Lee v. M & H Enters., Inc.

• Decision Date: 21 April 2015
• Docket Number: No. 1 CA–CV 13–0257.,1 CA–CV 13–0257.
• Citation: 713 Ariz. Adv. Rep. 39,347 P.3d 1153,237 Ariz. 172
• Parties: Timothy LEE, a single man, Plaintiff/Appellant/Cross–Appellee, v. M AND H ENTERPRISES, INC. dba Martin Harris Construction, a Nevada corporation, Defendant/Appellee/Cross–Appellant, and Wal–Mart Stores, Inc. dba Sam's Club, a foreign corporation, Defendant/Appellee.
• Court: Arizona Court of Appeals

237 Ariz. 172

347 P.3d 1153

713 Ariz. Adv. Rep. 39

Timothy LEE, a single man, Plaintiff/Appellant/Cross–Appellee

v.M AND H ENTERPRISES, INC. dba Martin Harris Construction, a Nevada corporation, Defendant/Appellee/Cross–AppellantandWal–Mart Stores, Inc. dba Sam's Club, a foreign corporation, Defendant/Appellee.

No. 1 CA–CV 13–0257.

Court of Appeals of Arizona, Division 1.

April 21, 2015.

Hopkins Law Offices PLC By Stephen M. Hopkins, Phoenix, Counsel for Plaintiff/Appellant/Cross–Appellee.

Lewis Brisbois Bisgaard & Smith LLP By James K. Kloss, Phoenix, Counsel for Defendant/Appellee/Cross–Appellant M and H Enterprises.

The Law Office of Don D. Skypeck By Douglas H. Fitch, Counsel for Defendant/Appellee Wal–Mart Stores, Inc.

Judge MICHAEL J. BROWN delivered the opinion of the Court, in which Presiding Judge KENT E. CATTANI and Judge MARGARET H. DOWNIE joined.

OPINION

BROWN, Judge:

¶ 1 Timothy Lee suffered serious injuries while performing cleanup duties during the final stages of construction at a Sam's Club store located on property owned by Wal–Mart Stores, Inc. (“Wal–Mart”). Lee was employed at the time by Able Body Labor (“Able Body”)¹ , which supplied workers for M & H Enterprises, Inc. (“M & H”), the general contractor on the project. After Lee successfully pursued a workers' compensation claim against Able Body, he sued Wal–Mart and M & H for negligence.

¶ 2 On appeal, Lee challenges the trial court's orders granting summary judgment in favor of Wal–Mart and granting judgment as a matter of law in favor of M & H. The issues we address are: (1) whether Lee, as an employee of an independent contractor, could properly assert a vicarious liability negligence claim against Wal–Mart; (2) whether Lee presented evidence creating a material factual dispute as to whether WalMart retained some control over his work and was therefore directly negligent; and (3) whether the lent employee doctrine relieves M & H from liability because Lee elected to pursue a workers' compensation award for his injuries. For the following reasons, we affirm.

BACKGROUND

¶ 3 At the request of M & H, Able Body provided workers to perform clean-up work at the Sam's Club construction site. Lee, who began employment with Able Body in 2007, had been regularly assigned such work over the course of several months. In January 2009, shortly before the planned opening date of the store, Able Body directed Lee to report for work at the construction site. An M & H representative instructed Lee to clean the tops of various freezers, which were roughly ten feet high. Lee used an onsite scissor-lift to access the portion that needed cleaning, and proceeded to remove debris. Next to the ten-foot freezers, separated by a small section of fiberboard, were taller freezers, roughly sixteen feet high. Rather than use the scissor-lift to reach the taller freezers, Lee attempted to access them by stepping on the fiberboard. While doing so, the fiberboard collapsed and Lee was seriously injured when he fell to the floor.

¶ 4 Lee sued Wal–Mart and M & H, alleging they each acted negligently by failing to maintain a safe place to work, free of hidden dangers. Lee also alleged that both Wal–Mart and M & H were in control of the property and therefore owed him a “non-delegable duty to ... provide a safe place to work, free of hidden dangers.” Although he acknowledged receipt of an award for workers' compensation benefits (based on his claim against Able Body), Lee asserted the award was inadequate to compensate him for his injuries.

¶ 5 M & H moved for summary judgment, asserting that the lent employee doctrine barred Lee's cause of action because he had elected to pursue his statutory right to obtain a workers' compensation award for his injuries. The trial court denied the motion. After reassignment of the case to a different judge, M & H filed a second motion for summary judgment. M & H argued that if it had a duty to control Lee's actions, then his only remedy was workers' compensation; but if M & H had no duty to control, then as a matter of law it could not have breached any duty to Lee.

¶ 6 Wal–Mart also filed a motion for summary judgment, arguing that as a landowner, it did not owe a non-delegable duty to Lee because his injury occurred while he was working as an employee of an independent contractor. Wal–Mart also asserted it did not contractually assume responsibility or exercise actual control over the work of M & H, Able Body, or Lee. Lee countered that, notwithstanding his status as an employee of a subcontractor and the terms of Wal–Mart's contract with M & H, a landowner has a non-delegable duty to provide a reasonably safe place for business invitees and there was evidence that Wal–Mart and M & H exercised shared control over the premises at the time of the accident.

¶ 7 The trial court denied M & H's motion but granted Wal–Mart's, finding that Wal–Mart had hired M & H to build the Sam's Club and thereby “effectively relinquished control of (and liability for), the project to [M & H]” through its contract. The court explained that although the project was nearing completion and Wal–Mart possibly had “taken possession” of part of the site, there was “nothing in the record suggesting that Wal–Mart had taken possession or control of the area in which Lee was working, nor that it controlled Lee's work.” The court denied Lee's subsequent motion for reconsideration and/or new trial, and entered judgment in favor of Wal–Mart.

¶ 8 A jury trial ensued on Lee's claim against M & H. At the close of Lee's presentation of evidence, M & H moved for judgment as a matter of law, reasserting its argument that Lee's claims were barred based on the lent employee doctrine. The court granted the motion, explaining that a contract for hire was implied from the circumstances and finding that M & H exercised control over Lee and no reasonable jury could conclude otherwise. Therefore, applying the lent employee doctrine, the court found that the exclusive remedy of workers' compensation barred Lee from pursuing civil damages.

¶ 9 The court entered a final judgment in favor of M & H. Lee timely appealed and M & H cross-appealed the denial of its second motion for partial summary judgment.

DISCUSSION

I. Wal–Mart's Motion for Summary Judgment

¶ 10 Summary judgment is proper when “there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law.” Ariz. R. Civ. P. 56(a). We review de novo the grant of summary judgment and view the evidence in the light most favorable to the non-moving party. Read v. Keyfauver, 233 Ariz. 32, 35, 308 P.3d 1183, 1186 (App.2013).

¶ 11 Lee argues the trial court erred in granting summary judgment because, pursuant to Restatement (Second) of Torts (“Restatement”) § 422 (1965), Wal–Mart necessarily retained a non-delegable duty, as the landowner, to keep its premises reasonably safe for business invitees. Lee further asserts the court erred because Wal–Mart retained control over his work and is therefore directly liable for his injuries.

A. Premises Liability (Vicarious) under Restatement § 422(a)

¶ 12 Arizona courts have consistently recognized that a landowner is not liable for the negligent conduct of an independent contractor unless the landowner has been independently negligent. See Welker v. Kennecott, 1 Ariz.App. 395, 401–04, 403 P.2d 330, 336–39 (1965) (citing Restatement (First) of Torts § 409 (1934) (“Except as stated in §§ 410 to 429, the employer of an independent contractor is not subject to liability for bodily harm caused to another by a tortious act or omission of the contractor or his servants.”)); see also E.L. Jones Constr. Co. v. Noland, 105 Ariz. 446, 454, 466 P.2d 740, 748 (1970) (recognizing the general rule that a property owner is not liable for the negligence of an independent contractor); Restatement § 409 cmt. b (explaining that the rule stated in this section, “as to the non-liability of an employer for physical harm caused to another by the act or omission of an independent contractor, was the original common law rule”). The explanation “ most commonly given” for this rule is based on the notion that because “the employer has no power of control over the manner in which the work is to be done by the contractor, it is to be regarded as the contractor's own enterprise, and he, rather than the employer, is the proper party to be charged with the responsibility of preventing the risk, and bearing and distributing it.” Restatement § 409 cmt. b.²

¶ 13 As our supreme court has noted, however, “many exceptions to the rule of nonliability have now been recognized so that even where the employer has not been personally negligent, he may be vicariously liable for the contractor's negligence.” Ft. Lowell–NSS Ltd. P'ship v. Kelly, 166 Ariz. 96, 101, 800 P.2d 962, 967 (1990).³ Most, if not all, of the exceptions fall into three broad categories:

1. Negligence of the employer in selecting, instructing, or supervising the contractor.

2. Non-delegable duties of the employer, arising out of some relation toward the public or the particular plaintiff.

3. Work which is specially, peculiarly, or “inherently” dangerous.

Restatement § 409 cmt. b.⁴

¶ 14 According to Lee, Wal–Mart had a non-delegable duty to keep the premises safe and is therefore vicariously liable under Restatement § 422, which describes an employer's general scope of liability for injuries resulting from work performed on land and structures:

A possessor of land who entrusts to an independent contractor construction, repair, or other work on the land, or on a building or other structure upon it, is subject to the same liability as though he had retained the work in his own hands to others on or outside of the land for physical harm caused to them by the unsafe condition of the structure

(a) while the possessor has retained possession of the land during the progress of the work, or

(b) after he has resumed possession of the land upon its completion.

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