In Indiana, courts have historically found it is acceptable practice for a general contractor to delegate the duty of ensuring the safety of a subcontractor’s employees to the subcontractor, so long as it is clearly set forth in the subcontractor agreement. Most general-subcontract agreements contain such language to limit a general contractor’s liability for worksite injuries during construction projects.
Recently, however, in the case of Michael Ryan v. TCI Architects/Engineers/Contractors, Inc. and BHM Enterprises, Inc. d/b/a Craft Mechanical, the Indiana Supreme Court looked beyond the subcontract agreement, and analyzed the owner-general contract, ultimately finding that the general contractor assumed a non-delegable duty of care to ensure worksite safety for all employees on a jobsite. In particular, the Supreme Court analyzed “Form No. 535,” which is a form provision created by Design-Build Institute of America contained in a majority of owner-general contracts, and found that the general contractor assumed a non-delegable duty to ensure safety at construction projects.
In June of 2012, TCI Architects entered into an agreement with Gander Mountain to serve as general contractor on a Gander Mountain construction project in Lafayette, Indiana. The owner-general agreement utilized Design-Build Institute of America (“DBIA”), Document No. 535, Standard Form of General Conditions of Contract Between Owner and Design-Builder (“Form No. 535”), which generally outlined the extent of TCI’s obligations regarding safety on the project site.
TCI hired subcontractors, and those subcontractors subsequently hired subcontractors for work at the project. TCI bound its subcontractors to agreements that called for each subcontractor to be solely responsible for protecting its own employees working on the project, including a duty of ensuring safety for its own employees. The subcontractors then bound their subs to the same agreement to be responsible to protect their own employees on the job.
During the project, an employee of a subcontractor fell from an 8-foot ladder and sustained serious injuries. The employee sued the general contractor, alleging the company breached their duty to provide him with a safe work place. The employee moved for summary judgment, claiming TCI owed a non-delegable duty toward him. The general contractor moved for summary judgment on the issues of duty, breach and proximate cause. The trial court granted partial summary judgment to the general contractor, finding that the intent of the contracts was to place responsibility of worksite safety upon each subcontractor, not the general contractor. The Indiana Court of Appeals affirmed, concluding that the contract between TCI and Gander Mountain did not impose a duty of care on TCI for the safety of subcontractor employees. The Indiana Supreme Court, however, reversed the trial court, finding “a general contractor, such as TCI, will ordinarily owe no outright duty of care to a subcontractor’s employees, much less so to employees of a subcontractor employee.” However, the Court also recognized that a duty of care can exist between a contractor and subcontractor where a contractual obligation to a project owner imposes a ‘specific duty’ on the general contractor.
The Court, in analyzing the provisions of Form No. 535 in the TCI-Gander Mountain Contract, determined that TCI assumed a non-delegable duty of care for all workers because TCI agreed to “designate a Safety Representative with the necessary qualifications and experience to supervise the implementation and monitoring of all safety precautions and programs related to the Work.” Because of this provision, the Supreme Court concluded that TCI expressly shouldered the duty of carrying out and supervising the very safety policies that could have prevented the injury to the employee. Therefore, the Court determined that TCI could not delegate this “specific duty” away in the form of a subcontract.
The Court’s examination of four (4) corners of the TCI-Gander Mountain Contract revealed that TCI intended to assume the risk of liability for damages that might have been incurred if any of the safety precautions and programs they agreed to undertake were to ever fall short of the reasonable standard of care. As such, the employee’s motion for partial summary judgment on the issue of duty was granted, and the remaining issues of breach, causation, and damages were remanded down for further proceedings.
Going forward, the Ryan decision presents a substantial hurdle for general contractors contracting with form documents to delegate away the duty of ensuring worksite safety to subcontractors’ employees. As such, it is very unlikely a general contractor will have viable grounds to pursue summary judgment on the issue of duty alone, even where they contractually delegate the duty of ensuring workplace safety to a subcontractor.
If you would like a complete copy of the opinion or if you have any other questions related to matters of Architect, Engineers and Construction Liability, feel free to contact one of our practice area lawyers.
This has been prepared for informational purposes only. It does not contain legal advice or legal opinion and should not be relied upon for individual situations. Nothing herein creates an attorney-client relationship between the Reader and Reminger. The information in this document is subject to change and the Reader should not rely on the statements in this document without first consulting legal counsel.
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Full Case Citation: Michael Ryan v. TCI Architects/Engineers/Contractors, Inc. and BMH Enterprises d/b/a Craft Mechanical, 2017 WL1488853 (Ind. 2017).
