News and Events
Cassiday Partner Jonh T. VanDenburgh featured in the August edition of DTCI Dispatch for his article on Construction.09/05/2023Defense Trial Council of IndianaRelated Practice Areas: Construction
Potential Narrowing of Nondelegable Duty in Construction Cases
Recent Indiana Court of Appeals Cases
John T. VanDenburgh
Safety is a crucial aspect of every construction project and includes promoting and maintaining worksite safety for the benefit of workers, third parties, and the public. Project owners, designers, general contractors, construction managers, and subcontractors routinely include safety obligations in their contracts with one another. These entities often balance the general promotion of safety on a project with contractual language that imposes a legal duty or responsibility for safety on a project. When an employee of another contractor or a third party is injured on a construction site, legal questions can often arise as to which entities, if any, may have a legal duty to that individual, such that the individual can sue the entity directly for causing or contributing to those injuries.
Traditionally, general contractors in Indiana were not liable for the negligent acts of an independent contractor unless certain limited exceptions were met. Following the Indiana Supreme Court decision in Ryan v. TCI Architects/Engineers/Contrs., Inc., 72 N.E.3d 908 (Ind. 2017), these limited exceptions were substantially expanded to the point where one may ask if the exceptions have become the rule. However, recent decisions by the Indiana Court of Appeals in 2022 could represent an effort to claw back the breadth of the nondelegable duty of safety in Indiana construction cases.
Traditional Rule Concerning Construction Site Responsibilities
In the construction context, the long-standing general rule in Indiana is that “a principal will not be held liable for the negligence of an independent contractor.” Carie v. PSI Energy, Inc., 715 N.E.2d 853, 855 (Ind. 1999). This means that if a subcontractor fails to provide a reasonably safe workspace, the general contractor will not incur liability for the subcontractor employee injury, even when such injury is proximately caused by the subcontractor negligence. The rationale behind this rule is that a general contractor has little to no control over the means and manner a subcontractor employs to complete the work. Stumpf v. Hagerman Constr. Corp., 863 N.E.2d 871, 876 (Ind. Ct. App. 2007).
However, while a general contractor is not generally liable for the negligence of an independent contractor, it may be liable if the independent contractor was performing a non-delegable duty. Bagley v. Insight Commc’ns Co., L.P., 658 N.E.2d 584, 586 (Ind. 1995). Non-delegable duties are deemed so important to the community that the principal shall not be permitted to transfer these duties to another. Id.
The general rule applies unless one of the following five exceptions is met: “(1) where the contract requires the performance of intrinsically dangerous work; (2) where the principal is by law or contract charged with performing the specific duty; (3) where the act will create a nuisance; (4) where the act to be performed will probably cause injury to others unless due precaution is
taken; and (5) where the act to be performed is illegal.” Hunt Constr. Grp. v. Garrett, 938 N.E.2d 794, 798 (Ind. Ct. App. 2010), aff’d, 964 N.E.2d 222 (Ind. 2012).
According to the Indiana Supreme Court, “the five exceptions represent specific, limited situations in which the associated duties are considered non-delegable because public policy concerns militate against permitting an employer to absolve itself of all further responsibility by transferring its duties to an independent contractor.” Bagley, 658 N.E.2d at 588. The purpose of the exceptions is to encourage the principal to participate in the control of the work covered by the exceptions in order to minimize the risk of resulting injuries. Id.
Although the Indiana Supreme Court recognized that the exceptions were limited and specific, they were subsequently seemingly expanded to allow the overall safety of a project to fit in the specific contractual duty exception. As a result, contractual language that may have been originally included for the mere purposes of promoting safety on a project could be used to make a contractor liable for all accidents on a construction site.
Nondelegable Duty after Ryan
In Ryan, the Indiana Supreme Court analyzed whether a general contractor intended to assume the duty of keeping a worksite safe through language in its contract with the project owner. Ryan, 72 N.E.3d at 915. In that case, the general contractor’s agreement provided that it (1) “recognize[d] the importance of performing the Work in a safe manner so as to prevent damage, injury or loss to ... all individuals at the Site, whether working or visiting”; (2) “assume[d] responsibility for implementing and monitoring all safety precautions and programs related to the performance of the Work”; (3) “designate a Safety Representative with the necessary qualifications and experience to supervise the implementation and monitoring of all safety precautions and programs related to the Work”; and (4) “comply with all Legal Requirements relating to safety.” Id.
The Court reasoned that “a contract that is found to demonstrate the general contractor’s intent to assume a duty of care exposes the general contractor to potential liability for a negligence claim where no such liability would have otherwise existed.” Id. at 914. Harmonizing all the contract’s provisions, the Court concluded that the contract affirmatively demonstrated an intent by the parties for the contractor to assume a nondelegable duty of safety over the entire project. Id. at 916.
The Court cautioned that its decision was “solely guided by our contract interpretation precedent,” and noted that “conducting a phrase-by-phrase comparison of language in each Court of Appeals case to the contract involved here is not the preferred approach.” Id. However, the Court also stated that the court of appeals’ cases on the assumption of duty “can be helpful in guiding a court,” specifically in evaluating the spectrum of language that may reveal intent to assume such nondelegable duties. In its review of the cases with similar fact patterns, the Indiana Supreme Court noted the common thread that found a contractor assumed a contractual duty of care where the general contractor’s contract includes requirements to “1) take precautions for safety of employees, 2) comply with applicable law and regulations, and 3) designate a member of its organization to prevent accidents.” Id.
The concern after Ryan was that despite the cautioning language by the Indiana Supreme Court, the nondelegable duty of safety had been substantially expanded. However, the Indiana Court of Appeals recently addressed two cases in 2022 dealing with the responsibility for injuries in the construction setting that may represent an attempt to reverse the course of the nondelegable duty. These cases are: Dixon v. Shiel Sexton Co., 196 N.E.3d 717 (Ind. Ct. App. 2022), and Tinsley-Williamson v. A.R. Mays Constr. Inc., 195 N.E.3d 891 (Ind. Ct. App. 2022).
Dixon v. Shiel Sexton Co., 196 N.E.3d 717 (Ind. Ct. App. 2022)
In Dixon, the project owner, Dormakaba USA, Inc. (“Dormakaba”) hired Shiel Sexton Company, Inc. (“Shiel Sexton”) to serve as the construction manager in connection with the construction of a Dormakaba office and warehouse project. It, in turn, subcontracted with Biancofiori Masonry, Inc. (BMI) to perform masonry duties on the project. Id. at 718. The plaintiff, Jerry Dixon (“Dixon”) was an employee of BMI who was injured after he fell when attempting to transition from a ladder to scaffolding that had been erected by BMI. Dixon filed suit against Shiel Sexton alleging his injuries were caused by the negligence of Shiel Sexton. Id. at 719.
Dixon argued that the designated evidence demonstrated that Shiel Sexton exceeded the scope of its contracts and assumed a duty of care for his safety through its conduct. In support thereof, Dixon pointed to conduct that he argued constituted supervisory responsibilities beyond those set forth in the original construction documents. Specifically, Shiel Sexton conducted weekly safety inspections and held routine safety meetings with subcontractors, required all subcontractors to watch a safety video before working on the project used a safety manager with the authority to remedy and discipline safety violations of subcontractors, and required subcontractors to become familiar with and adhere to Shiel Sexton’s safety rules. Dixon therefore contended that in actual practice, the responsibility for safety on the project was shared by Shiel Sexton and its subcontractors. Id.
Shiel Sexton moved for summary judgment arguing that it did not owe any type of duty of safety to Dixon. The trial court granted Shiel Sexton’s motion for summary judgment, holding that it owed no duties of safety to Dixon, either through contract or assumption of duties. An appeal ensued, and the Indiana Court of Appeals affirmed the trial court’s grant of summary judgment in favor of Shiel Sexton.
While Shiel Sexton’s contract required that it take certain action with respect to safety and that it employ a safety director, the contract specified that Shiel Sexton’s obligations in this regard “run to the Owner only,” and indicated that it assumed no duty of care to employees of subcontractors, such as Dixon. Id. at 718. The court of appeals explained that the construction documents placed exclusive control over safety on subcontractors. It further stated that any actions regarding safety at the project performed by Shiel Sexton fell within the scope of its contractual obligations. Id. at 722-23. Accordingly, Shiel Sexton assumed no duty of care with respect to the safety of Dixon through its conduct to supervise and/or ensure compliance with general safety requirements imposed by contract. Id.
Tinsley-Williamson v. A.R. Mays Constr. Inc., 195 N.E.3d 891 (Ind. Ct. App. 2022)
In Tinsley, a project owner, America Multi-Cinema Entertainment (AMC) entered into a contract with a contractor, LTCI, Ltd. (LTCI) to build a movie theater. LTCI subsequently entered into a contract with the general contractor, A.R. Mays, to substantially complete the project in accordance with the plans and specifications. AMC entered into a separate contract with Everything Cinema for the installation of new theater screens and sound systems for the theater. Id. at 894. The plaintiff, Ethan Tinsley (“Tinsley”) was an employee of Everything Cinema, who was injured after falling from unsecured scaffolding while he was working to install a sound system on site. Suit was filed on his behalf against A.R. Mays alleging contractual duties of safety owed and breached to Tinsley under the contract between A.R. Mays and LTCI. Id.
A.R. Mays filed a motion for partial summary judgment on the issue of its purposed contractual duties of care to Tinsley, which was granted by the trial court. On appeal, the court of appeals affirmed the trial court’s award of summary judgment in favor of A.R. Mays.
The contract between A.R. Mays and LTCI required that A.R. Mays (1) take reasonable precautions for the safety of, and provide reasonable protection to prevent damage, injury or loss to the “employees of the Work and other persons who may be affected thereby”; (2) comply with all applicable laws, statutes, codes, rules, and regulations; and (3) designate a responsible member at the site to prevent accidents.
While Tinsley attempted to rely on Ryan to argue that the three “common-thread” requirements were present, the Indiana Court of Appeals stated that this reliance was misplaced. Id. at 895. The court reasoned that Tinsley’s employer, Everything Cinema, was an independent contractor to AMC, and A.R. Mays had no contractual relationship to Everything Cinema. Id. Interestingly, the court of appeals did not appear to directly discuss whether Tinsley could have been a third-party beneficiary to the contract under the category of “persons who may be affected thereby.” Ultimately, the court held that “A.R. Mays’s contractual duties of care under the LTCI-A.R. Mays contract were not applicable to the employees of Everything Cinema.” Id. Accordingly, the Court held that the designated evidence negated the duty element of Tinsley’s negligence claim and affirmed the trial court’s entry of partial summary judgment for A.R. Mays. Id. at 866.
Synthesizing these two 2022 decisions in the context of Ryan, the Indiana Court of Appeals appears to be narrowing the definition of to whom and for whom contractual duties are implied for general contractors. Should more courts take this approach, Indiana may trend toward the traditional rules of jobsite safety duties for construction contractors.
Mr. VanDenburgh is a partner in the Merrillville office of Cassiday Schade and chairs the DTCI Construction Law Section. The opinions expressed in this article are those of the author.