Opinion ID: 852780
Heading Depth: 3
Heading Rank: 1

Heading: Liability of the Principal to the Independent Contractor or its Employees

Text: The term used to describe these exceptions  nondelegable duty  has historically been developed in the context of claims that the negligence of an independent contractor should be attributed to the principal. Dan B. Dobbs, The Law of Torts § 337, at 921-23 (2001). In that context, the Court of Appeals, following precedent in the majority of other states, had concluded in a number of cases that employees of the independent contractor could not invoke these exceptions to assert liability of the principal for acts of their employer as an independent contractor of the principal. Louisville Cement Co. v. Mumaw, 448 N.E.2d 1219, 1222 (Ind.Ct. App.1983); Johns v. New York Blower Co., 442 N.E.2d 382, 386 (Ind.Ct.App.1982); Hale v. Peabody Coal Co., 168 Ind.App. 336, 344, 343 N.E.2d 316, 324 (1976). If that doctrine is followed in Indiana, it would preclude Roberts's claim against PSI to the extent it is based on negligence of ACandS in failing to provide adequate safeguards or because ACandS employees were thought to be engaged in inherently dangerous activities. Roberts cites Bagley v. Insight Communications, Co., 658 N.E.2d 584, 587-88 (Ind.1995), for the proposition that an employee of an independent contractor may recover from the principal for negligence of the contractor or a fellow employee of the contractor. Richard Bagley was an employee of Sam Friend, a subcontractor for a cable installer, Steve Crawford. Crawford, in turn, was acting as a subcontractor for Insight Communications, a central Indiana cable television company. Bagley was injured in the course of his work for Friend and brought suit against Insight, Friend, and Crawford arguing, among other things, that Insight and Crawford were negligent in hiring Friend as their subcontractor. This Court stated the issue before it as may an independent contractor's employee, injured on the job as a result of the contractor's conduct, recover damages from a party who negligently hired the contractor, notwithstanding the general rule that one who uses an independent contractor will not be liable for the acts of that contractor? Id. at 584. Negligent hiring focuses on the negligence of the principal in selecting the contractor. In contrast, the previously defined exceptions to the general rule of nonliability for negligence of an independent contractor had found the principal liable not for its own negligence, but for negligence of its contractor in carrying out a nondelegable duty of the principal. Bagley summarily affirmed the Court of Appeals in rejecting the claim that Insight or Crawford had breached a duty to provide proper safety procedures but went on to address the negligent hiring issue. Id. at 586. After acknowledging that some states and the Restatement (Second) of Torts § 411 (1965) permitted a claim for negligent hiring, the Court did not adopt that general doctrine under Indiana law. Rather, it held that liability for negligent selection of a contractor could be imposed under the same circumstances that were recognized as exceptions to the rule of nonliability for negligence of the contractor. Bagley, 658 N.E.2d at 587. This permitted a claim for failure to exercise reasonable care to employ a competent and careful contractor if the activity to be conducted fell within one of the five exceptions. Id. We thus have Indiana law under Bagley recognizing claims for failure to exercise care in the selection of a contractor under the same circumstances as the law imposes potential liability for the actions of the contractor, even if carefully selected. The Court then considered whether the negligent hiring claim could be asserted by an employee of the contractor. The Court noted the earlier line of decisions by the Court of Appeals that held that these five exceptions permitted only third parties, not the contractor or its employees, to assert the principal's liability for acts of the contractor. [2] Acknowledging these cases, the Bagley court held such restriction of the exceptions to exclude injured workers is contrary to the purpose of the exceptions and is not compelled by their underlying policy concerns. Id. at 588. The Court stated, our objective is no less to protect workers who may be exposed to such risks than it is to protect non-employee third parties.... Where a contractor's employer is responsible for a non-delegable duty, the contractor's injured worker should not discriminately be deprived of access to full compensatory damages but should have recourse equal to that of an injured bystander. Id. The Court found Bagley's negligent hiring claim to fit the exception for acts to be performed by the independent contractor that will probably cause injury to others unless due precaution is taken. So viewed, Bagley's claim failed because Bagley was injured when a fellow employee slipped and fell on him from a ladder while he was driving a stake in the ground. There was no probability that injury would occur from his work, which consisted of simply driving a stake into the ground and no customary precautions were omitted. Accordingly, the requirements of this exception were not met. It was therefore unnecessary for Bagley to address whether the other defendants were negligent in selecting Bagley's employer. Because it addressed a negligent hiring claim, Bagley did not directly address the question whether an employee of an independent contractor may recover from the principal for the negligence of the contractor without any negligence of the principal in selecting the contractor. The language in Bagley, though directly addressing only negligent hiring requiring negligence of the principal, may fairly be read to apply to liability for acts of the contractor under the five exceptions. However, Bagley did not face the issue of a claim by a worker injured by the very condition the worker's employer was contracted to address. That is essentially what Roberts asserts here. Hiring of independent contractors to do work that may be described as probable to cause injury unless due precautions are taken occurs frequently in a technologically advanced society. If the principal has knowledge of some undisclosed risk factor not known to the contractor, there may be liability for failure to alert the contractor. See Restatement (Second) of Torts, § 343. Similarly, as Bagley held, at least under some circumstances, negligent selection of a contractor may expose a principal to liability. But if the law imposed on the principal liability for failure to supervise or monitor the contractor's activities, the result is added cost for minimal benefit. We think that to the extent an independent contractor is employed to redress or correct a problem for the principal, even if the contractor's activity may be viewed as either intrinsically dangerous or may require precautions, employees of the contractor have no claim against the principal based solely on either acts of the contractor or the condition to be remedied, or some combination of both. The contractor is presumably best equipped to evaluate the necessary precautions and determine the standard of ordinary care. See Peone v. Regulus Stud Mills, 113 Idaho 374, 744 P.2d 102, 107 (1987) (logging contractor is in a better position than a sawmill operator to assess the risks of falling trees); Restatement (Second) of Torts § 413, cmt. b. Employees of the contractor should have no claim against a principal for their own or the contractor's failure to use ordinary care in carrying out the contractor's assignment. Nor should a principal be liable to a contractor or its employees simply by reason of employing the contractor to engage in inherently dangerous activity. We hold therefore that in the absence of negligent selection of the contractor, an employee of the contractor has no claim against the principal based solely on the five exceptions to the general rule of nonliability for acts of the contractor.