Canady v. Crystal Development Corp., 53839
| Decision Date | 09 August 1988 |
| Docket Number | No. 53839,53839 |
| Citation | 756 S.W.2d 607 |
| Parties | Eddie M. CANADY, individually, and as guardian ad litem for Frederick Canady, Vincent Darell Canady, Thomas Gerald Canady and Edward L. Butler, Plaintiffs- Appellants, v. CRYSTAL DEVELOPMENT CORPORATION and Manlin & Liebert Builders, Inc., Defendants-Respondents. |
| Court | Missouri Court of Appeals |
Richard Schwartz & Associates, Richard E. Schwartz, St. Louis, for plaintiffs-appellants.
Brown, James, & Rabbitt, P.C., Daniel T. Rabbitt, Charles E. Reis, IV, St. Louis, for defendants-respondents.
Widow and children of John Canady appeal summary judgment granted defendant Crystal Development Corporation [Crystal] and defendant Manlin & Liebert Builders, Inc., [Manlin & Liebert]. Plaintiffs' action is based upon a wrongful death suit arising from injuries resulting in the death of John Canady, a carpenter who fell while working as an employee of Leo Echele Drywall, Inc., [Echele]. Defendant Crystal was sued as owner of the premises where the accident occurred during the construction of a residence. Defendant Manlin & Liebert was sued as the construction manager of the project for Bluesprings Construction Corporation [Bluesprings], the general contractor.
On September 1, 1987, the court considered plaintiffs' motion for partial summary judgment and motion of defendant Crystal for summary judgment. The court determined that it lacked subject matter jurisdiction over plaintiffs' claims against defendant Manlin & Liebert because plaintiffs' remedies, if any, were governed exclusively by the Workers' Compensation Act. It dismissed that claim based upon a finding that John Canady was a statutory employee of defendant Manlin & Liebert, under Section 287.040(3) and (4) RSMo 1978. The court sustained motion of defendant Crystal for summary judgment on either or both of two grounds: (1) Crystal was not the landowner of the property where the accident occurred because it transferred the property to a "sister" corporation, Bluesprings, two months prior to the casualty and before any construction had begun on the premises; or, (2) if Crystal was the "owner" of the property then it is not liable, as owner, under Section 287.040(1) RSMo 1978 because the work did not involve a non-delegable, special or inherent risk.
The summary judgment facts were presented to the court in the form of depositions, exhibits made part of the depositions, and unopposed exhibits attached to memorandum in support of the motions. From the depositions and the exhibits we find the following facts to be undisputed.
On October 1, 1981, John Canady and a co-employee of Echele were hanging large sheets of drywall, weighing fifty-sixty pounds, above an empty stairwell in a residence under construction. They were working nine feet above a concrete basement floor and over space provided for future installation of a staircase to the basement. Both men were using a discarded wood floor truss as a substitute for a scaffold across the open stairwell. Such practice was prohibited by OSHA Construction Safety Regulations.
In April, 1981, Lot 42 of Barrington Place Plat 2, the premises were owned by Crystal. On April 29, 1981 Crystal contracted to sell the lot to Dr. Willman and to construct a house for him. On July 31, 1981, Crystal transferred the property by general warranty deed to Bluesprings. This was done to enable Bluesprings to obtain construction financing and build the house. Thereafter, Crystal did not own, possess or control the premises. Bluesprings operated as owner and general contractor for the construction of the residence. It completed the house and transferred it to Dr. Willman. Plaintiffs sued Bluesprings, but later withdrew that claim. See, Section 287.040.1 RSMo 1978 which immunizes general contractors as statutory employers.
In 1981, Charles Liebert and Richard M. Manlin were the sole owners of Manlin & Liebert Builders Inc., a Missouri corporation. Manlin & Liebert Builders Inc., was the sole owner of Crystal Development Corporation and Bluesprings Construction Corporation. Bluesprings and Crystal were sibling corporations and subsidiary corporations of Manlin & Liebert. By deposition, Charles Liebert testified that Bluesprings was the general contractor; Manlin & Liebert was not an operating company; rather, it was a holding company and, on this project, furnished management services for Bluesprings. The management services provided advice, safety, bookkeeping, clerical and organizational tasks and the activities of S. Richards Bruno as a project manager on the job site. Bluesprings had no employees on site. Bruno was an employee of Manlin & Liebert, not an employee of Bluesprings, the general contractor. Bruno testified that his employment did not include authority to enter into a contract with Leo Echele Drywall Inc. However, Leo Echele, owner and operator of Leo Echele Drywall Inc., testified that he ordered materials and began work on the job site after telephone notice from Bruno. None of the corporations had written contracts. Echele had no contract in writing with Manlin & Liebert or Bluesprings. Manlin & Liebert had no written contract with Bluesprings. Echele invoiced Manlin & Liebert, but was paid by Bluesprings. Other summary judgment facts will be noted as required.
Plaintiffs alleged in their petition that John Canady was employed by Echele, and he sustained injuries for which Crystal was liable. Plaintiffs' theory is that the drywall installation was inherently dangerous work. Specifically, the breach of duty assigned was failure to engage a competent contractor and subcontractors, to exercise proper supervision over the work, including safety inspections and monitoring, and to keep the work area free from debris and scrap. Plaintiffs alleged that both defendants failed to provide a scaffold or other safety or protection devices to cover the basement opening. They also allege that Crystal entered into a verbal construction contract with Bluesprings and that Bluesprings hired defendant Manlin & Liebert to act as a construction manager. Plaintiffs contend that Manlin & Liebert was not an intermediate subcontractor of Bluesprings and that Echele was a subcontractor to Bluesprings.
Crystal was entitled to summary judgment only if the undisputed or summary judgment facts, viewed in a light most favorable to plaintiffs, together with all reasonable inferences which may be drawn from those facts constitute unassailable proof that Crystal was entitled to judgment as a matter of law. Gast v. Ebert, 739 S.W.2d 545, 546 (Mo. banc 1987). Under this standard we find summary judgment for Crystal was proper. The controlling undisputed fact is that at the time construction was begun and at the time of the casualty, Crystal was not the owner of the real estate on which Bluesprings was building a residence. For that reason Crystal had no common law duty to employees of subcontractors and no statutory duty under Section 287.040(1) RSMo 1978.
Plaintiffs filed a motion for partial summary judgment on the issue of defendant's statutory employee defense. As part of that motion plaintiffs informed the trial court "the land owner of the premises where the house was being erected ("improvements") was Bluesprings." A similar statement appears in plaintiffs' brief. The July 29, 1981 deed from Crystal to Bluesprings requires that conclusion. Crystal was neither the owner nor the possessor of the real estate. Accordingly, it had no duty to perform any of the acts assigned as negligent in plaintiffs' petition. Prior to the July 31, 1981 deed Crystal may have had a verbal contract with Bluesprings to construct the house it contracted to build for Dr. Willman. Charles Liebert so testified. However, after executing and recording the deed such contract became irrelevant to the issues. After the deed was recorded Crystal was a stranger to the construction including any agreement by one of the corporations with Echele, the direct employer of plaintiffs' decedent. The deed transferred any ownership interest and any right to possess the premises.
Plaintiffs have argued to this court that Crystal's liability arises under Restatement (Second) of Torts, Section 413. Section 413 imposes a duty on the "employer" of an independent contractor where the work to be performed by the independent contractor is likely to create a peculiar unreasonable risk of harm to others. This theory has been described as the peculiar risk doctrine. See, Smith v. Inter-County Telephone Co., 559 S.W.2d 518, 521 (Mo. banc 1977). The doctrine is an exception to the general rule that the "employer" is not liable for negligent acts of an independent contractor. Id. Plaintiffs also argue, in the alternative, Crystal was liable based on Restatement (Second) of Torts, Sections 416-429, which assigns liability to an employer who, although not negligent himself, hires a negligent independent contractor to perform work which involves a peculiar risk, one inherently dangerous.
Both theories fail because on undisputed evidence, confirmed by plaintiffs' own statements in their motion for summary judgment and in their brief, defendant Crystal was not the owner of the premises during the construction. Crystal did not contract with any builder. It did not "employ" Bluesprings to build the house. When the house was constructed, Bluesprings was both the owner and its own general contractor. Accordingly, the sections of the restatement adopted in Missouri in Stubblefield v. Federal Reserve Bank of St. Louis, 356 Mo. 1018, 204 S.W.2d 718, 722 (1947) and Hofstetter v. Union Elec. Co., 724 S.W.2d 527, 530 (Mo.App.1986) are not applicable to defendant Crystal. Nor is it necessary for us to reach the fact question of whether the work to be performed by John Canady for his direct employer, Echele, was inherently dangerous. On undisputed facts, after the execution...
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