Kinsman v. Unocal Corp.

• Decision Date: 19 December 2005
• Docket Number: No. S118561.,S118561.
• Citation: 37 Cal.4th 659,36 Cal.Rptr.3d 495,123 P.3d 931
• Court: California Supreme Court
• Parties: Ray KINSMAN et al., Plaintiffs and Respondents, v. UNOCAL CORPORATION, Defendant and Appellant.

36 Cal.Rptr.3d 495

37 Cal.4th 659

123 P.3d 931

Ray KINSMAN et al., Plaintiffs and Respondents, v. UNOCAL CORPORATION, Defendant and Appellant.

No. S118561.

Supreme Court of California.

December 19, 2005.

Horvitz & Levy, David M. Axelrad, Stephen E. Norris, Encino; Walsworth, Franklin, Bevins & McCall, Michael T. McCall, Robert M. Channell, Cyrian B. Tabuenaand Allan W. Ruggles, Orange, for Defendant and Appellant.

Charles H. Haake, Washington, DC; Gibson, Dunn & Crutcher, Andrea E. Neuman, Irvine; Knott & Glazier, Steven E. Knott and Guy P. Glazier, Los Angeles, for Lockheed Martin Corporation as Amicus Curiae on behalf of Defendant and Appellant.

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

Deborah J. La Fetra and Timothy Sandefur, Sacramento, for Pacific Legal Foundation as Amicus Curiae on behalf of Defendant and Appellant.

Greines, Martin, Stein & Richland, Marc J. Poster and Robert A. Olson, Los Angeles, for Farmers Insurance Exchange,

Truck Insurance Exchange, Fire Insurance Exchange and Mid-Century Insurance Company as Amici Curiae on behalf of Defendant and Appellant.

Graves & King, Patrick L. Graves, Harvey W. Wimer, Riverside, and Dennis J. Mahoney for Lennar Corporation as Amicus Curiae on behalf of Defendant and Appellant.

Law Offices of Daniel U. Smith, Daniel U. Smith, Kentfield, Ted W. Pelletier; Wartnick, Chaber, Harowitz & Tigerman, The Wartnick Law Firm, Harvey F. Wartnick, Charles C. Kelly II, Steven M. Harowitz, Stephen M. Tigerman and Richard A. Brody, San Francisco, for Plaintiffs and Respondents.

James C. Sturdevant, San Francisco; Sharon Arkin, Newport Beach; The Arns Law Firm, Morgan C. Smith, Jonathan E. Davis and Robert S. Arns, San Francisco, for Consumer Attorneys of California as Amicus Curiae on behalf of Plaintiffs and Respondents.

Ropers, Majeski, Kohn & Bentley, Mark G. Bonino and Elisa Nadeau, San Jose, for American International Companies as Amicus Curiae.

MORENO, J.

In a series of decisions over the last dozen or so years, this court has delineated the circumstances under which the employee of an independent contractor who is injured on the job may sue the hirer of that contractor. (Privette v. Superior Court (1993) 5 Cal.4th 689, 21 Cal.Rptr.2d 72, 854 P.2d 721 (Privette); Toland v. Sunland Housing Group, Inc. (1998) 18 Cal.4th 253, 74 Cal.Rptr.2d 878, 955 P.2d 504 (Toland); Camargo v. Tjaarda Dairy (2001) 25 Cal.4th 1235, 108 Cal.Rptr.2d 617, 25 P.3d 1096 (Camargo); Hooker v. Department of Transportation (2002) 27 Cal.4th 198, 115 Cal.Rptr.2d 853, 38 P.3d 1081 (Hooker); McKown v. Wal-Mart Stores, Inc. (2002) 27 Cal.4th 219, 115 Cal.Rptr.2d 868, 38 P.3d 1094 (McKown).) This case requires us to consider an issue not addressed by the previous cases: when, if ever, is a landowner that hires an independent contractor liable to an employee of that contractor who is injured as the result of hazardous conditions on the landowner's premises? Specifically, in this case we must decide whether a carpenter employed by an independent contractor that installed scaffolding for workers who replaced asbestos insulation in an oil refinery facility may sue the refinery owners for injuries caused by exposure to asbestos, when it is claimed that only the refinery owner knew the carpenter was being exposed to a hazardous substance.

We conclude that a landowner that hires an independent contractor may be liable to the contractor's employee if the following conditions are present: the landowner¹ knew, or should have known, of a latent or concealed preexisting hazardous condition on its property, the contractor did not know and could not have reasonably discovered this hazardous condition, and the landowner failed to warn the contractor about this condition. We further conclude that under the circumstances of the present case, the jury was not sufficiently instructed that the landowner was liable in this case only for failing to warn about a hidden hazardous condition, and that the lack of sufficient instruction was prejudicial to defendant. We therefore reverse the jury verdict in plaintiffs' favor and remand for a new trial.

I. STATEMENT OF FACTS

The following facts, as stated by the Court of Appeal below, are not in dispute: "During the 1950's, plaintiff Ray Kinsman worked on many occasions as a carpenter at defendant Unocal's refinery in Wilmington, California. Kinsman was employed by Burke & Reynolds, an independent contractor Unocal hired to perform scaffolding work during periods of `shutdown' and repair at the refinery. Kinsman built and dismantled scaffolding used by other trades, including pipefitters and insulators. This work exposed him to airborne asbestos, which was produced by other trades — particularly insulators — during their application and removal of asbestos-containing insulation from pipes and machinery. Though Kinsman did not work directly with such insulation, the evidence showed he was exposed to asbestos dust in three ways: (1) When insulators worked on scaffolding, asbestos-containing debris accumulated on the planks. Kinsman was exposed to this asbestos material when he cleared debris from the planks in dismantling used scaffolding. (2) Some asbestos dust was produced from Kinsman's work `tying in' scaffolding to insulated pipes or equipment. (3) Asbestos fibers released by the work of other trades `float[ed] in the air,' exposing Kinsman as he worked nearby. Kinsman did not wear a mask or respirator at Unocal.

"Years later, Kinsman developed mesothelioma, an asbestos-induced malignant cancer of the lining of the lungs. He sued scores of product manufacturers and distributors, as well as several premises owners. Ultimately, the case proceeded to a jury trial against Unocal, a `premises defendant,' alone. The parties stipulated that Kinsman was exposed to asbestos during his work at Unocal. In addition, following uncontroverted expert testimony that labeled this exposure a `substantial factor' contributing to Kinsman's development of mesothelioma, the trial court granted a directed verdict for Kinsman on the issue of causation. Because the parties also stipulated Kinsman bore no contributory fault, the only disputed issues before the jury concerned whether, and to what extent, Unocal was negligent, whether Kinsman's wife suffered a loss of consortium, and the amount of damages suffered by the Kinsmans."

Other critical facts are in dispute. Kinsman presented evidence that knowledge of asbestos dust as a hazard in the oil industry was well known by the 1950's. In particular, the so-called Bonsib Report prepared by the Standard Oil Company and released in 1937 identified the risks associated with asbestos dust in oil refineries. Kinsman argued that given industry knowledge, Unocal should have warned Kinsman's employer or adopted various safety measures. He produced evidence showing that other oil companies in the 1950's had adopted various safety measures, including better ventilation, plant design, and use of respirators.

Unocal conceded that it was aware of the hazards of asbestos dust by the 1950's. But Unocal argued that Kinsman was not exposed to levels of asbestos that were considered unsafe at the time. It contended that according to then-existing industry standards, exposure to asbestos dust was considered unsafe only in concentrations of 5 million particles per cubic foot or more, and that there was no evidence that Kinsman was exposed to such concentrations. In denying Unocal's motion for a directed verdict on that basis, the trial court concluded this standard was not tantamount to a government regulation, compliance with which would protect Unocal from negligence claims. Kinsman, in closing argument, pointed to the lack of evidence that Unocal complied with the industry standards, as well as testimony questioning the validity of those standards.

Burke & Reynolds did not provide safety equipment to Kinsman, and there is no specific evidence in the record regarding whether it, or any other contractor working for Unocal, knew or should have known at the time Kinsman worked at the refinery that asbestos posed a safety hazard.

Kinsman submitted his case on two theories of liability: first, a premises liability theory, that Unocal was negligent in the use, maintenance, or management of the areas where Kinsman worked; second, that Unocal was negligent in the exercise of retained control over the methods of the work or the manner of the work performed by Kinsman. The jury found for Kinsman only on the first theory. It assigned Unocal 15 percent of the fault in causing Kinsman's mesothelioma, with the remaining 85 percent of fault attributable to "all others," and awarded Kinsman over $3 million in compensatory damages against Unocal.

Unocal separately appealed from the judgment on the jury verdict and the court's denial of its motion for judgment notwithstanding the verdict. The Court of Appeal consolidated the appeals and reversed the judgment. After reviewing Privette, Toland, Camargo, Hooker and McKown, the court concluded that "a contractor's employee cannot recover under [a premises liability] theory unless the landowner had control over the dangerous condition and affirmatively contributed to the employee's injury." The court further rejected the argument that the Privette doctrine does not apply because there is no proof the contractor was negligent, and because the dangerous condition was created by other contractors hired by Unocal rather than Unocal itself.

Because the jury instructions given did not accurately reflect Unocal's limited duty as understood by the Court of Appeal, the court reversed and remanded for a new trial. However, the court opined that, in light of the jury's finding that Unocal did not retain control over Kinsman's work, "if the jury had been instructed about the limits on Unocal's liability...