Contractor Had Nondelegable Duty to Protect Subcontractor’s Employee

May 17, 2013 | Erika Eckley

After suffering an injury on the job site, an injured worker of a subcontractor sued his employer as well as the general contractor for an alleged breach of duty in providing him a safe work environment. On the day of the injury, the worker ascended a lift to the second floor of the worksite and exited the lift without first being tied off to prevent a fall. He stepped onto a sheet of decking that was not secured and fell twenty-three feet to the concrete floor below. Both the failure to tie off with a harness and rope and the failure to secure the decking after placing it in position were violations of the job site’s safety protocols. 

The worker settled his claim against his employer, the subcontractor, so only the claim against the general contractor for its breach remained. The district court granted summary judgment in favor of the general contractor. In doing so, the court held that the general contractor did not have a nondelegable duty to ensure the safety of all workers on the job site. The court also held the worker was not a third party beneficiary under the contract. The worker appealed.

Typically, the general contractor employing an independent contractor is not liable for injuries to the independent contractor’s employees. This applies unless a contract imposes responsibility on the general contractor for the safety of all employees or if the general contractor retains control of the premises and work performed.

In this case, the worker argued the contract between the general contractor and the owner imposed a nondelegable duty on the general contractor to prevent injury to all employees. On appeal, the court agreed that the following contractual terms created this duty:

§ A.10.2.1 The Design-Builder [the defendant] shall take reasonable precautions for the safety of, and shall provide reasonable protection to prevent damage, injury or loss to:
.1 employees on the Work and other persons who may be affected thereby;

§ A.10.2.2 The Design-Builder shall give notices and comply with applicable laws, ordinances, rules, regulations and lawful orders of public authorities bearing on safety of persons or property or their protection from damage, injury or loss.
§ A.10.2.3 The Design-Builder shall erect and maintain, as required by existing conditions and performance of the Contract Documents, reasonable safeguards for safety and protection, including posting danger signs and other warnings against hazards, promulgating safety regulations and notifying Owner and owners and users of adjacent sites and utilities.

§ A.10.2.6 The Design-Builder shall designate in writing to the Owner a responsible individual whose duty shall be the prevention of accidents.

The court held, by these terms, the general contractor assumed a duty for the safety of the workers. Once assumed, the duty was nondelegable, which meant that even if the contractor delegated the subcontractor to perform the task, the general contractor could not avoid liability for the duties if they were breached.

The contract also contained the following language, “The Contract documents shall not be construed to create a contractual relationship of any kind between any persons or entities other than the Owner and Design-Builder.” The court agreed this language was merely “boiler-plate” language aimed toward third-parties not contemplated by the agreement, and under the terms of the contract, the worker was a third-party beneficiary. Because the worker was listed within the scope of employees the general contractor agreed to keep safe under § A., the worker was a third party beneficiary and could sue under a tort theory to enforce the duty breached by the general contractor.

The court noted that the general contractor could have cut off any rights the worker might have had if the contract contained language expressly stating this. Language upheld for this principle from another case was the following, “There are no third party beneficiaries to this Agreement. The Agreement is intended only to benefit [the contractor] and [the contracting party].” The court found significant the difference in the contract language in this case and the language expressly denying any third party rights. Accordingly, the court reversed the summary judgment and remanded for further proceedings.

The importance of having an attorney review contracts for potential issues is evident in this case. The parties relied on “boiler-plate” language to try to prevent third party beneficiaries under the contract. This proved unsuccessful. Contractors and attorneys should take note of the accepted contract language disavowing third party beneficiaries under a contract and ensure terms accurately reflect the intent of the parties in allocating liability.  Security National Bank v. American Piping Group, Inc., No. 3-230/12-1466, 2013 Iowa App. LEXIS ____ (Iowa Ct. App. May 15, 2013).