Opinion ID: 2141079
Heading Depth: 1
Heading Rank: 3

Heading: Did I/N Tek Accept Calumet's Work as a Matter of Law?

Text: Blake argues that the material fact of acceptance in this case is in dispute. Specifically, Blake points to the lack of guardrails around the loading dock and asserts that Calumet's failure to complete the work in accordance with its contract with I/N Tek creates a jury question on whether I/N Tek accepted Calumet's work. In reply, Calumet contends that guardrails were in fact installed before November 3, 1989 but had been removed by a third party. Calumet asserts that its work on the loading dock had been accepted as a matter of lawinstallation of guardrails notwithstandingbecause Calumet's billing records indicate that I/N Tek paid for the loading dock in full two months before Blake's fall. Calumet also argues that it had relinquished physical control of the loading dock area before November 3, 1989, also indicating an acceptance. Contractors are liable for negligence while their work is in progress because they are presumably in a better position than the landowner to prevent injuries to third parties. Rush v. Hunziker, 216 Ind. 529, 24 N.E.2d 931 (1940). However, because a contractor's presence is transient the law has sought to relieve the contractor of liability after the work is accepted and completed, subject to some exceptions. Daugherty v. Herzog, 145 Ind. 255, 44 N.E. 457 (1896) is the seminal Indiana case holding that a contractor's duty of care to third parties is extinguished upon acceptance of the work. In Daugherty, the contractor remodeled the front wall of a drug store. Two years after the work was completed and turned over to the owner, the wall collapsed and killed the plaintiff's daughter, who had been walking on the public sidewalk below. In affirming the trial court's grant of a demurrer, we reasoned that [t]here must be some causal connection between the negligence and the hurt; and such causal connection is interrupted by the interposition, between the negligence and the hurt of any independent human agency. Daugherty, 145 Ind. at 257, 44 N.E. at 457 (internal quotation marks omitted). Thus, we emphasized in Daugherty that a contractor's duty of care ceases once the owner is again better able than the contractor to prevent harm to third parties. In the hundred years since Daugherty, we have not had occasion to elaborate on the underlying rationale for terminating the contractor's duty of care upon acceptance and how that rule should be applied, although we have restated the rule on at least two occasions. See Travis, Admx. v. Rochester Bridge Co., 188 Ind. 79, 122 N.E. 1 (1918) (holding contractor had no duty to third party five years after bridge was constructed, accepted by municipality, and opened to public); Citizens Gas & Coke Util. v. American Economy Ins. Co., 486 N.E.2d 998 (Ind.1985) (noting and restating Daugherty rule but deciding case on other grounds). [2] In evaluating acceptance for these purposes, the focus is on whether the owner was better able than the contractor to prevent injury to third parties at the time the harm occurred. Factors informing the acceptance inquiry include whether: (1) the owner or its agent reasserted physical control over the premises or instrumentality; (2) the work was actually completed; (3) the owner expressly communicated an acceptance or release of liability; or (4) the owner's actions permit a reasonable inference that the work was accepted. The owner can indicate an acceptance by re-occupying, leasing, selling or otherwise using the premises in a manner inconsistent with further physical control or construction activity by the contractor. Applying these criteria here, we cannot agree with the trial court and Court of Appeals that I/N Tek accepted Calumet's work on the loading dock as a matter of law. There are conflicting factual signs as to whether I/N Tek or United had interposed itself, in the manner contemplated by Daugherty, to break the causal connection between Calumet and Blake so as to relieve Calumet of its duty of care. That Calumet billed I/N Tek and claims to have received full payment before Blake was injured may suggest an acceptance, but on summary judgment and without proof of other facts it is inconclusive. Calumet's contract with I/N Tek may have provided for progress payments, but the contract is not included in the record. Calumet points to William Meeker's deposition testimony to support its argument that I/N Tek accepted the work, but this testimony is inconclusive because it adds up to no more than that I/N Tek paid Calumet's bill. The fact of payment alone cannot support summary judgment because payment could have occurred for a number of reasons, including mindless processing of submitted paperwork. The record is bereft of any other indication that the owner was subjectively satisfied with the work, or had communicated satisfaction, assuming it existed, or had any intent to accept the loading dock without the guardrails, if in fact none had ever been installed. Moreover, there is no record support for Calumet's claim that United or I/N Tek had asserted physical control over the loading dock area. On the contrary it is unclear who, if anyone, was in charge of this part of the construction site on November 3, 1989. [3] Other facts in the record suggest that acceptance had not yet occurred. For example, Calumet was still on the site at that time. Although it is undisputed that no guardrails were in place on the night of Blake's fall, there is a dispute whether the loading dock was completed in accordance with the specifications of Calumet's contract with I/N Tek. [4] Calumet cites to Meeker's testimony that suggests guardrails were installed before November 3, 1989 and that they had been removed, but some of the affidavits in the record support the conclusion that guardrails were never installed. This factual dispute bears directly on whether Calumet had fulfilled its obligations under the contract and, thus, whether the work can be inferred to have been accepted. It must be submitted to a jury. Blake may eventually lose on the acceptance issue. At this stage we hold only that he is entitled to a trial on the point.