Grahn v. Tosco Corp.

Decision Date04 November 1997
Docket NumberNo. A075345,A075345
Citation58 Cal.App.4th 1373,68 Cal.Rptr.2d 806
CourtCalifornia Court of Appeals Court of Appeals
Parties, 62 Cal. Comp. Cases 1546, 97 Cal. Daily Op. Serv. 8487, 97 Daily Journal D.A.R. 13,677 Gerald GRAHN et al., Plaintiffs and Respondents, v. TOSCO CORPORATION, Defendant and Appellant.

Tony J. Tanke, Redwood City, Gary L. Simms, San Francisco, Tanke & Willemsen, for Appellant.

Philip A. Harley, Novato, James L. Oberman, Hercules, Brayton, Harley, Curtis, for Respondents.

RUVOLO, Associate Justice.

I. INTRODUCTION

This is an appeal from a jury award of $1,074,420 in favor of respondents Gerald Grahn and his wife Bonnie Grahn for personal injury and loss of consortium resulting from his occupational exposure to asbestos. Grahn was the employee of an independent contractor, J.L. Thorpe & Sons (Thorpe), which performed insulation work at various locations throughout the Bay Area, including appellant Tosco Corporation's oil refinery (Tosco). The jury found Grahn's injuries partially resulted from Tosco's negligence and allocated 3 percent fault to Tosco, 60 percent fault to Grahn's employers, including Thorpe, and 37 percent fault to all others.

Tosco appeals, principally questioning whether, under the Supreme Court's decision in Privette v. Superior Court (1993) 5 Cal.4th 689, 21 Cal.Rptr.2d 72, 854 P.2d 721 (Privette), a hirer 1 of an independent contractor can be held liable in negligence for its own acts or omissions when an independent contractor's employee sustains work-related injuries that are also compensable by workers' compensation. As we explain in this opinion, we find Privette did not abrogate the law in California that a hirer of an independent contractor may be liable to the independent contractor's employee for the hirer's own independent fault. However, we conclude a number of significant instructional errors occurred during trial, particularly with regard to defining the standards applicable in determining when a hirer who is also in control of the premises where the work takes place can be found liable to the employee of an independent contractor. These instructions were critical to a proper consideration by the jury of the liability issues, and the errors were accordingly prejudicial. We therefore reverse.

II. FACTUAL BACKGROUND

At the time of trial respondent Gerald Grahn was a 51-year-old brick mason, who was employed from approximately 1963 to 1989 by Thorpe, one of the leading refractory installers in Northern California. Thorpe is an independent contractor specializing in installation and repair of refractory and insulation materials in high-temperature units such as furnaces, boilers, large industrial plants and shipyards, including all of the Bay Area's major refineries. Grahn worked for Thorpe at hundreds of different job sites, principally tearing out and installing brick and insulation.

After Grahn was diagnosed with asbestos-related lung disease, he and his wife Bonnie brought an action for damages against approximately 200 defendants. Grahn alleged that he suffered from "a condition related to exposure to asbestos and asbestos-containing products." In addition to manufacturers and suppliers of various asbestos-containing insulation products, Grahn also sued a number of property owners, including Tosco, alleging that these defendants owned or controlled the premises at which Grahn worked on behalf of his employer and that during such work, he was exposed to airborne asbestos. He further alleged that these property owners, who had hired his employer as an independent contractor, either knew or should have known that he would be exposed to a dangerous condition while working for his employer at their premises.

The case proceeded to trial solely against Tosco after all other defendants either settled or were dismissed from the action. Grahn asserted three theories of negligence against Tosco. First, Grahn contended Tosco was negligent in hiring Thorpe to remove asbestos-containing materials without any indication Thorpe was licensed or qualified to engage in such work. Second, it was alleged that Tosco retained control over the details of the work performed by Thorpe, which created a separate legal duty based on the negligent failure to exercise control or supervision. Third, Grahn claimed Tosco was negligent in the use and maintenance of its premises thereby exposing others to an unreasonable risk of harm.

The evidence at trial showed Tosco purchased the premises at issue from Phillips Petroleum on April 1, 1976. Tosco refined gasoline and made other petroleum products at the refinery and regularly hired independent contractors with specialized skills to repair, overhaul, and maintain refinery equipment.

Grahn worked at Tosco's refinery throughout his employment at Thorpe and remembered participating in a number of projects there after Tosco acquired the refinery in 1976. At trial, Grahn claimed he was exposed to airborne asbestos during these various work assignments on Tosco's premises. Obviously, none of the ripped-out materials from Grahn's jobs at Tosco were available for laboratory analysis; however, at trial Grahn attempted to prove these materials contained asbestos based primarily on the age and general appearance of the material being handled. For example, he recalled an extensive "rip-out" occurring at the refinery's Selas furnace in approximately 1986, at which time he removed not only insulation brick, but also block lining as far back as the furnace's breachings. As the ripped-out insulation material was dropped from heights as great as 60 feet, considerable dust was dispersed into the air. Grahn testified, "You would have a hard time seeing the person next to you for maybe two or three minutes until it starts clearing out, the air blowers moving it." He recalled wearing only a paper mask as respiratory protection on this job.

Grahn also remembered assisting in removing the lining from the refinery's No. 16 furnace, as well as replacing its transite roof and fireproofing the outside of the coker after a fire. Again, he recalled wearing paper respirators for safety protection on these jobs. In 1991, Grahn helped take the roof off the No. 3 boilerhouse, which was lined with block insulation. Also, in the 1990's, Grahn removed original brick and block insulation from the No. 27 boiler walls. Tosco never warned Grahn of the hazards associated with the asbestos present on its premises.

The jury returned its verdict on May 14, 1996, finding Grahn suffered from an asbestos-related disease and that Tosco's negligence was a cause of Grahn's asbestos exposure. The jury awarded compensatory damages to Grahn as follows: $12,420 for past medical expenses; $80,000 for future medical expenses; $6,000 for past loss of earnings; $650,000 for future loss of earnings; $216,000 of noneconomic damages; and $10,000 for future medical monitoring costs. The jury awarded Bonnie Grahn $100,000 for loss of consortium. The jury found Tosco had not acted with malice or oppression and declined to award punitive damages. Apportioning fault for Grahn's injuries, the jury allocated 3 percent to Tosco. The jury attributed 60 percent of the fault to Grahn's employers and 37 percent to all others. After the trial court denied Tosco's motion for a new trial, motion for judgment notwithstanding the verdict, and motion to vacate the judgment, this appeal followed.

III. DISCUSSION
A. The Precedential Legacy of Privette

The key to resolution of the parties' dispute is the correct interpretation of the impact of Privette, supra, 5 Cal.4th 689, 21 Cal.Rptr.2d 72, 854 P.2d 721 on preexisting California tort law. Of course, no one questions Privette's negative impact on the continued vitality of the peculiar risk doctrine 2 in California. Several intermediate appellate courts have written expansively on the effect of our Supreme Court's rationale in Privette on other theories of tort-based liability asserted against the hirers of independent contractors. However, they have not survived the 90-day "shelf life" of opinions chosen for review by our high court. 3 In the face of such daunting odds, we nevertheless add our voice to those who have been required to divine the scope of Privette pending further definitive word on the matters under review.

In Privette, supra, 5 Cal.4th 689, 21 Cal.Rptr.2d 72, 854 P.2d 721, the Supreme Court held that a nonnegligent property owner who hires an independent contractor to perform inherently dangerous work should not be held vicariously liable under the peculiar risk doctrine for injuries to the independent contractor's employee occasioned solely by the independent contractor's negligence for which there exists workers' compensation. (Id. at p. 702, 21 Cal.Rptr.2d 72, 854 P.2d 721.) The peculiar risk doctrine was created as one of several exceptions to the common law rule of nonliability of principals for the negligence of independent contractors. The doctrine permits civil recovery against the hirer of an independent contractor for injuries sustained as a result of the negligence of the contractor where the work involves a peculiar risk of harm in the absence of special precautions needed to eliminate that risk. (See Rest.2d Torts, 4 §§ 413, 416.) In these instances, a nondelegable duty is imposed on the hirer to ensure that reasonable safety precautions are implemented to reduce or eliminate the risk of injury. (Privette, supra, 5 Cal.4th at p. 694, 21 Cal.Rptr.2d 72, 854 P.2d 721.) The Privette court unanimously concluded that "... when the person injured by negligently performed contracted work is one of the contractor's own employees, the injury is already compensable under the workers' compensation scheme and therefore the doctrine of peculiar risk should provide no tort remedy, for those same injuries, against the person who hired the independent contractor."...

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