Steward v. McDonald

• Decision Date: 18 December 1997
• Docket Number: No. 97-137,97-137
• Parties: William T. STEWARD and Jeannine G. Steward, Appellants, v. Jerry Eugene McDONALD and Professional Services Industries, Inc., Appellees.
• Court: Arkansas Supreme Court

Page 297

958 S.W.2d 297

330 Ark. 837

William T. STEWARD and Jeannine G. Steward, Appellants, v. Jerry Eugene McDONALD and Professional Services Industries, Inc., Appellees.

No. 97-137.

Supreme Court of Arkansas.

Dec. 18, 1997.

Joel D. Johnson, Fort Smith, for Appellant.

Brian P. Boyce, Little Rock, Eddie H. Walker, Jr., Stephen M. Sharum, Fort Smith, for Appellee.

THORNTON, Justice.

The issue in this case is whether a landlord owes a duty of care to his tenant's employees. Appellants William T. Steward and Jeannine G. Steward ("Landlords") leased a building to appellee Professional Services Industries, Inc. (PSI). PSI employed appellee Jerry Eugene McDonald, who was injured when a riser broke while he was carrying boxes weighing approximately 120 pounds up a flight of stairs in the leased building. The stairway did not have a handrail at the time the injury occurred. After the accident, McDonald received benefits under the Arkansas Workers' Compensation Act.

McDonald filed a complaint against the Landlords, alleging that they had failed to maintain, repair, and construct the stairway in violation of our general unsafe-place-to-work statute, Ark.Code Ann. § 11-2-117 (1987), and that the Landlords were negligent in failing to provide guardrails, toeboards, and handrails as required by OSHA. McDonald later amended his complaint to allege violations of the Arkansas Department of Labor Basic Safety Manual. The Landlords then filed a third-party complaint against PSI, as the tenant, based on the principle of implied indemnification. The Landlords and PSI both filed motions for summary judgment. The trial court granted summary judgment in favor of PSI; however, it denied the Landlords' motion, and McDonald's claim against them proceeded to trial. The jury returned a general verdict in favor of the Landlords.

McDonald then filed a motion for new trial, on the basis that the verdict was "clearly contrary to the preponderance of the evidence or ... contrary to the law." Ark. R. Civ. P. 59(a)(6). The trial court premised its order granting a new trial on its interpretation of our general unsafe-place-to-work statute, Ark.Code Ann. § 11-2-117 (Repl.1996), which states in pertinent part:

Every employer and every owner of a place of employment, place of public assembly, or public building, now or hereafter constructed, shall construct, repair, and maintain it so as to render it safe.

Ark.Code Ann. § 11-2-117(b) (emphasis added). The trial court found that the statute applied to the Landlords and created a duty to provide a safe place to work. It further found that the jury's failure to find the Landlords negligent on that basis was clearly against a preponderance of the evidence.

In construing the statute, we have determined that the general assembly did not intend for the phrase "every owner of a place of employment" to expand or extend a landlord's duty to provide a safe place to work for his tenant's employees. We have not previously had occasion to interpret the meaning of this phrase in the context of this statute.

In his complaint, McDonald alleged that this statute imposes a duty on property owners, who lease a place of employment, to construct, repair, and maintain the property in a manner that renders it reasonably safe. McDonald based this argument solely on the statutory language. The trial court's order granting a new trial indicates that the court likewise found "that the jury finding that the Defendants were not negligent in failing to provide a safe place to work as required by A.C.A § 11-2-117 is clearly against the preponderance of the evidence."

McDonald also argued that the lease agreement, which contained language stating that the Landlords were responsible for major repairs and the tenant for minor repairs, could be interpreted to mean that the Landlords had a contractual duty to repair the stairs. This question was submitted to the jury for determination, and the jury found that the Landlords were not negligent. However, the trial court's order granting a new trial was not based on any assertion of duty imposed under the terms of the lease agreement, but rather that a duty was imposed by statute and by the safety regulations. Therefore, we confine our discussion to the issues on which the trial court predicated its order in granting a new trial.

We have followed the common-law rule that a lessor owes no duty to the lessee to repair the premises. Majewski v. Cantrell, 293 Ark. 360, 737 S.W.2d 649 (1987). However, we have elaborated that a lessor can be held liable where he agrees to undertake the repairs. Id. In Majewski, we followed the majority rule, stating that:

A landlord is subject to liability for physical harm caused to the tenant and others upon the leased property with the consent of the tenant or his subtenant by a condition of disrepair existing before or arising after the tenant has taken possession if: (1) the landlord, as such, has contracted by a promise in the lease or otherwise to keep the leased property in repair; (2) the disrepair creates an unreasonable risk to persons upon the leased property which the performance of the landlord's agreement would have prevented; and (3) the landlord fails to exercise reasonable care to perform his contract.

Id. at 362-63, 737 S.W.2d at 651.

Similarly, in Bartley v. Sweetser, 319 Ark. 117, 890 S.W.2d 250 (1994), we noted that since 1932, we have adhered to the rule that a landlord is under no legal obligation to a tenant for injuries sustained in common areas, absent a statute or agreement. See also 52 C.J.S. Landlord and Tenant § 417 (1968). A party who gratuitously undertakes a duty can, however, be liable for negligently performing that duty. Keck v. American Employment Agency, Inc., 279 Ark. 294, 652 S.W.2d 2 (1983); see also RESTATEMENT (SECOND) OF TORTS § 323 (1965). We have recognized that a duty can also arise, in certain circumstances, under the terms of a lease between a landlord and tenant. Bartley v. Sweetser, supra.

It is well settled that statutes will not be taken in derogation of the common law unless the act shows that such was the intent of the legislature. White v. State, 290 Ark. 130, 717 S.W.2d 784 (1986); Gray v. Nations, 1 Ark. (1 Pike) 557 (1839). We strictly construe statutes that impose duties or liabilities unknown at common law in favor of those upon whom the burden is sought to be imposed, and nothing will be taken as intended that is not clearly expressed. Hartford Ins. Group v. Carter, 251 Ark. 680, 473 S.W.2d 918 (1971); see also NORMAN J. SINGER, 3 SUTHERLAND STAT. CONST. § 61.01, at 171 (5th ed.1992).

McDonald's argument would require us to conclude that the legislature intended section 11-2-117 to subject all landowners who lease property to employers of more than five employees to liability for negligence in failing to provide and maintain a safe workplace. If we accept McDonald's interpretation of section 11-2-117, the resulting rule would clearly be in derogation of the common-law rule regarding a landlord's duty of care owed to a tenant. Therefore, we must strictly construe the statute in an attempt to give effect to the legislature's intent.

The legislature enacted almost all of Subchapter 2 of Title 11 through Act 161 of 1937, our Labor Department Act.1937 Ark. Acts 161 (codified at Ark.Code Ann. §§ 11-2-101--121); Horn v. Shirley, 246 Ark. 1134, 441 S.W.2d 468 (1969). The primary function of the Act is clearly expressed in its title:

AN ACT to Create a Department of Labor; to Create the Office of Commissioner of Land and to Define the Duties of the Commissioner as Administrative Head of the Department of Labor; to Provide for the Arbitration and Conciliation of Labor Disputes; to Authorize the Commissioner to Make Investigations and to Collect Statistics for the Purpose of Enforcing the Labor Laws of the State of Arkansas; to Empower the Board to Make Rules Relating to Health and Safety in Places of Employment; to Provide for the Review of Such Rules; to Provide Penalties for the Proper Enforcement of this Act and to Repeal all Laws in Conflict Herewith.

1937 Ark. Acts 161. We gain further insight into the legislature's purpose from the Act's Emergency Clause:

It is found and determined by the General Assembly that the present laws relating to labor in this State are not sufficient to meet present conditions; that in order for this State to coordinate its activities concerning labor with Federal Agencies on unemployment and security benefits, it is necessary that a Department of Labor be created with the powers and duties prescribed by this Bill; THEREFORE, an emergency is hereby declared to exist and this Act shall take effect and be in full force and effect from and after its passage and approval.

1937 Ark. Acts 161, § 26. The portion of the Act that is at issue here remains essentially unchanged from its form at inception. § 9 (b) (codified at Ark.Code Ann. § 11-2-117(b)).

Clearly, from the foregoing words of the general assembly, we may deduce that section 11-2-117 had its origin in legislation creating the Department of Labor with all its incidental powers and duties, granting the State the authority to enforce the statute with civil or criminal penalties, and establishing standards to be used in assessing whether a violation has occurred. Had the legislature intended a radical change in the law to extend causes of action for negligence based on a landlord's duty to his tenant, the Act would have expressed such an intention in some plain and unmistakable terms.

Instead, the Act speaks of causes of action brought by the State against employers and owners of places of employment, places of public assembly, or public buildings. The Labor Department Act clearly contemplates bringing a cause of action against an "employer," which is defined within this subchapter as "includ[ing] every person, ... having control or custody of any ... place of employment, or of any...