Court Opinion

ID: 9457571
Source: CourtListenerOpinion
Date Created: 2023-08-04 20:25:58.826133+00
Date Added: 2024-06-11T17:35:24.548864
License: Public Domain

*500HUFSTEDLER, Circuit Judge
(dissenting) :
I respectfully dissent. The majority opinion sustains the district court’s dismissal of West’s complaint on the ground that it did not state a claim for relief cognizable under Montana law. In my view, those conclusions rest on a misreading of the controlling Montana authority.
As the majority opinion acknowledges, Montana law recognizes exceptions to the general rule that a general contractor is not liable for injuries to third persons caused by an independent subcontractor’s negligence. One exception fixes liability upon the employer or general contractor where the work to be performed is inherently dangerous. (A. M. Holter Hardware Co. v. Western Mtge. & Warranty Title Co. (1915) 51 Mont. 94, 149 P. 489; Fegles Const. Co. v. McLaughlin Const. Co. (9th Cir. 1953) 205 F.2d 637.) A second exception imposes liability on the general contractor when he assumes a specific duty by contract; he cannot avoid liability for failing to perform his duty by subcontracting with another for performance. (Ulmen v. Schwieger (1932) 92 Mont. 331, 12 P.2d 856.) The majority opinion finds an exception to the second exception, whereby employees of an independent contractor are excluded from the class of persons for whose benefit the exception was created. The principal source of that conclusion is Wells v. Stanley J. Thill & Associates, Inc. (1969) 153 Mont. 28, 452 P.2d 1015. The court there held that neither the municipality-owner nor its supervising engineer had a duty to an employee of an independent contractor to require the contractor to comply with statutorily or contractually imposed safety standards. Wells would control this case if West had sued the United States as contractec, but Wells does not purport to relieve the general contractor from liability that it had assumed in its prime contract. The Wells dictum is to the contrary: ''[Tjhere were provisions in the plans and specifications that safety precautions should be taken to assure the safety of employees working on the project. Those provisions in the contract made it the duty of the contractor to take all necessary safety precautions.” (Id. at 34, 452 P.2d at 1018. Emphasis added.)
The Wells dictum is reinforced by the Montana Supreme Court’s decision in Ul-mén v. Schwieger, supra. Ulemen applied the exception for contractually assumed duties of care and is persuasive authority in favor of West’s position.
In Ulmén, the Montana state highway commission let the general contract for construction of a highway project to Schwieger. The contract obligated Schwieger to erect barricades and warning lights for the public’s safety. Schwieger sublet the culvert excavation and construction work. Ulmén was injured when his automobile crashed into an unguarded excavation and culvert. The court rejected Sehwieger’s contention that he could not be liable for his subcontractor’s negligence. It applied both exceptions to the independent contractor rule in upholding the judgment against Schwieger. In respect to the second exception, the court said:
“Another exception to the general rule, that an employer doing a piece of work through an independent contractor is not liable for the latter’s negligence, is where the employer has assumed a specific duty by contract. In such a case he cannot evade liability by employing another to do that which he has agreed to perform.” (92 Mont, at 348, 12 P.2d at 860).
The court ruled that the safety clause of the prime contract was admissible in evidence to show Schwieger’s duty to Ul-mén.
On rehearing, the court held that the subcontractor who had built the culvert was not jointly liable for Ulmen’s injuries, because “the original contractor, Schwieger, was at all times in control *501of the entire projected highway, the dangerous condition existing at the culvert being but a part thereof. Schwieger was, under the contract, required to maintain the barrier and detour sign to protect the public from the dangerous condition created by the excavating for the installation of the culvert * * (92 Mont. at 355, 12 P.2d at 862. Emphasis added.)
I cannot agree with the majority opinion that Ulmén can be distinguished on the ground that the person injured was a member of the general public, rather than an employee of an independent contractor. The focal point of the inquiry in Ulmén, as it is here, is this: For whose protection were those contractual duties imposed and assumed? In Ulmén, among the persons exposed to injury, if the contractual covenants were not performed, were the people using the highway. In our case, the persons exposed to injury by nonperformance of the safety clauses were the workmen on the job, whoever employed them. The general public would not be expected to be exposed to injury on a missile construction site, assuming the public had any access to the site. There is little point to creating a duty in favor of the persons who are the least likely to be injured by breach of safety covenants and to exclude from that class those persons who would be regularly exposed to such risks.
The district court assumed and the majority appears to agree that West was obliged by Montana law to sue on the prime contract as a third party beneficiary and that his action on the contract was foreclosed unless the prime contract contained an express promise to pay employees of subcontractors for injuries proximately caused by a breach of safety obligations undertaken by the general contractor in the prime contract.
The first assumption is contrary to Montana law. If a defendant’s negligent breach of contract also constitutes a tort, the Montana Supreme Court permits the plaintiff to elect either remedy. (See Garden City Floral Co. v. Hunt (1953) 126 Mont. 537, 543, 255 P.2d 352, 356.) None of the cases cited by the appellees purports to state a different rule. In each of them either privity existed or the particular contract in issue imposed no standard of care upon the defendant.
The second assumption is based on Hensley v. United States (D.Mont.1968) 279 F.Supp. 548, a case that is not in point, and upon our decision in National Surety Co. v. Ulmen (9th Cir. 1933) 68 F.2d 330, cert. denied (1934) 292 U.S. 624, 54 S.Ct. 629, 78 L.Ed. 1479, cited in Hensley, that is directed to a completely different issue than that presented both here and in Ulmén.
Hensley was injured by the negligence of his contractor-employer. He sued his employer as a third party beneficiary of safety clauses incorporated in a contract between his employer and the United States because Montana’s workmen’s compensation law barred his pursuing a negligence action. Relying upon this court’s decision in National Surety Co. v. Ulmén, supra, Hensley held’ that the employer could not sue as a third party beneficiary where the contract did not contain an express promise to pay damages. National Surety Co. is a companion case to Ulmen v. Schwieger, supra.
In National Surety Co. the question was whether Montana law permitted Ulmén to satisfy the judgment he had theretofore recovered from Schwieger by resort to the bond posted by Schwieger’s surety. We concluded that the surety’s obligation was fixed by the principal’s promises (Gary Hay & Grain Co. v. Carlson and Fidelity & Deposit Co. (1927) 79 Mont. 111, 123, 255 P. 722, 725) and that that obligation could not be extended to include Ulmen because Schwieger had not expressly so covenanted with third persons. The final resolution of the Ulmen-Schwieger dispute demonstrates that the surety’s liability for his principal’s negligence cannot be used to measure the principal’s liability. *502The surety was absolved of liability because the general contractor had not specifically promised to pay damages, but the contractor remained liable to injured third parties.
Hensley is thus inapposite for three reasons. First, it is based on our interpretation of Montana’s surety law, not on its law relating to independent contractors. Second, Hensley’s action was on the contract itself; it was not and could not have been maintained as a tort action. Third, to the extent that dicta suggest that there need be an express promise to pay an injured employee before liability in tort can be imposed on a general contractor for failure to perform duties assumed in a prime contract, it is contrary to the Ulmey, decision.
The Wells holding, as contrasted with its dictum, states a rule of law regulating the impact of vicarious liability. The Wells dictum and the rationale of Ulmén recognize that a rule based on vicarious liability does not control when a general contractor has itself assumed specific duties in respect of safety standards. To impose liability for breach of those contractually assumed duties is not to impose vicarious liability upon the general contractor; it is an enforcement of the general contractor’s own duties.
A holding that the general contractor is relieved of liability for breach of duties that it assumed toward the United States deprives the latter of an element of its bargain. We cannot say that the intent of that bargain excluded protection of employees of subcontractors injured by the failure of the general contractor to fulfill its safety commitments. No policy consideration underlying the inherently dangerous work exception purports to authorize abrogation of the prime contract’s safety provisions.
It is, of course, presently immaterial whether or not West can prove the allegations of his complaint.
I would reverse and remand the case for further proceedings consistent with Ulmén and the views herein expressed.