Opinion ID: 852780
Heading Depth: 2
Heading Rank: 1

Heading: Vicarious Liability for Acts of ACandS

Text: The parties agree that ACandS provided its services to PSI as an independent contractor. The long-standing general rule has been that a principal is not liable for the negligence of an independent contractor. Carie v. PSI Energy, Inc., 715 N.E.2d 853, 855 (Ind.1999). Indiana law recognizes five exceptions to this general rule, based on public policy concerns, which militate against permitting a principal to absolve itself of responsibility for some activities by conducting them through an independent contractor. Id. Roberts contended in the trial court that two of these exceptions applied here: (1) the intrinsically dangerous exception  where the contract requires the performance of intrinsically dangerous work, and (2) the due precaution exception  where the act will probably cause injury to others unless due precaution is taken. As is explained below, the trial court instructed on both theories. As Carie pointed out, the principal's liability in these exceptional situations is based on the idea that the principal is in the best position to identify, minimize, and administer the risks involved in the contractor's activities. Id. Here, however, PSI contends with considerable force that it and the other owners of facilities containing asbestos were in no better position than ACandS to evaluate the risks inherent in working with insulation containing asbestos.
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.
We also agree with PSI that recovery under the inherently dangerous exception was not supported by the evidence. The jury was instructed that: the law imposes a duty on a landowner [3] if the work to be performed is intrinsically dangerous. Work is intrinsically dangerous if the danger exists in the doing of the activity regardless of the method used. The work is intrinsically dangerous if the risk of injury cannot be eliminated or significantly reduced by taking proper precautions. Roberts argues that when he worked at PSI, he performed intrinsically dangerous work that is not delegable to an independent contractor. PSI does not challenge this instruction as an accurate statement of the law. Rather, PSI contends the evidence does not support the verdict. For the reasons given in Part D below, Roberts is not estopped from arguing that working with asbestos was intrinsically dangerous despite his simultaneous contention that PSI is liable for failure of ACandS to take due precautions to avoid the injury. We conclude, however, that the evidence does not support recovery on this theory. The term `inherently or intrinsically dangerous' has been defined as work necessarily attended with danger, no matter how skillfully or carefully it is performed. 41 Am.Jur.2d Independent Contractors § 54 (1995); see Shell Oil Co. v. Meyer, 705 N.E.2d 962, 978 (Ind.1998) (work is intrinsically dangerous if the danger exists in the doing of the activity regardless of the method used). Unlike the other four exceptions to the nonliability of the principal, the inherently dangerous exception is normally associated with strict liability and does not require negligence on the part of the contractor. Dobbs, supra § 337, at 921. It imposes liability for activities that are dangerous by nature, not merely because they are carried out in a risky manner. For example, if the enterprise hires an independent contractor to dust crops with poison, it is liable for damage to neighbors' crops without regard to negligence. Id. Roberts asserts that asbestos itself is intrinsically dangerous and any work that causes inherently dangerous fibers to enter the breathing space of humans is intrinsically dangerous work. He points to Covalt v. Carey Canada, Inc., 543 N.E.2d 382 (Ind.1989), in which this Court described asbestos fibers as an inherently dangerous substance ... a toxic foreign substance ... an inherently dangerous product ... and a hazardous foreign substance. Id. at 384-86. Roberts asserts that there is nothing that can make asbestos fibers safe. PSI responds that although asbestos may be an inherently dangerous substance, it does not follow that working with material containing asbestos is intrinsically dangerous work. PSI asserts that the evidence at trial demonstrates that the dangers of working with asbestos could have been minimized if Roberts had taken proper precautions. Roberts himself asserted liability based on the failure to use due precautions exception discussed in Part I.C. This assumes that injury can be significantly reduced and, as PSI points out, is inconsistent with the claim that the work is inherently dangerous. Dr. Michael Ellenbecker, an industrial hygiene expert called by Roberts, testified to the methods available at the time Roberts was exposed to asbestos that could have been employed to reduce his exposure. He described the possibility of substituting other insulation materials for asbestos, the practice of isolating the asbestos fibers, and other control and prevention measures. Dr. Ellenbecker testified it's possible to perform an installation where the hazards are minimized, but when we're talking about mesothelioma, I think it's difficult to do any activities with asbestos where you completely eliminate the hazard. Roberts argues that this testimony shows that performing asbestos work is an intrinsically dangerous activity because mesothelioma can be caused by very small exposures to asbestos. He reasons that because asbestos-related diseases are often terminal and can be caused by very small exposures, it follows that working with asbestos is intrinsically dangerous. We agree that working with asbestos can be perilous, but that is not enough to render it intrinsically dangerous as that term is used to establish liability for actions of an independent contractor. For example in McDaniel v. Business Investment Group, Ltd., 709 N.E.2d 17 (Ind. Ct.App.1999) trans. denied, an employee working on a sewer line in a 9 foot deep trench was killed when the sides of the trench caved in. The Indiana Court of Appeals held that trenching is not intrinsically dangerous work because although it can be dangerous, the use of proper procedures... renders the work relatively safe. Id. at 21. Roberts asserts that whether the danger from asbestos work could have been significantly reduced is itself a question of fact for the jury. If proper precautions can minimize the risk of injury, then the activity is not intrinsically dangerous. See Carie v. PSI Energy, Inc., 694 N.E.2d 729, 735 (Ind.Ct.App. 1998), affirmed in part and vacated in part by, Carie v. PSI Energy, Inc., 715 N.E.2d 853 (Ind.1999) (quoting Denneau v. Ind. & Mich. Elec. Co., 150 Ind.App. 615, 620, 277 N.E.2d 8, 12 (1971)). Here, it seems agreed by all that precautions could have minimized Roberts's exposure to asbestos. Indeed, as explained below, this was the premise of one of Roberts's principal theories of liability. Therefore, we conclude that working with asbestos is not intrinsically dangerous such that anyone hiring a contractor to address it incurs strict liability for injuries sustained from exposure to it. For this second and independent reason, Roberts's claim fails under the independent contractor liability theory. We also recognize, as the dissent points out, that the consequences of mesothelioma can be horrific. But that does not render asbestos intrinsically dangerous. The same is true of electricity and a number of other substances that, if mishandled, can be dangerous.
Roberts contends that PSI could have been found liable for his injuries under the due precaution exception to the general rule of non-liability for acts of independent contractors. Sometimes referred to as the peculiar risk doctrine, this exception imposes liability on a principal where the act to be performed will probably cause injury to others unless due precaution is taken. Carie, 715 N.E.2d at 856; Bagley, 658 N.E.2d at 586. This exception requires that, at the time of engaging the contractor, the principal should have foreseen that the performance of the work or the conditions under which it was to be performed would, absent precautionary measures, probably cause injury. Carie, 715 N.E.2d at 856; McDaniel, 709 N.E.2d at 22. Application of this exception therefore depends on the probability of injury from the risk and its foreseeability by the principal. This doctrine does not render the principal liable for the contractor's failure to take normal precautions incident to the activity to be carried out. Thus, a homeowner has no liability for an electrician's failure to take the normal precaution of breaking a circuit before touching the wiring. The McDaniel court explained, the exception applies only when the risk involved is something more than the routine and predictable hazards generally associated with a given occupation: it must be a risk unique to the circumstances of a given job. 709 N.E.2d at 22. It is not concerned with taking routine precautions, of a kind which any careful contractor could reasonably be expected to take, against all of the ordinary and customary dangers which may arise in the course of the contemplated work. Such precautions are the responsibility of the contractor. Restatement (Second) of Torts, § 413 cmt. b. The trial court instructed, the law imposes a duty on a landowner [read principal] if the work to be performed will probably cause injury to others unless due precautions are taken to avoid harm. The essence of this exception is the foreseeability of both the peculiar risk involved in the work and the need for special precautions. For purposes of this exception, the phrase `peculiar risk' refers to the risk of a particularized harm specific to the work being performed or the conditions under which it is performed. Moreover, the exception applies only when the risk involved is something more than the routine and predictable hazards generally associated with a given occupation: it must be a risk unique to the circumstances of a given job. PSI argues that exposure to asbestos materials at PSI job sites did not present a peculiar risk to an asbestos worker who worked with and around asbestos materials on a daily basis in the normal course of his trade. PSI points out that mesothelioma and other asbestos-related diseases are much more common in asbestos workers than in the general population. PSI contends these disorders are therefore routine and predictable hazards of asbestos insulation work. Roberts counters that mesothelioma has a very long latency period and Roberts did not know the danger at the time, so the danger in working with asbestos was neither routine nor predictable. Roberts's claim thus seeks to embrace the unforeseeability of the risk and at the same time attribute to PSI liability for failing to foresee it. We think that absent unusual circumstances at a given workplace, industry standards are applicable measures of the routine precautions that are the responsibility of the contractor, and injuries or disorders that are usual to a given occupation are not within the due precaution exception. McDaniel, 709 N.E.2d at 23. Roberts argues that even if unusual risk is required, PSI meets that test because his exposure to asbestos was more severe at PSI sites than at other jobsites and therefore working at PSI created a peculiar risk. PSI counters that there is no evidence that working at PSI involved risks unique or distinguishable from the general risk Roberts faced on a daily basis in the normal course of his profession. Roberts did the majority of his work on PSI property. He points to the duration, intensity, and volume of asbestos at PSI as unique, and argues that the high heat at PSI caused him not to wear a mask. He also points to evidence that PSI's workers kicked up dust, and that the asbestos insulation at PSI was in worse condition than that at other locations. We do not believe these facts establish that PSI created unusual risks as applied to an insulator. They establish at most a higher incidence of qualitatively identical hazards. And it is clear that working with any level of asbestos can be associated with mesothelioma. As we recently observed the normal, expected use of asbestos products entails contact with its migrating and potentially harmful residue. Stegemoller v. ACandS, Inc., 767 N.E.2d 974, 976 (Ind.2002). In sum, the record is undisputed that wherever Roberts may have worked as an insulation contractor, the risk was the same  that of breathing asbestos fibers and contracting mesothelioma. At most, PSI created a quantitatively higher risk, but not a risk unique to PSI, and not a risk requiring qualitatively different precautions from those generally associated with asbestos.
PSI asserts that because Roberts argued at trial that his illness could have been prevented with the use of available safety precautions, he is now judicially estopped from arguing that asbestos work is intrinsically dangerous. Judicial estoppel `prevents a party from asserting a position in a legal proceeding inconsistent with one previously asserted.' Meridian Ins. Co. v. Zepeda, 734 N.E.2d 1126, 1133 (Ind.Ct.App.2000) (quoting Wabash Grain, Inc. v. Smith, 700 N.E.2d 234, 237 (Ind.Ct. App.1998)), trans. denied. A party may properly plead alternative and contradictory theories, but judicial estoppel precludes a party from repudiating assertions in the party's own pleadings. Marquez v. Mayer, 727 N.E.2d 768, 773 (Ind.Ct.App.2000), trans. denied. Because application of the intrinsically dangerous exception requires a showing that the risk created by the work could not be prevented or minimized, PSI says, having prevailed on the theory that Roberts's illness could have been prevented through the use of available industrial hygiene techniques, Roberts is estopped from arguing on appeal that his illness was not preventable. Roberts counters that he argued that his disease could have been prevented by substitution of non-hazardous insulation for asbestos insulation. If this had been done, Roberts argues that he would not have been engaged in intrinsically dangerous work because he would not have been working with asbestos. We agree that Roberts is not precluded from arguing that working with asbestos is intrinsically dangerous and that his disease could have been prevented by substitution of another insulating material. PSI did not argue in the trial court that Roberts was judicially estopped from presenting this theory and does not object on appeal to the instructions to the jury on the intrinsically dangerous exception. PSI argued in objecting to the jury instructions on intrinsically dangerous that it is the entire theory of plaintiffs' case that plaintiffs' disease could have been prevented. We think the trial court could fairly take this as an objection that the instruction is not supported by the evidence.
In sum, Roberts has no claim against PSI for activities of ACandS as PSI's independent contractor because (a) the injuries he suffered came from a situation he was employed to address, (b) asbestos is not inherently dangerous as that term is used in the exception to nonliability for acts of independent contractors, and (c) the injuries he sustained are common among workers in his industry and the necessary precautions he identified are the responsibility of his employer, not PSI.