Legal Update: Recent Illinois Decisions
Wednesday, January 2, 2019
Posted by: Hilary Korabik
Recent Illinois Decisions Regarding Direct and Vicarious Liability Pursuant to Section 414 of the Restatement (Second) of Torts in Construction Negligence Cases
by Dennis Cotter, SmithAmundsen, LLC
On October 20, 2016, the Illinois Supreme Court filed its opinion in Carney v. Union Pacific Railroad Company, 2016 IL 118984, 77 N.E.3d 1, 4 reh’g denied (Jan. 23, 2017), affirming summary judgment in favor of Union Pacific in a construction negligence injury case filed by an employee of a sub-subcontractor who was injured while removing steel on a bridge demolition project. Union Pacific had subcontracted the purchase and removal of the bridge to Happ’s Inc., a scrap contractor, pursuant to a written subcontract. Happ’s then orally subcontracted with the Carney Group to provide assistance with the bridge removal. The plaintiff, Patrick Carney, was the son of the owner of the Carney Group, and while preforming the removal, a steel girder severed both of his legs below the knee.
Plaintiff brought a negligence action against several contractors, but the case against Union Pacific was the only one before the Supreme Court. Plaintiff alleged causes of action based upon Section 414 of the Restatement (Second) of Torts, Section 411 (Negligence in Selection of Contractor), and Section 343 (Dangerous Conditions on the Land). The trial court granted summary judgment in favor of Union Pacific on all Counts, the Appellate Court reversed, and the Supreme Court affirmed the granting of summary judgment in favor of Union Pacific. The primary significance of the Supreme Court’s opinion is two-fold: first, the Illinois Supreme Court had not recently addressed the law relating to causes of action arising under Section 414, and second, the Court clarified a growing confusion in Illinois trial and appellate courts regarding whether 414 provides for both the vicarious and direct liability of contractors who “control” the conduct of other contractors on a construction site, for purposes of determining negligence liability for an injury to a worker on the site. Many Illinois appellate courts had been concluding that 414 provides for both a vicarious and a direct liability exposure to contractors.
As to this latter issue, the Supreme Court stated definitively that 414 does not provide a basis for a vicarious liability (master/servant or agency) of one contractor, typically an upper tier contractor, for the alleged negligent conduct of another contractor. In fact, the Court clarified that the first sentence of Comment a to Section 414 actually makes clear that vicarious liability is NOT a component of 414:
“If an employer of an independent contractor retains control over the operative detail of doing any part of the work, he is subject to liability for the negligence of the employees of the contractor engaged therein, under the rules of that part of the law of Agency which deals with the relation of master and servant.”
The Court clarified that this sentence in Comment a does not explain when section 414 applies, but rather, it explains when section 414 does not apply. The Court then further clarified that, notwithstanding that 414 does not provide a basis for vicarious liability, it may subject one contractor to liability for the negligent acts of another contractor if the first contractor exercised supervisory control over the work being performed by the injured worker to a degree that the worker’s employer was not entirely free to perform that work in the manner that it deemed appropriate under the circumstances. (The Court did not further address what specific conduct would expose a contractor to vicarious liability because the plaintiff had not alleged a vicarious liability cause of action, and thus, missed an opportunity to provide further clarity to the bench and bar as to what would constitute vicarious liability in a construction injury case in Illinois.)
The Court analyzed the factors that may have given rise to Union Pacific’s direct liability under 414 and concluded that summary judgment was appropriate in Union Pacific’s favor. The Court in essence adopted a two-part test to assess whether a contractor had exerted sufficient supervisory control to trigger a duty under section 414. It stated that the best indicator of whether the defendant retained sufficient control to trigger a duty under section 414 is the written contract between the parties. It then noted that if the written contract provided no evidence of retained control, then control may be demonstrated by conduct (both pre and post-incident) on the part of the defendant.
In both prongs of the analysis, the Court emphasized that there must be such a retention of a right of supervision that the contractor is not entirely free to do the work in his own way. Contractual provisions that reserved the right to order the work stopped, to inspect its progress, to receive reports, to make suggestions and recommendations, prescribe alterations and deviations and perhaps most importantly, requiring that the work be performed safely, did not give rise to a duty under section 414. However, if the contractual provisions dictated with specificity the manner and method by which to comply with the above, thereby removing the other contractor’s freedom to make their own independent decisions, as specialists in their trade, as to how to perform their work, a duty may arise. The same considerations apply to the conduct of the allegedly supervising contractor both before and after the injury.
Two recent Illinois appellate cases have cited to Carney and provide further insight as to how Carney will be applied by the Illinois trial and appellate courts. On May 4, 2017, the First District Appellate Court (Cook County, IL) affirmed summary judgment in favor of a general contractor and drywall contractor when a stack of drywall fell on the employee of surveyor subcontractor while he was inspecting the job site. Snow v. Power Construction Company, LLC et al, 2017 IL App (1st) 151226. In affirming summary judgment in favor of the defendants, the Appellate Court cited to Carney, again stating the best indicator of whether the defendant retained control sufficient to trigger potential for liability under section 414 is the parties’ contract. The Court held that the contracts in that case made clear that each subcontractor was responsible for providing its own tools and materials, supervision of the work and safety. Regarding the defendants’ own jobsite safety programs, importantly, the Court stated that the fact that the defendants had a safety program, safety manuals, or a safety director did not constitute supervisory control over the work. The defendants’ safety programs must sufficiently affect the means and methods of the subcontractor’s work such that it was not free to complete the work as it deemed necessary.
On June 26, 2017 the First District Appellate Court again affirmed summary judgment in favor of a general contractor in Lepretre v. Lend Lease (US) Construction, Inc., 2017 IL App (1st) 162320. The plaintiff, Bond, was an employee of a sub-subcontractor and tripped over rebar he was installing for the concrete subcontractor at the time of the incident. The trial court, in granting summary judgment to the defendants, noted that the plaintiff failed to establish either vicarious or direct liability under section 414. The Appellate Court, citing to Carney, clarified again that there is no cause of action premised upon vicarious liability pursuant to section 414, only direct negligence for exercising supervisory control over the subcontractor’s work, either by contract or conduct, and there was no evidence of either in that case.
It should be noted that the Complaints in Carney and the two appellate cases cited above only alleged section 414-type negligence and did not include specific counts alleging vicarious liability, likely because of the pre-Carney confusion in Illinois regarding whether section 414 actually allows for a vicarious liability claim. As an Illinois construction injury defense firm, we are already beginning to see separate counts alleging vicarious liability in construction injury cases, along with section 414 and 343. It should be further clarified that the Carney decision does not preclude the filing of vicarious liability causes of action in Illinois construction injury cases, as we have seen in certain commentaries and legal filings post-Carney; rather, section 414 does not provide for a vicarious liability cause of action. We shall see how this issue develops in the months to come.