Blake v. Calumet Const. Corp.

• Decision Date: 18 December 1996
• Docket Number: No. 75S03-9509-CV-01097,75S03-9509-CV-01097
• Citation: 674 N.E.2d 167
• Parties: Emanuel C. BLAKE, Appellant (Plaintiff below), v. CALUMET CONSTRUCTION CORP., Appellee (Defendant below).
• Court: Indiana Supreme Court

Page 167

674 N.E.2d 167

Emanuel C. BLAKE, Appellant (Plaintiff below), v. CALUMET CONSTRUCTION CORP., Appellee (Defendant below).

No. 75S03-9509-CV-01097.

Supreme Court of Indiana.

Dec. 18, 1996.

Joseph V. Simeri, Butler & Simeri, P.C., South Bend, for Appellant.

Peter J. Agostino, Lynn E. Arnold, Kalamaros & Associates, P.C., South Bend, for Appellee.

ON PETITION TO TRANSFER

BOEHM, Justice.

This case turns on the circumstances under which a contractor on a construction project may be liable to third parties injured on the site. The Court of Appeals affirmed the trial court's grant of summary judgment to defendant Calumet Construction Corporation on the ground that as a matter of law Calumet owed no duty of care to plaintiff Emanuel C. Blake. Because we find disputed issues of material fact, the grant of summary judgment is reversed and the case is remanded for further proceedings in the trial court.

I. Factual & Procedural History

Blake was an employee of Morrison, Inc., a contractor on the site of a construction project for I/N Tek (the owner) in New Carlisle, Indiana. Calumet, another contractor on the site, had constructed a loading dock on the site adjacent to a maintenance building. Both Morrison and Calumet were working under the direction of United Engineers and Constructors, Inc. as project manager coordinating the work of all contractors. Blake was working in the maintenance building on the night of November 3, 1989. During a break at approximately nine o'clock that evening, Blake left the maintenance building through a door to the unlit loading dock area. Blake, who had never used this door before, tripped and fell approximately four feet to the concrete floor of the ramp of the loading dock, and sustained a fractured hip and other injuries. Although Calumet's contract with owner I/N Tek called for the installation of guardrails around the loading dock, no guardrails were in place at the time Blake fell.

We are unable to determine whether Calumet had three separate contracts with I/N Tek, or one contract calling for three separate items. Nor is it clear whether progress payments were required. We are not directed to any provision in any document governing payment or its effect on the legal relationship among Calumet, United or I/N Tek. However, Blake and Calumet agree that the first stage included construction of the loading dock and that the latter two stages involved unrelated work on different parts of the construction site. Calumet acknowledges that it was still doing work on the site when Blake was injured, but asserts it had moved on to the second stage of its contract with I/N Tek by that time. William Meeker, Calumet's project manager on the site, testified that Calumet's invoice records for the I/N Tek project indicated that I/N Tek had paid Calumet in full for the cost of the loading dock before Blake was injured.

On June 18, 1991 Blake filed this lawsuit against Calumet, and no one else, alleging that Calumet's negligence had caused his injuries. On November 22, 1992, the trial court granted Calumet's motion for summary judgment on the ground that Calumet owed no duty of care to Blake on the night he was injured. With one judge dissenting, the Court of Appeals affirmed, Blake v. Calumet Const. Corp., 648 N.E.2d 1250 (Ind.Ct.App.1995). Blake appeals. We have jurisdiction under Indiana Appellate Rule 11(B)(3).

II. Standard of Review & Issue Presented

Summary judgment is appropriate where the evidence shows there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Ind.Trial Rule 56(C). Our standard of review is well-established. Although Blake, the non-moving party, has the burden of persuading us that the grant of summary judgment was erroneous, we carefully assess the trial court's decision to ensure that he was not improperly denied his day in court. Mullin v. Municipal City of South Bend, 639 N.E.2d 278, 280-81 (Ind.1994). On summary judgment all facts and reasonable inferences drawn from those facts are construed in favor of the non-moving party. Wright v. Carter, 622 N.E.2d 170, 171 (Ind.1993). To recover under a theory of negligence, Blake must show three things: (1) Calumet owed a duty of care to Blake at the time he was injured; (2) Calumet failed to conform its conduct to that standard of care; and (3) damages were proximately caused to Blake by the breach. Webb v. Jarvis, 575 N.E.2d 992, 995 (Ind.1991). Because the trial court granted summary judgment on the first element of negligence--duty--we address only that issue. To find a duty running from one person to another is to state the conclusion that the former may be liable to the latter. Because this Court has often spoken in these terms, we use the same terminology here.

"Duty" has been defined as "an obligation, to which the law will give recognition and effect, to conform to a particular standard of conduct toward another." W. KEETON, PROSSER & KEETON ON THE LAW OF TORTS 356 (5th ed. 1984). In deciding whether to impose a duty at common law, this Court usually considers three factors: (1) the relationship between the parties; (2) the foreseeability of the harm; and (3) public policy concerns. Webb, 575 N.E.2d at 995; see also William L. Prosser, Palsgraf Revisited, 52 MICH. L.REV. 1, 12-16 (1953) (discussing other considerations, such as conscience of the community and ease of administration). The duty inquiry in this case, however, is governed by a line of decisions dealing specifically with contractors' liability to third parties for construction flaws. In general, Indiana law has followed the rule that contractors do not owe a duty of care to third parties after the owner has accepted the work. An exception to this rule exists where the work is deemed dangerously defective, inherently dangerous or imminently dangerous such that it poses a risk of imminent personal injury to third parties. Although the existence of duty is generally a question of law, see Webb, 575 N.E.2d at 995, under this line of authority duty in this case turns on two factual issues: did the owner accept the loading dock before the accident occurred and, if so, did the loading dock nonetheless present a risk of imminent personal injury as of that time? Both must be established favorably to Calumet by undisputed facts for summary judgment to be appropriate.¹

III. Did I/N Tek Accept Calumet's Work as a Matter of Law?

Blake argues that the material fact of acceptance in this case is in dispute. Specifically, Blake points to the lack of guardrails around the loading dock and asserts that Calumet's failure to complete the work in accordance with its contract with I/N Tek creates a jury question on whether I/N Tek accepted Calumet's work. In reply, Calumet contends that guardrails were in fact installed before November 3, 1989 but had been removed by a third party. Calumet asserts that its work on the loading dock had been accepted as a matter of law--installation of guardrails notwithstanding--because Calumet's billing records indicate that I/N Tek paid for the loading dock in full two months before Blake's fall. Calumet also argues that it had relinquished physical control of the loading dock area before November 3, 1989, also indicating an acceptance.

Contractors are liable for negligence while their work is in progress because they are presumably in a better position than the landowner to prevent injuries to third parties. Rush v. Hunziker, 216 Ind. 529, 24 N.E.2d 931 (1940). However, because a contractor's presence is transient the law has sought to relieve the contractor of liability after the work is accepted and completed, subject to some exceptions. Daugherty v. Herzog, 145 Ind. 255, 44 N.E. 457 (1896) is the seminal Indiana case holding that a contractor's duty of care to third parties is extinguished upon acceptance of the work. In Daugherty, the contractor remodeled the front wall of a drug store. Two years after the work was completed and turned over to the owner, the wall collapsed and killed the plaintiff's daughter, who had been walking on the public sidewalk below. In affirming the trial court's grant of a demurrer, we reasoned that "[t]here must be some causal connection between the negligence and the hurt; and such causal connection is interrupted by the interposition, between the negligence and the hurt of any independent human agency." Daugherty, 145 Ind. at 257, 44 N.E. at 457 (internal quotation marks omitted). Thus, we emphasized in Daugherty that a contractor's duty of care ceases once the owner is again better able than the contractor to prevent harm to third parties.

In the hundred years since Daugherty, we have not had occasion to elaborate on the underlying rationale for terminating the contractor's duty of care upon acceptance and how that rule should be applied, although we have restated the rule on at least two occasions. See Travis, Admx. v. Rochester Bridge Co., 188 Ind. 79, 122 N.E. 1 (1918) (holding contractor had no duty to third party five years after bridge was constructed, accepted by municipality, and opened to public); Citizens Gas & Coke Util. v. American Economy Ins. Co., 486 N.E.2d 998 (Ind.1985) (noting and restating Daugherty rule but deciding case on other grounds).² In evaluating "acceptance" for these purposes, the focus is on whether the owner was better able than the contractor to prevent injury to third parties at the time the harm occurred. Factors informing the acceptance inquiry include whether: (1) the owner or its agent reasserted physical control over the premises or instrumentality; (2) the work was actually completed; (3) the owner expressly communicated an acceptance or release of liability; or (4) the owner's actions permit a reasonable inference that the work was accepted. The owner can indicate an acceptance by re-occupying, leasing, selling or otherwise using the premises in a manner inconsistent with further physical...