1/1/2014

Toiling for Safety

The Exposure of Those on the Frontline

By Michael Brown , John Ferree , Mark Gerth

Safety is the number one goal of everyone associated with the construction industry. A worker hopes for a safe environment on the jobsite. Contractors and sub-contractors want to avoid injuries on the job that can cause delays and extra costs. The insurance industry seeks to limit the claims exposure as much as possible on all jobsites, both because it is good for them financially, and simply good policy to have a safe workplace.

On the other hand, given that plaintiffs’ lawyers are quick to argue that anyone who promotes safety as their goal must have failed whenever someone is hurt, does one make themselves a target for suit by promoting safety when an injury occurs? This can be particularly vexing for an entity that specifically undertakes to advocate and promote safety at the worksite.

The Indiana Supreme Court recently addressed this issue in the context of litigation involving a construction manager. It has become more common for construction managers to be employed to work between the prime contractors working on various phases of a project on the job site and the owner to coordinate the overall project. To the extent that a construction manager makes a commitment to the owner to promote job safety, it potentially puts itself in the hazardous position of being held to be an ensurer of the safety of everyone on the jobsite. The Indiana Supreme Court has held that one in that position can, by contractual agreement, limit exposure to the obligation made to the owner, as opposed to an obligation owed directly to the workers on the job site. That result, if applied in other contexts, certainly has the potential to remove an impediment to coordinated work site safety.

Case in Point

The Indiana Supreme Court’s holding in the case of Hunt Construction Group, Inc. v. Garrett, provided some needed clarity in this area. As the construction manager, Hunt exercised overall management of the construction project undertaking a variety of responsibilities pursuant to a contract with the project owner, some of which related to jobsite safety. Unlike a general contractor, a construction manager normally does not enter into contracts with other contractors on the project. This puts an entity like Hunt, and others in a similar contracting position, in a different relationship to the workers on the job.

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. She was injured when one of her co-workers 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 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 related to safety on the project, including the establishment of a safety program and monitoring the safety practices of contractors on the project. The contract documents, however, also clearly stated that Hunt was not assuming the safety obligations and responsibilities of the construction contractors on the project. Moreover, the contract between Hunt and the Stadium Authority contained provisions that Hunt’s work was for the benefit of the Stadium Authority, not the contractors or other parties involved. Additionally, the contract included a no third party benefit clause.

Notwithstanding those contract provisions, the plaintiff requested that the court declare Hunt be deemed vicariously liable for any safety violations on the part of Baker Concrete or its employees. Just as one might anticipate, counsel for the employee sees the word safety in the contract and goes for a quick determination that the construction manager, or likely any other entity similarly situated, be treated as a guarantor of the well-being of all personnel on the job. Hunt took on the challenge and, in addition to disputing the employee’s motion, filed its own motion for full summary judgment, arguing, among other things, it had not assumed a duty to the plaintiff by way of contract or by conduct.

The Outcome

The trial court granted the plaintiff’s motion and denied Hunt’s cross-motion. On appeal, it was ruled that Hunt could not be held vicariously liable for any negligence of the plaintiff’s employer, but it did hold that Hunt had assumed a duty of care to the plaintiff by contract. The Indiana Supreme Court agreed to review the case.

The issue squarely before the Supreme Court was the exposure created by contracts that called for one party to undertake the role of safety monitor. In this context, there is no direct relationship between the one undertaking to monitor safety and the workers themselves as there is in a contractor/sub-contractor relationship. Instead, a separate contract is created that establishes specific defined duties owed to the owner of the project, or the general contractor, but no direct obligation to those on the job site.

The existence of this type of relationship allows firms to serve as promoters of job safety, bringing to the job site ideas that may have been developed in other settings with general expertise while not undertaking a specific role with regard to day-to-day operations at the job site. Insulating such entities from that kind of direct obligation makes it feasible for them to perform that task. Otherwise, they would be constantly subjected to potential claims in litigation any time anyone was injured. That kind of exposure would likely make it infeasible for them to perform what is clearly an otherwise useful function.

The Supreme Court affirmed the unanimous decision of the Court of Appeals reversing the trial court’s judgment on the issue of vicarious liability. The Court then reversed the trial court’s denial of Hunt’s motion for summary judgment on the issue of duty. The Court noted that an owner of property has no duty to provide independent contractors or their employees with a safe work place. Thus, the Stadium Authority’s contract with Hunt delegating some specific responsibilities related to jobsite safety to Hunt was an effort to promote safety on the construction site beyond that required by law.

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 jobsite, both as to 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 non-liability of construction managers for work site injuries in all instances. A construction manager can still assume by contract a duty for jobsite 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 that 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 jobsite safety for employees of its sub-contractors.

Nevertheless, the decision does stand for the proposition that by the careful use of appropriate contract language, a construction manager or similarly situated entity can enter into agreements that allow for the monitoring of safety on the jobsite without becoming an ensurer of the safety of the employees on the site. In that instance, the primary duty for safety of employees on the site remains with each employee’s own employer.

Lessons Learned

The lesson is that there are means by which insurers, owners and contractors could all seek to limit injuries on the job site. A careful drafting and structuring of an advisory role for a safety consultant can serve the function without undue exposure for that consultant. It is in the best interest of all of the players involved in workplace safety to encourage a practice of reviewing safety procedures at all worksites.

The reality is that no worksite is ever going to be accident free. It is certainly a worthy goal, but there will always be problems that will develop with issues that arise from simple failure to follow procedures. When that happens, accidents will occur and any entity that has the word “safety” associated with it will be a target for a lawsuit. If more Courts can recognize the importance of distinguishing between the consultant and those on the ground directly involved in carrying out the safety process, then it will be much easier and practical to encourage the development of this important tool for workplace safety.



Michael Brown is a Senior Partner with Kightlinger & Gray in Indianapolis.

John Ferree is an Assistant Vice President and Regional Claims Technician at Chubb & Son, a division of Federal Insurance Company.

Mark Gerth is a General Partner with Kightlinger & Gray.

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