Koepke v. Carter Hawley Hale Stores, Inc., 1

• Citation: 682 P.2d 425,140 Ariz. 420
• Decision Date: 17 January 1984
• Docket Number: CA-CIV,No. 1,1
• Parties: Adele KOEPKE, Plaintiff-Appellant, v. CARTER HAWLEY HALE STORES, INC., a California corporation, Defendant-Appellee. 6007.
• Court: Court of Appeals of Arizona

Page 425

682 P.2d 425

140 Ariz. 420

Adele KOEPKE, Plaintiff-Appellant, v. CARTER HAWLEY HALE STORES, INC., a California corporation, Defendant-Appellee.

No. 1 CA-CIV 6007.

Court of Appeals of Arizona,

Division 1, Department B.

Jan. 17, 1984.

James W. Hill, Ltd. by James W. Hill, Phoenix, for plaintiff-appellant

Snell & Wilmer by Lawrence F. Winthrop, Phoenix, for defendant-appellee.

OPINION

MEYERSON, Presiding Judge.

Plaintiff-appellant Adele Koepke (Koepke) was injured while shopping at a Broadway department store owned by defendant-appellee Carter Hawley Hale Stores, Inc. (Broadway). Although Broadway was open for business when the accident occurred, the store was undergoing extensive remodeling and repair. As Koepke was walking down the aisle to the elevator, two employees of Standard Cabinet Works, Inc. (Standard), an independent contractor hired by Broadway for the construction, stretched a chalk line in her path across the aisle. Koepke tripped on the line and fell, seriously injuring her knee. Koepke sued both Broadway and Standard for negligence. Koepke's claim against Standard was settled for $35,000 and reduced to judgment. ¹ The trial court subsequently entered summary judgment in favor of Broadway and Koepke brought this appeal.

In order to evaluate the propriety of summary judgment for Broadway, it is necessary to distinguish among the various theories of liability asserted by Koepke. In essence, Koepke presents the following bases for recovery against Broadway:

(1) Vicarious liability for Standard's negligence under Restatement (Second) of Torts § 422 (1965) (Restatement).

(2) Liability for the negligence of Standard because Broadway retained control of Standard's work.

(3) Liability based upon Broadway's independent negligence.

The trial court found that under Arizona law Koepke could assert no claim of vicarious liability against Broadway. With respect to the remaining theories, the trial court found no disputed facts and that Broadway was entitled to judgment as a matter of law. Because we agree with Koepke that the trial court incorrectly granted Broadway's motion for summary judgment with respect to her claim under Restatement § 422, we begin our discussion with this important issue.

I. VICARIOUS LIABILITY UNDER RESTATEMENT § 422

Restatement § 422 defines one of several exceptions to the general rule of employer non-liability for the negligence of independent contractors. ² It provides in relevant part:

A possessor of land who entrusts to an independent contractor construction, repair, or other work upon 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 ....

Illustration (1) following this section explains the operation of this rule:

A, the owner of a department store, employs an independent contractor to construct a monitor over a skylight above one of the aisles in his store. A retains possession of the premises while the work is being done, and the store remains open for business. By reason of the negligence of the contractor while the work is in progress, the monitor is insecurely fastened, and falls through the skylight, injuring B, a customer in the aisle of the store. A is subject to liability to B.

Koepke argues that the facts in this case fall squarely within this section and therefore Broadway may be held vicariously liable for her injuries. Broadway admits that application of Restatement § 422 would preclude summary judgment in its favor, but asserts that Restatement § 422 simply is not the law in Arizona.

It is well established that we will follow the Restatement in the absence of Arizona law to the contrary. Jesik v. Maricopa County Community College Dist., 125 Ariz. 543, 546, 611 P.2d 547, 550 (1980). The present case presents such a situation. We have found no Arizona decision expressly accepting or rejecting application of Restatement § 422 in a case where the landowner, who retains control of his premises during construction, is sued by his invitee for injuries caused by the alleged negligence of an independent contractor performing the construction or repair. ³ Additionally, we believe adoption of Restatement § 422 is supported by sound policy considerations.

Other jurisdictions have examined the advisability of imposing vicarious liability on the employer of an independent contractor in similar situations. Many of these courts view this doctrine as an extension of the employer's non-delegable duties to the business invitee. In Lipman Wolfe & Co. v. Teeples & Thatcher, Inc., 268 Or. 578, 522 P.2d 467 (1974), a retail store hired a contractor to perform extensive remodeling, but chose to keep the store open for business. A customer fell on a slippery substance which a subcontractor had spread on the floor to prepare it for laying tile. She then sued the store which tendered the defense to the independent contractor and the subcontractor. The tender was refused and the store settled with the customer and then brought an indemnity action to recover the amount of the settlement. The court concluded that the store was entitled to indemnification because of the store's vicarious liability under Restatement § 422. The court held:

The storekeeper, of course, has the duty to have its premises in a reasonably safe condition for the reception of its customers. The storekeeper is liable for the negligence of its own employees who fail to keep the store in a reasonably safe condition. When a contractor is brought in to remodel or repair and the store permits customers to continue to enter the premises the danger to customers increases. Under such circumstances it would be inconsistent to hold that a storekeeper can escape liability by asserting that the increased danger to its customers was created by an independent contractor and therefore, the storekeeper is not liable.

Id. at 585-86, 522 P.2d at 470 (citations omitted).

The New Jersey Supreme Court has also utilized a non-delegable duty theory to impose liability on a contracting employer. In Mayer v. Fairlawn Jewish Center, 38 N.J. 549, 186 A.2d 274 (1962), it held:

Under the circumstances of this case, Center had a non-delegable duty to exercise reasonable care for the safety of persons using the premises at its invitation. If, while repairs or structural alterations were going on, a dangerous condition was created which resulted in injury to an invitee liability for damages would exist. And with respect to that liability it would be immaterial whether the construction work was being performed by the Center's own employees or by an independent contractor.

Id. at 555, 186 A.2d at 277 (citations omitted). See generally Annot., 96 A.L.R.3d 1213 (1979); Prosser § 71 at 468-75. 2 F. Harper & F. James, The Law of Torts § 26.11 at 1406-1408 (1956); contra Mai Kai, Inc. v. Colucci, 205 So.2d 291 (Fla.1967).

In adopting Restatement § 422, we have given careful consideration to the policies underlying the rule. First, the possessor of the land is the one primarily benefited by the contractor's work. See Van Arsdale v. Hollinger, 68 Cal.2d 245, 253, 66 Cal.Rptr. 20, 25, 437 P.2d 508, 513 (1968). In this case, Broadway elected to remain open for business during its remodeling. Rather than take the precaution of closing the store (or the portion of the store undergoing the remodeling), it chose to invite customers on its premises and obtain the economic benefit of continuing its retail operations.

Second, a contractee such as Broadway is able to obtain insurance against risks such as Koepke's injuries and incorporate such expenses into its cost of doing business. Id. at 253, 66 Cal.Rptr. at 25, 437 P.2d at 513. Broadway selects the independent contractor and is free to insist upon one that is financially responsible. Broadway may insist that its independent contractors agree to indemnify it for any loss due to their negligence.

Third, Broadway is in a position to prevent or minimize such risks. It is within Broadway's control to insure hiring of a competent contractor. It can make sure that safety procedures for customer protection are initiated and followed. It can require that dangerous conditions be remedied.

Broadway argues that prior Arizona decisions, which hold that a possessor of land is not the insurer of the safety of business invitees, have in effect repudiated the principles embodied in Restatement § 422. Borrow v. El Dorado Lodge, 75 Ariz. 139, 252 P.2d 791 (1953); Moore v. Southwestern Sash & Door Co., 71 Ariz. 418, 228 P.2d 993 (1951). Such statements in these cases, upon which Broadway relies, simply mean that absent negligence, the landowner is not liable for injuries to invitees. But liability under Restatement § 422 has as a prerequisite the showing of negligence on the part of the independent contractor. Thus, the plaintiff must show the independent contractor's negligence ⁴ to invoke Restatement § 422 and therefore the cases relied upon by Broadway are inapposite.

This distinction is apparent in McGuire v. Valley National Bank, 94 Ariz. 50, 381 P.2d 588 (1963), a case heavily relied upon by Broadway. The plaintiff tripped on a pebble-like substance on the stairs in defendant's building. Workmen of an independent contractor employed by the defendant had been working on the air conditioning unit and had been using the stairs. A janitor cleaned the stairway two hours before plaintiff's accident. The supreme court affirmed a directed verdict against the plaintiff concluding that there was no evidence of anyone's negligence. McGuire would be applicable only if upon remand Koepke fails to prove that the injuries were caused by Standard's negligence.

To summarize, we hold that the trial court erred...