IL Supreme Court Issues Favorable Ruling in Construction Case

Posted by Bradford S. Purcell | Nov 14, 2016 | 0Comments

Over the past two decades, Illinois appellate courts handed down a body of conflicting and confusing case law regarding when a general contractor or owner of a project should be liable (directly or vicariously) for the negligence of its subcontractors. The courts struggled to set any clear framework for determining when a party sufficiently “retained control” over the subcontractor under section 414 of the Restatement (Second) of Torts, which was adopted as the construction negligence standard in the state. The Illinois Supreme Court has now ruled on this issue for the first time in over forty years, finding that a railroad company did not have control over a demolition subcontractor to be liable under section 414.

In Carney v. Union Pacific Railroad Co., 2016 IL 118984 (Oct. 20, 2016), Union Pacific (“UP”) entered into a contract with a demolition contractor to remove abandoned railroad bridges. The demolition contractor hired the plaintiff's company on a “handshake agreement” to help remove the bridge beams by crane. In the process of removing one of the beams that was connected to the crane, another beam that was not secured fell to the ground. The plaintiff's legs were severed below the knees when the beam collapsed and moved the steel plate on which he was standing.

The complaint alleged that UP retained control over the demolition contractor's work, negligently hired the demolition contractor, and failed to warn of the danger of the steel plate. The trial court granted summary judgment, but the appellate court reversed and found that there was a factual issue as to whether UP retained control over the work performed by the plaintiff's employer to become vicariously or directly liable to plaintiff.

Section 414 states, “One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care.” The Court recognized that the various comments to this section created “confusion” about when liability, whether direct or vicarious, attaches. The Supreme Court confined its analysis to direct liability – not vicarious liability – because section 414 addresses only direct liability. The Court explained that agency law, under which an employer may be vicariously liable for the torts of its employees, is distinct from the principles encompassed in section 414, under which an employer is directly liable for its own negligence. In short, “section 414 takes over where agency law ends.”

In finding that UP did not retain sufficient control, the Court first noted that the subcontract identified the demolition company as an independent contractor that was responsible for “all superintendence” of the work. The contract language gave UP “general rights” (e.g., to terminate work) and not control over the “manner” in which the work was performed. Even the safety requirements in the contract were not enough to show control by UP. There was “nothing within the four corners of the contract indicating that defendant retained control such that [the demolition company] was not entirely free to do the work in its own way.” UP was not involved in the engineering or sequencing of the demolition plan, and it did not speak to the demolition crew on site.

The plaintiff argued that UP should be liable because of its efforts to safely remove the girders post-incident. The Court rejected this argument and observed, “To hold otherwise would penalize a defendant's safety efforts by creating, in effect, strict liability for personal injury to any job site employee.” This is the key passage from the opinion. For years, the construction negligence case authority drifted toward a strict liability standard where any involvement in safety could impose liability. In fact, the pattern jury instruction states, “An owner/contractor who entrusts work to a subcontractor can be liable for injuries resulting from the work if the owner/contractor retained some control over the safety of the work and the injuries were proximately caused by the owner/contractor's failure to exercise that control with ordinary care.” While the Carney ruling is limited to the facts of that case, it should serve to remove the focus on a defendant's efforts to promote safety and, instead, place it on the manner in which the subcontractor performed the work, as the comments to section 414 require.

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