Case Title: McFadden v. Ten-T Corp.

Citation: 529 So. 2d 192

Docket Number: 

State: alabama

Court: Alabama Supreme Court

Date: 1988-05-27T00:00:00Z

Document:
529 So. 2d 192 (1988)
Mary Evelyn McFADDEN
v.
TEN-T CORPORATION.
86-738.

Supreme Court of Alabama.
May 27, 1988.
Andrew T. Citrin and Steven A. Martino of Cunningham, Bounds, Yance, Crowder and Brown, Mobile, for appellant.
Douglas L. Brown and William H. Philpot, Jr., Armbrecht, Jackson, DeMouy, Crowe, Holmes & Reeves, Mobile, for appellee.
BEATTY, Justice.
The plaintiff, Mary Evelyn McFadden, appeals from a summary judgment granted in favor of the defendant, Ten-T Corporation, in her action to recover damages. We reverse and remand.
The Alabama State Highway Department awarded a contract to Ten-T Corporation as a general contractor to resurface and widen a portion of a state highway in Escambia County. The Highway Department furnished the plans and specifications for the project, which, by contract, Ten-T Corporation was required to follow in the construction. Specifications for the drainage of the highway were specifically included in the plans. The Highway Department provided an on-site representative to inspect every phase of construction.
Following completion of the construction in December 1983, and the recommendation of the supervising engineer, the Highway Department accepted the work on December 28, 1983, and assumed responsibility for the maintenance of the highway. On July 18, 1984, approximately seven and one-half months after completion of the construction, Mrs. McFadden had an automobile accident on this portion of the highway. She was on her way to work during a heavy rain. As Mrs. McFadden entered a curve, she hit a body of water in the middle of her lane, lost control of the car, collided with a tree, and suffered injuries, resulting in medical expenses in excess of $17,000.
Mrs. McFadden and her husband filed suit against Ten-T Corporation based on her injuries and his loss of consortium arising out of Ten-T Corporation's alleged negligence in the widening and resurfacing of the highway, which they claim created the hazardous condition that proximately caused Mrs. McFadden's accident.
The trial court granted Ten-T Corporation's motion for summary judgment, holding that, as a matter of law, the plaintiff was not entitled to recover against the defendant, based on the application of a decision of the Fifth Circuit Court of Appeals, E.I. duPont de Nemours & Co. v. Kissinger, 259 F.2d 411 (5th Cir.1958). In that case, the Fifth Circuit Court of Appeals construed Alabama law to be that, if the owner has accepted an independent contractor's work, that contractor could not be held liable in negligence to an injured third *193 party. Mrs. McFadden appeals from the summary judgment granted in favor of Ten-T Corporation. Her husband did not join in this appeal.
This case presents squarely the question of whether this Court should accept the 30-year-old rule of the Fifth Circuit Court of Appeals in E.I. duPont de Nemours & Co., supra, that a contractor is insulated from liability to third persons simply by virtue of the fact that the owner has accepted the contractor's completed construction prior to the plaintiff's accident. Or, in these circumstances, should liability extend to contractors where third persons are injured as a result of the contractor's negligent construction or repair?
A review of Alabama cases decided since E.I. duPont de Nemours & Co. reveals that, while some cases have been decided on the assumption that injured third parties have a cause of action against contractors for negligence, the issue of whether a contractor is immune from liability merely because the owner has accepted the contractor's work has never been directly presented to this Court. The plaintiff urges this Court not to adopt the rationale set forth in E.I. duPont de Nemours & Co., but to apply the "imminently dangerous" exception to the general rule of nonliability. In the alternative, plaintiff urges this Court to expressly adopt the contemporary rule extending liability to contractors following acceptance of their work by the owner if the contractors' work was negligently done and it was foreseeable that third persons would be injured by that work.
The imminently dangerous exception to manufacturer's nonliability, which eliminated the requirement of privity for plaintiffs to recover, was first enunciated in Mac-Pherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050, 1053 (1916):
It is the exception to the general rule of nonliability with which the Fifth Circuit was concerned in E.I. duPont de Nemours & Co. In that case, the plaintiff's injury allegedly resulted from the use of a ¾ inch screw to attach a handle to a 250-pound warehouse door. The plaintiff was injured when he attempted to open the door and the handle fell off, causing him to suddenly fall backward with significant force. The warehouse in which the door was located had been constructed 13 years prior to the accident and was built by E.I. duPont de Nemours & Company for the federal government, purportedly as a temporary structure, or five-year plant, during World War II. At the time of the plaintiff's injuries, the warehouse was a part of a group of buildings being rehabilitated by the federal government. Those hired to do that rehabilitative work had been cautioned extensively concerning the possible dangers *194 existing due to the age and deterioration of the project.
The plaintiff filed a negligence action against E.I. duPont de Nemours & Company, and, following a trial, the jury returned a verdict in favor of the plaintiff. E.I. duPont de Nemours & Company appealed the trial court's denial of its directed verdict. On appeal, the injured plaintiff urged the Fifth Circuit Court of Appeals to apply the imminently dangerous exception to the general rule of nonliability for contractors just as it had been applied in the case of manufactured goods. The Court of Appeals examined three Alabama cases involving negligent manufacturing and, under the facts of that case, concluded that the Alabama "rule thus developed respecting manufacturers of dangerous mechanisms should not be extended to building contractors." Additionally, the Court of Appeals held that the trial court erred in not directing a verdict for E.I. duPont de Nemours & Company, because the evidence of negligence was insufficient to go to the jury.
Essentially two forms of the rule of contractor liability exist today. Some jurisdictions have adopted the general rule that a contractor has no liability to third persons following acceptance of the work by the owner unless one of the exceptions, such as the imminently dangerous exception, applies. See Reynolds v. Manley, 223 Ark. 314, 265 S.W.2d 714 (1954); Whiten v. Orr Construction Co., 109 Ga.App. 267, 136 S.E.2d 136 (1964). Other jurisdictions apply the rule that a contractor is liable to third persons following acceptance of the work by the owner if the structure was negligently built and it was reasonably foreseeable that these third persons would be injured. See Johnson v. Equipment Specialists, Inc., 58 Ill.App.3d 133, 15 Ill. Dec. 491, 373 N.E.2d 837 (1978), and cases cited therein.
The development of the contemporary rule extending liability to contractors following acceptance of the work by the owner has paralleled the development of products liability law as explained by Justice Maddox in his dissent in Bagby Elevator & Electric Co. v. McBride, 292 Ala. 191, 202, 291 So. 2d 306, 316 (1974), set out in pertinent part below:
(Emphasis added.)
The matter of contractor liability underlies this Court's decision in Bagby Elevator & Electric Co., supra, in which we held that the last phrase (the seven-year provision) of Section 1 of Act No. 788, Acts of Alabama 1969, p. 1418, was violative of *195 Section 45 of the Alabama Constitution of 1901, because the Act "does not clearly express the subject of the Act; and the body of the Act in reality contains two subjectsone, a statute of limitations, and the other, a provision abolishing certain rights of action against architects and builders." 292 Ala. at 198, 291 So. 2d  at 312. Act No. 788, as codified in Title 7, § 23(1), Code of 1940 (Recomp.1958), provided as follows:
The plaintiff in Bagby Elevator & Electric Co. was a minor, age 10, who was injured on an elevator installed by the defendant in that case. From aught that appears in that opinion, the defendant did not argue that the child plaintiff had no cause of action against it under the rule of nonliability of contractors to injured third parties after the work has been accepted.
Later, in the case of Plant v. R.L. Reid, Inc., 294 Ala. 155, 313 So. 2d 518 (1975) ("Reid I"), a majority of this Court reaffirmed the holding in Bagby Elevator & Electric Co. and further held that the remainder of the statute, absent the seven-year provision, was unconstitutionally vague as applied to tort actions, because, applying accepted rules of statutory construction, the Court could not determine what the legislature intended. The pertinent nderlying facts in Plant were set out in the opinion as follows:
294 Ala. at 157, 313 So. 2d  at 519. Having struck down Title 7, § 23(1), supra, this Court reversed the judgment for the defendant in Plant and held that the statute of limitations applicable to the plaintiff's cause of action was the limitations period contained in Title 7, § 123, the wrongful death statute. The case was remanded for a trial.
On remand, the case was tried on the plaintiff's amended complaint alleging that the defendant, R.L. Reid, Inc., a firm of consulting engineers, which had contracted with the Alabama State Docks to provide "general engineering work and preparation of plans and specifications [for], and supervision of construction" of alterations to the loading facilities at the bulk-handling plant at the Alabama State Docks at Mobile, did in fact prepare such plans and specifications for modification of the conveying system in place at the State Docks. The complaint further alleged that modifications were subsequently made to the conveying system in accordance with the plans and specifications provided by the defendant, and that the defendant was negligent in failing to specify in its plans that a guard or shield be placed at the point on the conveyor system where the plaintiff's decedent was pulled into the system, causing his death. The jury returned a verdict for the plaintiff awarding her $350,000. Judgment was entered for the plaintiff in that *196 amount and the defendant's pre-judgment and post-judgment motions were denied.
On appeal by the defendant, a majority of this Court reversed the judgment below and remanded the case for a new trial. R.L. Reid, Inc. v. Plant, 350 So. 2d 1022 (Ala.1977) ("Reid II"). The rationale of the majority's decision was set out in the opinion as follows:
(Emphasis added.) 350 So. 2d 1025-27.
Significantly, in Reid II, as in Bagby Elevator & Electric Co., supra, neither the defendant, amid curias, nor this Court questioned whether the defendant owed a duty to third parties not to perform their work negligently, notwithstanding the fact that the work had been accepted by the Alabama State Docks, with whom the defendant had contracted. Indeed, Title 7, § 23(1), was enacted, and Bagby Elevator & Electric Co. and both Reid I and Reid II were written, with the assumption that a cause of action in tort existed in favor of injured third parties against "persons who performed or furnished the design, planning, supervision or construction of improvements on real property ... for damages *197 arising out of any action or omission of such persons in the design, planning, supervision or construction of such improvements." Title 7, § 23(1), supra.
In the process of drafting the Code of 1975, § 23(1) from the 1940 Code was "rewritten in accordance with the cases of Bagby Elevator & Electric Co. and [Reid]." Code of 1975, Legislative Manuscript, Vol. 7, Appendix I, p. A-39. The rewritten version is codified at Code of 1975, § 6-5-218, set out below:
(Emphasis added.) It is important to note that § 6-5-218(b) expressly contemplates not only actions by "owner[s] of the subject improvement[s]," but also actions "by any other person," which is significant because it is further indication of a recognition by the legislature that liability of the persons protected by the statute of repose of § 6-5-218(a) may extend to those not in privity with such persons.
In Jackson v. Mannesmann Demag Corp., 435 So. 2d 725 (Ala.1983), decided eight years after the statute was rewritten, this Court was called upon to decide the constitutionality of § 6-5-218(a). Four different constitutional challenges were advanced; however, this Court found dispositive the first, which was that the statute violates Article 1, § 13, of the Alabama Constitution, known as the "open court" provision. The plaintiff in Jackson was injured by an electric arc furnace at the Autlan Manganese Corporation plant near Theodore, Alabama. He filed an action against Mannesmann Demag Corporation and McDowell-Wellman Engineering Corporation, asserting claims based on the Alabama Extended Manufacturer's Liability Doctrine and on negligence. The trial court ruled that the action was barred by the seven-year statute of repose contained in § 6-5-218 and entered summary judgment in favor of the defendants.
Before undertaking to analyze the § 13 issue, this Court explained the legislative history of § 6-5-218, which we reiterate below:
435 So. 2d  at 726-27. In holding that § 6-5-218 violated the open court provision of the Alabama Constitution, this Court analogized this statute to the Alabama products liability statute of repose, which, in Lankford v. Sullivan, Long & Hagerty, 416 So. 2d 996 (Ala.1982), this Court had held violated § 13. In the process of that analysis, we recognized the obvious similarities between claims against manufacturers of products, especially products with long useful lives, and claims against those who perform or furnish "the design, planning, supervision or observation of construction or the construction of an improvement to real property" (§ 6-5-218):
"`We recognize the problems which inhere in exposing builders and related professionals to potential liability for an indefinite period of time after an improvement to real property has been completed. Undoubtedly, the passage of time does aggravate the difficulty of producing reliable evidence, and it is likely that advances in technology tend to push industry standards inexorably higher. The impact of these problems, however, is felt by all litigants. Moreover, the difficulties of proof would seem to fall at least as heavily on injured plaintiffs, who must generally carry the initial burden of establishing that the defendant was negligent. In any event, these problems are not unique to the construction industry, and they are not sufficiently compelling to justify the enactment of legislation which, without providing an alternative means of redress, totally abolishes an injured person's cause of action. The legislation impermissibly benefits only one class of defendants, at the expense of an injured party's right to sue, and in violation of our constitutional guarantee of access to courts.'
"Overland, supra, at 574." *200 435 So. 2d  at 727-28. In a footnote to our opinion in Jackson, supra, this Court observed the following:
435 So. 2d  at 728. The relevance of this observation, as well as the other language from the opinion quoted and emphasized above, is in the recognition itself of the right of action at issue in that case, which is also at issue in the present case. Of further significance is that, in line with other jurisdictions, this Court has recognized the similarity between manufacturer's liability and contractor's liability. See Casrell v. Altec Industries, Inc., 335 So. 2d 128 (Ala.1976); Atkins v. American Motors Corp., 335 So. 2d 134 (Ala.1976). While we do not propose to adopt the same standards for contractor's liability as have been adopted for manufacturer's liability, we do recognize that the purpose that supports manufacturer's liability is the same as that that supports contractor's liability: a defendant will not be relieved from liability merely on the basis of lack of privity, when, as a result of his negligence, third persons are injured. Although very little practical difference exists in the application of the rules, this Court expressly follows the majority of jurisdictions that have adopted the rule extending liability to contractors following acceptance of their work by the owner where a third party is injured by the contractor's negligence.
We agree with the reasoning of the Illinois Supreme Court in Hunt v. Blasius, 74 Ill. 2d 203, 23 Ill.Dec. 574, 384 N.E.2d 368 (1979), in setting forth the requirements of contractor's liability and the proximate cause issue relating to a contractor's compliance with the owner's plans and specifications:
"`A builder or contractor is justified in relying upon the plans and specifications which he has contracted to follow, unless they are so apparently defective that an ordinary builder of ordinary prudence would be put upon notice that the work was dangerous and likely to cause injury.' (Cited with approval in Leininger v. Steams-Roger Manufacturing Co. (1965), 17 Utah 2d 37, 41-42, 404 P.2d 33, 36; Davis v. Henderlong Lumber Co. (N.D.Ind. 1963), 221 F. Supp. 129, 134; Person v. Cauldwell-Wingate Co. (2d Cir.1951), 187 F.2d 832, 835, cert. denied (1951), 341 U.S. 936, 95 L. Ed. 1364, 71 S. Ct. 855.)" *201 384 N.E.2d  at 371. We also agree with the New Jersey Supreme Court in Totten v. Gruzen, 52 N.J. 202, 245 A.2d 1 (1968), that the issue of liability does not depend on whether the defect is latent or patent:
245 A.2d  at 6.
In expressly recognizing this rule of liability for contractors following acceptance of their work by the owner, we are compelled to distinguish our previous holdings in cases involving the sale of new and used homes. This Court first held in Cochran v. Keeton, 287 Ala. 439, 252 So. 2d 313 (1971), that a builder-vendor would be liable on a theory of implied warranty in the sale of a new home, thus eliminating the rule of caveat emptor in new home sales. As this Court noted then: "Considerable comment has been made by legal scholars about the new trend toward judicial abolition of the doctrine of caveat emptor in real estate sales. Most scholars question the retention of the rule in view of current day conditions." 287 Ala. at 440, 252 So. 2d  at 314-15. While the rule of caveat emptor is still a valid defense in an action based on the sale of a used home, this rule has no applicability to a theory of liability based on personal injury caused by negligent construction, whether in regard to new homes or used homes. Thus, in an action based on the sale of a new home, the injured party may have more than one theory of recovery available to him; however, if he states a claim based on negligent construction, the injured party must meet the burden of proof attendant to contractor's liability.
In light of the foregoing, the judgment is reversed and the cause is remanded to the trial court for further proceedings consistent with this opinion.
REVERSED AND REMANDED.
MADDOX, JONES, ALMON, SHORES and ADAMS, JJ., concur.