Tort Law

Keith A. Cutler, Esquire

In assessing tort liability, “subcontractor” is not synonymous with “independent contractor.”  Sakabu v. Regency Construction Co., Inc., No. 97934 (Mo. App. E.D., October 2, 2012), Clayton, J.

Plaintiffs hired Defendant as a general contractor to renovate Plaintiffs house. Defendant brought in a subcontractor to perform the plumbing work In the course of the plumbing work, sparks from the subcontractor s equipment caused Plaintiffs house to catch afire Plaintiffs filed suit against the general contractor for negligence in , inter alia, failing to supervise the subcontractor and failing to take adequate safety measures. Defendant filed a motion for summary judgment, arguing that general contractors cannot be held liable for the acts of subcontractors. Plaintiffs contended that, while general contractors are not liable for the acts of independent contractors, that is not necessarily true with respect to subcontractors. The trial court granted the motion for summary judgment, and Plaintiffs appealed.

Held: Reversed and remanded.
The terms independent contractor and subcontractor are not synonymous Independent contractors are those entrusted to perform a specific job, but are left free to do their work and choose the method of accomplishing the work Subcontractors are those who are awarded part of an existing contract, usually by a general contractor. Subcontractors may or may not be “independent contractors;” that depends on the level of control and supervision exercised by the general contractor over the subcontractor. In this case, whether or not the plumber was an independent contractor was a dispute of material fact; however, no analysis was conducted by the trial court to determine the level of control and supervision Defendant exercised over plumber subcontractor. Because a material fact remained in dispute, the trial court erred in granting summary judgment.

Heidi Doerhoff Vollet, Esquire

Public Service Commission acted beyond its authority in approving tariff sheet of natural gas provider that purported to limit the utility’s liability for personal injury or property damages caused by the utility’s negligence. This is not the type of liability that the Commission may abrogate through a tariff sheet unless there is specific statutory authority to do so. Public policy favors liability by the utility for injuries to customers that are not purely economic damages that would be considered in setting rates. Public Service Commission of the State of Missouri v. Missouri Gas Energy, No. 74732 (Mo. App. W.D., October 23, 2012), Welsh, C.J.

The Office of Public Council challenged the tariff rate sheet of the Southern Union Company d/b/a Missouri Gas Energy (MGE) establishing rates for natural gas customers. The challenged tariff sheet purported to limit MGE’s tort liability to its customers in several respects, including for personal injuries or property damages incurred as a result of MGE’s negligence.

The Public Service Commission (PSC) approved the parts of the tariff sheet that limited MGE’s negligence liability. The Office of Public Council appealed the PSC’s determination.

Held: Reversed and remanded.
Unless specifically abrogated by statute, the common law rule that a company is liable where its negligence causes injury or harm applies to a natural gas utility. The PSC does not have the authority to approve a utility’s abrogation of negligence claims through a tariff sheet. Prior cases allowing utilities to limit liability for purely economic damages are not controlling because economic damages are the types of limitations that would be involved in establishing a utility company’s rates. Liability for negligence resulting in personal injury or property damage incurred by customers is not the type of liability involved in the service of providing natural gas that the PSC may limit in establishing rates, unless the legislature provides specific authority to the PSC to do so.

Trial court exceeded the scope of remand when it allowed evidence that a non-party would have to pay punitive damages award, where the court had already found liability for punitive damages but had remanded for a determination of the amount of punitive damages that was warranted. Trial court should not have allowed evidence that another corporation that had acquired manufacturing rights over the product after the first trial  would have to pay the punitive damages because introduction of such evidence allowed the defendant to “effectively substitute” another defendant. Smith et al. v. Brown & Williamson Tobacco Corp., No’s. 71918 consolidated with 71919 (Mo. App. W.D., October 2, 2012), Ellis, J.

In earlier case (“Smith I”), the family of a woman who died of lung cancer brought a wrongful death suit against the cigarette manufacturer, Brown & Williamson. The jury found in favor of plaintiffs on their negligent design, negligent failure to warn, and strict liability product defect claims and awarded $20 million in punitive damages.

On appeal in Smith I, the Western District found that punitive damages were permissible only on the strict liability product defect claim. Because the punitive damages award did not indicate what portion was attributable to the product defect claim, the Western District remanded for a new jury trial on the issue of punitive damages on the product defect claim only.

On remand, the trial court bifurcated the trial. In the first phase, the jury determined that the defendant was liable for punitive damages on the strict liability claim. In the second phase, the trial court admitted, over plaintiffs’ objection, evidence that the punitive damages would actually be paid by R.J. Reynolds, which now owned the manufacturing rights. The trial court also admitted, over plaintiffs’ objection, evidence about R.J. Reynolds’ efforts to reduce the negative effects of cigarettes on its customers. The jury awarded plaintiffs $1.5 million in punitive damages. 

Held: Affirmed in part and reversed and remanded in part.
The determination that defendant was liable for punitive damages was affirmed because there was sufficient evidence that defendant engaged in aggravated conduct. But the trial court exceeded the scope of the remand by allowing defendant to present additional evidence and argument that the innocent non-party R.J. Reynolds would have to pay the punitive damages. This amounted to allowing Brown & Williamson to “effectively substitute” R.J. Reynolds as the defendant.

In a dissenting opinion, three judges would hold that there was no substitution of defendants and, although the evidence may not have been particularly relevant, it was not inadmissible and did not exceed the mandate of the remand. The court in Smith I did not address the scope of the evidence that could be admitted in determining the amount of punitive damages awardable on remand.

Survivors of man killed while driving employer’s vehicle can bring a claim for negligent entrustment even though no third party was injured and the injury was due to the decedent’s own negligence. Employer owed a duty to decedent not to allow him to drive when it knew he was incompetent due to habitual intoxication. Under Missouri’s pure comparative fault system, a first-party claim can be brought even though significant fault is likely attributable to decedent.  Hays v. Royer, No. 74772 (Mo. App. W.D., September 18, 2012), Mitchell, J.

Decedent was killed while driving employer’s vehicle while intoxicated. Decedent’s wife and minor son brought negligent entrustment action against employer alleging that employer should have known that decedent was an unsafe driver and should not have entrusted the company car to decedent because he was habitually intoxicated and had been known to drive the vehicle when intoxicated on multiple prior occasions. 

Circuit court granted employer’s motion to dismiss on the basis that employer had no duty to protect decedent, an adult, from his own alcohol consumption.  Employer also argued that there is no cause of action for first person negligent entrustment (where no third party is injured) and that it would violate public policy to impose liability on employer in this situation. 

Held: Reversed and remanded.
The trial court erred in dismissing for failure to state a claim. The entrustor has a duty to the entrustee if he has reason to believe that the entrustment is likely to result in injury to the entrustee or to a third party. Foreseeability is a factor in determining whether and to what extent a duty exists. Because the petition alleges that employer knew of decedent’s propensity to drive the vehicle while intoxicated, it alleges facts that, if true, would allow recovery for negligent entrustment. Under Missouri’s pure comparative fault system, decedent would not have been barred from recovery even if his own negligence exceeded that of employer. Because his survivors stand in his shoes, they can bring a first-party claim of negligent entrustment even if decedent was significantly at fault.