Peters v. Forster

• Decision Date: 11 March 2004
• Docket Number: No. 42S01-0301-CV-24.,42S01-0301-CV-24.
• Parties: Wayne A. PETERS and Helen Peters, Appellants (Plaintiffs below), v. Donald FORSTER, Appellee (Defendant below).
• Court: Indiana Supreme Court

804 N.E.2d 736

Wayne A. PETERS and Helen Peters, Appellants (Plaintiffs below), v. Donald FORSTER, Appellee (Defendant below).

No. 42S01-0301-CV-24.

Supreme Court of Indiana.

March 11, 2004.

Lane C. Siesky, Barber & Shoulders, Evansville, IN, Attorney for Appellants.

Daniel L. Siewers, Hart, Bell, Cummings, Ewing & Stuckey, Vincennes, IN, Attorney for Appellee.

ON PETITION TO TRANSFER FROM THE INDIANA COURT OF APPEALS, NO. 42A01-0109-CV-350.

RUCKER, Justice.

Case Summary

Sustaining injury after slipping on a ramp attached to a home that he was visiting, Wayne Peters sued the contractor who installed the ramp. The trial court granted summary judgment in the contractor's favor on grounds that the "acceptance rule" precluded liability. On review the Court of Appeals reversed relying on an exception to the rule. Today we grant transfer and join those jurisdictions that have abandoned what has been described as an outmoded relic. In so doing we reverse the judgment of the trial court.

Facts and Procedural History

Earl and Avonda Hamm owned a home in Vincennes, Indiana. Because Mr. Hamm was bedridden and because Mrs. Hamm's own ability to climb steps was declining, the Hamms decided to install a ramp on the front of their residence. A neighbor of the Hamms' daughter had constructed a ramp for his handicapped wife who had since passed away. Having no further use for the ramp, he sold it to the Hamms for less than a hundred dollars.

Donald Forster owned several rental properties and was the landlord of the Hamms' daughter. He also engaged in construction work as an independent contractor. By agreement with the Hamms, Forster transported the ramp from its original location to the Hamm residence where he and a few of his employees attached it to the front of the house with "a couple of screws." Appellants' App. at 35. Forster was aware the ramp did not meet building code requirements for a wheelchair ramp, but he was unaware of code requirements for other types of ramps. After installation, the Hamms' daughter attached carpeting to the ramp.

On March 15, 1999, Wayne Peters delivered a meal to the Hamm residence. Using the ramp to enter the house Peters apparently encountered no difficulty. Upon leaving however, Peters slipped and fell sustaining serious injury. Thereafter, he filed a complaint for damages against the Hamms for negligence in maintaining the ramp. Peters' wife joined in the complaint on a loss of consortium claim. The complaint was later amended to include Forster as a party defendant.¹ Thereafter Forster moved for summary judgment which the trial court granted on grounds that as a matter of law Forster owed no duty to Peters because the Hamms "accepted and paid for" the work Forster performed. Appellants' App. at 1. On review, the Court of Appeals reversed relying on an exception to the general rule of nonliability where an owner accepts a contractor's work. Peters v. Forster, 770 N.E.2d 414, 419 (Ind.Ct.App.2002). We grant transfer and abandon the rule.

Discussion

In order to prevail on a claim of negligence, a plaintiff is required to prove: (1) a duty owed by the defendant to the plaintiff; (2) a breach of that duty by the defendant; and (3) an injury to the plaintiff proximately caused by the breach. Benton v. City of Oakland City, 721 N.E.2d 224, 232 (Ind.1999). Duty is a question of law for the court to decide. Absent a duty, there can be no breach of duty and thus no negligence or liability based upon the breach. Wilson v. Haimbaugh, 482 N.E.2d 486, 487 (Ind.Ct.App. 1985).

Generally, Indiana has followed the rule that "contractors do not owe a duty of care to third parties after the owner has accepted the work." Blake v. Calumet Constr. Corp., 674 N.E.2d 167, 170 (Ind.1996); Citizens Gas & Coke Util. v. Am. Econ. Ins. Co., 486 N.E.2d 998, 1000 (Ind.1985). This rule, commonly referred to as the "acceptance rule" or the "completed and accepted rule," has its origins in English common law under which "architects and builders were immune from civil liability to third persons who were injured as a result of their negligence in design or construction." George Anthony Smith, Recent Statutory Developments Concerning the Limitations of Actions Against Architects, Engineers, and Builders, 60 Ky. L.J. 462, 463 (1972). Immunity was based on privity of contract. "Without this relationship one could not sue." Id. The authority most often cited for injecting a privity requirement into what was otherwise a negligence claim is Winterbottom v. Wright, 152 Eng. Rep. 402 (Ex. 1842). In that case, a party entered into a contract with the Postmaster General to keep the mail coach in good repair. A mail coach driver was injured when the coach collapsed and he sought damages from the party charged with maintaining the vehicle. Denying relief and articulating the sentiment of the members of the Court of Exchequer, Lord Abinger declared in pertinent part:

There is no privity of contract between these parties; and if the plaintiff can sue, every passenger, or even any person passing along the road, who was injured by the upsetting of the coach, might bring a similar action. Unless we confine the operation of such contracts as this to the parties who entered into them, the most absurd and outrageous consequences, to which I can see no limit, would ensue....

Id. at 405. Early American common law mirrored the English common law rule requiring privity of contract. Accordingly, although a contractor was held liable for injury that resulted from his negligence before his work was completed, "his responsibility was terminated, and he was not liable to any third person once the structure was completed and accepted by the owner." W. Page Keeton et al., Prosser & Keeton on the Law of Torts § 104A, at 722 (5th ed.1984).

The acceptance rule first appeared on Indiana's legal landscape with this Court's opinion in Daugherty v. Herzog, 145 Ind. 255, 44 N.E. 457 (1896). In that case the appellant's daughter was fatally injured when the wall of a building collapsed, striking her. Seeking recovery for the loss of his daughter's services, the father filed an action in negligence against the contractor who had reconstructed the building. Affirming the trial court's grant of a demurrer, this Court determined that the father had no cause of action against the contractor. The Court reasoned that the contractor was liable only to the party to whom he owed a duty. In that case it was the person with whom he was in privity, namely the owner with whom the contractor had contracted. This Court also noted that "[t]he repairs had been completed and accepted long before appellant's daughter was injured." Id. at 457. Continuing, the Court gave the following examples and explanation for its ruling:

There must be causal connection between the negligence and the hurt; and such causal connection is interrupted by the interposition, between the negligence and the hurt of any independent human agency.... Thus, a contractor is employed by a city to build a bridge in a workmanlike manner; and after he has finished his work, and it has been accepted by the city, a traveler is hurt when passing over it by a defect caused by the contractor's negligence. Now the contractor may be liable to the city for his negligence, but he is not liable in an action on the case for damages. The reason sometimes given to sustain such conclusion is, that otherwise there would be no end to suits. But a better ground is that there is, no causal connection, as we have seen, between the traveler's hurt and the contractor's negligence ... [B]etween the contractor and the traveler intervened the city, an independent responsible agent, breaking the causal connection.

Id. at 457-58 (quotations omitted). Relying on Daugherty and its progeny, our courts have articulated two primary reasons supporting the acceptance rule: (1) the application of the doctrine of privity to cases involving negligence;² and (2) the owner's control of the entity when the injury occurred.³

The privity of contract requirement in the law of negligence has largely eroded. In a watershed decision Judge Cardozo, speaking for a majority on the New York court of last resort, ruled that a manufacturer of automobiles could be held liable in negligence to the ultimate purchaser of the vehicle, not just the immediate purchaser—the retail dealer. MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050, 1053 (1916). In essence, at least in the area of manufacturer's liability, MacPherson stripped the privity requirement of Winterbottom from its lofty position. Our courts have done likewise. See, e.g., Perdue Farms, Inc. v. Pryor, 683 N.E.2d 239, 241 (Ind.1997)

("Privity of contract is no longer required if a personal injury action for a defective product sounds in tort."); Coca Cola Bottling Works of Evansville v. Williams, 111 Ind.App. 502, 37 N.E.2d 702, 706 (1941) (citing MacPherson with approval and declaring that "the rule now in the best reasoned cases is that the manufacturer of foods or bottled goods sold for human consumption may be held liable to the ultimate consumer for injuries caused by foreign deleterious substances in such goods regardless of whether or not there was privity of contract between them"). Still, the privity of contract requirement in the area of contractors and builders has lingered in Indiana and apparently in several other jurisdictions as well.⁴ However even for contractors and builders, privity as an absolute defense is subject to numerous exceptions. For example, even absent privity of contract, a contractor remains liable where (i) the contractor turns over work "in a condition that was dangerously defective, inherently dangerous or imminently dangerous such that it created a risk of imminent personal injury", Citizens Gas, 486 N.E.2d at 1000, or where (ii) "the thing sold or constructed be not imminently dangerous to human life, but may become such by reason of...