Ft. Lowell-NSS Ltd. Partnership v. Kelly, LOWELL-NSS

CourtCourt of Appeals of Arizona
Citation784 P.2d 699,162 Ariz. 493
Docket NumberCA-SA,No. 2,LOWELL-NSS,2
PartiesFT.LIMITED PARTNERSHIP, Petitioner, v. The Honorable John F. KELLY, a Judge for the Superior Court of the State of Arizona, County of Pima, Respondent, and Josephine JULA and Michael Jula, wife and husband, Real Parties in Interest. 89-0071.
Decision Date31 July 1989


This special action was taken from an order of the respondent court denying defendant/petitioner Ft. Lowell-NSS Limited Partnership's motion for summary judgment. We accept jurisdiction because the claims of the parties raise novel and important issues which we believe require resolution by this court.

Petitioner is the owner of a self-storage facility located in Tucson. The project was developed by National Self Storage Management, Inc. (NSS), under an agreement with petitioner. The general contractor on the project was Hatfield & Associates, Inc., which in turn subcontracted with Glebe Electric to install conduit and electrical wiring and fixtures in accordance with plans provided by the architect.

Access to the facility is obtained by entering a code into an electronic security system touch pad which was installed by Glebe. On April 3, 1985, plaintiff/real party in interest Josephine Jula (Jula), an employee of petitioner, was demonstrating the system to a new tenant when she received an electric shock and resulting injuries. She subsequently brought suit against NSS and others seeking damages. Her complaint was later amended to add petitioner as a defendant. 1

Petitioner filed a motion for summary judgment, arguing that its duty as a landowner was to maintain the premises in a reasonably safe condition and to give warning of latent or concealed perils. Presenting evidence that it had no knowledge that the security system was defective or that it had ever injured anyone prior to Jula's incident, petitioner argued that it was not liable for her injuries. The trial court denied the motion, finding that there were facts from which "it could be inferred that [petitioner] should have known of the hazardous condition alleged to have caused Plaintiff's injuries" and that "[a]ny information which Glebe Electric had, or any knowledge it should have had, would be imputed to [petitioner]," citing Glowacki v. A.J. Bayless Markets, Inc., 76 Ariz. 295, 263 P.2d 799 (1953), and Restatement (Second) of Agency § 277 (1965).

Petitioner then filed a motion for reconsideration, arguing that Glebe was an independent contractor and that there was no agency relationship between them. The court denied the motion, finding that Glebe was both an independent contractor and an agent of petitioner. Noting the general rule that "a person who employs an independent contractor is not vicariously liable," the court nevertheless appears to have found two exceptions applicable to this case, neither of which had been raised by Jula. The first was a landowner's nondelegable duty to keep his premises reasonably safe for business invitees. The second was where the work to be done by the independent contractor is inherently dangerous. Finding that "[a]ny work involving electric wiring is necessarily or inherently dangerous," the court concluded:

THE COURT FINDS that where a developer/property owner hires general contractors who hire subcontractors to construct improvements in a case such as this, that any negligence of the contractors is imputed to the developer/property owner on the basis of the non-delegable duty exception.

This special action followed.

The "general" rule has often been stated that an employer is not liable for the negligence of an independent contractor. E.L. Jones Const. Co. v. Noland, 105 Ariz. 446, 466 P.2d 740 (1970); Parks v. Atkinson, 19 Ariz.App. 111, 505 P.2d 279 (1973); Restatement (Second) of Torts § 409 (1965). This rule is now so riddled with exceptions that its continuing validity has been called into question. W. Prosser, The Law of Torts § 71 at 509 (5th ed. 1984). Two exceptions pertaining to the nondelegable duties of a landowner and an employer of an independent contractor are presented here.


The first exception to which the trial court alluded in this case is the nondelegable duty of a landowner to keep his premises reasonably safe for business invitees. Unfortunately, this issue has been largely ignored by the parties. One aspect of this exception is found in § 422 of the Restatement, which provides as follows:

§ 422. Work on Buildings and Other Structures on Land

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.

This section was first considered by our courts in cases involving injuries to employees of an independent contractor seeking to recover damages from the employer/landowner for injuries occurring during the course of construction. In Welker v. Kennecott Copper Co., 1 Ariz.App. 395, 403 P.2d 330 (1965), this court construed the term "others" as used in § 422 and other Restatement exceptions to exclude such employees, in part because they were covered by the worker's compensation statutes and to hold otherwise would impose greater liability on the employer than he would have to his own employees, contrary to the intentions of the Restatement. See also Mason v. Arizona Public Service Co., 127 Ariz. 546, 622 P.2d 493 (App.1980); Parks v. Atkinson, supra.

In Koepke v. Carter Hawley Hale Stores, Inc., 140 Ariz. 420, 682 P.2d 425 (App.1984), Division One of this court considered a claim under subsection (a) of this section in a case involving a department store customer who was injured as a result of the negligence of an independent contractor doing remodeling and repair work while the store remained open for business. The court found several policy reasons supporting the adoption of the Restatement position and its application to that case. First, the department store received an economic benefit from remaining open while the work was in progress. Second, the department store was able to protect itself financially by obtaining insurance as a cost of doing business and by selecting a financially responsible contractor. Third, the department store could prevent or minimize the risk of injury by hiring a competent contractor and insisting on proper safety precautions. The court rejected the argument that this section in effect made the landowner an insurer of the safety of business invitees, noting that liability would ensue only upon a showing of the contractor's negligence.

We are now called upon to decide whether the vicarious liability imposed upon landowners under § 422(b) should be adopted in Arizona. 2 The courts in other jurisdictions adopting § 422(b) have done so generally on grounds similar to those enunciated by Division One in Koepke, supra, in adopting § 422(a). Patton v. Spa Lady, Inc., 772 P.2d 1082 (Alaska 1989); Pappas v. Carson, 50 Cal.App.3d 261, 123 Cal.Rptr. 343 (1975) (also finding that care in the alteration/repair of premises is a matter of public importance); see also West End Corp. v. Royals, 450 So.2d 420 (Miss.1984) (following § 422(b) without analysis).

In other jurisdictions, the courts have either rejected the Restatement position outright or construed it to avoid vicarious liability. In Washington Avenue Food Center v. Modlin, 205 So.2d 295 (Fla.1967), the Florida Supreme Court reversed the court of appeals' adoption of § 422(b) on the basis of its decision in Mai Kai, Inc. v. Colucci, 205 So.2d 291 (Fla.1967), where the court concluded that adoption of the Restatement position would result in the arbitrary application of one standard to a businessman who contracts for the construction of a building on his property and another standard to a businessman who purchases a previously constructed building. In S.S. Kresge Co. v. Port of Longview, 18 Wash.App. 805, 573 P.2d 1336 (1977), the Washington court rejected the Restatement position, holding that liability would ensue only where the owner had control or the right to control the work of the independent contractor.

The New Jersey Supreme Court has also rejected the concept of strict liability for landowners. In Brown v. Racquet Club of Bricktown, 95 N.J. 280, 471 A.2d 25 (1984), the defendant club was sued by two women who were injured when a staircase on its premises collapsed. The club had purchased the building during its construction. Against a dissent arguing that § 422 should be adopted and that such cases should be treated similarly to products liability cases, the court applied a general negligence standard, emphasizing the landowner's duty of inspection.

A proprietor generally is not liable for injuries caused by defects of which he had no actual or implied knowledge or notice, and no reasonable opportunity to discover.... Whether a reasonable opportunity to discover a defect existed will depend on both the character and the duration of the defect.... Thus, proprietors have been absolved of liability where a defective condition was found not to be discoverable by reasonable inspection ... or where a latent defect, undiscoverable except by extraordinary investigation, caused an injury shortly after a new owner bought a building.

95 N.J. at 291, 471 A.2d at 30 (citations...

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