Torts

TORTS

Injured Employee of Independent Contractor Is Barred Under Privette/Toland Principles From Suing Contractor's Employer for Negligent Hiring

In Camargo v. Tjaarda Dairy (2001) 25 C.4th 1235, 108 C.R.2d 617, 25 P.2d 1096, defendant dairy contracted with an independent contractor to scrape manure out of its corrals and to haul it away. Decedent, an employee of the contractor, was killed when the tractor he was driving rolled over. Decedent's wife and children sued defendant for wrongful death on the theory, among others, that defendant was negligent in hiring the contractor because defendant failed to determine whether decedent was qualified to operate the tractor safely. Held, defendant's motion for summary judgment was properly granted. The rationale of Privette v. Superior Court (1993) 5 C.4th 689, 21 C.R.2d 72, 854 P.2d 721, 6 Summary (9th), Torts, Supp., §1016A, and Toland v. Sunland Housing Group (1998) 18 C.4th 253, 74 C.R.2d 878, 955 P.2d 504, 6 Summary (9th), Torts, Supp., §1016A, which barred actions by employees of an independent contractor against the contractor's hirer under the peculiar risk doctrine, likewise applies to bar actions by independent contractor's employees for negligent hiring of the contractor. (25 C.4th 1238.)

(a) Privette exception to peculiar risk doctrine. Under the doctrine of peculiar risk, a person who hires an independent contractor to do inherently dangerous work can be held liable for tort damages when the contractor causes injury to others by negligently performing the work. The doctrine serves to ensure that innocent bystanders or neighboring landowners injured by the hired contractor’s negligence will have a source of compensation even if the contractor turns out to be insolvent. In Privette, the court refused to extend the peculiar risk doctrine to the hired contractor's employees. The rationale for the exception is that the hirer should not have to pay for injuries caused by the contractor's negligent performance because the workers' compensation system already covers those injuries. The property owner who hires an independent contractor should be subject to no greater liability than that contractor, whose exposure for injury to an employee is limited to providing workers’ compensation insurance. The rule of workers’ compensation exclusivity, which shields an independent contractor who pays workers’ compensation insurance premiums from further liability to its employees for on-the-job injuries, should equally protect the property owner who, in hiring the contractor, is indirectly paying for the cost of such coverage, which has been calculated into the contract price. Also, to allow an independent contractor’s employees who incur work-related injuries compensable under the workers’ compensation system to additionally seek damages under the doctrine of peculiar risk from the person who hired the contractor would give those employees an unwarranted windfall, and something that is denied to other workers--the right to recover tort damages for industrial injuries caused by their employer’s failure to provide a safe working environment. In effect, a single class of employees, those who work for independent contractors, would be exempted from the statutorily mandated limits of workers’ compensation. (25C.4th 1238.)

(b) Toland case: Application of Privette rationale to either "direct" or "vicarious" peculiar risk liability. The doctrine of peculiar risk, insofar as it was relevant in Privette and Toland, is described in Rest.2d, Torts §§413, 416. Under Rest.2d, Torts §413, a person who hires an independent contractor to do inherently dangerous work, but who fails to provide in the contract or in some other manner that special precautions be taken to avert the peculiar risks of that work, can be liable if the contractor’s negligent performance of the work causes injury to others. Because §413 rests the liability of the hiring person on that person's omission to provide for special precautions in the contract or in some other manner, it is sometimes described as a rule of "direct liability.” Under Rest.2d, Torts §416, even if the hiring person has provided for special precautions in the contract or otherwise, the hiring person can nevertheless be liable if the contractor fails to exercise reasonable care to take such precautions and the contractor’s performance of the work causes injury to others. Because the hiring person’s liability under § 416 flows from the independent contractor’s negligent failure to take special precautions in performing the inherently dangerous work, as required by "the contract or otherwise," the hiring person’s liability is often referred to as "vicarious liability." The court in Toland rejected the argument that Privette did not bar recovery for direct liability under §413, but only for vicarious liability under §416. Peculiar risk is not a traditional theory of direct liability for the risks created by one's own conduct: Liability under both sections is in essence "vicarious" or "derivative" in the sense that it derives from the act or omission of the hired contractor, who has caused the injury by failing to use reasonable care in performing the work. Toland held that Privette bars employees of a hired contractor who are injured by the contractor’s negligence from seeking recovery against the hiring person, irrespective of whether recovery is sought under the theory of peculiar risk set forth in §416 or §413. In either situation, it would be unfair to impose liability on the hiring person when the liability of the contractor, the one primarily responsible for the worker’s on-the-job injuries, is limited to providing workers’ compensation coverage. (25 C.4th 1240.)

(c) Negligent hiring liability. Rest.2d, Torts §411, entitled “Negligence in Selection of Contractor,” provides: “An employer is subject to liability for physical harm to third persons caused by his failure to exercise reasonable care to employ a competent and careful contractor [] (a) to do work which will involve a risk of physical harm unless it is skillfully and carefully done, or [] (b) to perform any duty which the employer owes to third persons.” (25 C.4th 1241.)

(d) Application of Privette/Toland rationale to negligent hiring. For the same reasons as those expressed in Privette and Toland, an employee of an independent contractor should not be considered a "third person" for purposes of Rest.2d, Torts §411 and should be barred from seeking recovery from the hirer for negligent hiring. Admittedly, the hirer under §411 is, in a sense, being taxed with the hirer's own negligence under a theory of direct liability. However, the same can be said with regard to an action brought under the peculiar risk theory set forth in section 413. More importantly, under both §§411 and 413, the liability of the hirer is essentially vicarious in that it derives from the contractor's act or omission. Therefore, in a negligent hiring case under the theory set forth in §411, just as in peculiar risk cases under the theories set forth in §§413 and 416, it would be unfair to impose liability on the hiring person when the liability of the contractor, the one primarily responsible for the worker’s on-the-job injuries, is limited to providing workers’ compensation coverage. Two of the related policy considerations relied on in Privette also support the conclusion here that an employee of an independent contractor should not be permitted to bring a negligent hiring action against the hirer of the contractor: (1) The rule of workers’ compensation exclusivity, which shields an independent contractor who pays workers’ compensation insurance premiums from further liability to its employees, should equally apply to the person hiring the contractor because the hirer has indirectly paid the cost of such coverage inasmuch as it was presumably calculated into the contract price; and (2) permitting such a recovery would give employees of independent contractors an unwarranted windfall, something that is denied other workers--the right to recover tort damages for industrial injuries caused by their employer’s failure to provide a safe working environment. (25 C.4th 1241.) Insofar as it is inconsistent with this opinion, Grahn v. Tosco Corp. (1997) 58 C.A.4th 1373, 68 C.R.2d 806, 6 Summary (9th), Torts, Supp., §1016A, is disapproved. (25 C.4th 1243.)

Witkin References

On general rule of nonliability of hirer for independent contractor's torts, see 6 Summary (9th), Torts, §1009.

On liability of hirer for independent contractor's negligence in performing inherently dangerous work (peculiar risk doctrine), see 6 Summary (9th), Torts, §§1013, 1014.

On Privette-Toland rule, see 6 Summary (9th), Torts, Supp., §1016A.

On liability for negligent hiring of independent contractor, see 6 Summary (9th), Torts, §1010.

On exclusivity of workers' compensation remedy, see 2 Summary (9th), Workers' Compensation, §25 et seq.

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Last updated
Thursday, October 04, 2001