Matanuska Elec. Ass'n v. Johnson

• Decision Date: 19 November 1963
• Docket Number: No. 278,278
• Citation: 386 P.2d 698
• Parties: MATANUSKA ELECTRIC ASSOCIATION, INC., Appellant, v. Walter JOHNSON, Appellee.
• Court: Alaska Supreme Court

Page 698

386 P.2d 698

MATANUSKA ELECTRIC ASSOCIATION, INC., Appellant, v. Walter JOHNSON, Appellee.

No. 278.

Supreme Court of Alaska.

Nov. 19, 1963.

John C. Hughes, Hughes, Thorsness & Lowe, Anchorage, for appellant.

W. C. Arnold, Anchorage, for appellee.

Before NESBETT, C. J., and DIMOND and AREND, JJ.

NESBETT, Chief Justice.

The question before us is whether the employer of an independent contractor may be held liable to the contractor's injured employee for negligence in failing to select a competent contractor where the contractor has failed to provide workmen's compensation insurance as required by law and is financially unable to respond in damages for injuries sustained by its workmen.

Appellant Matanuska Electric Association, hereinafter referred to as MEA, awarded a right of way bulldozing clearance contract in the sum of $837.90 to John Joslin who was low bidder. Joslin commenced performance of the contract without an employee, but after losing a track on the dozer he hired the appellee Johnson to assist in remounting the track and thereafter in marking the right of way and picking up roots. While engaged in this employment Johnson was badly injured by a falling tree which had been dislodged by the dozer.

At the time he contracted with MEA Joslin thought that he was covered by a policy of workmen's compensation insurance, but learned after the accident that he carried only public liability insurance. MEA's contract with Joslin required that he carry workmen's compensation and liability insurance. On small individual clearing contracts the contractor was not required by MEA to show evidence of workmen's compensation coverage. Instead, according to its manager, MEA relied on its own insurance to cover the contractor and his employees.

The suit by appellee against MEA and Joslin was tried before the court without a jury and resulted in a judgment against the defendants jointly and severally in the sum of $12,920, which was approximately the amount of benefits appellee would have received had Joslin actually been covered by workmen's compensation insurance.

The trial court found that Joslin was a civil engineer who had been engaged in heavy construction and road work since 1940; that he had operated bulldozers at various times since 1943; that he had bid on five different small jobs offered by MEA and had been successful bidder on two occasions. It found that under the proven facts Joslin was an independent contractor; that MEA had a duty to exercise reasonable care to select an independent contractor who would be responsible for injuries to his employees and others arising out of the performance of the work and that MEA had breached this duty. The court made no finding that Joslin's education, skill and experience were inadequate for the type contract awarded him. No finding was made that Joslin was personally reckless or irresponsible, although he was found to have been negligent in causing appellee's injuries.

The general rule is that the employer of an independent contractor is not responsible for the negligence of the contractor. This rule is said to be based on the fact that the employer of an independent contractor has no control over the prosecution of the work and that it would be unjust to hold him liable for the torts of another whom he cannot direct. ¹ It has also been said to be based on the presumption that a contractor will discharge his legal duties owing to employees and third persons.

An exception to the rule is applied where the work to be performed by the contractor is by its nature such that others may be injured unless it is skillfully and carefully done. Where the courts have found the work to be of that nature they have held that the employer has the duty to exercise reasonable care to select a contractor with reasonable skill and competence in the type of work to be performed. The degree of care which must be exercised in selecting an independent contractor has been defined as ordinary care to employ one reasonably competent with ordinary skill in doing the kind of work for which employed, ³ and as that care which a reasonable man would exercise under the circumstances of each individual case. ⁴ Failure to exercise such care in selection will make the employer liable for the contractor's acts or omissions. ⁵

A study of the authorities illustrating this exception does not provide the reader with any definite concept of its application. The particular facts of each case must govern. In Joslin v. Idaho Times Pub. Co. ⁶ the court took judicial notice of the fact that the delivery of newspapers by the use of motorcycles required skill, experience and judgment and was hazardous enough to require that an employer of such deliverymen exercise care in selecting fit and safe operators. On the other hand, in Moore v. Roberts ⁷ it was held that the employer of a contractor to haul lumber by motor truck had the right, in the absence of any notice to the contrary, to assume that the contractor was not conducting his business in violation of the law. The contractor had no permit from the Railroad Commission and his driver had no chauffeur's license or permit from the Railroad Commission. Nevertheless, the evidence was held to be insufficient to create the issue that the employer was negligent in the selection of the contractor. In Kendall v. Johnson ⁸ the court stated that the work of blasting may or may not fall within the exception to the general rule depending upon the circumstances. Since the contractor was employed to construct a railroad grade in the Cascade Mountains far removed from any human habitation the general rule of nonliability was held to apply. In Berg v. Parsons ⁹ however, the contractor blasted to excavate city lots. The only investigation of the contractor's competence to do the work consisted of an inquiry of a law clerk in a lawyer's office who advised that he had seen a piece of blasting done by the contractor which was reasonably well performed. The court held that the employer had not performed his duty to employ a competent contractor. In Tansey v. Robinson ¹⁰ it was revealed that a grocery delivery contractor had twenty-nine previous traffic convictions, had lost his license and had no permit from the Illinois Commerce Commission to carry property for hire. The only inquiry made by the employer was of the contractor's predecessor who advised that the contractor was reliable and recommended him. The contractor had produced a policy of insurance. The court held that an issue as to whether the employer had used reasonable care in the selection was raised and summary judgment should not have been granted.

The competency of a contractor is generally determined by the skill and experience that he has to do the particular work. In Joslin v. Idaho Times Pub. Co. ¹¹ the court stressed the skill, experience and judgment required to safely operate motor vehicles. In Tansey v. Robinson ¹² the past record of traffic convictions of a contract grocery deliveryman and his loss of his driver's license and failure to have a state permit were considered to be factors reflecting on his competency.

The question of whether the contractor employed was in fact competent seems to arise only after suit on a claim of negligence. The question before the court then becomes two-pronged. The first question is whether the contractor was in fact negligent in the respect claimed. If so, then the second question may be whether the employer, after reasonable inquiry, knew or should have known that the contractor was unsuited for the work before employing him. A single act of negligence on the part of the contractor does not necessarily establish incompetence. ¹³ On the other hand, if the negligence resulted from a lack of skill or experience in performing the particular type of work, inadequacy of equipment, or from recklessness or other personal characteristics of the contractor, then the question may be whether the employer, after making such investigation of the contractor's competency as a reasonable person would have made under the same circumstances, learned or should have learned of the contractor's lack of skill, inadequate equipment, or of existing personal characteristics such as recklessness or lack of judgment.

In the case before us Joslin was awarded a contract to clear a power line right of way forty feet wide and six miles long. The work required the use of a tractor bulldozer and as near as we can determine from the record was to be performed away from populated areas. The small amount of the contract price would indicate that few, if any employees were to be used. One official of MEA testified that the qualifications for obtaining the contract were that the bidder own a bulldozer and operate it himself. Joslin was asked by MEA to produce evidence of public liability insurance but not of workmen's compensation. Joslin testified that it was not his intention to employ anyone to assist him and that he did not employ Johnson until the second or third day of work when it became necessary to have assistance in remounting a track of the tractor.

The clearance of forested land by bulldozing, even though to be performed away from populated areas is work which could result in injury to others unless skillfully and carefully done. The moving of heavy equipment to and from the site, the felling and shoving of trees and other objects require skill and experience and unless done with care can result in injury to others. We believe that Joslin's background of education and experience, plus his record of having twice previously performed contracts for MEA, negatives any claim that he was not technically competent to perform the work he contracted to do. As we have mentioned, the trial court made no finding concerning Joslin's technical competency. Its finding of a breach of duty by MEA appears to have been based entirely on the fact that Joslin was not financially able to...