Court Opinion

ID: 9781943
Source: CourtListenerOpinion
Date Created: 2023-08-30 17:43:28.698781+00
Date Added: 2024-06-11T07:34:43.507369
License: Public Domain

McAnany, J.,
concurring in part and dissenting in part: I concur that under Dillard v. Strecker, 255 Kan. 704, 877 P.2d 371 (1994), we are required to set aside the judgment against National Beef Packing Company (National Beef). However, I respectfully dissent from the majority’s holding that Dillard, as expanded by the majority, controls with respect to all of Herrell’s claims. I would remand the case for retrial excluding Herrell’s claim that National Beef violated the Occupational Safety and Health Administration (OSHA) regulation regarding barricading or otherwise guarding the hole where Herrell fell.
A brief recap of the facts is in order. National Beef decided to erect a new roof at its rendering plant. National Beef hired J-A-G Construction, Inc., (J-A-G) to do die work. The work involved drilling holes in the floor of the plant to install columns to support the new roof structure. Once the holes were drilled, J-A-G hired the engineering firm Terracon Consultants, Inc., (Terracon) to sample and test the soil in the holes before installing the columns. Terra-con sent its employee, Shelly Herrell, to obtain soil samples for testing. In the meantime, National Beef continued its rendering operation at the plant, resulting in the plant’s concrete floor being covered with animal blood and entrails when Herrell arrived. This offal filled a hole in the concrete and hid its presence from Herrell. Herrell stepped into the unguarded hole and sustained the personal injuries that prompted this suit. It is unclear from the record whether the hole Herrell stepped in was one of the holes drilled for the roof columns. In any event, it was not the hole she was going to in order to obtain soil samples for testing.
Herrell pursued a workers compensation claim against her employer, Terracon, and ultimately received benefits of $54,439.45, for which Terracon and its insurance carrier claimed a lien. Herrell then sued National Beef in tort.
At trial the jury was instructed that Herrell claimed National Beef was negligent (1) in creating an unreasonably dangerous condition by allowing rendering to fill and cover the hole in the floor; *326(2) in not removing the rendering so as to make the hole visible; (3) in failing to warn about the presence of the hidden hole; and (4) in various iterations of these claims. Herrell also claimed National Beef violated an OSHA regulation that required it to either cover the hole or provide a railing around it to prevent someone from accidentally stepping into it. Herrell made no claim that National Beef was vicariously liable for any conduct of Terracon or JA-G. Further, the jury was not instructed that Herrell was engaged in an inherently dangerous activity at the time of the accident; nor was the jury asked to determine whether Herrelfs activities were inherently dangerous, the trial procedure authorized in McCubbin v. Walker, 256 Kan. 276, 290, 886 P.2d 790 (1994) (citing Falls v. Scott, 249 Kan. 54, 59-62, 815 P.2d 1104 [1991]).
The jury awarded Herrell damages of $119,318.98. After satisfying the hen for workers compensation benefits, her net jury award was $64,879.53.
National Beef argues on appeal, and the majority agrees, that Dillard controls and bars all of Herrell's claims. The majority does so by extrapolating from cases from other jurisdictions cited in Dillard to reach the conclusion that Dillard applies to all negligence claims brought by a contractor s injured employee against die landowner when the injured employee is entitled to workers compensation benefits.
In announcing its decision in Dillard the Supreme Court explicitly warned: “Our decision is limited to the facts herein and to those instances where the injured employee or an independent contractor covered by workers compensation seeks to hold a landowner liable under the theories discussed in the opinion.” 255 Kan. at 727. I do not believe we should take that caveat lightly. Further, K.S.A. 44-504(a) is clear and unambiguous. It provides: *327Immunizing National Beef from tort liability for Herrell’s injuries ignores the plain language of the statute.
*326“When the injury or death for which compensation is payable under the workers compensation act was caused under circumstances creating a legal liability against some person other than the employer or any person in the same employ to pay damages, the injured worker or the worker’s dependents or personal representatives shall have the right to take compensation under the workers compensation act and pursue a remedy by proper action in a court of competent jurisdiction against such other person.”
*327Turning to the facts in Dillard, Archbishop Strecker had engaged a general contractor to construct a new Catholic church and school. The general contractor contracted with P&S Masonry, Inc., to do masonry work on the project. Dillard was employed by P&S Masonry, Inc. Dillard was injured when a masonry wall being constructed on the job site collapsed. Dillard contended the Archbishop, as landowner, was negligent in failing to retain a special inspector to inspect the wall as required by the local building code. Dillard also claimed the Archbishop was vicariously liable for the negligence of the masonry contractor who constructed the wall since its construction was an inherently dangerous activity. Because the case was appealed following the entry of summary judgment in favor of the Archbishop, the Supreme Court assumed as true that the Archbishop had a nondelegable duty to provide a special inspector for the wall and that construction of the wall was an inherently dangerous activity.
In granting summary judgment the district court relied on Zueck v. Oppenheimer Gateway Properties, 809 S.W.2d 384 (Mo. 1991); Parker v. Neighborhood Theatres, 76 Md. App. 590, 547 A.2d 1080 (1988); and Ray v. Schneider, 16 Conn. App. 660, 548 A.2d 461 (1988). On appeal, the Supreme Court discussed each of these opinions. Zueck involved a claim that the landowner was vicariously hable for the negligent acts of the contractor when Zueck was injured in a fall while engaged in an inherently dangerous activity. Herrell, the plaintiff in the action now before us, makes no such claim. In Parker the Maryland court held that “vicarious liability of the owner may not be predicated upon a statutory non-delegable duly where the injuries to an employee of a contractor arise solely from the negligence of the contractor in failing to maintain a reasonably safe work place.” 76 Md. App. at 597. Herrell makes no claim of vicarious liability for the negligence of the contractor. Ray also was predicated upon the landowner’s vicarious liability for the negligence of the contractor. Here, Herrell directs her ire not at the contractor but rather at National Beef for covering up the hole with offal so as to create a snare for the unwaiy.
*328In tracing the history of Zueck, our Supreme Court described the Missouri Supreme Court’s holding in Matteuzzi v. Columbus Partnership, L.P., 866 S.W.2d 128 (Mo. 1993), which expanded the holding in Zueck with respect to claims not before the court in Dillard. Given the cautionary language at the end of Dillard, I am reluctant to rely upon the Supreme Court’s dicta relating to Matteuzzi in order to unnecessarily expand the court’s ruling in Dillard.
The majority concludes without analysis that
“[I]f just the policy reasons set out in Dillard are considered, National Beefs position would be correct. The policy considerations support a conclusion that an employee of an independent contractor covered by workers compensation insurance cannot recover in negligence from the landowner, regardless of the employee’s underlying theory of the landowner’s liability.” Slip op. at 19.
To the contrary, it seems to me that the various policy considerations enumerated by the Supreme Court in Dillard to support non-liability of the landowner do not apply to the facts now before us and do not support further expansion of the holding in Dillard. Here are the nine policy considerations stated in Dillard, 255 Kan. at 725-26:
1. “The landowner should not have greater liability to an employee of an independent contractor than the liability of the contractor to that employee. ”
In Dillard, the ultimate cause of the accident and of Dillard’s injuries was the contractor’s negligent construction of the wall that collapsed. Under those facts, why should the Archbishop bear greater responsibility than the neglectful contractor whose exposure is limited under our workers compensation laws? But here, Herrell made no claim that the contractor was negligent. Open and obvious holes are to be expected at a construction site. Traps created by the landowner in covering those holes are not.
Further, in Dillard the defect in the premises that caused injury was the negligently constructed wall at the job site. Here, Herrell was on her way to the job site, i.e., the hole where she intended to obtain soil samples, when she fell into a different hole. Unlike in Dillard, the defect in the landowner’s premises was not at the site where the injured worker was doing her work. It was at a point en *329route to the place where she planned on working. HerrelPs claim was that National Beef made latent a defect that otherwise would have been open and obvious. It seems to me that under these circumstances ordinary premises tort liability should control.
I will discuss further this notion of the landowner s liability in connection with policy statement No. 9. But in the meantime, I note that the landowner’s liability is “greater” only in the sense that exposure to damages is not limited to benefits enumerated in our workers compensation laws. However, the landowner has the compensating factor of being able to confront the injured worker with his or her own negligence, a defense unavailable to the employer of the injured worker. That is the fundamental trade-off between our common-law tort system and our workers compensation statutes. So the notion that the landowner’s liability is greater is debatable.
It seems to me that unlike in Dillard, this policy consideration should not apply to Herrell’s claim.
2. “The landowner should not have greater liability to the employees of an independent contractor than the landowner has to the landowner’s own employees. ”
This notion seems reasonable on its face. But suppose a worker goes to work for a landowner who is engaged in a business that generates a higher than normal rate of injuries. The increased exposure to the risk of injury is a fact that becomes readily apparent as the worker continues on the job and chooses to do so. While an individual worker’s decisions may be driven by many factors, we must presume from basic economic principles that the decision to continue in the job is an economic decision made after factoring in the known increased likelihood of injury and the employee’s rate of compensation.
Now, also suppose another worker goes to work for a different employer in a different industry where, because of the nature of the work or the conditions of the workplace, the risk of injury is substantially less. That employer then is hired as an independent contractor to perform work on the landowner’s premises. The contractor sends its worker to perform the contracted work. Unlike *330for the landowner’s direct employees, the risk of working on the landowner’s property may not have been factored into the compensation of the contractor’s employee, nor may the contractor’s employee have been aware of the risks associated with working on the landowner’s premises. In this situation, why should the landowner not be exposed to greater liability than the contractor for a worker’s injury on the landowner’s property due to a latent defect in the property created by the landowner?
Thus, it seems to me that this policy statement expressed by the court does not have universal application and cannot be used to bar Harrell’s claim absent some specific facts in the record to support its use.
3. “Liability on the part of the landowner would encourage the landowner to use the landowners less experienced employees rather than an experienced contractor. ”
There is nothing in the facts before us to suggest that this concern could be realized in this case. Assuming that soil sampling and testing is a highly technical endeavor, I find it not only unlikely but pure speculation to conclude that National Beef would engage in this activity itself to immunize itself from claims of nonemployees.
4. “Employees of an independent contractor, and their dependents, are protected under the provision of the workers compensation statutes. ”
If this were dispositive, there would be no justification for any independent actions against third-party tortfeasors by an injured worker and K.S.A. 44-504(a) would be meaningless.
5. “Workers in inherently dangerous jobs are fully aware of the dangers involved and receive compensation accordingly.”
As noted earlier, I believe this statement is entirely correct. But why does it apply to Herrell? I suggest that it clearly does not since there is no claim that Herrell was engaged in an inherently dangerous activity, or that Herrell, a visitor to the premises and not an ongoing employee working there, was aware of the danger of defects in the premises made latent by the landowner’s conduct.
*3316. “Landowners may not have expert knowledge of inherently dangerous work, the risks involved, and the methods of avoiding such risks that an independent contractor engaged in such activity possesses.”
Again, there was nothing inherently dangerous about the work of collecting and testing soil samples. There is no concern that National Beef would conduct its own soil sampling and testing and thereby expose its own employees to an inherently dangerous activity. Had National Beef used its own employees, it would not have exposed them to an inherently dangerous activity in taking soil samples from a hole. The danger arose from National Beef s conduct in camouflaging a different hole that was in the path that led to Herrelfs work site. Thus, when it comes to knowledge of the risks associated with the work, under the facts now before us that knowledge rested with National Beef, not Herrell or her employer, Terracon.
Various holes in the concrete floor of the rendering plant were marked with sandbags and were easily visible. The hole into which Herrell fell was not so marked but was hidden by the viscera that filled it and the surrounding area. National Beef, rather than Herr-ell or Terracon, was in the best position to assess the risk and take reasonable measures to avoid it. As stated in Zueck which the majority relies on, 41 Kan. App. 2d at 319, the Missouri Supreme Court observed that in situations such as the one before us today in which the work itself is not inherently dangerous,
“common sense permits a landowner to identify the potential of harm which an activity may create to persons not participating in the activity. Having identified the risks, a responsible landowner may undertake the steps necessary to protect third parties from that harm. The need to deny access to a facility, erect protective barricades around excavations, construct protective overheads where work aloft is anticipated, and a myriad of obviously needed and easily fabricated devices are relatively easy to anticipate and provide. [Citations omitted.]” 809 S.W.2d at 387.
If this rationale from Dillard were to apply to the facts now before us, it would support extending liability to National Beef rather than shielding it from liability.
*3327. “Liability on the part of the landowner would create a class of employees, those of an independent contractor, with greater rights than the employees of the landowner for doing the same work. ”
This is simply a restatement of policy statement No. 2, and the same comments apply here.
8. “To allow an employee of an independent contractor covered by workers compensation to invoke the inherently dangerous doctrine would (a) reward landowners who, despite their own lack of expertise, choose to perform work negligently resulting in injury to workers, (b) increase the risks to innocent third parties, and (c) punish landowners who seek expert assistance in an effort to avoid liability for injury. ”
Again, Herrell does not rely on the inherently dangerous doctrine. This doctrine creates a path to establish liability on the part of a landowner who engages a negligent contractor to perform inherently dangerous work. Herrell makes no claim that the contractor was negligent. Further, there is nothing to suggest that National Beef would have undertaken its own soil sampling and testing to avoid tort liability.
9. “A landowner who engages the services of an independent contractor pays directly or indirectly for the compensation coverage when the landowner contracts with the independent contractor.”
This is an oft-repeated but unexamined rationale for rejecting a landowner’s tort liability. See, e.g., Vagle v. Pickands Mather & Co., 611 F.2d 1212, 1218 (8th Cir. 1979); Eutsler v. United States, 376 F.2d 634, 636 (10th Cir. 1967); Sloan v. Atlantic Richfield Company, 552 P.2d 157, 160-161 (Alaska 1976); King v. Shelby Rural Electric Cooperative Corp., 502 S.W.2d 659 (Ky. App. 1973); Tauscher v. Puget Sound Power & Light Co., 96 Wash. 2d 274, 635 P.2d 426 (1981). These are all cases cited in Dillard. This rationale seems to have originated in language in a tentative draft of the Restatement (Second) of Torts, which was never included in the final draft. See Eutsler, 376 F.2d at 636.
*333This rationale is closely linked to the proposition that a landowner should not have greater liability to the employees of an independent contractor than the landowner has to the landowner’s own employees. In hiring an independent contractor to do the work, the landowner avoids paying its own employees and substitutes the contractor’s employees to accomplish the task. In doing so, the landowner pays for the work based on the wages paid by the contractor to its employees plus a factor for overhead and profit.
Under this analysis the payment the landowner makes to the independent contractor includes the cost of workers compensation coverage for the contractor’s employee. In other words, the contractor passes this expense through to the landowner in the bill for the contracted services. Thus, if the contractor’s employee is injured while working on the landowner’s premises, this rationale notes that the landowner already has indirectly paid for the workers compensation benefits received by the contractor’s injured employee. While this rationale seems to make sense in the abstract, is there a legitimate basis to support applying it in this case?
First, Herrell was injured while en route to the site where she was to collect soil samples for analysis. She was unable to collect the soil samples after her injury. The work was done later by a coworker. We can infer that National Beef paid Terracon indirectly for the soil sampling and testing, but not for any work performed by Herrell. Thus, National Beef s shield against tort liability is predicated on work performed by someone other than the person against whom that shield is now raised.
Second, we should take into account the fact that different industries have different workers compensation loss experiences. To the extent workers compensation premiums are underwritten based upon these differences, we can expect employers in different industries to pay different rates for workers compensation coverage. Workers compensation costs for a worker who spends all of his or her time in one work environment, such as an employee of National Beef, probably will be different than the cost for a worker employed by a consultant, such as Terracon, whose employees do their work in a variety of work environments with varying exposures *334to potential injuries. Today Herrell may be sent to a rendering plant to do soil tests. Tomorrow she may be at a library or out in an open, undeveloped field doing geotechnical consulting work. The following day she may be in an office laboratory doing analyses of her samples. The overall risk of a job-related accident to an employee such as Herrell could very well be less than the risk exposure for an employee working full-time in a rendering plant. Thus, the work done by Herrell, whose workers compensation cost to her employer would have passed through to National Beef, could very well have been less than the cost to National Beef if it had not contracted out the work.
We expect profit maximizers to seek to minimize production costs. When this is accomplished by contracting out work in a manner that fails to account for the true risk associated with the producer’s business, the producer is rewarded with a lower production cost and a higher profit. Why is this increased profit not enough?
When the employee of a contractor is injured at the producer’s facility due to the producer’s negligence, should the producer have the added reward of being shielded by the contractor’s workers compensation coverage? That coverage makes workers compensation the exclusive remedy for the injured worker vis-a-vis the employer. Here, the producer is not the employer. The producer may already have enjoyed the benefit of the reduced cost of Herr-ell’s work. It has not been demonstrated so far that society gains by extending to the producer the workers compensation shield against tort liability.
Application of this last policy rationale in Dillard v. Strecker, 255 Kan. 704, 877 P.2d 371 (1994), creates the possibility for National Beef to enjoy the protection of the exclusive remedy provision of our workers compensation laws while indirectly paying a premium that does not reflect the risk the worker is exposed to in National Beef s plant. When this occurs a cost more properly attributed to National Beef s product is shifted to and becomes part of the cost of Terracon’s.services to its customers. It seems to me that if this occurs, there is a distortion in the marketplace that at least in some small way undermines market efficiency.
*335When a landowner contracts out work under these circumstances, the potential for harm in performing the work does not change. What changes is the potential liability of the landowner who has control over the nature and extent of the risks the contractor’s workers will confront on the landowner’s premises. When the landowner is allowed to use the contractor’s workers compensation coverage as a shield, the market becomes less efficient because the price of the product does not reflect its actual cost. This seems to me to create a rather perverse incentive the law should discourage rather than encourage in instances in which the risk of injury arises from controllable conditions on the landowner’s premises. With regard to controllable conditions on the landowner’s premises, the court in Zueck observed:
“Tort law is ‘concerned with the allocation of losses arising out of human activities .... “The purpose of the law of torts is to adjust these losses, and to afford compensation for injuries sustained by one person as a result of the [negligent] conduct of another.” ’ [Citation omitted.] To achieve this objective, courts and legislatures have established rules of liability. These rules ought to function to promote care and punish neglect by placing the burden of their breach on the person who can best avoid the harm. When a rule of tort liability encourages a result contrary to these policy goals, it ought to be abandoned.” 809 S.W.2d at 388.
As a final point on Dillard rationale No. 9, it seems to me that if this workers compensation cost-shifting notion is permitted between landowner and contractor, why not also between the landowner and other contracting parties? If, for example, a wholesale animal food supplier buys rendering products directly from National Beef and sends its truck to National Beef s rendering plant to take delivery and in the process runs over Herrell in National Beefs parking lot, should not National Beefs customer also have the protection of the tort-liability shield under our workers compensation law? After all, if the cost of Herrell’s workers compensation coverage passed through to National Beef when Terracon provided the employee to do the soil testing, that same cost was again passed through to National Beef s customer in the price of its products.
*336For all these reasons, I believe this last policy consideration stated in Dillard should not apply to Herrell.
The Dillard court concluded that “[a] landowner is not liable to an employee of an independent contractor covered by workers compensation for injuries sustained as a result of the breach of a nondelegable duty imposed upon the landowner by statute or ordinance.” 255 Kan. 704, Syl. ¶ 3. Herrell claimed, among other things, that National Beef violated OSHA regulations in not placing an appropriate barrier around the hole where Herrell fell. This claim comes within the clear prohibition of Dillard. However, the jury returned a general verdict on the issue of liability, not distinguishing between Herrelfs various claims. Since I would read Dillard narrowly rather than broadly, and since I would not extrapolate the ruling in Dillard to facts and claims not at issue there, I would set aside the judgment against National Beef but remand the case for retrial on Herrell's remaining issues. See Franklin v. Northwest Drilling Co., Inc., 215 Kan. 304, 315, 524 P.2d 1194 (1974).