Even Minor Control Over Contractors Could Lead To Liability

Wednesday, January 28, 2009 | 0

By Brian J. Kaplan


Synopsis: Another major construction liability ruling focusing on Section 414 of the Restatement.
 
Editors comment: This lengthy decision also exhaustively analyzes the state of Illinois construction law and is a must-read for general contractors.

In Grillo v. Yeager Construction, (No. 1-07-2335 December 31, 2008), the Illinois Appellate Court considered a claim where a stone mason fell off a scaffold erected on the perimeter of a house. Plaintiff supervised his own employees in the building of the scaffold. He alleged part of the reason the scaffold failed was due to a failure of the general contractor to backfill the property. Further, he had to use the unsafe scaffolding as he was under pressure to finish the work. He sued the homeowners and the general contractor alleging negligence. The homeowners' motion for summary judgment was granted.
 
Plaintiff alleged Yeager Construction (Yeager) was the general contractor of the construction site and David Yeager (David) was an employee or agent of defendant with whom he entered into a contract to perform the work. Yeager denied this. Following trial, the jury returned a verdict against Yeager. On appeal, Yeager contends, among other things, the trial court erred in denying its motion for judgment notwithstanding the verdict (judgment n.o.v., or judgment not withstanding the verdict) where plaintiff failed to establish a prima facie case of negligence.
 
Yeager argued plaintiff failed to establish that it owed a duty of care pursuant to Section 414 of the Restatement (Second) of Torts, because there was no evidence David was Yeager's employee or agent and there was no evidence Yeager was the general contractor for the project. The court disagreed, finding plaintiff introduced sufficient evidence to dispute defendant's claims. Although there was conflicting testimony with respect to what occurred surrounding the project, the court found the following salient facts:
 
Plaintiff testified he was hired by David to perform masonry work and David indicated Yeager would guarantee his payment. The homeowner testified Scott Yeager (Scott) told him David worked for Yeager and would supervise the project. Scott testified he prepared a schedule and outline for the construction project that listed "Yeager Construction Project Management Costs" and David would be the superintendent and receive a monthly salary for project management and job supervision, which included tasks such as acquiring subcontractor bids, procuring contracts for subcontractors, scheduling and organizing subcontractors and quality control. Monthly invoices for David's work were prepared on Yeager letterhead, and that contract which Scott signed, identified Yeager as the contractor and David as its representative.
 
There was also testimony the bank released loan money directly to Yeager. Further, Scott visited the construction site every month and provided weekly updates to the homeowners that Scott would obtain from David, who was at the construction site daily. There was also an insurance policy listing Yeager as the insured for the project.
 
Accordingly, the court found plaintiff introduced sufficient evidence to dispute defendant's claims that David was not an employee or agent and Yeager was not the general contractor. The jury assessed the credibility of the witnesses in favor of plaintiff by determining Yeager was the general contractor, which employed or granted authority to David. Since plaintiff demonstrated a substantial factual dispute, involving the assessment of credibility of the witnesses and the determination regarding conflicting evidence is decisive to the outcome, the court reasoned a grant of judgment n.o.v. was not appropriate.
 
Yeager next contended it did not owe plaintiff a duty of care where plaintiff failed to prove the existence of a contract for masonry work between plaintiff and Yeager as the evidence showed plaintiff was hired by the homeowners. After considering the facts, along with the contradictory evidence presented by plaintiff, the court held Yeager's motion for judgment n.o.v. was properly denied on this basis as well.
 
Yeager next contended it owed no duty to plaintiff under Section 414 of the Restatement (Second) of Torts, where plaintiff, himself, was an independent contractor rather than the employee of an independent contractor. Section 414 of the Restatement provides an exception to the general rule that one who employs an independent contractor is not liable for the acts or omissions of the independent contractor which 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 found there was sufficient evidence of control and supervision for the jury to decide whether Yeager was liable under the applicable section. The court also found evidence Yeager's actions on the job site indicated Yeager retained more than a general right of supervision. Accordingly, based on the evidence presented at trial, the court found it cannot be said that no contrary verdict could ever stand. Thus, the court concluded the evidence supported the circuit court's denial of Yeager's motion for judgment n.o.v.
 

 
Brian J. Kaplan is an attorney in the Chicago law firm of Keefe, Campbell & Associates.

The views and opinions expressed by the author are not necessarily those of WorkCompCentral.com, its editors or management.