16 Ways to Overcome the Independent Contractor Defense

Independent contractor shell game

Effective representation of the plaintiff in a case of serious injury or wrongful death often requires that counsel overcome an “independent contractor” defense.  That frequently involves solving a shell game of independent contractor business relationships used to evade financial responsibility. Sometimes lawyers refer to this as getting “beyond the monkey to the organ grinder.”

The general rule is that a defendant is not liable for the negligence of an independent contractor, but there are many exceptions.  While not comprehensive, this paper seeks to outline major theories for overcoming the independent contractor defense.

  1. Interstate Motor Carriers.

Prior to 1956, interstate motor carriers commonly sought to evade financial responsibility by hiding behind “independent contractor” arrangements. In 1953, while addressing carriers’ evasion of  accountability similar to that engaged in by the ATF in this case, the United States Supreme Court described such practices as “evils that had grown up” in the industry, and that the ICC need not “sit idly by and wink at practices that lead to violations of its provisions.” American Trucking Ass’ns v. United States, 344 U.S. 298, 301, 311 (1953).  Those “evils” were summarized in Rediehs Express, Inc. v. Maple, 491 N.E.2d 1006 (Ind. Ct. App. 1986):

The history of the regulations of motor carriers reveals that after the commencement of regulation in 1935, . . .  a substantial number of carriers . . . began to use equipment owned and driven by truckers who had no such ICC operating authority. This use was accomplished by a variety of leases, trip leases, and by other arrangements under which owner-operator truckers carried on the operations of the carriers with operating authority.  In contracting with such persons the carriers took care to constitute the lessors as independent contractors which enabled them to avoid the commission’s safety, financial, and insurance regulations that had been prescribed for equipment and drivers in order to protect the public.

Many of the owner-operators without authority were itinerant truckers known as “gypsies,” fly-by-night truckers with poor, unsafe equipment who had little financial ability. They may or may not have had adequate insurance. The hard core of the problem was the trip lease and its attendant evils which permitted an indifferent carrier to evade its safety and financial responsibility. . . . The practice of leasing made it difficult in accident cases to fix responsibility, and certified carriers could thus escape the consequences of the regulations and responsibility for accidents by employing irresponsible persons as independent contractors who were not financially accountable and who had no insurance or were under-insured.

“The use of non-owned vehicles led to public confusion as to who was financially responsible for accidents caused by those vehicles.” Graham v. Malone Freight Lines, Inc., 948 F.Supp. 1124, n.3 (D. Mass. 1996).   Thus, interstate motor carriers often “were able to escape liability for virtually all motor vehicle accidents occurring in the motor carrier’s business.”  Cincinnati v. Haack, 708 N.E.2d 214 (Ohio Ct. App. 1997). In such cases, it was “clear that the scheme as a whole is a mere subterfuge, an unpermitted evasion, not a real avoidance of the provisions of the law.”  Georgia Truck System, Inc. v. Interstate Commerce Commission, 123 F.2d 210 (5th Cir. 1941), as it was “the motor carrier who has put the entire trip in motion,”American Transit Lines v. Smith, 246 F.2d 86, 87 (6th Cir. 1957).

Since 1956, federal law has treated truck drivers who are treated as independent contractors for purposes of tax and employment law as statutory employees of a motor carrier in the interstate motor carrier context.  The 1956 amendment to the Interstate Common Carrier Act was intended to require a motor carrier to be fully responsible for the maintenance and operation of the leased equipment and the supervision of the borrowed drivers, thereby protecting the public from accidents, preventing public confusion about who was financially responsible if accidents occurred, and providing financially responsible defendants.  Price v. Westmoreland, 727 F.2d 494 (5th Cir. 1984); Morris v. JTM Materials, supra.

“These are basic requirements that are inherent in the relation of the for-hire carrier to the public. When they are lacking, the chaotic conditions that preceded enactment of the Motor Carrier Act, 1935 inevitably ensue.” Cox v. Bond Transp., Inc., 249 A.2d 579 (N.J. 1969).  The purpose is “to protect persons who are injured in highway accidents, by increasing the likelihood that a substantial entity will be available to respond to any judgment rendered.”  Johnson v. Pacific Intermountain Express Co., 662 S.W.2d 237 (Mo. 1983).  This eliminates “the defense of independent contractor by making the owner/operator of the equipment the ‘statutory employee’ of the carrier.”  Shell v. Navajo Freight Lines, 693 P.2d 382 (Colo. Ct. App. 1984).

The Federal Motor Carrier Safety Regulations, 49 C.F.R. § 390.5, defines the term“employee” as,

any individual, other than an employer, who is employed by an employer and who in the course of his or her employment directly affects commercial motor vehicle safety.  Such term includes a driver of a commercial motor vehicle (including an independent contractor while in the course of operating a commercial motor vehicle), a mechanic, and a freight handler.

The Regulatory Guidance to 49 C.F.R. § 390.5 , at Question 17, explains:

The term “employee,” as defined in § 390.5, specifically includes an independent contractor employed by a motor carrier.  The existence of operating authority has no bearing upon the issue.  The motor carrier is, therefore, responsible for compliance with the FMCSRs by its driver employees, including those who are owner-operators.

62 Fed. Reg. 16,407 (April 4, 1997). 49 C.F.R. Chapter III: Regulatory Guidance for the Federal Motor Carrier Safety Regulations, Interpretation to § 390.5, question 17 (1997)(emphasis added).  See also 49 C.F.R. § 390.5 (2002).

The definition of “motor carrier” includes “a motor carrier’s agent,” “employee” includes “an independent contractor while in the course of operating a commercial motor vehicle.” 49  C.F.R.§ 390.5, and “lease” includes a “contract or arrangement in which the owner grants the use of equipment, with or without driver . . . .” 49  C.F.R.§ 376.2. The alternative and disjunctive reference to “contract or arrangement” must have some significance other than mere redundancy. Moreover, “[e]very motor carrier, its officers, agents . . .  shall be instructed in and comply with the rules . . . .” 49  C.F.R. § 392.1.

These Regulations were intended to safeguard the public by preventing motor carriers from circumventing applicable regulations by leasing the equipment and services of independent contractors exempt from federal regulation. The definition of “lease” as “contract or arrangement” extends to any arrangement by which a carrier allows another to haul its freight for compensation. Any other construction would defeat the Congressional policy of requiring financially responsible interstate transportation. Hartford Ins. Co. v. Occidental Fire & Cas. Co., 908 F.2d 235 (7th Cir. 1990); Transamerica Ins. Co. v. Maryland Cas. Ins. Co., 166 Ariz. 219, 801 P.2d 454 (1990).

 

  1. Restatement of Torts 2nd – Liability Of An Employer Of An Independent Contractor

 The Second Restatement of Torts includes 15 exceptions to the general rule that an employer is not responsible for the negligence of an independent contractor.  These exceptions are sometimes referred to as non-delegable duties. This paper is not intended as a comprehensive analysis of court decisions applying, approving, rejecting or distinguishing these Restatement provisions.

  • Contractor’s Conduct In Obedience To Employer’s Directions

Restatement (Second) of Torts  § 410 provides:

The employer of an independent contractor is subject to the same liability for physical harm caused by an act or omission committed by the contractor pursuant to orders or directions negligently given by the employer, as though the act or omission were that of the employer himself.

Comment b states that this section deals only with the “liability of an employer who does not intend that the contractor shall cause physical harm to any other person, but who either employs a contractor to do work which, no matter how carefully done, involves an unreasonable risk of physical harm to others to whom he owes a duty to exercise care, or who employs a contractor to do work which could be safely done but for the fact that he directs the contractor to do it in a manner involving such risk.

The liability is based upon the fact that the employer has been negligent in directing his contractor to do work which is dangerous in itself or in the manner in which it is done. Therefore, the employer is subject to liability, under the rule stated in this Section, for only such physical harm as is caused by the dangerous character of the work or the dangerous manner in which it is directed to be done. He is not subject to liability for any harm caused by some improper method which the contractor, without any direction of his employer, adopts in doing the work.”

Comment c clarifies that “the orders and directions are not negligently given if the employer neither knows nor should know that the work involves such risk even though the contractor discovers during the progress of the work that such risks will be involved in following the orders and directions.”

Comment d explains that “this Section is most usually applicable where construction or repair work is entrusted to an independent contractor under plans and specifications provided by the employer, which prescribe the result to be attained and the material to be used in the work and the manner in which it is to be used. It is, however, equally applicable wherever an employer otherwise directs his independent contractor to do work which, in itself or as ordered to be done, is unreasonably dangerous to others.”

One of the illustrations in the comments is as follows: “A hires a taxicab, tells the driver, B, that he has only five minutes to catch his train, directs B to ignore traffic signals, and offers him a reward of five dollars if he will get to the station in time for the train. While B is driving the taxicab at an excessive rate of speed, it collides with the car of C, causing harm to C. A is subject to liability to C.” It would seem this should be applicable to a shipper, freight broker or logistics company who knowingly establishes positive or negative incentives for a trucker or trucking company to ignore hours of service and other safety regulations,

Comment h provides: “The act of the contractor which subjects the employer to liability under the rule stated in this Section is usually negligence on the part of the contractor. But this is not necessarily true. It may happen that the employer knows or should know of circumstances of which the contractor is excusably ignorant, and which make the work or the manner in which it is directed to be done unreasonably dangerous. In such a case, the contractor would not be subject to liability since he, as a reasonable man, would not realize the risk involved in his conduct. On the other hand, the employer, as a reasonable man, should realize the danger and is negligent in directing the work to be done.

In Posner v. Paul’s Trucking Service, Inc., 380 F.2d 757 (1st Cir.,1967), a freight broker required delivery by an independent contractor on a schedule that could not be made in compliance with hours of service rules, thus creating a jury question of the broker’s liability in negligently giving those instructions. Restatement § 410 has been seldom followed in Southern states but has been applied in at least a couple of Tennessee cases. See Givens v. Mullikin ex rel. Estate of McElwaney, 75 S.W.3d 383, 394 (Tenn., 2002)(Insurer and insured could be held vicariously liable for insurance defense lawyer’s abuse of process directed, commanded, or knowingly authorized by insurer or insured), and Waggoner Motors, Inc. v. Waverly Church of Christ, 159 S.W.3d 42, 53 (Tenn.Ct.App.,2004)(Where a church acting as its own general contractor retained and exercised control over independent contractor’s work, knew or had reason to know of the unreasonable risks posed by overspray, and ordered contractor to proceed despite his warnings of potential overspray damage, it was liable for the negligence of the subcontractor).

  • Negligence In Selection Of Contractor

Restatement (Second) of Torts  § 411 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.

Safety rather than financial responsibility is the focus of this section, so merely hiring an independent contractor that is not financially responsible is not enough.

  • Failure To Inspect Work Of Contractor After Completion

 Restatement (Second) of Torts  § 412 provides:

 One who is under a duty to exercise reasonable care to maintain land or chattels in such condition as not to involve unreasonable risk of bodily harm to others and who entrusts the work of repair and maintenance to an independent contractor, is subject to liability for bodily harm caused to them by his failure to exercise such care as the circumstances may reasonably require him to exercise to ascertain whether the land or chattel is in reasonably safe condition after the contractor’s work is completed.

Comment c enumerates factors considered under this section as follows: (1) the danger involved in the condition of the structure or chattel if the work is entrusted to the contractor is not carefully and skillfully done; (2) the character of the work—whether it is of the kind which a competent contractor is so likely to do properly that it is reasonable to rely entirely or to a certain extent upon his competence as a sufficient assurance that the work has been safely done; (3) the ability which the employer has or should have to appreciate the proper or improper character of the work done for him by the contractor; (4) the ease or difficulty of ascertaining the actual character of the completed work; and (5) the existence of a relation between the contractor’s employer and those injured by the careless or incompetent work of the contractor which entitles them to expect that the employer will personally exercise care for their safety.”

Comment e states that “[t]he rule stated in this Section subjects the employer of an independent contractor to liability only if, as a result of his failure to exercise such care as the circumstances require in inspecting the completed work done by his contractor, he fails to discover its bad condition and as a result bodily harm is caused to someone to whom he owes a duty of maintaining his land or chattels in reasonably safe condition.”

The extent of the employer’s knowledge and experience in the field of work to be done is to be taken into account.

  • Duty To Provide For Taking Of Precautions Against Dangers Involved In Work Entrusted To Contractor

Restatement (Second) of Torts  § 413 states:

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.

This section is not concerned with routine precautions such as driving at a safe speed with good brakes. Rather, it deals with “peculiar risks” such as demolition of buildings, excavations, etc. 

  • Negligence In Exercising Control Retained By Employer

Restatement (Second) of Torts  § 414 states:

One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care.

This requires more than a general right to determine objectives. There must be some retention of control of operative details, such as when a principal has a foreman on site to supervise work of contractors.

  • Duty Of Possessor Of Land To Prevent Activities And Conditions Dangerous To Those Outside Of Land

 Restatement (Second) of Torts § 414A provides:

A possessor of land who has employed or permitted an independent contractor to do work on the land, and knows or has reason to know that the activities of the contractor or conditions created by him involve an unreasonable risk of physical harm to those outside of the land, is subject to liability to them for such harm if he fails to exercise reasonable care to protect them against it.

 This does not create a duty to inspect, or any reason not to assume that an apparently contractor will not perform work properly. However, when the principal knows or has reason to know that the contractor is engaging or is about to engage in an activity, or that he has created or is about to create conditions, which will involve such an unreasonable risk to others outside of the land, it is his duty to interfere, and to exercise reasonable care to prevent physical harm to such persons. . . ”

  • Duty To Supervise Equipment And Methods Of Contractors Or Concessionaires On Land Held Open To Public

Restatement (Second) of Torts  § 415 states:

A possessor of land who holds it open to the public for any purpose is subject to liability to members of the public entering for that purpose for physical harm caused to them by his failure to exercise reasonable care to protect them against unreasonably dangerous activities of, or unreasonably dangerous conditions created by, an independent contractor or concessionaire employed or permitted to do work or carry on an activity on the land.

This is “based upon the failure of the possessor of the land in question to exercise reasonable care to supervise the equipment or methods of his contractor or concessionaire who carries on an activity which endangers the public attracted to the possessor’s land. In order that the liability shall exist, it is, therefore, necessary, not only that the contractor shall be negligent, but also that the possessor shall have a reasonable opportunity to ascertain the improper equipment or method of his contractor and to secure the substitution of safe equipment and methods.”  Comment c.

  • Harm Caused By Negligence Of A Carefully Selected Independent Contractor

Restatement (Second) of Torts § 416 states:

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.

“[T]he employer remains liable for injuries resulting from dangers which he should contemplate at the time that he enters into the contract, and cannot shift to the contractor the responsibility for such dangers, or for taking precautions against them. . . . the fact that the contract contains express stipulations for the taking of adequate precautions and that the contractor agrees to assume all liability for harm caused by his failure to do so, does not relieve his employer from the liability stated in this Section. . . . It is sufficient that it is likely to involve a peculiar risk of physical harm unless special precautions are taken, even though the risk is not abnormally great. A “peculiar risk” is a risk differing from the common risks to which persons in general are commonly subjected by the ordinary forms of negligence which are usual in the community. It must involve some special hazard resulting from the nature of the work done, which calls for special precautions.” For example,” if the principal employs an independent contractor to operate a truck this does not apply to speed, maintenance of brakes, etc., but “if the contractor is employed to transport giant logs weighing several tons over the highway, the employer will be subject to liability for the contractor’s failure to take special precautions to anchor them on his trucks. . . . It is sufficient that it is a risk which the employer should recognize as likely to arise in the course of the ordinary and usual method of doing the work, or the particular method which the employer knows that the contractor will adopt.”  Comments a, c and d.  Cross reference with Restatement §427, infra. 

  • Work Done In Public Place

Restatement (Second) of Torts 417 states:

One who employs an independent contractor to do work in a public place which unless carefully done involves a risk of making the physical condition of the place dangerous for the use of members of the public, is subject to liability for physical harm caused to members of the public by a negligent act or omission of the contractor which makes the physical condition of the place dangerous for their use.

It is not necessary for work be done under or require a franchise, license or permit, or that such a franchise, permit, or license. It is enough that the work, unless carefully done, will involve making the physical condition of the public place dangerous for the use of the public. The words “public place” denote any place includes public highways, parks and public buildings, etc.

  • Maintenance Of Public Highways And Other Public Places

 Restatement (Second) of Torts § 418 provides:

(1) One who is under a duty to construct or maintain a highway in reasonably safe condition for the use of the public, and who entrusts its construction, maintenance, or repair to an independent contractor, is subject to the same liability for physical harm to persons using the highway while it is held open for travel during such work, caused by the negligent failure of the contractor to make it reasonably safe for travel, as though the employer had retained the work in his own hands.

(2) The statement in Subsection (1) applies to any place which is maintained by a government for the use of the public, if the government is under the same duty to maintain it in reasonably safe condition as it owes to the public in respect to the condition of its highways.

Insofar as this section is directed to liability of governmental entities, its application is in many localities limited by statutory limitations on governmental liability. However, it may also apply to a contractor who undertakes to repair, construct, or maintain a highway, and entrusts the work to a subcontractor; 

  • Repairs Which Lessor Is Under A Duty To His Lessee To Make

 Restatement (Second) of Torts § 419 provides:

 A lessor of land who employs an independent contractor to perform a duty which the lessor owes to his lessee to maintain the leased land in reasonably safe condition, is subject to liability to the lessee, and to third persons upon the land with the consent of the lessee, for physical harm caused by the contractor’s failure to exercise reasonable care to make the land reasonably safe.

 This rule “applies only where a legislative enactment imposes the duty of repair or where the lessor by a covenant in the lease or otherwise has assumed a contractual duty to make repairs.”  Comment a.

  •  Repairs Gratuitously Undertaken By Lessor

 Restatement (Second) of Torts § 420 provides:

 A lessor of land who employs an independent contractor to make repairs which the lessor is under no duty to make, is subject to the same liability to the lessee, and to others upon the land with the consent of the lessee, for physical harm caused by the contractor’s negligence in making or purporting to make the repairs as though the contractor’s conduct were that of the lessor.

 

  • Maintenance Of Structures On Land Retained In Lessor’s Possession Necessary To Tenant’s Enjoyment Of Leased Land

Restatement (Second) of Torts § 421 provides:

 A possessor of land who, having leased a part of the land, is under a duty to maintain in reasonably safe condition the part retained by him, and who entrusts the repair of such part to an independent contractor, is subject to the same liability to the lessee, and to others upon the retained part of the land with the consent of the lessee, for physical harm caused by the negligence of the contractor in failing to maintain such part of the land in reasonably safe condition, as though the lessor had himself retained the making of the repairs in his own hands. 

  • Work On Buildings And Other Structures On Land

Restatement (Second) of Torts § 422 states:

A possessor of land who entrusts to an independent contractor construction, repair, or other work on the land, or on a building or other structure upon it, is subject to the same liability as though he had retained the work in his own hands to others on or outside of the land for physical harm caused to them by the unsafe condition of the structure

(a) while the possessor has retained possession of the land during the progress of the work, or

(b) after he has resumed possession of the land upon its completion.

This applies “only to injuries occurring while the possessor has retained possession of the premises during the progress of the work, or after he has resumed possession of the land upon the completion of the work. The rule stated in this Section has no application to injuries occurring while the land is turned over to the contractor and he is in exclusive possession of it. Thus where the employer moves out of his building and surrenders it to the contractor while it is undergoing construction, demolition, or repair, there is no liability under the rule here stated.” Comment c. 

  • Work Withdrawing Lateral Support

Restatement (Second) of Torts § 422A states:

One who employs an independent contractor to do work which the employer knows or should know to be likely to withdraw lateral support from the land of another is subject to the same liability for the contractor’s withdrawal of such support as if the employer had retained the work in his own hands.

“[O]ne who employs an independent contractor to do work involving excavation, or other work of a kind which the employer knows or should know to be likely to result in the withdrawal of lateral support from the land of another, is subject to the same liability for a withdrawal of such support by the contractor as if he had retained the work in his own hands.” Comment b.

  • Making Or Repair Of Instrumentalities Used In Highly Dangerous Activities

Restatement (Second) of Torts § 423 provides:

One who carries on an activity which threatens a grave risk of serious bodily harm or death unless the instrumentalities used are carefully constructed and maintained, and who employs an independent contractor to construct or maintain such instrumentalities, is subject to the same liability for physical harm caused by the negligence of the contractor in constructing or maintaining such instrumentalities as though the employer had himself done the work of construction or maintenance.

 This has been applied to high voltage electric lines and appliances, brakes on vehicles, explosives, radioactive materials, etc.

 

  • Precautions Required By Statute Or Regulation

  Restatement (Second) of Torts § 424 provides:

One who by statute or by administrative regulation is under a duty to provide specified safeguards or precautions for the safety of others is subject to liability to the others for whose protection the duty is imposed for harm caused by the failure of a contractor employed by him to provide such safeguards or precautions.

 This has been applied to support a nondelegable duty to comply with a variety of building and safety codes.

 

  • Repair Of Chattel Supplied Or Land Held Open To Public As Place Of Business

Restatement (Second) of Torts § 425 provides:

One who employs an independent contractor to maintain in safe condition land which he holds open to the entry of the public as his place of business, or a chattel which he supplies for others to use for his business purposes or which he leases for immediate use, is subject to the same liability for physical harm caused by the contractor’s negligent failure to maintain the land or chattel in reasonably safe condition, as though he had retained its maintenance in his own hands.

This has been applied to elevators (Gaffney v. EQK Realty Investors, 213 Ga.App. 653, 445 S.E.2d 771 (1994)), escalators, hotel water heaters, security systems, premises safety and a wide variety of other context.

  • Negligence Collateral To Risk Of Doing The Work

Restatement (Second) of Torts § 426 provides:

Except as stated in §§ 428 and 429, an employer of an independent contractor, unless he is himself negligent, is not liable for physical harm caused by any negligence of the contractor if

(a) the contractor’s negligence consists solely in the improper manner in which he does the work, and

(b) it creates a risk of such harm which is not inherent in or normal to the work, and

(c) the employer had no reason to contemplate the contractor’s negligence when the contract was made.

This “collateral negligence” or “casual negligence” in the operative detail of the work, as distinguished from the general plan or method followed or the result to be accomplished. It relates to negligence which is unusual or abnormal, or foreign to the normal or contemplated risks of doing the work, as distinguished from negligence which creates only the normal or contemplated risk. Comment a.

  • Negligence As To Danger Inherent In The Work

Restatement (Second) of Torts § 427 states:

One who employs an independent contractor to do work involving a special danger to others which the employer knows or has reason to know to be inherent in or normal to the work, or which he contemplates or has reason to contemplate when making the contract, is subject to liability for physical harm caused to such others by the contractor’s failure to take reasonable precautions against such danger.

This is closely related to Restatement §16. However, It is not, necessary to the employer’s liability that the work be of a kind which cannot be done without a risk of harm to others, or that it be of a kind which involves a high degree of risk of such harm, or that the risk be one of very serious harm, such as death or serious bodily injury. It is not necessary that the work call for any special skill or care in doing it. It is sufficient that work of any kind involves a risk, recognizable in advance, of physical harm to others which is inherent in the work itself, or normally to be expected in the ordinary course of the usual or prescribed way of doing it, or that the employer has special reason to contemplate such a risk under the particular circumstances under which the work is to be done. Comments a and b.

 

  • Work Involving Abnormally Dangerous Activity

Restatement (Second) of Torts § 427A provides:

One who employs an independent contractor to do work which the employer knows or has reason to know to involve an abnormally dangerous activity, is subject to liability to the same extent as the contractor for physical harm to others caused by the activity.

This has been applied in a wide variety of cases involving premises security, explosions, structure collapses, electrocution, toxins, etc.

 

  • Work Likely To Involve Trespass Or Nuisance

Restatement (Second) of Torts § 427B provides:

One who employs an independent contractor to do work which the employer knows or has reason to know to be likely to involve a trespass upon the land of another or the creation of a public or a private nuisance, is subject to liability for harm resulting to others from such trespass or nuisance.

This provision has been invoked in a variety of circumstances, especially in cases involving flooding, pollutants or fire spreading to another’s property. 

 

  • Public Franchise / Unreasonable Risk of Harm.

Restatement (Second) of Torts § 428 states:

An individual or a corporation carrying on an activity which can be lawfully carried on only under a franchise granted by public authority and which involves an unreasonable risk of harm to others, is subject to liability for physical harm caused to such others by the negligence of a contractor employed to do work in carrying on the activity.

Prior to adoption of the statutory employer rules in the interstate motor carrier context, this Restatement rule was used to overcome the independent contractor defense. See, e.g., Black v. Montgomery Trucking Co., Inc., 129 Ga.App. 36,(followed Restatement rule), reversed on other grounds without mention of either Restatement rule or federal statutes or regulations, 231 Ga. 211 (1973)(compare Dove v. National Freight, Inc., 138 Ga.App. 114 (1976)); Venuto v. Robinson, 118 F.2d 679 (3rd Cir., 1941)( Restatement 428 applied to hold interstate motor carrier liable for negligence of independent contractor driver); Hodges v. Johnson, 52 F.Supp. 488 (D.C.VA. 1943); War Emergency Co‑op. Ass’n v. Widenhouse, 169 F.2d 403 (4th Cir. 1948); Lehman v. Robertson Truck‑A‑Way, 122 Cal.App.2d 82, 264 P.2d 653 (Cal.App. 3 Dist. 1953); Louis v. Youngren, 12 Ill.App.2d 198, 138 N.E.2d 696 (Ill.App. 1 Dist., 1956); Eli v. Murphy, 39 Cal.2d 598, 248 P.2d 756 (Cal, 1952)(nondelegable duty of motor carrier to public).

However, some jurisdictions have declined to classify trucking as an unreasonably dangerous activity giving rise to a nondelegable duty under this statement of the Restatement, reasoning that “[t]he operation of any motor vehicle may be said to involve some risk to others but the use of [this independent contractor’s] equipment involved no more risk than that of any other.” Gaskill v. Calaveras Cement Co. 102 Cal.App.2d 120, 226 P.2d 633 (1951).   Lebrun v. Stop & Shop Supermarket Co., 67 Mass.App.Ct. 1102, 851 N.E.2d 478 (Table)(Mass.App.Ct.,2006).See also, Brown v. Truck Connections Intern., Inc., 526 F.Supp.2d 920 (E.D.Ark.,2007); Walker v. Wittenberg, Delony & Davidson, Inc., 241 Ark. 525, 531, 242 Ark. 97, 412 S.W.2d 621, 625 (1967).

There are also cases holding this inapplicable to a shipper which does not have a public franchise. See, e.g., Wilson v. IESI N.Y. Corp., 444 F.Supp.2d 298 (M.D.Pa.,2006).

Exempt commodity loads. In Serna v. Pettey Leach Trucking, Inc., 110 Cal.App.4th 1475, 2 Cal.Rptr.3d 835 (2003), the California Court of Appeals held that the Restatement (Second) of Torts § 428 applied to a interstate motor carrier even though that carrier was carrying a commodity (poultry) that was exempt from the economic regulations of the DOT.

Taxi cabs. Courts in several jurisdictions have applied Restatement § 428 to operation of taxi cabs under a public franchise so that taxi companies that lease cabs to drivers as independent contractors are vicariously liable. See, e.g., Belder v. Dandridge, 2002 WL 32076963 (Va.Cir.Ct. 2002); Teixeira v. Car Cab Three, Inc., 1994 WL 413034 (Mass.App.Div. 1994); Paige v. Red Top, Inc., 255 A.2d 279 (NJ App. Div. 1969).

  • Negligence In Doing Work Which Is Accepted In Reliance On The Employer’s Doing The Work Himself

Restatement (Second) of Torts § 428 provides:

One who employs an independent contractor to perform services for another which are accepted in the reasonable belief that the services are being rendered by the employer or by his servants, is subject to liability for physical harm caused by the negligence of the contractor in supplying such services, to the same extent as though the employer were supplying them himself or by his servants. Where a customer relies upon the principal to provide goods or services, and the principal substitutes goods or services from an independent contractor, the principal may be liable for the contractor’s negligence.

Conclusion.  Attorneys for victims of catastrophic injuries and families of wrongful death victims facing an independent contractor defense may use this paper as  a starting point for research, exploration and perhaps a bit of creativity, weaving together Restatement, statutes, regulations, local ordinances and common law to obtain fair compensation for their clients.

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Ken Shigley is a past president of the State Bar of Georgia, past chair of the American Association for Justice Motor Vehicle Collision, Highway and Premises Liability Section, a board-certified civil trial attorney of the National Board of Trial Advocacy, and lead author of Georgia Law of Torts: Trial Preparation and Practice. This blog post is adapted from a paper accompanying a presentation by Mr. Shigley at the Southern Trial Lawyers Association seminar in New Orleans in 2012.

  • Stokes

    This is a very nice and comprehensive and informative article, thank you for that. I think one “shortcut” to remember all these exceptions is the “common sense” rule – if common sense indicates it would be “unfair” for the defendant to avoid liability, courts will be more likely to find no independent contractor relationship exists. I think this is especially true with premise liability and injuries that occur at work.

    I think one of the biggest smoking guns for proving the defendant is really responsible for the acts of the wrongdoer is when the defendant does everything it can to create an independent contractor relationship in name only. Luckily, Courts will gladly look beyond the label and focus on the actual duties of the independent contractor, level of control over the independent contractor, etc.

  • Vinay Singh

    Independent contractor relationship is an excuse used by lots of defendants to escape financial liabilities but a smart and an aware attorney can always strive hard to show the light and judges these days take this into account if presented in a convincing manner. It has always happened when a legal lacuna is exploited too many times, it raises more suspicions and doubts in the courts.
    http://dentoninjurylawyers.com/auto-accident/