CONSTRUCTION LAW UPDATE

This is one of our periodic newsletters on matters of concern to our friends and clients in the construction trades and the design professions. There are several recent cases of note that discuss what level of control over the activities of a sub or independent contractor is necessary to make a general contractor liable for injuries suffered by employees of the sub. But first, an interesting discussion of a general contractor’s gross negligence from the Court of Appeals in Tyler.

Contractor’s Gross Negligence/Site Safety

Brown & Root, Inc. vs. Shelton, ___ S.W. 3d __, 2003 WL 21771917 (Tex. App.-Tyler, July 31, 2003) is an asbestos case in which the widow of a long time worker at a Kelly Springfield plant alleged claims against Brown & Root on the theory that her late husband was exposed to asbestos while Brown & Root was performing construction work at the plant. At trial, the jury found in favor of the plaintiff and awarded substantial punitive damages against Brown & Root based upon a finding of gross negligence.

On appeal, Brown & Root challenged the legal sufficiency of the evidence of its alleged gross negligence. The appellate court held that there was legally sufficient evidence to support the finding of gross negligence, in part because Brown & Root had been active on construction industry safety councils where the risks associated with asbestos had been discussed well prior to the plaintiff’s exposure in 1967. What caught our attention about the decision, however, was that the court found most compelling the evidence that Brown & Root failed to employ certain safety measures at the plaintiff’s plant that it was employing on other jobs:

Additionally, extensive evidence was introduced detailing the stringent safety measures mandated by Exxon on all jobs undertaken for them by Brown & Root. These measure outline both the risks involved in the use of materials such as asbestos, and also instruct as to mandatory precautions to be implemented to reduce such risks. No evidence was offered, however, to show that Brown & Root employed any similar measures at the Kelly-Springfield site...Though Brown & Root asserts that the Exxon policies applied only to Exxon contracted jobs, in so doing it overlooks the fact that the crucial inquiry is what is known by the defendant, and not from whom the defendant obtained that knowledge.

2003 WL 21771917 at 8 (emphasis supplied).

We know that the safety practices at issue in the case took place in the 1960's, and that most contractors have substantially changed their safety programs since those days. Certainly Shelton sounds a warning to any who have not: adopt safety policies that are consistent from job to job and equal to the most stringent safety requirements imposed by any customer. Failure to do so creates an unacceptable liability risk.

The Level of Control Sufficient to Create Liability

Several recent cases cite the Texas Supreme Court’s decision in Lee Lewis Constr., Inc. vs. Harrison, 70 S.W. 3d 778 (Tx. 2002) (see our newsletter of February, 2002) as the courts wrestle with issues of general contractor liability. Harrison really just restated the well established rule that a general contractor can be liable for injuries suffered by the employee of a sub if the general contractor asserts control over the manner in which the sub does its work.

In Tyson Foods, Inc. vs. Guzman, __S.W. 3d __, 2003 WL 21773844 (Tx. App.-Tyler, July 31, 2003) we once again look to the Tyler court, which was confronted by the negligence claims of Gustavo Guzman, an employee of an independent contractor that provided services to Tyson at a chicken farm. Mr. Guzman, worthy fellow, had been employed as a chicken catcher and had been run over by a forklift piloted by a Tyson employee. (And, yes, we believe that whenever you are feeling sorry about your lot in life you can make yourself feel better almost instantly by reflecting on what it must be like to catch chickens in a dark shed all day.) The case is interesting because the question of control was determined almost exclusively on evidence relating to the safety precautions that Tyson forced its subcontractors to adopt after Mr. Guzman’s accident. The trial court had permitted the admission of evidence of subsequent remedial measures (generally prohibited by Rule 407, Texas Rules of Evidence) for the limited purpose of proving the Tyson had sufficient control over the operations of its subcontractors to force them to adopt the safety measures. Except, in this case, per Harrison, control equals liability. Hence Rule 407 is circumvented in its entirety. The Tyler court affirmed. We are not ashamed to state the obvious, that the case amply illustrates that safety precautions are generally best implemented before someone gets hurt. We also note that the case once again highlights that the safety meeting at the start of every job ought to include a statement by every sub about the safety procedures they will be adopting during the work. If that step is omitted, and somebody gets hurt at the site, the GC will be caught in an impossible position: do nothing and run the risk of more injuries, or impose standards on the subs and prove that you have a level of control that makes you liable to the injured worker. Perhaps the public policy implications of Guzman are worth some addition consideration, because we think a lot of GC”s thrown into this dilemma are going to err on the side of not imposing standards on the subs.

We also note briefly the decision of the Houston Court of Appeals (1st Dist.) in Gonzalez vs. Pin Oak Interests, L.L.C., 2003 WL 1891660 (Tx. App.-Houston [1st Dist.] April 17, 2003). The plaintiff was severely injured as a result of a fall from an unsecured third floor window opening. The general contractor got out of the case on summary judgment at trial, and the Houston court affirmed. The appellate court first looked to the contract between the GC and the sub, and found that the contract did not per se give the GC direct control over the sub’s manner of doing its work. The court then looked to whether the GC had exercised actual control over the sub’s work. The GC’s superintendent testified that, had he seen the unsecured window opening, he certainly would have order the sub to secure it. The court picked up on the “had he seen” part of that testimony, and held that the GC did not exercise control because the superintendent had not seen the opening and so had not ordered it to be secured. So, the superintendent’s testimony, which seems to us to be an admission by the GC that it had the control to force the sub to adopt specific safety precautions, is taken by the court as proof that there was no control because the statement demonstrates that no control was exercised. 2003 WL 1891660 at 4. We get it, we guess. Control is action, not power.