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By: David B. Vornehm, Esq., and Sean T. Devenney, Esq.
Drewry Simmons Vornehm, LLP

When it comes to determining who is responsible for jobsite safety, CONTRACTS ARE IMPORTANT. That is the “take-home lesson” from the recent Indiana Supreme Court decision in Michael Ryan v. TCI Architects/Engineers/Contractors, Inc. et. al., and should come as no surprise to construction industry participants. This decision relates to a general contractor’s potential liability to employees of a subcontractor on a construction project for their jobsite injuries.  The Court found that the design-builder assumed a duty of safety to all workers on the site, including those of its subcontractor. The fact that it included language in its subcontract purporting to shift that responsibility to the subcontractor for safety of the subcontractor’s employees did not eliminate the design-builders own responsibility that it undertook pursuant to its prime contract – DBIA Form 530.

It is important to note that the decision of the Court was primarily based upon its interpretation of the language contained in the Design-Build Institute of America (“DBIA”) 1998 Standard Form of Agreement Between Owner & Design-Builder (From No. 530).  The result of the court’s analysis was that the 1998 DBIA Form No. 530 created responsibility and liability for the design-builder/general contractor with respect to injuries of subcontractor employees on the Project site.

The facts of the case are that Ryan, an employee of sheet metal subcontractor B.A. Romines Sheet Metal (“Romines”), was injured when he fell approximately 8 to 10 feet while working on a construction site for the construction of a Gander Mountain store.   Romines had a contract with BMH Enterprises, Inc. d/b/a Craft Mechanical (“Craft”). Craft, in turn, had a contract with the design-builder/general contractor TCI Architects (“TCI”). Ryan contended, in part, that the ladder he was provided by his foreman was too short.

Ryan was prohibited from suing his own employer due to the Indiana’s Workers Compensation Act, which makes an employee’s exclusive remedy against his employer a claim for Workers Compensation. An employee is not prohibited, however, from making a claim against other contractors on the construction site for his injuries. To succeed in doing so, however, the Court must determine whether other contractors on the site had “assumed a duty of safety” to the injured employee.

In this case, the TCI subcontract with Craft placed the duty of jobsite safety on Craft. At the trial court level, Ryan filed motion for summary judgment asking the court to find that, through its contract with the project owner, TCI had assumed a duty of safety to Ryan. TCI cross-moved for summary judgment requesting a finding that TCI had not assumed a duty of safety to Ryan on the Project, and that motion was granted by the trial court. This was affirmed by the Indiana Court of Appeal but reversed by the Indiana Supreme Court, which TCI had assumed a duty of safety to the subcontractor’s employee.

In reaching that result, the Supreme Court applied an exception to the general rule that a general contractor owes no duty to employees of subcontractors on a construction project. The Court noted there are five exceptions to the general rule: (1) where the work required is intrinsically dangerous; (2) the act will create a nuisance; (3) the act to be performed will probably cause injury to others unless precaution is taken; (4) the act to be performed is illegal; and (5) a party to a contract on the project has assumed a duty of care/safety to project participants.   It is this last exception that the Court analyzed in reaching its determination.

The Court focused on the DBIA Form 530 language relating to Project safety and found that TCI assumed a duty of safety to employees working on the site via the contract.   The Court noted that the Form agreement specified that TCI:

“(1) “[TCI] recognizes the importance of performing Work in a safe manner so as to prevent damage, injury or loss to . . . all individuals at the Site whether working or visiting . . .” ;

(2) [TCI] assume[s] responsibility for implementing and monitoring all safety precautions and programs related to the performance of the Work;

(3) [TCI] was “to designate a Safety Representative with the necessary qualifications and experience to supervise the implementation and monitoring of all safety precautions and programs related to the Work’”

(4) The TCI Safety Representative was to “make routine daily inspections of the Site and . . . hold weekly safety meeting with . . . Subcontractors and others as applicable”;

(5) TCI and subcontractors “shall comply with all Legal Requirements relating to safety”;

(6) TCI agreed that it “shall at all times exercise complete and exclusive control over the means, methods, sequences and techniques of construction”; TCI was responsible for the performance of the “Work of Subcontractors and acts and omissions in connection with such performance;” and

(7) TCI was to “provide all material, equipment, tools and labor, necessary to complete the Work.”

The Court concluded that, taken together, all of this safety specific contract language meant that TCI had contractually agreed to assume a duty to keep the worksite in a reasonably safe condition. Importantly, TCI argued that its subcontract with Craft in which TCI explicitly required the subcontractor to meet the safety requirements of the Project, did not “override” the language in TCI’s contract with the Project Owner to somehow eliminate TCI’s liability to Ryan.

Lesson Learned: Contractors wishing to avoid liability for jobsite safety on projects must look at both their upstream contracts and downstream contracts and make sure the language in each of those contracts does not create legal liability. Careful drafting is a must. Further, any design builder contemplating the use of the 1998 version of the Form 530 should consider modifying it in order minimize the design builder’s potential liability for injuries to employees of subcontractors working on the Project.

Here is a link to the case:

http://www.in.gov/judiciary/opinions/pdf/04261701shd.pdf

About the authors:    This article was written by David B. Vornehm and Sean T. Devenney, construction lawyers with Drewry Simmons Vornehm, LLP, with offices in Indianapolis, Carmel and Crown Point Indiana. They can be reached at dvornehm@dsvlaw.com and sdevenney@dsvlaw.com.

736 Hanover Place, Suite 200
Carmel, IN 46032
(317) 580-4848
dvornehm@dsvlaw.com
www.DSVlaw.com

 

Copyright 2017, ConstructionRisk, LLC

This article is published in ConstructionRisk.com Report, Vol. 19, No. 6 (June 2017).