distinct occupation, (3) the local practice of whether the work is done under the direction of the employer or without supervision, (4) the skill required in the particular occupation, (5) whether the employer or the workman supplies the instrumentalities, tools, and place of work, (6) whether work is part of the employer’s regular business, (7) whether the method of payment is by the time or the job, and (8) whether the parties believe they are creating an independent contractor or employee relationship.

As to whether the allegations of negligence were appropriate, the court of appeals said a mere breach of contract does not provide a basis for liability in tort. On the other hand, regardless of the existence of a contract, if the act or omission constitutes a tort, then tort liability exists. If the conduct is not a tort, then a breach of contract will not create tort liability. The question then is whether the alleged conduct constitutes a tort.