Peone v. Regulus Stud Mills, Inc.

• Decision Date: 02 October 1987
• Docket Number: No. 16409,16409
• Parties: Roy PEONE and Janet Peone, Plaintiffs-Appellants, v. REGULUS STUD MILLS, INC., an Idaho corporation, Defendant-Respondent.
• Court: Idaho Supreme Court

Page 102

744 P.2d 102

113 Idaho 374

Roy PEONE and Janet Peone, Plaintiffs-Appellants, v. REGULUS STUD MILLS, INC., an Idaho corporation, Defendant-Respondent.

No. 16409.

Supreme Court of Idaho.

Oct. 2, 1987.

[113 Idaho 375] Kenneth B. Howard Jr. (argued), Coeur d'Alene, for plaintiffs-appellants.

Charles M. Dodson, Coeur d'Alene, and Joseph S. Montecucco (argued), Spokane, Wash., for defendant-respondent.

DONALDSON, Justice.

Today, we must answer the question of whether a party to a contract owes a duty of care to the employees of the other contracting party who under the contract is engaged to perform logging activities, in light of Restatement (Second) of Torts § 413 or § 416. This question is certified by the United States Court of Appeals for the Ninth Circuit pursuant to I.A.R. 12.1.

The facts as contained in this certification are brief. Regulus Stud Mills, Inc., a sawmill operator, held timber rights to land in north Idaho. Regulus awarded Haynes Logging a contract to remove timber from the land and to deliver it to the Regulus mill. Roy Peone, an employee of Haynes working on the Regulus contract, was injured by a falling dead tree, or snag. As a result of the accident, Peone is now a paraplegic.

Peone filed suit against Regulus in Federal District Court, with jurisdiction based upon diversity of citizenship. Peone alleges that Regulus is liable for his injuries because it negligently employed an incompetent contractor, Haynes Logging, which had acted negligently in removing the timber.

The United States District Court entered summary judgment for Regulus. The court concluded that even though logging is an inherently dangerous activity, ¹ as a matter of law Regulus owed no duty to Peone to select a safety-conscious independent contractor, nor did vicarious liability attach for Haynes' failure to use due care. The District Court acknowledged that no controlling Idaho precedent existed, but, nevertheless, it had to make a decision to proceed with the case. Appeal was taken to the Ninth Circuit Court of Appeals. In turn, that court pursuant to I.A.R. 12.1 certified the following question to this Court:

"Whether, under Idaho law, an employer of an independent contractor is liable to an employee of the independent contractor under either or both of the exceptions to the general rule of nonliability provided in the Restatement of Torts:

"(1) the negligence of the employer in selecting an independent contractor or in failing to insure that adequate safety precautions were taken, as contemplated by section 413; or

"(2) the vicarious liability to the employee of the independent contractor for the independent contractor's failure to take precautions, as provided by section 416.

"If Restatement sections 413 or 416 are applicable under Idaho law, it would appear to be important in resolving these questions of law to determine whether employees of the independent contractor are deemed to be others within the purview of those Restatement sections."

The question presented is a narrow one. We are asked to determine whether §§ 413 or 416 of the Restatement is consistent with Idaho law and creates a duty. We are not asked to decide whether any other facet of the law creates a duty. The dissent suggests the Idaho Minimum Safety Standards & Practices for Logging creates such a duty. This contention may or may not be correct, but it is not for us to decide. Peone, as plaintiff, chose the federal forum as the arena to vindicate his rights. Our role is limited to answering the certified question. Peone, can argue the applicability of the regulations before the 9th Circuit Court of Appeals. For us to now decide the matter would result in an advisory opinion on a question not certified. The regulations adopted by the Industrial The two exceptions at issue today are §§ 413 and 416 of the Restatement (Second). These sections read as follows:

[113 Idaho 376] Commission do not have any effect on whether the Restatement sections at issue should be the law in Idaho.

"s 413. Duty to Provide for Taking of Precautions Against Dangers Involved in Work Entrusted to Contractor--

"One who employs an independent contractor to do work which the employer should recognize as likely to create, during its progress, a peculiar unreasonable risk of physical harm to others unless special precautions are taken, is subject to liability for physical harm caused to them by the absence of such precautions if the employer

"(a) fails to provide in the contract that the contractor shall take such precautions, or

"(b) fails to exercise reasonable care to provide in some other manner for the taking of such precautions."

"s 416. Work Dangerous in Absence of Special Precautions

"One who employs an independent contractor to do work which the employer should recognize as likely to create during its progress a peculiar risk of physical harm to others unless special precautions are taken, is subject to liability for physical harm caused to them by the failure of the contractor to exercise reasonable care to take such precautions, even though the employer has provided for such precautions in the contract or otherwise."

Courts have not hesitated to adopt §§ 413 and 416 with regard to a duty owed to injured members of the general public. See Comment, Liability to Employees of Independent Contractors Engaged in Inherently Dangerous Work: A Workable Workers' Compensation Proposal, 48 Fordham Law Rev. 1165, 1167 (1980). Section 413 imposes liability on the third party employer for injuries caused by peculiar or unreasonable risks of physical harm to others. As stated in the comment to § 413:

"This Section is concerned with the special risk, peculiar to the work to be done, and arising out of its character, or out of the place where it is to be done, against which a reasonable man would recognize the necessity of taking special precautions. The situation is one in which a risk is created which is not a normal, routine matter of customary human activity, such as driving an automobile, but is rather a special danger to those in the vicinity arising out of the particular situation created, and calling for special precautions. 'Peculiar' does not mean that the risk must be one which is abnormal to the type of work done, or that it must be an abnormally great risk. It has reference only to a special, recognizable nature arising out of the work itself."

Section 416 applies specifically to work considered inherently dangerous. It imposes vicarious liability on the third party owner for the contractor's negligence on the theory that the third party owner's duty to use reasonable care is nondelegable presumably due to the hazardous nature of the work.

The United States Court of Appeals, District of Columbia Circuit, has explained the rationale underlying § 416 as follows:

"This exception is premised upon the rationale that, because of the inherently dangerous nature of the work, the contractee is obligated to contemplate and guard against such dangers and thus, should not be allowed to 'escape' liability to persons or property negligently damaged in the performance of such work by its contractor. Although unequivocally applicable to third persons who are not employees of a contractor, the exception has been the subject of debate in diverse judicial interpretation when implied to employees of a contractor." Lindler v. District of Columbia, 502 F.2d 495, 498 (D.C.Cir.1974). (Emphasis in original.)

The issue we address today, is whether employees of independent contractors are included within the class of "others" within the meaning of the Restatement provisions §§ 413 and 416. This issue has seen much debate among the various jurisdictions throughout the United States. See generally Included among the jurisdictions that have adopted §§ 413 or 416 and impose liability are the following: Aceves v. Regal Pale Brewing Co., 24 Cal.3d 502, 156 Cal.Rptr. 41, 595 P.2d 619 (1979); Clausen v. R.W. Gilbert Const. Co. Inc., 309 N.W.2d 462 (Iowa 1981); Thon v. Saginaw Paint & Manufacturing Co., 120 Mich.App. 745, 327 N.W.2d 551 (1982); Peterson v. City of Golden Valley, N.D., 308 N.W.3d 550 (N.D.1981); and Lindler v. District of Columbia, 502 F.2d 495 (D.C.Cir.1974) (applying the law of the District of Columbia). The rationale offered by these courts for imposing liability vary. For example, the Aceves court stated:

[113 Idaho 377] Employer Liability--Contractors' Employees, 34 A.L.R. 4th 914 (1984).

"A number of considerations have led courts to depart from the rule of nonliability of an employer for the torts of an independent contractor. Some of the principal ones are that the employer is the one who primarily benefits from the contractor's work, the employer selects the contractor and is free to insist on a competent and financially responsible one, the employer is in a position to demand indemnity from the contractor, the insurance necessary to distribute the risk is properly a cost of the employer's business, and the performance of the duty of care is one of great public importance." Id. 595 P.2d at 622.

Some courts have rejected the rationale contained in the Restatement (Second) of Torts, Special Note to ch. 15, (Tent. Draft. No. 7, 1962), pp. 17-18, ² which, if adopted, would have limited liability for injured employees to workmen's compensation benefits. The District of Columbia Court noted that this tentative draft was not included in the final draft of the Restatement, and, therefore, should not be used for support. Lindler, supra, at 499. "The question is not who may ultimately bear the costs [of worker's compensation], but rather who does the law require to bear the costs." Id. at 499. Dean Prosser explained why the language of the tentative draft was not included in the final version of the Restatement. He stated that workmen's compensation statutes vary widely among the jurisdictions and concluded "that it appears undesirable, if not impossible,...