Scott VOIGTS, Plaintiff and Appellant, v. BRUTOCO ENGINEERING and CONSTRUCTION COMPANY, INC., Defendant, Cross-complainant and Respondent; Miguel Construction, Inc., Cross-defendant and Respondent.
The question of whether, after Privette v. Superior Court (1993) 5 Cal.4th 689, 21 Cal.Rptr.2d 72, 854 P.2d 721, a subcontractor's employee can have a cause of action for direct liability against a general contractor or developer is now before the California Supreme Court.1 The case before us here forces us to confront the boundaries of the Privette decision in the narrow situation where a subcontractor's employee is injured by a hazard created solely by the subcontractor. In such a case, as we explain below, Privette requires that the general contractor should not incur tort liability to the subcontractor's employee. As in Privette itself, tort liability advances “no societal interest that is not already served by the workers' compensation system.” (Id. at p. 692, 21 Cal.Rptr.2d 72, 854 P.2d 721.)
On October 25, 1991, Scott Voigts was severely injured when he fell 12 feet from unsafe scaffolding during the construction of a bridge road over a creek. The scaffolding was built by his employer, a subcontractor, Miguel Construction, Inc. (Miguel) which had undertaken to erect a concrete abutment wall on the project for Brutoco Engineering and Construction Company, Inc. (Brutoco), the general contractor. The scaffolding was too narrow and lacked safety rails. After the accident, the subcontractor was cited by CAL–OSHA for violating California regulations regarding scaffold construction.
Voigts obtained workers' compensation benefits for his injuries and sued the general contractor on the project for having failed to provide him with a safe workplace.2 The contract between Brutoco and Miguel provided that Brutoco was to have “complete control of the premises on which the work [was] to be performed” as well as “all matters representing the timely and orderly conduct of the work of Subcontractor on the premises.”
In November 1993 Brutoco requested summary judgment based on the recent Privette decision. In addition to the facts already mentioned, the opposition papers established that Brutoco kept a superintendent on duty at the work site who took a job tour at least once a day, whose inspections would include looking at any scaffolding or other “apparatuses” being used, and who was aware of normal safety rules for scaffolds, including the need for safety railing. The opposition papers also presented some evidence that the scaffolding might have been built “a couple, maybe three days” prior to the accident. From this evidence we draw the inference that the superintendent prior to the accident was aware of the particular scaffold from which Voigts fell, even though he denied any such knowledge at his deposition.
The trial court granted the summary judgment motion and this appeal ensued.
In Privette v. Superior Court, supra, 5 Cal.4th 689, 21 Cal.Rptr.2d 72, 854 P.2d 721, the owner of a rental duplex hired a roofing contractor to install a new tar and gravel roof. After the gravel was deposited on the roof, the contractor's foreman directed an employee to carry 10 five-gallon buckets of hot tar up the ladder to the roof. The employee fell off the ladder and was burned. The Supreme Court held that the employee could not recover in tort against the owner under the doctrine of peculiar risk, which, as the court defined it, is the idea that “a person who hires an independent contractor to perform work that is inherently dangerous can be held liable for tort damages when the contractor's negligent performance of the work causes injuries to others.” (Id. at p. 691, 21 Cal.Rptr.2d 72, 854 P.2d 721.) The court declared that liability under the peculiar risk doctrine does not extend, in light of the existence of the workers' compensation system, to employees of an independent contractor hired to do dangerous work. (See id. at pp. 691–693, 702, 21 Cal.Rptr.2d 72, 854 P.2d 721.)
Recognizing that the Privette decision precludes liability under the peculiar risk doctrine, Voigts stresses the possibility that Brutoco, as general contractor on the creek bridge project, may be found liable in its own right for Voigts' injuries, even though there is no question that his employer, not the general contractor, built the scaffold, he was injured in the course and scope of his employment, and his employer provided workers' compensation benefits. Specifically, Voigts argues that he may still seek tort damages against Brutoco on the basis of Brutoco's “nondelegable” duty to prevent hazardous conditions on property it occupied and controlled, and the fact its contract with the subcontractor Miguel gave it “complete control” over the premises and over the “conduct” of the subcontractor's “work.”
After Privette, various panels of the Court of Appeal have dealt with cases which raised the question of whether, or under what circumstances, general contractors or other persons who (in Privette's phrase) “hire” independent (or sub) contractors could be held liable to the employees of the independent (or sub) contractors for the hirer's own negligence. What is remarkable is not that there is some doctrinal tension in these decisions,3 but the degree to which panels purporting to allow the possibility of liability against parties who hired the independent contractor employer of the injured worker did so either (a) in dicta, or (b) in a nonpublished portion of the decision. Indeed, the decision which dealt with the problem most squarely was handed down by the Ninth Circuit interpreting California law, and there in a dissenting opinion. (The majority made no attempt to answer the points raised by the dissent.) As we will now show, no rationale for limiting Privette to just peculiar risk has emerged from any of the cases.
A. No Rationale Has Emerged From The Cases After Privette to Limit the Privette Decision to Just the Peculiar Risk Doctrine
The first published decision to mention Privette was Srithong v. Total Investment Co., supra, 23 Cal.App.4th 721, 28 Cal.Rptr.2d 672. Like Privette, it was another hot tar case. Srithong, however, did not deal with whether or how the person who hires an independent contractor may be liable to that contractor's employee, but with the scope of liability under Proposition 51.4 Srithong is notable, for our purposes, for its observation that the essence of nondelegable duty is rooted in status, not fault.
In Srithong, a landowner of a mini-mall contracted with a roofing company to repair roof leaks. Hot tar seeped through the roof and fell on a restaurant operator working below. The restaurant operator sued both the roofing contractor and the landowner; the case went to trial prior to the Privette decision. The jury found the roofing contractor 95 percent at fault and the landowner 5 percent at fault. There was a very small amount of economic damages (less than $3,000), but a very large amount of noneconomic damages ($83,000). The landowner requested entry of a separate judgment under Proposition 51, which would have the effect of limiting its total liability to less than $7,000. The motion was granted and the injured restaurant operator appealed. The appellate court modified the judgment to make the landowner jointly and severally liable.
The Srithong court reasoned that the landowner had a duty to maintain its property in reasonably safe condition, and that it could not escape liability for a failure to maintain property in a safe condition by delegating that duty to an independent contractor. The court then characterized this “nondelegable” duty as “vicarious,” because it was not based on the personal fault of the landowner. (Id. at p. 727, 28 Cal.Rptr.2d 672.) The Srithong court relied on a passage from Maloney v. Rath (1968) 69 Cal.2d 442, 446, 71 Cal.Rptr. 897, 445 P.2d 513, which compared and contrasted nondelegable duty with strict liability. The Maloney passage made the point that nondelegable duty exists to assure compensation from a party who may be properly “held liable for the negligence of his agent, whether his agent was an employee or an independent contractor.” 5 Accordingly, the Srithong court concluded the very vicariousness of the landowner's liability meant that Proposition 51 did not apply. Vicarious liability is based on status, a consideration independent of joint and several liability, which is based on fault. Because the landowner's liability was vicarious, there was no fault to apportion and it was therefore error to grant the landowner a separate judgment. (See id. at pp. 726–728, 28 Cal.Rptr.2d 672.)
A month after Srithong was decided, the scope of the Privette decision was addressed more directly in Owens v. Giannetta–Heinrich Construction Co., supra, 23 Cal.App.4th 1662, 29 Cal.Rptr.2d 11. The court there implied that Privette should be limited to “only” situations where the third party liability “is vicarious rather than direct,” but did not support that idea with any more analysis beyond the ipse dixit, “It is plain․” 6
The Owens opinion does not tell the reader exactly what happened, but does indicate that an employee of an independent subcontractor was injured at a construction project and then sued the general contractor under the doctrine of peculiar risk. Because the jury found the general contractor liable “under the doctrine of peculiar risk” for the injuries, the Owens court held that Privette barred any recovery and reversed a judgment against the general contractor. (Owens, supra, 23 Cal.App.4th at p. 1671, 29 Cal.Rptr.2d 11.)
As related, in the course of its discussion the Owens court opined that the Privette decision was intended “to apply only in those situations where third party liability is vicarious rather than direct” (Owens, supra, 23 Cal.App.4th at p. 1668, 29 Cal.Rptr.2d 11, emphasis added), thereby implying that a general contractor still might be “directly” liable for injuries sustained by a subcontractor's employees. Why the court felt the need to express these thoughts is not clear from the opinion and in any event they must be regarded as dicta. As it happened, in the case before it the jury had found the general contractor liable entirely “on a theory of vicarious liability.” (Ibid.)
Next came Smith v. ACandS, Inc. (1994) 31 Cal.App.4th 77, 37 Cal.Rptr.2d 457, which held that a utility company could not be held vicariously liable for injuries to the employee of an independent asbestos insulation contractor, even if the injuries were in part caused by the negligence of other contractors. The Smith court pointed out that Privette marked the “return to the ‘original form’ of the doctrine of peculiar risk.” That is, “a landowner is liable to innocent bystanders and neighboring property owners injured by a hired contractor's negligent performance of dangerous work on the land.” (Id. at pp. 95–96, 37 Cal.Rptr.2d 457.) The employee in Smith, a pipe fitter, was neither a bystander nor a neighboring property owner and thus could not recover against the utility on that theory. (See id. at p. 96, 37 Cal.Rptr.2d 457.) The Smith court further found “compelling” the commonality of workers' compensation to both Privette and the case before it, and concluded that imposing tort damages on a person who hires an independent contractor would penalize those who have the good sense to hire experts to do dangerous work rather than trying to do it themselves with their own inexperienced employees. (Ibid.; see Privette, supra, 5 Cal.4th at p. 700, 21 Cal.Rptr.2d 72, 854 P.2d 721 [“to impose vicarious liability for tort damages on a person who hires an independent contractor for specialized work would penalize those individuals who hire experts to perform dangerous work rather than assigning such activity to their own inexperienced employees”].)
However, in reversing a judgment against the utility company, the Smith court did not direct judgment be entered in its favor. In a two-paragraph subsection on page 97 of the opinion which did not discuss Privette, the court said there was sufficient evidence for a jury to conclude that the utility company was negligent in its own right in that the company failed to hire “careful and competent insulators or to take other reasonable precautions” in light of the known dangers of asbestos. The question of the company's negligence was to be the subject of a new trial. (See Smith, supra, 31 Cal.App.4th at p. 97, 37 Cal.Rptr.2d 457.)
The vicarious-direct dichotomy found explicitly dispositive in Srithong and Owens was again the key element in Doney v. TRW, Inc. (1995) 33 Cal.App.4th 245, 39 Cal.Rptr.2d 292. There, the court held that the heirs of employees killed during a murderous rampage in the offices of a corporate subsidiary could not sue the corporate parent on an alter ego theory. The Doney court identified three reasons from the Privette decision which precluded vicarious liability under the peculiar risk doctrine, and pointed out that they applied just as much to the alter ego doctrine as they did to the peculiar risk doctrine. (Doney, supra, 33 Cal.App.4th at p. 251, 39 Cal.Rptr.2d 292.) Those three reasons were: (1) the anomalousness of assessing greater liability against a nonnegligent person than against the person whose negligence actually caused the injury; (2) the windfall that would accrue to a certain class of employees—those who work for independent contractors—to recover tort damages for injuries for the failure to be provided a safe working environment, something which other workers do not have; and (3) the burden that is placed on a party who is fault-free in light of the inability of such a person to obtain equitable indemnity from the negligent employer. (See id. at pp. 250–252, 39 Cal.Rptr.2d 292, citing Privette, supra, 5 Cal.4th at pp. 698, 700–701, 21 Cal.Rptr.2d 72, 854 P.2d 721.) 7
Apparently, the heirs also contended that the alter ego had a separate duty to provide the decedents with reasonable security. They lost on that point as well, but we do not know why. The Doney court did not publish its discussion on reasonable security. (See Doney, supra, 33 Cal.App.4th at p. 252, 39 Cal.Rptr.2d 292.)
The next case to come along, Whitford v. Swinerton & Walberg Co. (1995) 34 Cal.App.4th 1054, 40 Cal.Rptr.2d 688, also relegated the issue of any liability on the part of the defendant independent of the negligence of the independent contractor to a nonpublished portion of the opinion. In Whitford, a carpenter employed by a subcontractor was trying to lift a section of coreboard into a track near an open elevator shaft. A gust of wind blew him back, the carpenter pushed forward and the coreboard went out over the open shaft, threatening to bring the carpenter down with it. The carpenter pulled back as hard as he could and regained control of the board, but in the process injured a disc in his back. Apparently the injury might not have happened except that subcontractors had lowered certain safety cables. The carpenter sued the general contractor for negligence and peculiar risk. The jury found the general contractor was negligent in its own right and liable for the subcontractor's negligence under the peculiar risk theory. While the trial court entered a judgment assessing the general contractor for its own negligence, it refused to impute the subcontractor's negligence to the general contractor. Both the carpenter and the general contractor then appealed.
Even though the appellate court affirmed the judgment, most of the opinion was taken up agreeing with the general contractor that Privette was to be applied retroactively. (See Whitford, supra, 34 Cal.App.4th at pp. 1058–1060, 40 Cal.Rptr.2d 688.) In a lone paragraph near the end of the opinion, the court stated that reversal was not required because the “greater cause” of the carpenter's injury was the general contractor's own negligence, though the court did not discuss the nature of that negligence. (Id. at p. 1060, 40 Cal.Rptr.2d 688.) The retroactive application of Privette simply meant that the general contractor was not liable for the subcontractor's negligence under the peculiar risk doctrine and the trial court had already, in effect, so provided. (Ibid.) There was no error on the negligence finding, but the court's discussion of that point was not published. (See ibid.)
This brings us to Felmlee v. Falcon Cable TV, supra, 36 Cal.App.4th 1032, 43 Cal.Rptr.2d 158. Felmlee, like Owens, appears to have tried to limit Privette by volunteering that Privette did not encompass certain forms of liability, but then showing that the employee of the independent contractor was destined to lose anyway. As it turns out, Felmlee touched only obliquely on the problem of negligence separate from that of the independent contractor.
In Felmlee, a cable television operator hired an independent contractor to do maintenance and repairs on its lines. An employee of the contractor climbed up on a ladder attached to a “mid-span” cable which was strung between two telephone poles. His goal was to cut a messenger cable, which was connected to the mid-span. When he cut the messenger cable, the change in tension on the mid-span caused it to rock back and forth, throwing the employee off the ladder. The employee sued the cable television operator, who obtained a defense verdict. The employee appealed, but failed to convince the appellate court that certain safety regulations and ordinances required the cable operator to insure that its independent contractor's employee wear safety belts and harnesses. (See id. at p. 1039, 43 Cal.Rptr.2d 158.) The Felmlee court observed, however, that the trial court did not err in denying the cable operator's motion for nonsuit, as “[t]here existed sufficient evidence of negligence on the part of [the cable operator] to permit that issue to go to the jury.” (Id. at p. 1037, 43 Cal.Rptr.2d 158.) The court did not identify what that evidence was.
Reminiscent of the Owens “It is plain” language, the Felmlee court declared, without citation to any part of the Privette opinion or discussion of its text, that Privette did not “purport to abolish all forms of vicarious liability in general, or the doctrine of nondelegable duty in particular, as a basis for suits by employees of contractors against the contractors' employer.” (Felmlee, supra, 36 Cal.App.4th at p. 1038, 43 Cal.Rptr.2d 158.) Additionally, and again without any elaboration or citation, the Felmlee court observed that the doctrine of peculiar risk was to be distinguished from liability for “specific, nondelegable duties in certain cases,” such as when a statute requires specific safeguards. (Ibid.)
The Felmlee court's observations were dicta. There was no need to address the scope of the Privette decision or any distinctions between nondelegable duties and peculiar risk. The safety regulations at issue in the case did not specifically require a cable operator to “insure” that its independent contractors' employees wore safety belts or harnesses, so no such “nondelegable” duty was implicated in any event. (See id. at p. 1039, 43 Cal.Rptr.2d 158.)
The employee in Felmlee also argued that the trial court erred in instructing the jury that the cable operator had no duty to warn of a danger which was obvious. That argument was rejected, but in the process the court opined, reminiscent of a similar discussion in the Smith decision where the court also made no reference to Privette, that the jury was still free to consider whether the cable operator “was directly negligent in failing to correct any foreseeable, dangerous condition of the cables which may have contributed” to the employee's injuries. (Id. at p. 1040, 43 Cal.Rptr.2d 158.)
The published decision to date which had the most occasion to confront the problem of negligence separate from that of the independent contractor employer was Yanez v. U.S., supra, 63 F.3d 870. Yanez involved a worker in a munitions plant operated by an independent contractor of the federal government; she was injured when dextrinated lead azide supplied to the plant by a third party exploded. She sued the federal government on both peculiar risk and negligence theories. Her negligence theory was based on the idea that federal officials knew of a variety of contractually required safety standards, including the need for conductive shoes in the plant.
California law governed the tort claim against the federal government. After a judgment for the United States on the pleadings, the Ninth Circuit quickly dispensed with the peculiar risk claim, including the assertion that the person who hires an independent contractor could still, after Privette, be liable for the negligent failure to supervise the precautions taken by that contractor.8 The court reasoned such a claim is “indistinguishable from the theory of liability rejected in Privette.” (Id. at p. 873.)
The Yanez court split, however, over whether the federal government could be held liable for the retention of control. The majority assumed that pre-Privette law holding that a principal may be held liable for having actual knowledge of a dangerous condition and the authority to correct it was still viable, even in the context of injury to an independent contractor's employee. (See id. at p. 875, relying on Holman v. State of California (1975) 53 Cal.App.3d 317, 124 Cal.Rptr. 773 and Rest. (2d) Torts, § 414.) In its entire discussion of this “retained control” liability, the Yanez majority did not confront Privette, not mentioning the decision at all on page 875 where the court explained the basis for its decision. (See Yanez, supra, 63 F.3d at pp. 874–875.) The majority simply declared that, under Holman v. California, supra, 53 Cal.App.3d 317, 124 Cal.Rptr. 773, actual knowledge of a dangerous condition and the authority to correct it was sufficient to establish liability under section 414 of the Restatement Second.9 The court did not confront, except, perhaps, by deliberately giving a deaf ear to the points raised in the dissent, the question of whether such liability logically was within the scope of Privette's reasoning.
In dissent, Judge Noonan reiterated the three reasons given for the Privette decision perceived by the Doney court (see Yanez, supra, 63 F.3d at p. 876 (dis. opn. of Noonan, J.)), and argued that those three reasons applied “equally to ‘retained control’ ” liability. (Ibid.) He stated that while Privette did, indeed, deal with the peculiar risk doctrine, the decision's reasoning “is not limited to peculiar risk.” (Id. at p. 875.) Hence he chided his colleagues for their refusal to “follow the reasoning of the state's highest court” even as to a “theory of liability not expressly dealt with by that court.” (Id. at p. 875.)
The Privette decision most recently came up in an insurance contribution case, Fire Ins. Exchange v. American States Ins. Co. (1995) 39 Cal.App.4th 653, 46 Cal.Rptr.2d 135, decided by the same panel which decided Felmlee. In Fire Ins. Exchange, the trial court ordered the umbrella insurer of a general contractor to contribute equally, along with the umbrella insurer of certain landowners for whom the general contractor was building a new home, to the settlement of a lawsuit brought against both the general contractor and the landowners by the injured employee of a subcontractor. In the underlying case, an employee of a wood framing subcontractor was injured when scaffolding built by the framing subcontractor collapsed. The general contractor's insurer argued that the trial court erred in not prorating the policies based on the fault of each insured, apparently assuming that the landowners were on the hook for most, if not all, of the liability to the employee's subcontractor. In particular, the general contractor's insurer contended that the landowners owed a nondelegable duty to provide the subcontractor's employee a safe work place. At the same time, its insurer thought that the general contractor was free of potential liability on a cause of action for peculiar risk.
The Fire Ins. Exchange court rejected the idea. Not “every personal injury involving scaffolding is a peculiar risk case rendering the landowner 100 percent liable.” (Id. at p. 660, 46 Cal.Rptr.2d 135.) So the landowners were not going to be stuck for all the liability. And, said the court, the general contractor faced liability itself: It had refused to provide metal scaffolding and ordered the framing subcontractor to build the scaffolding from wood; the general contractor also “supervised the work and visited the job site twice a day.” (Id. at p. 661, 46 Cal.Rptr.2d 135.) Citing a passage from Privette noting the “shadowy” line between collateral negligence and “risks that are inherent in the work” for purposes of liability under the peculiar risk doctrine, the Fire Ins. Exchange court concluded that the trial court did not abuse its discretion in equally prorating liability between the landowner's insurer and the general contractor's insurer. (See Fire Ins. Exchange, supra, 39 Cal.App.4th at pp. 660–661, 46 Cal.Rptr.2d 135.)
Thus despite five opinions (Owens, Smith, Whitford, Felmlee and Yanez) which had the opportunity to explore whether or how Privette allows the injured employee to recover against the party who hired the independent contractor, one opinion (Fire Ins. Exchange) which had indirect occasion to explore the same question, and two opinions (Srithong and Doney) which had occasion to explore Privette in other contexts, no convincing rationale for limiting Privette to just peculiar risk has emerged. The most that might be said is that a number of the cases have impliedly allowed or provided for that possibility. However, those cases can hardly be said to have etched the idea into legal concrete. Owens' statements trying to limit Privette to just vicarious liability, and Felmlee's statements trying to limit Privette to even less than that, were not only dicta—in both cases the employee lost—but not terribly persuasive dicta: Both cases declared what Privette did not say without any citation, analysis, or need to distinguish Privette.
Other cases are just as inconclusive. Doney rejected, but in a nonpublished portion of the decision, liability of the parent company for not having provided reasonable security. The same goes for Whitford, which came to an opposite conclusion as to the general contractor's negligence, but never discussed the nature of that negligence or why Privette would not preclude liability there.
Of the remaining cases, Smith and Yanez both allowed for the possibility of liability apart from Privette in brief discussions which made no attempt to come to grips with the Supreme Court's decision; indeed, Yanez, despite whatever merits its analysis might have (which we discuss anon), did not even make an attempt to come to grips with the points raised by the dissenting judge. Finally, not only did Fire Insurance Exchange not provide a reason to limit Privette to peculiar risk, but that case arose in the context of an action between insurers for equitable contribution, so all the court needed to concern itself with was the rough equity of the trial court's allocation, not the precise limits of liability as laid down in the Privette decision. In short, while a number of travelers have passed through the territory, it remains uncharted.
B. Privette Logically Encompasses More Than Just Peculiar Risk
Not only has no rationale emerged from the intermediate appellate courts for limiting the Privette decision to just peculiar risk, but a moment's reflection will demonstrate that Privette should not be so limited. It must be remembered that Privette explicitly overruled a prior decision, Woolen v. Aerojet General Corp. (1962) 57 Cal.2d 407, 20 Cal.Rptr. 12, 369 P.2d 708, which had allowed the hired contractor's employee to seek recovery from a nonnegligent property owner. (See Privette, supra, 5 Cal.4th at p. 696, 21 Cal.Rptr.2d 72, 854 P.2d 721.) The reason Privette reconsidered the Woolen decision was that in Privette there was a brand-new issue which had never been considered by the high court in such a context: the exclusive remedy provisions of the workers' compensation system. (Privette, supra, 5 Cal.4th at p. 696, 21 Cal.Rptr.2d 72, 854 P.2d 721.) Hence the Privette court stressed that “[u]ntil today, we have had no occasion to attempt to reconcile our decision in Woolen with the provision of the workers' compensation scheme limiting employer liability for an employee's work-related injury to providing workers' compensation coverage.” (Id. at p. 700, 21 Cal.Rptr.2d 72, 854 P.2d 721.) Further, the Privette court prefaced its decision to overturn Woolen with the words, “when considered in light of the various goals that the workers' compensation statutes seek to achieve․” (See id. at p. 701, 21 Cal.Rptr.2d 72, 854 P.2d 721.)
Thus the core of the Privette decision is the exclusive remedy provision of the workers' compensation statutes applied to liability claimed under the peculiar risk doctrine. But it would be “anomalous,” to say the least, to confine the ambit of the decision to just peculiar risk. As the case before this court now demonstrates, the Privette decision could easily be rendered a dead letter, and the exclusive workers' compensation remedy easily circumvented, if all it did was preclude peculiar risk liability. Having swept away peculiar risk, the Privette court would have only made room for other causes of action, functioning essentially the same way, to move in and take its place.
In the present case, for example, there is no dispute that the workplace hazard which caused the injury was created solely by the subcontractor.10 If all it takes is the assertion that the person who hires the independent contractor has a “nondelegable” duty to keep the workplace free of hazards created by the independent contractor to establish an independent basis for liability, then Privette might as well never have been decided. Even though the same policy concerns articulated in the Privette decision might be present, even though the exclusive workers' compensation remedy would be easily circumvented, and even though the basic relationship between the parties is the same, all the enterprising plaintiff's attorney needs to do is allege causes of action framed in different words than “peculiar risk,” and, presto chango, the double recovery available prior to Privette would remain.
Fidelity to the Privette decision requires, by contrast, an examination of the basic reasons behind it, and serious consideration of whether those reasons apply to a given claim by an independent contractor's employee, regardless of whether that claim is framed in terms of “peculiar risk,” or, as here, “nondelegable duty,” “retention of control,” or even the supposedly “negligent retention” of the independent contractor itself. We have already noted that both the Doney opinion and Judge Noonan's Yanez dissent perceived three basic reasons for precluding recovery under a peculiar risk theory: the anomaly that a “nonnegligent” party should pay more than the negligent independent contractor who caused the injury in the first place (Privette, supra, 5 Cal.4th at p. 698, 21 Cal.Rptr.2d 72, 854 P.2d 721), the “unwarranted windfall” that accrues to employees who work for independent contractors which is “denied other workers” (id. at p. 700, 21 Cal.Rptr.2d 72, 854 P.2d 721), and the inability to obtain equitable indemnity from the independent contractor (id. at p. 701, 21 Cal.Rptr.2d 72, 854 P.2d 721). To this triad we would add that Privette also spoke of the need not to penalize persons who hire “experts to perform dangerous work rather than assigning such activity to their own inexperienced employees” (id. at p. 700, 21 Cal.Rptr.2d 72, 854 P.2d 721). Finally, an overarching principle emerges from the Privette decision, which the Supreme Court thought important enough to make the focus of the introduction to the opinion—the question of whether liability advances any “societal interest that is not already served by the workers' compensation system.” (Id. at p. 692, 21 Cal.Rptr.2d 72, 854 P.2d 721.) Nothing about these considerations is necessarily confined to just peculiar risk liability.
C. Voigts' Claim for Breach of Nondelegable Duty Falls Within the Ambit of the Privette Decision
Voigts' primary argument is that Brutoco had a “nondelegable” duty to maintain Voigts' workplace in a safe condition. And because the duty was “nondelegable,” by definition the liability which Brutoco faces for breach of the duty is, in the words of his brief, “totally different” from liability under the peculiar risk doctrine precluded by Privette.
We need not—and do not—opine as to the nature of any such duty on the part of Brutoco as to hazards not created by Voigts' employer, the subcontractor Miguel. But liability for hazards, created by independent contractors, which injure the employees of those very contractors, are another matter. When the hazard is created by the independent (or sub) contractor, such liability is the functional equivalent of the peculiar risk liability at issue in the Privette decision. As a practical matter, liability on a theory of nondelegable duty means nothing more than the failure to intervene to correct a mistake or hazard that would not exist but for the independent (or sub) contractor. In such a case, any tort liability incurred by the hiring party to an employee of the independent contractor is wholly derivative, and based on the hiring party's in action in failing to correct a hazard created by the employee's employer. Indeed, if there is any difference between application of peculiar risk and nondelegable duty to insure a safe workplace, the difference favors tort liability less in the latter situation. There, the nature of the hazard is directly related to the concerns of the workers' compensation system.
Voigts relies on Johnson v. Tosco Corp. (1991) 1 Cal.App.4th 123, 1 Cal.Rptr.2d 747 for the idea that breach of nondelegable duties is a claim “different” from the peculiar risk doctrine. Johnson, however, does nothing to show that such a claim is different from peculiar risk when considered in the light of Privette.
In Johnson, the employee of an independent contractor sued the owner of an oil refinery after the employee fell off a defective scaffold (it tilted back on him as he was doing some insulating) while making negligent use of the scaffold (he tried to reach a barely accessible pipe fitting). The employee sued the owner of the refinery on three theories (knowledge of a dangerous condition on its land, retention of control over the contractor's work, and peculiar risk), and obtained a large verdict. The appellate court reversed, holding that the cumulative effect of three errors was prejudicial to the oil refinery owner. The first error was an instruction on the peculiar risk doctrine. Much of the Johnson opinion is taken up with a demonstration that the peculiar risk doctrine is not a basis for liability when a contractor uses defective equipment which the person who hires that contractor had no part in selecting, and when the contractor misuses the equipment. (See id. at pp. 132–133, 1 Cal.Rptr.2d 747.)
The passage from Johnson on which Voigts relies here was the court's response to the employee's argument seeking to “avoid” the conclusion that the peculiar risk doctrine afforded no ground of recovery at all. The employee's argument was that the oil refiner “should have known of the dangerous condition at the work site and therefore should have taken precautions.” (Id. at p. 134, 1 Cal.Rptr.2d 747.) The Johnson court responded by saying that knowledge of a dangerous condition related to “the other two theories of liability—the landowner's responsibility and the owner's retention of control over the operation.” In the next sentence the court opined—and here is the sentence that Voigts' now stresses—“[t]he peculiar risk doctrine is not a duplicative theory of liability that can be subsumed within these other theories but a distinct basis of liability.” (Id. at p. 134, 1 Cal.Rptr.2d 747.)
What Voigts does not tell us is that the oil refiner conceded there was substantial evidence under the other theories of liability (id. at p. 131, 1 Cal.Rptr.2d 747), so the Johnson court never explained (or had to explain) how landowner's responsibility and retention of control differed from peculiar risk. The court's “not a duplicative theory” comment was made without citation or analysis. And the comment certainly is not authority for the idea that under facts such as the case here there is some meaningful difference between the three theories for purposes of the policy considerations set forth in Privette, which had yet to be decided. The Johnson case was fought on the question of the prejudicial effect of the (as it turned out) erroneous peculiar risk instruction and two other instructions.11
Nondelegable duty after Privette is a “duplicative” theory in cases where the independent (or sub) contractor creates the hazard which injures one of its employees. All the same concerns animating the Privette decision are present: The party who did not create the hazard faces tort liability while the party who did has no such exposure. The injured employee gains the windfall of both workers' compensation and tort recovery because of the fortuity of working for an employer who was itself hired by another party. The same lack of equitable indemnity remains.12 Property owners or general contractors are penalized for having hired experts—had they attempted the job themselves they might have created even more hazards but at least their exposure would be limited to workers' compensation. And, overall, no societal purpose is served that is not already served by workers' compensation.
This last point about societal purpose deserves some elaboration. It cannot be denied that the cause of workplace safety, considered in a vacuum, is always served by establishing an incentive for persons who hire independent contractors to quickly intervene if those contractors create any unsafe conditions. The more people who have an incentive to yell “halt” to the creation of hazards the better.
But any increase in overall worker safety that is gained by holding persons who hire independent contractors liable in tort applies just as much to peculiar risk as it does to other doctrines which, to the degree they also impose tort liability, create incentives for parties to supervise, oversee or otherwise assume a watchdog role over independent contractors. The second sentence of the Privette opinion describes the purpose of the peculiar risk doctrine this way: “By imposing [tort] liability without fault on the person who hires the independent contractor, the doctrine seeks to ensure that injuries caused by inherently dangerous work will be compensated, that the person for whose benefit the contracted work is done bears responsibility for any risks of injury to others, and that adequate safeguards are taken to prevent such injuries.” (Privette, supra, 5 Cal.4th at p. 691, 21 Cal.Rptr.2d 72, 854 P.2d 721, emphasis added.) It is undeniable that any doctrine which has the effect of holding parties liable in tort for injuries created by the independent contractors they hire encourages “adequate safeguards.” The point is, the incremental increase in workplace safety afforded by such doctrines—including peculiar risk—was not perceived by the Privette court to further a societal interest “not already served by the workers' compensation system” when it comes to injuries to the employees of independent contractors. By contrast, injuries to non employees, or injuries to employees caused by hazards not created by their independent contractor employers, are a different matter, and we express no opinion on the societal interests served by tort liability in those situations.
D. Voigts' Claim for Liability Based on Retention of Control Also Falls Within the Ambit of the Privette Decision
Voigts also directs our attention to the provisions in general contractor Brutoco's agreement with subcontractor Miguel which gave Brutoco “complete control of the premises on the work to be performed” plus control of “all matters representing the timely and orderly conduct” of Miguel's work. Under section 414 of the Restatement (Second) of Torts, such retention of control entails tort liability for the “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 Ninth Circuit in Yanez relied on section 414 of the Restatement Second to hold that the federal government was liable under California law because government inspectors knew (Yanez court's emphasis) of widespread “non-use” of required conductive shoes at a munitions plant.
We address the special problem of the knowledge of the person who hires the independent contractor about the independent contractor's negligence in subheading III.H. below. For the moment, however, it is enough to observe that retention of control—when the hazard is created by the independent (or sub) contractor—is just as subject to the policy considerations and rationales set forth in the Privette opinion as peculiar risk, and in at least one respect even more so.
When the hazard is created by the independent (or sub) contractor, the fact remains that the most that can be said against the hirer of the contractor who retains control, to use the Restatement's phrase, “over any part of the work,” is that the person is guilty of a sin of omission. It is, as we have seen in the case of peculiar risk and nondelegable duty, a case of the failure to intervene to assure adequate workplace safeguards are taken. Privette's point about the anomalousness of holding the “nonnegligent” party liable in tort while the truly negligent party simply pays its workers' compensation premiums remains.
Likewise, the points about the double recovery for workers who are (as a matter of fortuity) employed by employers who were themselves hired by third parties, and the inability of those third parties to obtain equitable indemnity against the employers of injured employees, also remain.
Moreover, to vary the Privette rule in cases where the person who hires an independent (or sub) contractor retains control over any part of the work would not only penalize the hiring of experts to do dangerous work in cases where the peculiar risk would also otherwise apply, but create a most pernicious incentive on the part of those who hire independent contractors to relinquish control over the independent (or sub) contractor's work. That might—were Voigts' view to prevail—insulate such persons from tort liability for injuries to the employees of independent contractors, but it would have a deleterious effect on quality control and safety for non employees of independent contractors.
Further, to vary the Privette rule just because of the retention of control in the case of dangerous work (i.e., where the peculiar risk doctrine would also otherwise apply) would subvert the salutary purposes of the “original form” of the peculiar risk doctrine itself. If the retention of control made a meaningful difference from the rule in Privette, those who hire independent contractors would be placed in a conflict—torn between retaining control, so as to ensure the safety of nonemployees (such as neighboring landowners or other third parties) and relinquishing it, in which case they would have purchased insulation from tort liability to the employees of their contractors.
Finally, the fact remains that despite the incremental increase in worker safety mentioned above which is always present when the person who hires an independent contractor has a reason to watch over the contractor, no societal interest not already served by workers' compensation is served by tort recovery by the employees of independent (or sub) contractors on a retention of control theory. Indeed, as we have just shown, if retention of control by itself could vary the Privette rule, societal interests in quality control and safety for nonemployees would be dampened.
To the degree that the majority decision in Yanez stands for an opposite conclusion, we respectively part company with it. Yanez's decision on the retention of control problem is not persuasive because the majority failed to come to grips with Privette or even with the points raised by the dissenting judge.
E. Voigts' Claim for Liability Based on Peculiar Risk as Articulated by Section 413 of the Restatement Falls Within the Ambit of the Privette Decision
Voigts also invites us to declare Brutoco to be “directly” liable for its own negligence under the peculiar risk doctrine as articulated in section 413 of the Restatement (Second) of Torts. Section 413 imposes liability on a landowner when he or she employs an independent contractor for work which is “likely to create, during its progress, a peculiar unreasonable risk of physical harm to others unless special precautions are taken,” the harm is caused by the absence of such precautions, and the landowner either failed to provide in the contract that the contractor take those precautions or did not provide for them in some other manner.13 Suffice here to say that peculiar risk—including peculiar risk as articulated in section 413 of the Restatement—remains subject to all the considerations set out in Privette. It is, in the context of an injury to a contractor's employee, fundamentally a form of vicarious liability. Indeed, the Ninth Circuit was unanimous on that particular point in Yanez. (See Yanez, supra, 63 F.3d at p. 873 [“we conclude that Yanez's ‘section 413’ claim is indistinguishable from the theory of liability rejected in Privette ”].)
F. Voigts' Potential Claim for Liability Based on the Negligent Retention of His Employer Also Falls Within the Ambit of the Privette Decision
In Privette, the injured employee originally had a theory that he should be able to sue the owner of the rental duplex for negligently selecting the roofing contractor who employed him. (See Privette, supra, 5 Cal.4th at p. 692, fn. 1, 21 Cal.Rptr.2d 72, 854 P.2d 721.) The theory was eventually dropped before the high court issued its opinion. In this case Voigts has announced that “[u]pon remand” he will seek to amend his complaint to allege a cause of action for negligent retention of his employer. In his brief, Voigts asserts that such a cause of action is viable because Brutoco's superintendent might have known that the subcontractor was using defective scaffolding.
We address the problem of knowledge below in part III.H. It is clear from Voigts' argument, however, that his negligent retention theory is simply another way of saying that the general contractor should be held liable for failing to intervene in the work of the subcontractor to prevent it from creating a workplace hazard, except that not only should the general contractor have intervened, it should have kicked the subcontractor off the job (negligent retention) entirely. As such, everything we have said about the applicability of Privette to the theories of nondelegable duty and retention of control goes for this theory as well. We need only add that either a negligent selection or negligent retention theory of liability under the circumstances of this case (again, to reiterate: where the hazard was entirely created by the independent contractor and the injury was to the independent contractor's employee) emphasizes both the lack of independent negligence attributable to Brutoco, and the essentially derivative nature of the tort liability which Voigts, if he prevailed, were to obtain. Either theory of fault is necessarily based on Brutoco being held responsible for a personnel decision to hire or keep an allegedly ne'er-do-well independent contractor, not for any hazard created by Brutoco apart from the independent contractor's conduct.
G. Privette Still Applies Even Though There is An Express Indemnification Agreement
Voigts further argues that the presence of express contractual indemnification in this case means that Privette should not apply, because the absence of equitable indemnification was one of the major points in that decision. True, one of the reasons for the Privette holding is the unfairness of letting the person who hires a contractor be liable in tort to the employee of that contractor when that person cannot, given the workers' compensation system, obtain equitable indemnity from the contractor. (See Privette, supra, 5 Cal.4th at p. 698, 21 Cal.Rptr.2d 72, 854 P.2d 721.) But the presence of express indemnity is hardly a sufficient reason for a different rule. If anything, the opposite is the case.
To make the person who hires an independent contractor liable for the workplace injuries of the latter's employees merely because of an indemnification agreement is to make both the hirer and the independent contractor pay for the same risk twice in the form of insurance premiums which must provide two kinds of coverage to accommodate the same risk. That is, the person who hires an independent contractor would not only have to pay a price which covers the independent contractor's workers' compensation insurance costs, but would also have to pay a cost that would cover the independent contractor's liability insurance costs for the contractual liability the independent contractor will have assumed for the tort liability of the general contractor.14 (See Van Arsdale v. Hollinger (1968) 68 Cal.2d 245, 253, 66 Cal.Rptr. 20, 437 P.2d 508 [“the insurance necessary to distribute the risk is properly a cost” of the person who employs the independent contractor]; see also Privette, supra, 5 Cal.4th at p. 699, 21 Cal.Rptr.2d 72, 854 P.2d 721 [noting tentative draft of Second Restatement of Torts concluded that a hiring party's liability should not extend to an independent contractor's employees because cost of workers' compensation insurance is ultimately borne by defendant who hires independent contractor].)
A corollary of this point is that varying a result otherwise dictated by the Privette decision because of the existence of express indemnification would be to denude subcontractors of the protection of the exclusive remedy provisions of the workers' compensation laws. We are not blind to the fact that general contractors require express indemnification clauses in almost all subcontracts in the construction industry. Were we to hold a general contractor liable to a subcontractor's employee for the failure to timely correct a hazardous condition created by the subcontractor, the result would be to make subcontractors pay twice for workplace injuries to their own employees which the subcontractors had caused—once in workers' compensation premiums, once in liability insurance premiums. (See Anderson v. Chancellor Western Oil Dev. Corp. (1975) 53 Cal.App.3d 235, 242, 125 Cal.Rptr. 640 [“if Camay's negligence is imputed to Chancellor who in turn can seek indemnification from Camay, the result will be a circumvention of the well-established rule that an employee's remedy against his employer for industrial injury is exclusively one for benefits under the workmen's compensation law.”].) Sooner or later, insurers would catch on to the fact that subcontractors would face a double risk for a single workplace accident involving their employees.
By the same token, while subcontractors would be paying twice for the same injury, their employees would have the windfall benefit of recovering twice. (See Privette, supra, 5 Cal.4th at p. 700, 21 Cal.Rptr.2d 72, 854 P.2d 721.) And not only would they recover twice, but it would be, in the last analysis, from the same source: their employer.
H. Privette Applies Even Though the General Contractor May Have Known of the Hazard Created by the Subcontractor
As mentioned above, there was evidence submitted in the opposition to the summary judgment motion which would support the inference that Brutoco's job superintendent was aware that the independent contractor Miguel had erected an unsafe scaffold. Specifically, the general contractor's superintendent took a daily job tour and knew of normal safety rules for scaffolds. Also, the particular scaffold from which Voigts fell might have been up for as long as three days. From such facts we may reasonably infer (despite the superintendent's denial at his deposition) that he knew of the subcontractor's deficient scaffolding, and did nothing to correct it. Two reasons persuade us, however, that mere awareness of a safety hazard created by an independent contractor is not enough, consistent with the Privette decision, to establish independent tort liability on the part of the person who hires that independent contractor.
First, whatever duty a hiring party has to the employee of an independent contractor based on mere awareness is, at its most fundamental level, identical to the duty the independent contractor has to its employee—the duty to insure that the employee's employer provides a safe workplace. In such a context, the hiring party merely acts as a backstop to cure any unsafe conditions created by the employer. Accordingly, tort liability on the part of the general contractor based on just knowledge of the hazard duplicates the same social interest served by the workers' compensation laws—a safe workplace qua safe workplace.15
Second, tort liability based on mere awareness of a hazard created by the employee's employer (and failure to intervene to correct that hazard) implicates all the basic policy concerns of the Privette decision. The anomaly remains; the liability of the person who actually created the hazard is still less than the person who did not create the hazard, and whose only fault is in a sin of omission. (Cf. Jimenez v. Pacific Western Construction Co. (1986) 185 Cal.App.3d 102, 116–117, 229 Cal.Rptr. 575 [mere knowledge of dangerous condition and failure to take action to remedy that condition should properly be classified as passive nonfeasance or nonaction, not active negligence].) 16
The windfall remains; one injured employee is able to recover tort damages for an unsafe workplace, while another is not. (Cf. Arendell v. Auto Parts Club, Inc. (1994) 29 Cal.App.4th 1261, 1264–1266, 35 Cal.Rptr.2d 83 [workers injured after attack on auto parts store in area known by employer to be prone to crime could not sue employer in tort but were limited to workers' compensation remedy].)
There is the same lack of ability to obtain equitable indemnity, as well as the same tendency to discourage the hiring of expert independent contractors and do the job through one's own employees. Indeed, if mere awareness does make a difference, then general contractors and hiring parties are given an incentive not to supervise job sites and “see no evil” as far as their independent contractors are concerned.
We have already pointed out, of course, that tort liability based on mere awareness of a hazard created by an independent contractor serves no social interest that is not otherwise served by workers' compensation laws. Indeed, the cause of workplace safety is not served any more in the case of knowledge of a hazard created by the independent contractor than it is in the case of peculiar risk, a matter on which Privette is directly controlling. Peculiar risk liability is, after all, based on an express recognition by the hiring party that the project is “likely to create, during its progress, a peculiar unreasonable risk of harm to others.” (Rest. (2nd.) Torts, § 413.) If anything, the culpability of the hiring party is less in the case of mere awareness of a hazard created by the independent contractor than in the case of peculiar risk, where the danger was inherent in the very nature of the work.
I. The Privette Decision is Retroactive
Finally, Voigts suggests that the rule articulated by the Privette decision not be applied retroactively. (He was injured in 1991; he filed his complaint in 1992; Privette was decided in 1993.) While one may detect varying nuances in the Court of Appeal decisions to date on the applicability of Privette to the cases before them, they have been uniform that Privette is retroactive. (See Owens, supra, 23 Cal.App.4th at pp. 1669–1671, 29 Cal.Rptr.2d 11; Smith, supra, 31 Cal.App.4th at p. 95, 37 Cal.Rptr.2d 457; Whitford, supra, 34 Cal.App.4th at pp. 1058–1060, 40 Cal.Rptr.2d 688.) There is no need for us to redo the work of these courts, and in particular Owens and Smith, each of which clearly wrestled with the retroactivity question and reached a principled conclusion. Suffice to say here that Voigts is unable to identify any element of real reliance which would provide a compelling reason to depart from the usual rule of retroactive application of case law.17 The rule in Privette did not alter real-world expectations. If anything, it conformed the law to the standard assumption that on-the-job injuries are a matter for the workers' compensation system. And in terms of its effect on litigants qua litigants, it merely foreclosed a windfall recovery available to a narrow class of workers. (See Privette, supra, 5 Cal.4th at p. 700, 21 Cal.Rptr.2d 72, 854 P.2d 721.)
While our opinion is long, our holding is relatively narrow: Privette precludes tort recovery in this case because the hazard which caused the injury to the independent contractor's employee was created by the independent contractor and the defendant's only fault was its failure to correct that hazard in time to prevent the accident. We do not hold that the relationship between a general contractor and a subcontractor is such that Privette might apply even if the general contractor's negligence was in some meaningfully independent way responsible for the injuries to the employee of the subcontractor. This is not a case, for example, where a general contractor kept a vicious junkyard dog on the premises that attacked a subcontractor's employee.18 Nor is this a case where the general contractor undertook to supply equipment to the subcontractor and an injury occurred because that equipment was defective. (Compare Morgan v. Stubblefield, supra, 6 Cal.3d 606, 100 Cal.Rptr. 1, 493 P.2d 465 with McDonald v. Shell Oil Co., supra, 44 Cal.2d 785, 285 P.2d 902.) 19 But this is a case where Privette should not be easily circumvented by artificially categorizing the person who hires a contractor as “independently” negligent toward the contractor's employee just because he or she did not intervene to correct a condition created by that contractor.
The judgment is affirmed.
1. Toland v. Sunland Housing Group, Inc.(S050870), review granted March 14, 1996; Warner v. General Telephone Co. (S052974), review granted May 22, 1996.
2. The complaint alleged three causes of action: negligence, dangerous condition of public property, and “vicarious liability” under the peculiar risk doctrine. In this appeal Voigts has also voiced the intention to amend his complaint to add a cause of action for negligent selection of independent contractors, i.e., that Brutoco should be liable because it awarded a contract to Voigts' own employer. Since the parties have not briefed the issue, we do not address the question of whether Voigts has waived the right to amend his complaint at this stage. (Cf. Lee v. Bank of America (1994) 27 Cal.App.4th 197, 215–216, 32 Cal.Rptr.2d 388 (because role of pleadings in summary judgment is to delimit scope of issues, amendments to pleadings must be made no later than entry of judgment after summary judgment motion).)
3. Which there is: Compare Srithong v. Total Investment Co. (1994) 23 Cal.App.4th 721, 727, 28 Cal.Rptr.2d 672 (peculiar risk and nondelegable duty are both forms of vicarious liability), with Owens v. Giannetta–Heinrich Construction Co. (1994) 23 Cal.App.4th 1662, 1668, 29 Cal.Rptr.2d 11 (Privette was intended to apply to situations where “third party liability is vicarious rather than direct,” albeit only in those situations), and with Felmlee v. Falcon Cable TV (1995) 36 Cal.App.4th 1032, 1038, 43 Cal.Rptr.2d 158 (Privette did not “purport to abolish all forms of vicarious liability in general, or the doctrine of nondelegable duty in particular, as a basis for suits by employees of contractors against the contractors' employer”).
4. Proposition 51 is codified as Civil Code 1431 et seq. The basic idea is that a tortfeasor is only liable for its own proportionate fault where noneconomic damages are concerned. (See generally DaFonte v. Up–Right, Inc. (1992) 2 Cal.4th 593, 600, 7 Cal.Rptr.2d 238, 828 P.2d 140 (“the more intangible and subjective categories of damage were limited by Proposition 51 to a rule of strict proportionate liability”).)
5. Here is the entire passage from Maloney:“Unlike strict liability, a nondelegable duty operates, not as a substitute for liability based on negligence, but to assure that when a negligently caused harm occurs, the injured party will be compensated by the person whose activity caused the harm and who may therefore properly be held liable for the negligence of his agent, whether his agent was an employee or an independent contractor. To the extent that recognition of nondelegable duties tends to insure that there will be a financially responsible defendant available to compensate for the negligent harms caused by that defendant's activity, it ameliorates the need for strict liability to secure compensation.” (Maloney, supra, 69 Cal.2d at p. 446, 71 Cal.Rptr. 897, 445 P.2d 513.)
6. The court led up to its declaration by stating that “peculiar risk” is not “exclusively a form of vicarious liability” (see Owens, supra, 23 Cal.App.4th at pp. 1667–1668, 29 Cal.Rptr.2d 11), then began a new paragraph with the observation, “It is plain from the discussion in Privette that the Supreme Court intended its holding to apply only in those situations where third party liability is vicarious rather than direct.” (Id. at p. 1668, 29 Cal.Rptr.2d 11.) From that one sentence, made without citation or other reference to the text of the Privette decision, the Owens court then launched into a discussion of the basis for the jury's verdict. (Ibid.)Judge Noonan of the Ninth Circuit would later state that he found the analysis in Owens to be most unimpressive. “How Owens could conclude that [Restatement Second] section 413 liability survives Privette is beyond imagination. We have no obligation to accept this maverick misreading of the Supreme Court of California.” (Yanez v. U.S. (9th Cir.1995) 63 F.3d 870, 877 (dis. opn. of Noonan, J.).)
7. Judge Noonan in his Yanez dissent would later employ what were, essentially, the same three reasons. (See Yanez, supra, 63 F.3d at p. 876 (dis. opn. of Noonan, J.) (“Applying California law, we are bound not to produce a result that the California Supreme Court has stigmatized as anomalous, that the California Supreme Court has declared gives an unjustified benefit to the plaintiff employee, that the California Supreme Court has found to be unjust to the party to the contract with the independent contractor.”).)
8. The plaintiff's basis for this claim was section 413 of the Restatement Second of Torts, with which we deal below.
9. Restatement (Second) section 414 provides that “[o]ne 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.”
10. At oral argument, counsel for Voigts tried to exploit the fact that lumber used by the subcontractor Miguel had been initially supplied by Brutoco. The point might be relevant if there was some meaningful causal connection between the lumber and the accident—for example, if Voigts had been injured because the lumber was too weak to support his weight. (Cf. Morgan v. Stubblefield (1972) 6 Cal.3d 606, 625–626, 100 Cal.Rptr. 1, 493 P.2d 465 (equipment company providing scaffold knew what sort of scaffold was needed but supplied scaffold of improper dimensions and without needed anchoring device).)No such connection, however, exists. (See McDonald v. Shell Oil Co. (1955) 44 Cal.2d 785, 788 & 791, 285 P.2d 902 (“Plaintiff makes no claim that this new rope or catline was in any way defective or contributed to the cause of the accident․ [¶] ․ Nor is this a case where the owner furnished the equipment or was obligated by contract to do so, and the equipment proved to be defective, causing injury to the employee of the independent contractor.”).) Here, it is undisputed that Miguel built the scaffold and the reason for the accident was the way the scaffold was built, not the quality of materials used to build it. Indeed, there is no evidence Brutoco ever agreed to supply lumber for Miguel's scaffold or that Miguel ever asked for the lumber. All that can be extracted from the record is that Miguel used lumber to build its scaffold which had been left on the site by Brutoco. (See id. at p. 788, 285 P.2d 902 (employees of independent contractor simply borrowed catline from oil company's warehouse for use on well-pulling rig with no provision in the contract that oil company was to supply contractor with such items for its use on job; held, no liability on oil company because negligence was properly that of the independent contractor).)
11. And one of the two other instructions was held to be confusing to the jury because it told them that the oil refiner had a duty to warn of nonobvious dangers, where the danger in Johnson—a partially assembled and unstable scaffold placed over a hard and uneven surface—was not a “concealed danger.” (Johnson, supra, 1 Cal.App.4th at p. 140, 1 Cal.Rptr.2d 747.)
12. We discuss the effect of contractual indemnity below in part III.G.
13. That is our paraphrase. Here is the exact text: “One who employs an independent contractor to do work which the employer should recognize as likely to create, during its progress, a peculiar unreasonable risk of physical harm to others unless special precautions are taken, is subject to liability for physical harm caused to them by the absence of such precautions if the employer [¶] (a) fails to provide in the contract that the contractor shall take such precautions, or [¶] (b) fails to exercise reasonable care to provide in some other manner for the taking of such precautions.”
14. Liability insurance policies often have a contractual liability clause which provides for the tort liability of another which the policyholder incurs by way of contract. (See generally Fireman's Fund Ins. Co. v. City of Turlock (1985) 170 Cal.App.3d 988, 994–998, 216 Cal.Rptr. 796; International Surplus Lines Ins. Co. v. Devonshire Coverage Corp. (1979) 93 Cal.App.3d 601, 608, 155 Cal.Rptr. 870 (“The parties agree that the effect of this indorsement was to provide liability coverage to Devonshire in situations where Devonshire had by written contract assumed the liability of a third party.”).)
15. Tort liability imposed on the hiring party based on mere knowledge of a hazard created by the independent contractor should be contrasted with such liability based on a hazard created by the hiring party. While we need not explore the latter situation in detail, suffice to say here that it is at least arguable that a different social interest is served there—not just a safe workplace per se, but the interest that hazards otherwise external to the workplace not be introduced into it.
16. There is a huge body of case law devoted to the problem of distinguishing between “active” and “passive” negligence for purposes of contractual indemnity. We do not look to that body of law to resolve the case before us because the active-passive distinction in indemnity law is necessarily independent of the impact of the workers' compensation system which the Privette court found dispositive.Nevertheless, there is something to be learned from the Jimenez decision, in which the court grappled directly with the problem of mere awareness of a hazard. There, a general contractor was hired (presumably by the federal government) to build a road in a national park. The general contractor hired a pipeline installer to dig trenches and install the drain and culvert pipes for the project. The general contractor's foreman was on the job site every day, and he was aware of the need to slope trench walls deeper than five feet. The pipeline installer dug a trench which, at its north wall, was between eight and nine feet high—and not sloped. The trench collapsed, killing one employee of the pipeline installer and injuring another. The injured employee and the heirs of the dead employee then sued the general contractor, who in turn cross-complained against the pipeline installer for indemnity. The employee and the heirs obtained a verdict against the general contractor, and also found that the negligence of the general contractor was active, which resulted in the general contractor's losing its cross-complaint for indemnity. The general contractor then appealed.The appellate court affirmed the judgment based on the general contractor's foreman's actual knowledge about the dangerous condition of the trench. (See id. at pp. 112–113, 229 Cal.Rptr. 575.) But the conclusion was strictly a matter of following “Supreme Court dictum” from Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal.3d 622, 629, 119 Cal.Rptr. 449, 532 P.2d 97 and other cases repeating it. (See Jimenez, supra, 185 Cal.App.3d at p. 115, 229 Cal.Rptr. 575.) The Jimenez court thought the result did not accord with the reality of the situation, and the court took several pages to explain why. (See id. at pp. 113–117, 229 Cal.Rptr. 575.) The case was the first time a reported California decision had held a co-tortfeasor “barred from contractual indemnity ․ solely because of the prospective indemnitee's knowledge of the dangerous condition created by the prospective indemnitor.” (Id. at p. 113, 229 Cal.Rptr. 575, emphasis added.) This result was unfair, said the Jimenez court, because it placed the financial responsibility for the accident on the party “who did not actually participate in the creation of the dangerous condition,” as distinct from the party who actually did create the hazard. (Id. at p. 114, 229 Cal.Rptr. 575; cf. Privette, supra, 5 Cal.4th at p. 698, 21 Cal.Rptr.2d 72, 854 P.2d 721 (because the expansive view of the peculiar risk doctrine “produces the anomalous result that a nonnegligent person's liability for an injury is greater than that of the person whose negligence actually caused the injury, it has been widely criticized”).)The Jimenez court concluded that the conduct of the general contractor before it was “one of nonparticipation.” The general contractor did not dig the trenches, it merely observed the dangerous trench before the accident. For this it was held liable in negligence, but that liability “should properly be classified as passive negligence in its action for indemnity.” (Id. at p. 116, 229 Cal.Rptr. 575.) Mere knowledge and failure to act, the court then pointed out, is “reasonably” characterized as “ ‘nonfeasance’ ” or “ ‘nonaction.’ ” (Id. at p. 116, 229 Cal.Rptr. 575.) The result was thus “unsound” because “[n]o public purpose is served” by denying indemnification to a party who “took no active role in creating the unsafe condition.” (Id. at p. 117, 229 Cal.Rptr. 575.)
17. In Owens, supra, 23 Cal.App.4th at page 1670, 29 Cal.Rptr.2d 11, the court indicated that “reliance by litigants on the former rule” was a factor cutting against retroactive application. While it makes no difference (Owens still held that the rule in Privette was retroactive), we cannot agree. The “reliance ․ on the former rule” mentioned in Owens is merely a recognition that there was, indeed, a “former” rule and that rule had been changed. (See ibid.) But the former rule was not the sort of former rule which might have caused parties prior to litigation to alter their real-world decisions (though it certainly gave them an additional reason to keep the standard express indemnification clause in general contractor-subcontractor agreements), or alter their conduct in litigation (like a new rule of evidence). Rather, the old rule was a kind of “freebie” which was being taken away because, as the Privette court took pains to explain, it never should have been there in the first place. (See Privette, supra, 5 Cal.4th at pp. 700–702, 21 Cal.Rptr.2d 72, 854 P.2d 721 (explaining that until the Privette decision, the high court never really had occasion to consider the impact of the workers' compensation system with the application of the peculiar risk doctrine that allowed employees of independent contractors to sue the persons who hired those independent contractors).)
18. Or, to give another such example, suppose that Voigts' employer, Miguel, had done all it could to provide him with a safe scaffold, but Voigts was hurt when some debris from dynamiting by another subcontractor in another section of the project flew into one of his eyes?The facts in Felmlee are also interesting—and distinguishable from the present case—in this regard. In Felmlee, it was not unreasonable to say that at least a part of the employee's injuries were attributable to the tension on the mid-span, a physical item over which the cable operator, and not the independent contractor, had meaningful control. In the present case, by contrast, the injuries are solely attributable to a scaffold built too narrowly and without handrails, a matter over which the subcontractor had the control.
19. We reiterate that the fact that the subcontractor here used lumber which can be traced to the general contractor is a red herring in the absence of anything which either links the quality of the lumber to the accident or shows that the general contractor specifically undertook to supply the subcontractor's lumber needs.
SILLS, Presiding Justice.
CROSBY and RYLAARSDAM, JJ., concur.