Carney v. Union Pacific R.R. Co., 77 N.E.3d 1

Background

In 2006 Union Pacific (UP) sold three abandoned bridges to Happ’s, Inc. under a Purchase and Removal Agreement that identified Happ’s as an independent contractor required to provide “all superintendence,” labor, tools, and safety compliance.
Happ’s subcontracted or coordinated with Carney Group (Patrick Carney’s company) for demolition work; Patrick Carney (plaintiff) was employed by Carney Group and was injured on July 31, 2006 when a girder fell and severed his legs.
Plaintiff sued UP (among others) asserting three negligence theories: retained-control liability (Restatement §414), negligent selection/hiring (Restatement §411), and premises liability for a dangerous condition on the land (Restatement §343) — UP moved for summary judgment; the trial court granted it; the appellate court reversed; Illinois Supreme Court granted review.
Key disputed facts: contractual terms reserving certain rights to UP (inspection, stopping work, requiring removal of unsafe equipment), whether UP ever required a demolition sequence plan, the extent of UP’s pre- and post-accident involvement, and whether the steel transition/floor plate was a UP-controlled dangerous condition.
The Supreme Court held (majority) that (1) UP did not retain the requisite control for §414 liability, (2) plaintiff — an employee of a subcontractor — is not a “third person” under §411 so negligent-hiring fails as a matter of law, and (3) the steel plate was part of the bridge (sold to Happ’s) and UP lacked knowledge it extended into the roadbed for §343 liability; appellate court reversal was therefore reversed and trial court judgment affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Retained-control (§414): whether UP retained control over Happ’s methods/supervision	UP exercised supervisory control (contract language, engineering notes, post-accident direction) so UP negligently failed to exercise retained control	Contract explicitly made Happ’s independent contractor and assigned "all superintendence" to Happ’s; UP’s reserved rights were general and safety-focused, insufficient to show retained control	Held for UP: no genuine issue that UP retained the degree of control required for §414 liability; summary judgment proper
Negligent selection (§411): whether UP negligently hired an incompetent contractor	UP selected Happ’s without adequate inquiry into its bridge-demolition experience; Happ’s lacked requisite competence for large through-plate steel bridge removal	UP relied on its approved-contractor list; Happ’s engaged experienced subcontractor (Carney Group) to perform specialized work	Mixed: court found a fact question that UP may have failed to exercise reasonable care in selection, but plaintiff was an employee of Carney Group and thus not a “third person” under §411 — claim barred as a matter of law
Plaintiff status for §411 duty: whether plaintiff qualifies as a “third person”	Plaintiff argued he was at most a subcontractor’s employee (not precluded) and should be allowed to proceed	UP argued plaintiff was an employee of Carney Group and employees of the contractor are not within §411’s protected third-person class	Held for UP: employee of contractor/subcontractor is not a “third person” under §411; §411 claim fails
Premises liability (§343): whether UP was liable for the steel transition plate condition	The steel plate extended into the roadbed and UP, as landowner for a decade, should have known of the dangerous condition and failed to warn	The plate was part of the bridge sold to Happ’s (AS IS); UP did not build or use the bridge and lacked knowledge of how far the plate extended into the roadbed	Held for UP: the plate belonged to the bridge (sold to Happ’s) and UP lacked actual or constructive knowledge of the plate’s extent; summary judgment proper

Key Cases Cited

Larson v. Commonwealth Edison Co., 33 Ill.2d 316 (Illinois 1965) (implicitly adopted Restatement rule on retained control of independent contractors)
Gomien v. Wear-Ever Aluminum, Inc., 50 Ill.2d 19 (Illinois 1971) (recognizing employer liability for negligent selection of contractor)
Genaust v. Illinois Power Co., 62 Ill.2d 456 (Illinois 1976) (adopting Restatement §343 premises-liability standard)
Recio v. GR-MHA Corp., 366 Ill. App.3d 48 (Ill. App. 2006) (questioning extension of §411 duty to contractor employees)
Apostal v. Oliveri Construction Co., 287 Ill. App.3d 675 (Ill. App. 1997) (Restatement duties to "others" do not extend to contractor employees)
Camargo v. Tjaarda Dairy, 25 P.3d 1096 (Cal. 2001) (majority view excluding contractor employees from §411 third-person class)
Urena v. Capano Homes, Inc., 930 A.2d 877 (Del. 2007) (disallowing §411 claims by contractor employees; policy reasons explained)