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On a design-build project where an architect held the prime contract under DBIA forms 530 and 535, it was liable for overall site safety – including that which it had by subcontract expressly delegated to its construction subcontractor.   Because the language of the prime agreement imposed safety duties on the prime design-builder, the court held that those duties could not be avoided or delegated down to a subcontractor.   Ryan v. TCI Architects/Engineers/Contractors, Inc., 72 N.E. 3d 908 (Indiana 2017).

This case deals with a general contractor. The question was whether it assumed a non-delegable duty of care to keep a worksite safe when it executed the DBIA form contract. Looking at the language of the contract, the court held that the contract demonstrated the design-builder’s intend to assume a duty of care for everyone at the site.

An employee of a sub-subcontractor sustained a workplace injury. The injured individual filed suit against the design-builder to recover for its injuries. The trial court, on the basis that the subcontract agreement between the prime and sub stated that all site safety responsibility was delegated to the subcontractor, granted summary judgment for the design-builder.

This decision was reversed and remanded on appeal, with the appellate court explaining that the prime contractor had expressly agreed by the terms of the prime contract with the project owner to accept site safety responsibility, and this could not subsequently be delegated away. The court explained as follows:

“The language that Ryan points to as affirmatively demonstrating TCI’s intent to assume a duty of care is found in the contract Gander Mountain and TCI entered into—specifically Form 535. Ryan directs our attention to Section 2.8.1 of that form, which provides that “[TCI] recognizes the importance of performing the Work in a safe manner so as to prevent damage, injury or loss to … all individuals at the Site, whether working or visiting….” Appellant’s App. at 71.

The contract also directs TCI to “assume [ ] responsibility for implementing and monitoring all safety precautions and programs related to the performance of the Work.” Id. Furthermore, 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.” Id.

The Safety Representative was to “make routine daily inspections of the Site and … hold weekly safety meetings with [TCI’s] personnel, Subcontractors and others as applicable.” Id. Finally, the contract instructed that TCI and subcontractors *915 “shall comply with all Legal Requirements relating to safety.” Id.

This language, taken as a whole, makes clear that TCI intended to assume the duty of keeping the worksite reasonably safe. First, the language quoted above is found in subparagraph 2.8, whose heading is aptly entitled: “Design-Builder’s Responsibility for Project Safety.” App. at 71. Such a heading is telling of the purpose the section served: to outline the responsibilities TCI was to assume.

By assuming responsibility for implementing and monitoring all safety precautions and programs related to work performance, TCI expressly shouldered the duty of carrying out and periodically supervising the very safety policies that may have prevented worker injury here.

Assumption of responsibility also means that TCI assumed the risk of liability for damages that might have been incurred if any of those safety precautions and programs were to ever fall short of the reasonable standard of care.

Though we stop short of assessing whether TCI’s actions failed to meet the requisite standard—a question better left to the fact finder—we are convinced TCI assumed the duty of care, and thus the risk of potential liability, when it assumed responsibility for implementing and monitoring safety precautions and programs.”

The court also deemed that the prime contract gave the design-builder a “level of control” that satisfies the court’s concerns over imputing liability on a general contractor who “enjoys no control over the means and manner of competing the work.” The design-builder here explicitly agreed that it “shall at all times exercise complete and exclusive control over the means, methods, sequences and techniques of construction.”   And it assumed responsibility for “proper performance of the Work of Subcontractors and any acts and omissions in connection with such performance.”

Further, said the court, “charging [the design-builder] with the duty of designating a safety representative to perform inspections and hold safety meetings with contractors further supports [laborer’s] contention that [design-builder] assumed a specific duty to maintain a reasonably safe environment. The safety representative’s obligations extended to supervising and implementing the safety precautions and programs imputed on [design-builder], as well as performing safety inspections and holding safety meetings with subcontractors.”

Comment: This decision is somewhat surprising in that the court interpreted the DBIA design-build form as creating a non-delegable safety duty to the prime contractor. The court stated that it applied Indiana’s “four corners” rule in written instrument interpretation and therefore found that subsequent subcontracts had no effect on the design-builder’s assumption of the duty of care. The parties’ intent with regard to the responsibilities assumed by the prime contract can only be ascertained from the “four corners” of the prime contract and cannot be informed by what parties may have included in the language of the subcontracts.

I wonder if the design-builder might have avoided this result by inserting language in the prime agreement expressly stating that it could assign the safety duties to its subcontractors instead of itself assuming all the duties stated in the quoted sections. That might have been enough to satisfy the court by demonstrating the intent that was subsequently expressed by the subcontracts. I don’t know whether this would work, but it can’t hurt to insert such language in the prime agreement as a precaution against a court rendering a decision like the one here.

 

About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with Construction Risk Counsel, PLLC) representing design professionals, contractors and project owners.  He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects.  He is publisher of ConstructionRisk.com Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932.  This article is published in ConstructionRisk.com Report, Vol. 19, No. 9 (Sep 2017).

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