ORMSBY v CAPITAL WELDING, INC
Docket Nos. 123287, 123289
Supreme Court of Michigan
July 23, 2004
471 Mich 45
Argued March 10, 2004 (Calendar No. 10).
ORMSBY V CAPITAL WELDING, INC
Docket Nos. 123287, 123289. Argued March 10, 2004 (Calendar No. 10). Decided July 23, 2004.
Ralph Ormsby and his wife, derivatively, brought an action in the Oakland Circuit Court against Monarch Building Services, Inc., a construction general contractor, and Capital Welding, Inc., a subcontractor that supervised his employer, Capital‘s subcontractor, and against others, seeking damages for injuries he suffered on the job site. The court, Alice L. Gilbert, J., granted summary disposition for Capital and Monarch, ruling that the plaintiffs failed to meet the four-part test of Funk v Gen Motors Corp, 392 Mich 91 (1974), for liability for injuries of a subcontractor‘s employee in a common work area. The court denied the plaintiff‘s motion to amend his complaint, ruling that amendment would be futile. The Court of Appeals, KELLY, P.J., and JANSEN and DONOFRIO, JJ., affirmed in part on the basis that Capital was not contractually obligated to indemnify Monarch, and reversed in part, concluding that Capital could be liable for the injuries under the retained control theory, and that both Monarch and Capital could be liable under the common work area claim. 255 Mich App 165 (2003). Capital and Monarch both appealed. 469 Mich 954 (2003).
In an opinion by Justice TAYLOR, joined by Chief Justice CORRIGAN, and Justices WEAVER, YOUNG, and MARKMAN, the Supreme Court held:
The common work area doctrine is an exception to the general rule of nonliability for acts of independent subcontractors and the employees of those subcontractors The retained control doctrine is merely a subordinate doctrine to the common work area doctrine applied by the Funk Court to an owner defendant and has no application to general contractors. Summary disposition for Capital and Monarch was appropriate under the common work area doctrine.
- The elements delineated in Funk for liability under the common work area exception to the nonliability of a general contractor for the acts of an independent subcontractor are: (1) the defendant, a general contractor or a property owner who assumes the role of a general contractor by retaining control, failed to take reasonable steps (2) to guard against readily observable and avoidable dangers (3) that created a high degree of risk to a significant number of workers (4) in a common work area. For liability under the common work area doctrine, all four elements must be found.
- In this case, because Capital was not an owner or general contractor, it cannot be liable pursuant to Funk. Summary disposition for Capital was appropriate.
- In this case, because the plaintiffs failed to demonstrate, pursuant to the Funk test, that there was a danger that created a high degree of risk to a significant number of workers in a common area, summary disposition for Monarch, the general contractor, was appropriate.
Justice CAVANAGH, concurring in result only, stated that the result reached by the majority is correct. It is unnecessary for the Court to determine the relationship or separateness of the doctrines of retained control and common work area. The doctrine of retained control applies only to the owner of property, and neither Capital Welding nor Monarch Building Services is the owner of the property. Because the common work area doctrine does not apply to subcontractors, Capital is exempt from that claim as well. With respect to Monarch‘s motion for summary disposition regarding the common work area doctrine, the plaintiff failed to show that a genuine issue of material fact existed about whether there was danger creating a high degree of risk to a significant number of workers and Monarch was entitled to judgment as a matter of law.
Justice KELLY, concurring in part and dissenting in part, stated that the retained control doctrine and the common work area doctrine are distinct theories of liability. The retained control doctrine applies to one who engages an independent contractor but retains actual control over the manner in which the work is performed. It imposes a duty to ensure that the contractor exercises due care for the safety of others. The common work area doctrine arises from the characteristics of common work areas and the efficiency of imposing responsibility on the entity that has responsibility over the entire area. Whether either of these doctrines applies in a given case is a question of fact.
In this case, the plaintiff‘s testimony is sufficient to create a genuine issue of material fact regarding whether a significant number of workers were exposed to the danger. Moreover, the plaintiff presented evidence that defendant Capital Welding retained control over the manner in which the work of Capital Welding‘s subcontractor, Abray, was performed. Thus, Capital Welding retained its responsibility to ensure that the work was performed safely, and it was not entitled to summary disposition. With respect to defendant Monarch, however, the plaintiff failed to establish that Monarch had anything more than general oversight of the construction. This is insufficient to establish liability under either the common work area doctrine or the retained control doctrine. Thus, Monarch was entitled to summary disposition.
Under the decisions in this case and in DeShambo v Anderson, 471 Mich 27 (2004), one who engages an independent contractor and then negligently directs the actions of that contractor may not be held liable unless an injury occurs in a common work area. That result is not consistent with the principles underlying the common law or with the intent of the tort reform statutes.
Affirmed in part and reversed in part.
1. NEGLIGENCE — GENERAL CONTRACTORS — SUBCONTRACTORS — COMMON WORK AREA DOCTRINE.
The elements necessary for liability by a general contractor under the common work area doctrine exception to the general rule of nonliability of a general contractor for the negligent acts of an independent subcontractor are the (1) general contractor failed to take reasonable steps (2) to guard against readily observable and avoidable dangers (3) that create a high degree of risk to a significant number of workers (4) in a common work area.
2. NEGLIGENCE — GENERAL CONTRACTORS — SUBCONTRACTORS — PROPERTY OWNERS — RETAINED CONTROL DOCTRINE.
The retained control doctrine is a doctrine subordinate to the common work area doctrine and applies when the owner assumes the unique duties and obligations of a
Miller & Padilla, P.C. (by Neil A. Miller) (Sommers, Schwartz, Silver & Schwartz, P.C., by Patrick Burkett, of counsel), for the plaintiffs.
Rutledge, Manion, Rabaut, Terry & Thomas, P.C. (by Joseph J. Wright), for defendant Capital Welding, Inc.
Pedersen, Keenan, King, Wachsberg & Andrzejak, P.C. (by Michael M. Wachsberg), for defendant Monarch Building Services, Inc.
Amici Curiae:
Clark Hill PLC (by Kevin S. Hendrick and Paul C. Smith) for the Michigan Chapter and the Greater Detroit Chapter of the Associated General Contractors.
Novara, Tesija & McGuire, P.L.L.C. (by Nicholas R. Nahat), for the Michigan Regional Council of Carpenters.
Richard L. Steinberg,
Clark Hill PLC (by F.R. Damm and Paul C. Smith) for the Michigan Manufacturers Association.
TAYLOR, J. We granted leave to appeal in this case to consider the relationship between the “common work area doctrine” and the “retained control doctrine,” and to address the scope of each doctrine. At common law, property owners and general contractors generally could not be held liable for the negligence of independent subcontractors and their employees. In Funk v Gen Motors Corp, 392 Mich 91, 104-105; 220 NW2d 641 (1974),1 however, this Court set forth a new exception to this general rule of nonliability, holding that, under certain circumstances, a general contractor could be held liable under the “common work area doctrine” and, further, that a property owner could be held equally liable under the “retained control doctrine.”
In this case, the Court of Appeals reversed the trial court‘s grant of summary disposition for both defen- dants, holding that these doctrines are two distinct and separate exceptions to the general rule of nonliability of property owners and general contractors concerning the negligence of independent subcontractors and their employees. We disagree with the Court of Appeals and clarify today that these two doctrines are not two distinct and separate exceptions, rather only one — the “common work area doctrine” — is an exception to the general rule of nonliability for the negligent acts of independent subcontractors and their employees. Thus, only when the Funk four-part “common work area” test is satisfied may an injured employee of an independent subcontractor sue the general contractor for that contractor‘s alleged negligence.
Further, the “retained control doctrine” is a doctrine subordinate to the “common work area doctrine” and is not itself an exception to the general rule of nonliability. Rather, it simply stands for the proposition that when the Funk “common work area doctrine” would apply, and the property owner has sufficiently “retained control” over the construction project, that owner steps into the shoes of the general contractor and is held to the same degree of care as the general contractor. Thus, the “retained control doctrine,” in this context, means that if a property owner assumes the role of a general contractor, such owner assumes the unique duties and obligations of a general contractor. Accordingly, we reverse the decision of the Court of Appeals and reinstate the trial court‘s grant of summary disposition for both defendants.
I. FACTS AND PROCEEDINGS BELOW
This case arose out of a construction accident that occurred during the construction of a Rite Aid store in Troy, Michigan. Property owner Rite Aid hired defen- dant Monarch Building Services, Inc. (Monarch), as the general contractor for the project. Monarch subcontracted the steel fabrication and steel erection work to defendant Capital Welding, Inc. (Capital), which then subcontracted the steel erection work to Abray Steel Erectors (Abray). Plaintiff Ralph Ormsby was employed by
Capital delivered the steel for the project, at which time a crew from Abray began erecting the building using the steel. During the unloading process, Abray personnel allegedly disregarded an express warning that Capital had attached to the steel beams that stated, “Under no circumstances are deck bundles or construction loads of any other description to be placed on unbridged joists.” The warning also cautioned against loading bundles of steel decking, weighing between two and three tons each, onto the unsecured erected steel structure.
Plaintiff began working on the unsecured joists to properly align the joists into position. To do so, he would strike the unsecured joist with a hammer. While performing this task, there was a sudden shift in an unsecured joist that, coupled with the fact that the joist was loaded with decking, allegedly caused the collapse of the structure, resulting in plaintiff‘s fifteen foot fall and subsequent injuries.
Plaintiff filed suit against Capital, alleging, among other things, that Capital retained control of and negligently supervised the project, and acquiesced to unsafe construction activities, including loading unwelded bar joists.2 Plaintiff later amended his complaint and added the same claims against Monarch.
Capital filed a motion for summary disposition contending that there was no genuine issue of material fact regarding whether it retained control over the project because plaintiff failed to present any evidence that he was injured in a common work area. Plaintiff opposed the motion, contending instead that the two doctrines were separate and distinct, and thus Capital could be held liable under the “retained control doctrine” even if he failed to satisfy the elements of the “common work area doctrine.”
The trial court agreed with Capital and granted its motion. Combining the doctrines of “common work area” and “retained control,” the trial court determined that “the retained control theory applies only in situations involving ‘common work areas.’ ” The trial court further stated, “This Court finds that there was no common work area that created a high degree of risk to a significant number of workers” and “there is no evidence that other subcontractors would work on the erection of the steel structure.” That is, the trial court found that plaintiff had failed to satisfy two elements of the “common work area doctrine,” and thus no genuine issue of material fact existed regarding whether either doctrine applied to Capital.
Following Capital‘s successful motion, Monarch filed its own motion for summary disposition under
The Court of Appeals reversed in part, holding (1) that the “common work area doctrine” and “retained control doctrine”
II. STANDARD OF REVIEW
Summary disposition under either
When a trial court grants summary disposition pursuant to
for the nonprevailing party to amend its pleadings pursuant to
III. ANALYSIS
As discussed briefly above, at common law, property owners and general contractors generally could not be held liable for the negligence of independent subcontractors and their employees. However, in Funk, this Court set forth an exception to this general rule of nonliability. There, property owner General Motors (GM) hired general contractor Darin & Armstrong (Darin) to expand one of its plants. The general contractor, in turn, subcontracted a portion of the work to Funk‘s employer, Ben Agree Company. Funk was injured in a fall from a platform and sued GM and Darin, alleging that each owed him a duty to implement reasonable safety precautions and to ensure that workers on the project used adequate safety equipment to protect against falls. GM and Darin defended on the basis that, under the common law, neither had a duty to protect plaintiff from these types of dangers. Departing from established law, this Court set forth an exception in circumstances involving construction projects and affirmed the verdict against Darin:
We regard it to be part of the business of a general contractor to assure that reasonable steps within its supervisory and coordinating authority are taken to guard against readily observable, avoidable dangers in common work areas which create a high degree of risk to a significant number of workmen. [Funk, supra at 104.]
That is, for a general contractor to be held liable under the “common work area doctrine,”
Having established that a general contractor could be held liable for negligence regarding job safety, the Court then addressed the potential liability of a property owner. The Court held that, under the new rule, a property owner could itself be liable if it had “retained control” in such a way that it had effectively stepped into the shoes of the general contractor and been acting as such. The Court first stated:
This analysis [i.e., the “common work area” test quoted above in reference to the general contractor] would not ordinarily render a “mere” owner liable. In contrast with a general contractor, the owner typically is not a professional builder. Most owners visit the construction site only casually and are not knowledgeable concerning safety measures. . . . Supervising job safety, providing safeguards, is not part of the business of a typical owner. [Id. at 104-105 (emphasis added).]
Then it continued by outlining the circumstances in which the ordinary rule would not control, saying:
[T]he law does not . . . absolve an owner who acts in a superintending capacity and has knowledge of high degrees of risk faced by construction workers from responsibility for failing to require observance of reasonable safety precautions. [Id. at 106-107.]
The Court‘s use of the word “ordinarily,” italicized above, considered in conjunction with its statement that a property owner cannot escape liability if that owner acts in a “superintending capacity and has knowledge of high degrees of risk faced by construction workers,” necessarily implies that, under certain circumstances, the “common work area” doctrine would render a property owner liable.5 Thus, it is clear that this Court was applying the identical “common work area” analysis to GM, as property owner, on the basis that it “retained control.”
Applying these new doctrines to the facts in Funk, the Court noted that Funk had largely created his own circumstances because he essentially “dug a hole and . . . [he] fell into it,” id. at 100. The general contractor, Darin, was fully knowledgeable of the subcontractor‘s failure to implement reasonable safety precautions for a readily apparent danger where such precautions likely would have prevented Funk‘s fall. Further, the Court held that GM had exercised “an unusually high degree of control over the construction project,” and thus was also liable for Funk‘s injuries. Id. at 101. Thus, this Court stated that the evidence supported a finding of GM‘s tacit, if not actual, control of safety measures or the lack thereof “in the highly visible common work areas.” Id. at 107.
Accordingly, we conclude that, on the basis of this Court‘s analysis in Funk, the “common work area doctrine” and the “retained control doctrine” are not two distinct and separate exceptions. Rather, the former doctrine is an exception to the general rule of
nonliability of
In her dissent in Funk, Justice COLEMAN was concerned that the “common work area doctrine” would devolve in practice into a strict liability regime where general contractors would be responsible for any common work area injury that an employee of an independent subcontractor suffers. Id. at 116. Although Justice COLEMAN‘s concerns have not come to fruition,7 Funk has morphed from a straightforward doctrine conferring liability, under certain circumstances, on property owners or general contractors for the negligence of independent subcontractors, into a “two exception” creation. Indeed, the instant opinion by the Court of Appeals outlined that progression8 and proceeded to erroneously
conclude that even an entity that is neither a property owner nor a general contractor (subcontractor Capital) can be liable under Funk.
IV. APPLICATION
To establish the liability of a general contractor under Funk, a plaintiff must prove four elements: (1) that the defendant contractor failed to take reasonable steps within its supervisory and coordinating
Funk is simply inapplicable to Capital in this case because Capital was neither the property owner nor the general contractor. Thus, the trial court‘s order granting it summary disposition was proper. Accordingly, we reverse the judgment of the Court of Appeals and reinstate the trial court‘s order granting summary disposition for Capital.10
Because Monarch was the general contractor, the “common work area doctrine” may be applicable. The trial court determined that plaintiff had failed to satisfy element three, danger creating a high degree of risk to a significant number of workmen, and element four, a
If the top of the overhang or even the overhang in its entirety were considered to be a “common work area” for purposes of subjecting the general contractor to liability for injuries incurred by employees of subcontractors, then virtually no place or object located on the construction premises could be considered not to be a common work area. We do not believe that this is the result the Supreme Court intended. This Court has previously suggested that the Court‘s use of the phrase “common work area” in Funk, supra, suggests that the Court desired to limit the scope of a general contractor‘s supervisory duties and liability. We thus read the common work area formulation as an effort to distinguish between a situation where employees of a subcontractor were working on a unique project in isolation from other workers and a situation where employees of a number of subcontractors were all subject to the same risk or hazard. In the first instance, each subcontractor is generally held responsible for the safe operation of its part of the work. In the latter case, where a substantial number of employees of multiple subcontractors may be exposed to a risk of danger, economic considerations suggest that placing ultimate responsibility on the general contractor for job safety in common work areas will “render it more likely that the various subcontractors . . . will implement or that the general contractor will himself implement the necessary precautions and provide the necessary safety equipment in those areas.” Funk, supra at 104 (citations omitted).
common work area, and thus granted summary disposition for Monarch. This approach is consistent with Funk and reflects the understanding that a plaintiff‘s failure to satisfy any one of the four elements of the “common work area doctrine” is fatal to a Funk claim.11
The Court of Appeals, misapprehending the merit of the trial court‘s approach, reversed the decision of the trial court on the basis that it erred in finding that no genuine issue of material fact existed regarding element four — a “common work area.” Regardless of whether a genuine issue of material fact existed with respect to element four, reversal was erroneous because the Court of Appeals overlooked the fact that the trial court‘s order was premised not just on a deficiency of evidence regarding element four, but also on the fact that no genuine issue of material
requires a plaintiff to establish all four elements of the “common work area doctrine” to prevail, the trial court ruling should have been affirmed. Thus, the trial court did not abuse its discretion by refusing to allow plaintiff to amend his complaint concerning the existence of a “common work area,” because such an amendment would have been futile. Accordingly, we reverse the judgment of the Court of Appeals and reinstate the trial court‘s grant of summary disposition for Monarch.
V. CONCLUSION
The doctrines of “common work area” and “retained control” are not two distinct and separate exceptions. Rather, under the “common work area doctrine,” a general contractor may be held liable for the negligence of its independent subcontractors only if all the elements of the four-part “common work area” test set forth in Funk have been satisfied. Further, the “retained control doctrine” is subordinate to the “common work area doctrine” and simply stands for the proposition that when the “common work area doctrine” would apply, and the property owner has stepped into the shoes of the general contractor, thereby “retaining control” over the construction project, that owner may likewise be held liable for the negligence of its independent subcontractors.13 Because neither Capital nor Monarch satisfies all four elements of the “common work area” doctrine, we reverse the judgment of the
vague reference to “any worker” being exposed to danger if the structure was not competently constructed is likewise insufficient to create a genuine issue of material fact. The high degree of risk to a significant number of workers must exist when the plaintiff is injured; not after construction has been completed.
Court of Appeals and reinstate the trial court‘s grant of summary disposition for both defendants.
CAVANAGH, J. (concurring in result only). I concur in the result reached by the majority. However, I write separately because I would reach that result regardless of whether the doctrines of retained control and common work area are separate doctrines. I agree with the majority that the trial court‘s grant of summary disposition to both defendants should be reinstated because the dispositive issues in this case are not affected by whether the doctrines
Regardless of whether the doctrine of retained control is subordinate to or separate from the common work area doctrine, it is only applicable to property owners, and because neither defendant Capital nor defendant Monarch is the property owner, the trial court was correct to grant each defendant‘s motion for summary disposition with respect to the doctrine of retained control.
Further, the common work area doctrine does not apply to subcontractors, thus the trial court was correct to grant defendant Capital‘s motion for summary disposition with respect to common work area liability. See Funk v Gen Motors Corp, 392 Mich 91, 104; 220 NW2d 641 (1974). The trial court was also correct to grant defendant Monarch‘s motion for summary disposition with respect to the common work area doctrine. Re- gardless of when the danger to a significant number of workers must exist, plaintiff failed to show that a genuine issue of material fact existed about whether there was danger creating a high degree of risk to a significant number of workers. Because plaintiff failed to establish a genuine issue of material fact and because defendant Monarch was entitled to judgment as a matter of law, the trial court was correct to grant defendant Monarch‘s motion for summary disposition. Thus, I concur in the result only.
KELLY, J. (concurring in part and dissenting in part). This Court granted leave limited to whether the retained control doctrine and the common work area doctrine are separate and to a discussion of the scope of each doctrine. 469 Mich 947 (2003). The majority holds that the doctrines are not separate as applied to general contractors who utilize subcontractors. Ante at 49.
I respectfully dissent. I believe that the retained control doctrine and the common work area doctrine are distinct theories of liability. They are founded on different premises. Like all common-law tort theories, they reinforce distinct social norms.1
The retained control doctrine applies to one who engages an independent contractor but retains actual control over the manner in which the work is performed. It imposes a duty to ensure that the contractor exercises due care for the safety of others. See 2 Restatement of Torts, 2d, § 414, p 387. It deters undesirable conduct.
The common work area doctrine arises from the characteristics of common work areas and the efficiency of imposing responsibility on the entity that has respon-
sibility over the entire area. Funk v Gen Motors Corporation, 392 Mich 91, 104; 220 NW2d 641 (1974), overruled in part on other grounds by Hardy v Monsanto Enviro-Chem Systems, Inc, 414 Mich 29; 323 NW2d 270 (1982).
Whether either of these doctrines applies in a given case is a question of fact. The majority affirms the trial court‘s determination
Plaintiff testified that a mason was working “right below” him when the steel structure collapsed. This is evidence that other workers were in, around, and under the structure while it was being erected. It is reasonable to infer that other workers would continue to be in, on, and around it as construction continued. If the structure were not built competently, an extremely dangerous condition would exist that the structure would collapse. It is of no moment that there happened to be only one worker in the area at the time of the accident.
THE COURT OF APPEALS DECISION IS CORRECT
I agree with the Court of Appeals. Plaintiff‘s testimony is sufficient to create a genuine issue of material
fact regarding whether a significant number of workers in addition to the mason were exposed to the danger.
Moreover, plaintiff presented evidence that defendant Capital Welding retained control over the manner in which the work of Capital‘s subcontractor, Abray, was performed. Capital‘s field superintendent stated that he instructed Abray‘s ironworkers on proper erection. Plaintiff, Abray‘s employee, testified that Capital‘s superintendent instructed him on particular aspects of the job.3
The contract between Capital and Monarch obligated Capital to undertake safety precautions for the steel erection work. Capital‘s field superintendent stated that he had the authority to remove a contractor from the site for safety violations. Therefore, Capital retained its responsibility to ensure that the steel was erected safely after subcontracting the work to Abray, plaintiff‘s employer.
An analogy between Funk and this case is appropriate. Funk did not explicitly limit its reasoning to landowners and general contractors. The landowner there was liable to its contractor‘s employee because it retained control over the safety precautions implemented on the site. See Funk at 107-108. In this case, plaintiff presented evidence that Capital retained control over the methods and safety procedures for Abray‘s erection of the steel. Capital stands in the identical position to plaintiff as the landowner in Funk did as to Funk. Accordingly, it was not entitled to summary disposition on the proposition that it could not be liable to its contractor‘s employee.
However, with respect to Monarch, plaintiff failed to establish that Monarch had anything more than general oversight of the construction. This is insufficient to establish liability under either the common work area doctrine or the retained control doctrine. Johnson v Turner Constr Co, 198 Mich App 478, 480; 499 NW2d 27 (1993). Monarch was entitled to summary disposition.
POSSIBLE UNINTENDED RESULTS OF THE DESHAMBO AND ORMSBY DECISIONS
DeShambo4 and Ormsby read together could have unfortunate unintended results
However, an injured individual can recover only from a party that can be held legally liable. The trier of fact may assign fault to one who engages an independent contractor and then negligently directs the actions of that contractor. But under today‘s decisions in Ormsby and DeShambo, such an employer, landowner or otherwise, could not be held liable unless an injury occurs in a common work area. Hence, employers now can conceivably escape all liability for their own negligence in a given accident.
I believe that this result is not consistent with the principles underlying the common law. It is inconsistent, also, with the intent of the tort reform statutes. A negligent actor should be legally liable for his actions. Because the majority‘s decision undermines this principle, I disagree and would affirm the decision of the Court of Appeals.