Camargo v. Tjaarda Dairy

• Decision Date: 05 July 2001
• Docket Number: No. S088632.,S088632.
• Citation: 25 Cal.4th 1235,25 P.3d 1096,108 Cal.Rptr.2d 617
• Court: California Supreme Court
• Parties: Eva CAMARGO et al., Plaintiffs and Appellants, v. TJAARDA DAIRY et al., Defendants and Respondents.

108 Cal.Rptr.2d 617

25 Cal.4th 1235

25 P.3d 1096

Eva CAMARGO et al., Plaintiffs and Appellants, v. TJAARDA DAIRY et al., Defendants and Respondents.

No. S088632.

Supreme Court of California.

July 5, 2001.

Law Offices of Federico Castelan Sayre, Federico Castelan Sayre and Timothy A. Black, Newport Beach, for Plaintiffs and Appellants.

Ian Herzog, Santa Monica; Bruce Broillet; Thomas Stolpman, Long Beach; Daniel U. Smith, Los Angeles; William L. Veen, San Francisco; Robert S. Arns, San Francisco; Kevin Calcagnie, Newport Beach; and Rebecca Quinn for Consumer Attorneys Association as Amicus Curiae on behalf of Plaintiffs and Appellants.

Borton, Petrini & Conron, John F. Petrini and Michael J. Stump, Bakersfield, for Defendants and Respondents.

Deborah J. La Fetra for Pacific Legal Foundation as Amicus Curiae on behalf of Defendants and Respondents.

John P. Carpenter for the Association of General Contractors of California as Amicus Curiae on behalf of Defendants and Respondents.

William J. Moran, Mission Hills, and Eileen F. Braunreiter, San Francisco, for Automobile Club of Southern California and California State Automobile Association as Amici Curiae on behalf of Defendants and Respondents.

Sedgwick, Detert, Moran & Arnold and Frederick D. Baker, San Francisco, for American Chemistry Council as Amicus Curiae on behalf of Defendants and Respondents.

Fred J. Hiestand, Sacramento, for the Civil Justice Association of California as Amicus Curiae on behalf of Defendants and Respondents.

BROWN, J.

Alberto Camargo was killed when his tractor rolled over as he was driving over a large mound of manure in a corral belonging to Tjaarda Dairy. Camargo was an employee of Golden Cal Trucking, and Golden Cal Trucking was an independent contractor Tjaarda Dairy had hired to scrape the manure out of its corrals and to haul it away in exchange for the right to purchase the manure at a discount. Plaintiffs, Camargo's wife and five children, sued defendants Tjaarda Dairy and Perry Tjaarda on the theory, among others, that they were negligent in hiring Golden Cal Trucking because they failed to determine whether Camargo was qualified to operate the tractor safely. The trial court granted defendants' motion for summary judgment. With regard to the cause of action for negligent hiring, the trial court relied on our then recent decision in Toland v. Sunland Housing Group, Inc. (1998) 18 Cal.4th 253, 74 Cal.Rptr.2d 878, 955 P.2d 504 (Toland), for its conclusion that an injured employee of an independent contractor may not bring such an action against the hirer of the contractor. Plaintiffs appealed, limiting their appeal to this issue, and the Court of Appeal reversed. The question presented, therefore, is whether the rationale of our decisions in Privette v. Superior Court (1993) 5 Cal.4th 689, 21 Cal.Rptr.2d 72, 854 P.2d 721 (Privette) and Toland which involved tort liability under the peculiar risk doctrine, also applies to the tort of negligent hiring. The answer to this question is yes, the Privette/Toland rationale does bar an employee of an independent contractor from bringing a negligent hiring action against the hirer of the contractor.

Discussion

I. Privette, the Peculiar Risk Doctrine, and the Rationale for Precluding an Employee of an Independent Contractor from Relying on That Doctrine in a Suit Against the Hirer of the Contractor

In Toland, we summarized the peculiar risk doctrine and explained why we had concluded in Privette that under the doctrine a hirer's liability does not extend to the hired contractor's employees. "Under the doctrine of peculiar risk, a person who hires an independent contractor to do inherently dangerous work can be held liable for tort damages when the contractor causes injury to others by negligently performing the work. The doctrine serves to ensure that innocent bystanders or neighboring landowners injured by the hired contractor's negligence will have a source of compensation even if the contractor turns out to be insolvent. As we explained in [Privette, supra, 5 Cal.4th at page] 694 [21 Cal.Rptr.2d 72, 854 P.2d 721], courts created the peculiar risk doctrine in the belief that `as between two parties innocent of any personal wrongdoing—the person who contracted for the work and the hapless victim of the contractor's negligence—the risk of loss occasioned by the contracted work was more fairly allocated to the person for whose benefit the job was undertaken.' [¶] In Privette ..., we unanimously held that under the peculiar risk doctrine the hiring person's liability does not extend to the hired contractor's employees. Because the Workers' Compensation Act (Lab.Code, § 3200 et seq.) shields an independent contractor from tort liability to its employees, applying the peculiar risk doctrine to the independent contractor's employees would illogically and unfairly subject the hiring person, who did nothing to create the risk that caused the injury, to greater liability than that faced by the independent contractor whose negligence caused the employee's injury. (5 Cal.4th at pp. 698-700 [21 Cal.Rptr.2d 72, 854 P.2d 721].) As we concluded: `[T]he property owner should not have to pay for injuries caused by the contractor's negligent performance of the work when workers' compensation statutes already cover those injuries.' (Id. at p. 699 [21 Cal.Rptr.2d 72, 854 P.2d 721].)" (Toland, supra, 18 Cal.4th at p. 256, 74 Cal.Rptr.2d 878, 955 P.2d 504.)

This rationale—-that the hirer should not have to pay for injuries caused by the contractor's negligent performance because the workers' compensation system already covers those injuries—is, we pointed out in Privette, supported by related policy considerations. "As one court observed, the `principal' who hires an independent contractor should be subject to no greater liability `than its [independent contractor] agent,' whose exposure for injury to an employee is limited to providing workers' compensation insurance. [Citation.] Other courts have reasoned that the rule of workers' compensation exclusivity, which shields an independent contractor who pays workers' compensation insurance premiums from further liability to its employees for on-the-job injuries, should equally protect the property owner who, in hiring the contractor, is indirectly paying for the cost of such coverage, which the contractor presumably has calculated into the contract price.... [¶] ... [¶] Courts and legal commentators have expressed concern that to allow an independent contractor's employees who incur work-related injuries compensable under the workers' compensation system to also seek damages under the doctrine of peculiar risk from the person who hired the contractor would give those employees an unwarranted windfall. As these authorities point out, to permit such recovery would give these employees something that is denied to other workers: the right to recover tort damages for industrial injuries caused by their employer's failure to provide a safe working environment. This, in effect, would exempt a single class of employees, those who work for independent contractors, from the statutorily mandated limits of workers' compensation. [Citations.] Moreover, to impose vicarious liability for tort damages on a person who hires an independent contractor for specialized work would penalize those individuals who hire experts to perform dangerous work rather than assigning such activity to their own inexperienced employees. [Citations.]" (Privette, supra, 5 Cal.4th at pp. 699-700,21 Cal.Rptr.2d 72,854 P.2d 721.)

In Privette, the complaint, initially, also alleged negligent hiring, but that cause of action was dropped, so we did not there reach the question we address now. (Privette, supra, 5 Cal.4th at pp. 692, fn. 1, 702, 21 Cal.Rptr.2d 72, 854 P.2d 721.)

II. Toland and the Application of the Privette Rationale to the Peculiar Risk Doctrine as Set Forth in Section 413, as Well as Section 416, of the Restatement Second of Torts

The doctrine of peculiar risk, insofar as it was relevant in Privette and Toland, is described in sections 413 and 416 of the Restatement Second of Torts.¹ Under section 413, a person who hires an independent contractor to do inherently dangerous work, but who fails to provide in the contract or in some other manner that special precautions be taken to avert the peculiar risks of that work, can be liable if the contractor's negligent performance of the work causes injury to others. "Because section 413 rests the liability of the hiring person on his or her omission to provide for special precautions in the contract or in some other manner, it is sometimes described as a rule of `direct liability.'" (Toland, supra, 18 Cal.4th at p. 259, 74 Cal.Rptr.2d 878, 955 P.2d 504.)

Under section 416, even if the hiring person has provided for special precautions in the contract or otherwise, the hiring person can nevertheless be liable if the contractor fails to exercise reasonable care to take such precautions and the contractor's performance of the work causes injury to others. "Because the hiring person's liability under section 416 ... flows from the independent contractor's negligent failure to take special precautions in performing the inherently dangerous work, as required by `the contract or otherwise,' the hiring person's liability is often referred to as `vicarious liability.' [Citations.]" (Toland, supra, 18 Cal.4th at p. 260, 74 Cal. Rptr.2d 878, 955 P.2d 504, fn. omitted.)

In Toland, a subcontractor's employee sued the general contractor for on-the-job injuries, asserting that Privette did not bar recovery for direct liability under section 413, but only for vicarious liability under section 416. We rejected the argument, noting that the distinction between the two sorts of liability was not that neat under peculiar risk theory. "[P]eculiar risk liability is not a traditional theory of direct liability for the risks created by one's...