NO. 94-029

IN THE SUPREME COURT OF THE STATE OF MONTANA

1995

RUSSELL B. GIBBY,

Plaintiff & Respondent,

v.

NORANDA MINERALS CORPORATION,

Defendant & Appellant.

APPEALS FROM: District Court of the Eighth Judicial District,

1n and for the County of Cascade,

The Honorable John McCarvel, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Dana Christensen, Murphy, Robinson, Heckathorn &

Phillips, Kalispell, Montana; Richard Ranney,

Williams & Ranney, Missoula, Montana

For Respondent:

Tom L. Lewis, Andrew D. Huppert, Lewis, Huppert &

Slovak, Great Falls, Montana

Filed:

Submitted on Briefs: June 15, 1995

Decided: October 16, 1995
Justice William E. Hunt, Sr., delivered the Opinion of the Court.

Appellant, Noranda Minerals Corporation appeals from a jury

verdict in favor of the plaintiff, Russell Gibby, and trial court

orders from the Eighth Judicial District Court, Cascade County. We

affirm.

We consider the following issues to be dispositive;

1. Did the District Court err in concluding that Noranda

Minerals Corporation had a nondelegable duty to ensure safety at

the Libby Adit?

2. Did the District Court err in instructing the jury that

Noranda Minerals Corporation had a nondelegable duty to provide

Russell Gibby a safe place to work under the Montana Safe Place to

Work statute rather than leave this issue to the jury as a question

of fact?

3. Did the District Court err in instructing the jury that

Noranda Minerals Corporation had a nondelegable duty to follow

safety standards promulgated under the authority of the Mine Safety

and Health Act (MSHA), 30 U.S.C., 5 801, and that violation of this

standard was evidence of negligence?

4 . Did the District Court err in concluding there was

sufficient evidence to support the jury's verdict that Noranda

Minerals Corporation was negligent and that Noranda's negligence

was a proximate cause of Russell Gibby's damages?

FACTS

In 1988, Noranda Minerals Corporation (Noranda) and Montana

Reserves Company entered into a Mining Venture agreement for the

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purpose of acquiring property and developing mining facilities in

the Cabinet Mountains of Northwest Montana. Noranda maintained a

55% interest in the ownership of the venture and was designated

manager of operations. The venture agreement allowed Noranda to

contract out the work of excavating tunnels.

Gilbert Corporation of Delaware, Inc. and the Dynatech Mining

Company formed a joint venture to bid on one of Noranda's

excavating projects. Gilbert-Dynatech (Gilbert) was hired by

Noranda to drive an exploration tunnel into the side of the Cabinet

Mountains (the Libby Adit). Noranda and Gilbert entered a

"Purchase Order Agreement MP 11001 for the Underground Evaluation

of Montana Project Montanore" (the POA).

Plaintiff and respondent, Russell Gibby (Gibby), filed this

action after injuring his back while working on the Libby Adit.

Gibby was employed by Gilbert in August 1989 as a shift

superintendent. On September 12, 1990, Gibby was using a hand held

jack-hammer, a type of drill which was known to hang up on

fractured rock and loose debris. Gibby injured his back while

pulling this hand-operated rock drill out of an anchor hole. Gibby

sought and received workers' compensation benefits through Gilbert.

He then brought this action against Noranda in tort for his

injuries.

Noranda filed an answer generally denying all allegations

contained in Gibby's complaint in April 1992. In July 1993, Noranda

filed a motion for summary judgment on the grounds that Noranda had

either delegated or discharged all duties to provide the plaintiff

a safe place to work. This motion was denied in October 1993.

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Trial was held on October 25, 1991, and the jury returned a verdict

in favor of Gibby for $1.3 million.

Noranda appeals the pre-trial denial of the motion for summary

judgment, the denial of the motions for a judgment as matter of

law, to alter or amend the judgment or for a new trial, and the

District Court's jury instructions.

ISSUE 1

Did the District Court err in concluding that Noranda Minerals

Corporation had a nondelegable duty to ensure safety at the Libby

Adit?

The question of whether a duty exists is a question of law.

Therefore, when reviewing a District Court's conclusions we must

determine whether the interpretation of the law was correct. In re

Marriage of Barnard (1994), 264 Mont. 103, 106, 870 P.2d 91,93,

(citing In re Marriage of Burris (19931, 258 Mont. 265, 269, 852

P.2d 616, 619).

Montana recognizes the general rule that owners or general

contractors of a construction project will not be held liable for

injuries to the subcontractor's employees. Shannon v. Howard S.

Wright Construction Co. (1979), 181 Mont. 269, 593 P.2d. 438.

However, the general rule has become the subject to a "catalog" of

exceptions. Shannon, 593 P.2d at 441 (citing Wells v. Thill

(1969), 153 Mont. 28, 33, 452 P.2d 1015, 1017-18). One of these

exceptions arises out of contracts, because Montana has long

recognized that certain contractual obligations are nondelegable.

See, e.g. Ulman v. Schweiger (1932), 92 Mont. 331, 347, 12 P.2d

856, 859.

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In 1979 we held that an owner or general contractor could be

held liable for the subcontractor's employee's injuries. Shannon,

593 P.2d. 438. In that case, we found that the owner and the

general contractor could be held liable given evidence of owner

control over the subcontractor's workplace environment. Shannon,

593 P.2d at 444. In 1981, we reaffirmed this holding and held that

a nondelegable duty under Montana's Safe Place to Work statute

could arise out of a contract. Stepanek v. Kober Construction

(1981), 191Mont. 430, 625 P.2d 51. In Stepanek general contractor

had assumed a nondelegable duty to a subcontractor when it

contractually agreed to maintain and supervise job safety.

Steuanek, 625 P.2d at 53.

Following Steoanek, in 1994, we found the Montana Department

of Highways (MDOHI) held a nondelegable duty of safety to the

employees of a subcontractor. Steiner v. Department of Highways

(1994), 269 Mont. 270, 887 P.2d 1228. In that case, a contract

with the Federal Highway Administration required MDOH to monitor a

highway project and assure compliance with safety regulations.

Subsequently, we held that the provisions of the contract had

created a nondelegable duty to provide a safe place to work for the

employees of a subcontractor. Steiner, 887 P.2d at 1232.

In the instant case, the District Court looked at the

contracts Noranda had signed in connection with the Libby Adit

project. The record shows, first, the terms of the joint venture

agreement with Mineral Reserves Company designate Noranda as the

majority owner and manager of operations. Second, under the terms

of the Purchase Order Agreement (POA) with Gilbert, Noranda had

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retained supervisory authority over Gilbert's employees and the

methods of operations, including employee safety. The POA provides

a protracted list of provisions detailing the balance of power

between Noranda and Gilbert. The POA gives Noranda the authority

to:

a)

b)

C)

d)

e)

f)

9)

h)

i)

j)

k)

Interpret the agreement and define intent and meaning and

judge its performance,

make decisions on all matters relating to the execution

and progress of the work,

stop the work whenever in Noranda's opinion such stoppage

may be necessary,

order the issuance of reports, data and other information

as deemed necessary,

order Gilbert-Dynatec employee's attendance at meetings

and request assistance and cooperation on matters

pertaining to the project,

perform safety inspection at the work site at any time,

remove from the job any subcontractor whose work did not

meet Noranda's approval,

make changes by altering, adding to or deducting from the

work,

order and direct Gilbert-Dynatec to increase or improve

the plant or equipment, improve methods, increase and

employ additional force or to perform night work or

overtime work when Noranda deemed any of GilbertDynatet's methods to be unsafe, inefficient or

inadequate, or should Noranda deem that Gilbert-Dynatec

was not proceeding with the work with sufficient

diligence,

prevent the removal of any equipment form the job site

without prior approval,

order Gilbert-Dynatec to expedite the work, work

overtime, add additional shifts, employ additional men or

provide additional equipment in the event that GilbertDynatec fails to complete any part of the work in the

time specified in the construction schedule,

stop the work or give whatever instruction were necessary

to correct conditions which Noranda deemed a threat to

the safety of life or the safety of any part of the work

or joining property or if any emergency arose which

affected or threatened to affect the safety of life or

the safety of any part of the work or any adjoining

property and then determine whether Gilbert-Dynatec was

entitled to any extension of time or extra compensation

due to the delay,

inspect the work and progress thereof,

order the removal and re-execution of all work which

failed to conform to the agreement,

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0) take possession of and use any completed or partially

completed portions of the work, not withstanding that the

period of time for completing may not have expired,

P) accelerate the work, delete portions of the work and/or

use Noranda's own forces or employ other contractors to

correct any portion of the work which Noranda deemed

improperly performed,

q) terminate the work in whole or in part for Noranda's

convenience at any time by written notice,

r) require an organized and effective safety program at

every location where work was performed, and

s) monitor Gilbert-Dynatec's performance, including safety

and health violations, conduct unannounced periodic

inspection with emphasis on safety and health and halt

any/all work performed at the construction site or area

until employees practices are changed or physical hazards

were corrected.

In addition to this contractual grant of authority testimony

offered at trial reflects that this authority was then exercised

extensively at the job site. In considering both the contracts and

Noranda's exercise of authority there is a clear indication of

"actual control" arising out of a contract. Steoanek, 625 P.2d at

Because Noranda exercised the requisite control, we hold that

the District Court's conclusion that Noranda had retained control

over the Libby Adit project and subsequently owed a nondelegable

duty of safety to the respondent, was a correct interpretation of

the law.

ISSUE 2

Did the District Court err in instructing the jury that

Noranda had a nondelegable duty to provide Russell Gibby a safe

place to work as under the Montana Safe Place to Work statute

rather than leave this issue to the jury as a question of fact?

The District Court has discretion over jury instructions and

we will not overturn a lower court's decision absent an abuse of
discretion. Chambers v. Pierson (1994), 266 Mont. 436, 880 P.2d

1350. When examining whether jury instructions were properly given

or refused, we must consider the jury instructions in their

entirety and in connection with the other instructions given and

the evidence introduced at trial. Feller v. Fox (1989), 237 Mont.

150, 772 P.2d 842.

In this case Noranda disputes the District Court's Jury

Instruction 16A, which read as follows:

As a matter of law Noranda Minerals Corporation had

a nondelegable duty to provide Russell Gibby a reasonably

safe place to work. This nondelegable duty required:

(1) that Noranda furnish a place of employment that

is reasonably safe for all persons working in the mine;

(2) that Noranda adopt and use practices, means,

method, operations and processes that were reasonable

adequate to render the place of employment safe; and

(3) that Noranda did any other thing reasonably

necessary to protect the life, health and safety of

Gilbert-Dynatec employees working in the mine.

This instruction contains the provisions of Montana Safe Place to

Work statute, § 50-71-201, MCA, which reads:

Employer to provide safe workplace and to purchase,

furnish, and require use of health and safety items --

safe practices. Each employer shall:

(1) furnish a place of employment that

is safe for each of his employees;

(2) with the exception of footwear,

purchase, furnish, and require the use of

health and safety devices, safeguards,

protective safety clothing, or other health

and safety items, including but not limited to

air masks, hardhats, and protective gloves,

that may be required by state or federal law,

the employer, or the terms of an employment

contract, unless the terms of a collective

bargaining agreement provide otherwise;

(3) adopt and use practices, means,

methods, operations, and processes that are

reasonably adequate to render the place of

employment safe; and
(4) do any other thing reasonably

necessary to protect the life, health, and

safety of his employees.

Noranda argues this instruction left the jury with the impression

that Noranda was illegally and wrongfully attempting to delegate

duties concerning safety in the workplace to Gilbert and

furthermore Montana's Safe Place to Work statute does not apply to

Noranda because it is an owner, not an "employer."

However, the statute is applicable to Noranda. Following the

logic in Shannon, Steoanek, and Steiner, where a nondelegable duty

has been created through a contract, the provisions of the Safe

Place to Work statute apply. Steoanek, 625 P.2d at 55. As was

discussed previously in Issue One, Noxanda retained both the right

and the duty to control job safety at the Libby Adit. This was a

question of law for the court, not a question of fact for the jury.

Therefore, Noranda had a nondelegable duty under Montana's Safe

Place to Work statute, 5 50-71-201, MCA, to provide Russell Gibby

with a safe working environment.

Furthermore, we must consider the instructions in their

entirety. The legal principle of causation requires a two-tiered

analysis. Kitchen Krafters v. Eastside Bank (19901, 242 Mont. 171,

789 P.2d 576. The first tier is a determination of whether the

action in question was the "cause-in-fact" of the damages, the

second tier requires a determination of whether the actions

proximately caused the damages. Kitchen Krafters, 789 P.2d at 574.

The Distxict Court concluded that it properly instructed the jury

that Noranda's conduct was a "cause-in-fact" of Gibby's injuries

"if it was a material element and substantial factor in bringing

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about the injuries." An instruction on Montana's Safe Place to

Work provides the jury with a "cause-in-fact" instruction, this

does not alleviate the jury's duty to find Noranda's actions (or

inaction) as the proximate cause of Gibby's injuries.

Therefore, we do not find reversible error upon review of the

jury instructions. The District Court adequately instructed the

jury on the applicable law, we affirm the District Court's

Instruction 16A.

ISSUE 3

Did the District Court err in instructing the jury that

Noranda had a nondelegable duty to follow safety standards

promulgated under the authority of the Mine Safety and Health Act,

(MSHA) , 30 U.S.C., 5 801, and that violation of this standard was

evidence of negligence?

The District Court has discretion over jury instructions and

we will not overturn a lower court's decision absent abuse of

discretion. Chambers, 880 P.2d 1350. Instruction 16B read as

follows:

The purpose of the Federal Mining Safety and Health Act

('lMHHA") is the protection of life, the promotion of

health and safety, and the prevention of accidents.

Under MSHA, Noranda had the nondelegable duty to:

(1) correct hazardous conditions at the mine

(section 57.3200);

(2) provide experienced persons to examine ground

conditions, haulage ways, travel ways, and surface areas

both prior to commencement of work and periodically

during performance of work in the mine (section 57.3401);

(3) inspect equipment and correct defects in the

equipment, machinery, and tools that affect safety to

prevent the creation of hazards to persons working in the

mine (section 57.141000);

(4) prohibit use of machinery, equipment,and tools

beyond the design capacity intended by the manufacturer,

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where such use may create a hazard to persons (section

57.14205);

(5) provide a competent person designated to examine

each working place at least once each shift for

conditions which may adversely affect safety or health

and initiate appropriate action to correct such

conditions (section 57.18002); and

(6) initiate appropriate action to correct such

conditions (section 57.18002).

In Stepanek we concluded that a violation of federal

regulations intended to protect the plaintiff could be considered

by the trier of fact as evidence of negligence. Stewanek, 625 P.2d

at 56. In this case Instruction 16B sets forth the nondelegable

duties any "operator" of a mining operation has under the Federal

Mine Safety and Health Act. The code defines an operator as:

[an1 owner, lessee, or other person who operates,

controls, or supervises a coal or other mine or any

independent contractor performing services o r

construction at such mine; 30 U.S.C. 5 802(d).

This was then read in conjunction with Instruction 16C which

stated: "Failure to discharge nondelegable duties imposed by MSHA

is evidence of negligence in Montana." Following Steoanek, the

jury could consider a violation of the Mine Safety and Health Act

as evidence when determining negligence.

We hold that the instructions were correctly presented to the

jury, and there was no abuse of discretion in giving Instructions

16B and 16C, and we therefore affirm the District Court in giving

those instructions.

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ISSUE 4

Did the District Court err in concluding there was sufficient

evidence to support the jury's verdict that Noranda was negligent

and that Noranda's negligence was a proximate cause of the

plaintiff, Russell Gibby's damages?

"[Tlhis court will affirm the verdict of a jury if there is

substantial credible evidence on the record to support the

verdict." Interstate Production Credit Association v. DeSaye

(1991), 250 Mont. 320, 322-23, 820 P.2d 1285, 1287. In a

negligence claim there are four elements: duty, breach, cause and

damages. Whitfield v. Therriault Corporation (1987), 229 Mont.

195, 745 P.2d 1126.

We have already held that Noranda owed the respondent a duty

to provide a safe work environment, thus satisfying the first

element of negligence. Beyond this, evidence was introduced to

show Noranda had breached this duty in failing to provide the

appropriate equipment. Gibby was injured while using a hand held

drill, a drill that was inappropriate for the task. This evidence

satisfies the second element.

The third element of causation breaks down into "cause-infact" and proximate cause. Kitchen Krafters, 789 P.2d at 547.

Again, we have already held that Noranda could be held legally

responsible under the Safe Place to Work statute, the next question

is whether this negligence was then the proximate cause of Gibby's

injuries.

The District Court's Instruction 17 read as follows:

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The defendant's conduct caused the plaintiff's injuries

if the conduct was a "cause-in-fact" and "proximate

cause" of the plaintiff's injuries . . . The defendant's

conduct was a "proximate cause" of the plaintiff's

injuries if it appears from the facts and circumstances

surrounding the incident that an ordinarily prudent

person could have reasonably foreseen that injury or

damage would be a natural and probable consequence of the

conduct.

A review of the record supports a finding that Noranda knew of the

loose debris at the mine site, knowing of these conditions it was

generally known the type of hand held drill Gibby was using would

be inappropriate. Therefore, there is substantial credible

evidence to support a finding that Noranda's failure to provide the

proper equipment could reasonably lead to the type of injury Gibby

suffered.

We hold there was substantial credible evidence to support the

jury verdict, and no abuse of discretion in the District Court's

jury instructions on proximate cause.

Affirmed.

We Concur:

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