SLOAN v. ATLANTIC RICHFIELD COMPANY

OPINION ON REHEARING

CONNOR, Justice.

In this opinion on rehearing we must decide the scope of recovery permitted the employee of an independent contractor under common law tort principles. The question before us stems from an appeal from a jury verdict in favor of Atlantic Richfield Co. (ARCO) in a wrongful death action brought by the widow of a carpenter, Moses Sloan, killed in a construction accident on the North Slope. In Sloan v. Atlantic Richfield Co., 541 P.2d 717 (Alaska 1975), we reversed and remanded the case for retrial on a single issue: whether ARCO had retained possession of the work site, thereby bringing itself within an exception to the common law general rule that a possessor or owner of land is not liable for the torts of an independent contractor.

In the case at bar this exception was defined in jury instruction # 32 as follows:

The crucial issue upon which rehearing was granted is whether Sloan, as an employee of an independent contractor, is an "other" under the above language, and hence a person to whom ARCO owed a duty under this exception to the independent contractor rule.

The question has been faced by a number of courts, largely in the context of other common law exceptions to the independent contractor rule as expressed in the Restatement (Second) of Torts (1965). A Special Note in Tentative Draft No. 7, (1962) of the Restatement would have excluded the employees of independent contractors from liability under all exceptions to the rule.

This reasoning has been found persuasive by some courts. King v. Shelby Rural Elec. Coop., 502 S.W.2d 659, 662 (Ky. 1973), cert. denied, 417 U.S. 932, 94 S.Ct. 2644, 41 L.Ed.2d 235 (1974); Olson v. Kilstofte & Vosejpka, Inc., 327 F.Supp. 583, 587 (D.Minn. 1971), aff'd sub nom. Olson v. Red Wing Shoe Co., 456 F.2d 1299 (8th Cir.1972). While California, Michigan and Tennessee hold that the employees of independent contractors are protected, the numerical weight of authority in other jurisdictions, including Arizona, Florida, Kentucky, New Mexico, Washington and Wisconsin, is that they are not, at least with respect to nondelegable duties based on inherently dangerous activities. King v. Shelby Rural Elec. Coop., supra at 661-662.

That the Special Note was not finally included in the Second Restatement has, however, been considered by some as conclusive that the employees of an independent contractor may recover. Hagberg v. Sioux Falls, 281 F.Supp. 460, 468 n. 7 (D.S.D. 1968). We disagree. It is just as likely that the American Law Institute was unable to agree, and left the issue purposely unclear. Cf. Welker v. Kennecott Copper Co., 1 Ariz.App. 395, 403 P.2d 330, 338 (1965). We must decline to apply inconclusive "legislative history" arguments to the Restatements, if for no other reason than they are not legislative enactments. They are useful tools in the task of establishing principles of the common law. But we decline to approach our traditionally case-based jurisprudence as though it emanates from the Restatements like a code, however scholarly the preparation. The Restatements are indeed reflective of the development of the common law, but they are not determinative.

We accept the general conclusions arrived at in Welker v. Kennecott Copper Co., supra at 336-40. There the court, after extensive treatment of the cases and the Restatement, concluded that no recovery should be imposed in favor of the employee of an independent contractor for vicarious liability. On the other hand, where an owner or general contractor is independently responsible, as by a failure to prudently exercise controls retained over the details of performing the work at the jobsite, or by a failure to turn over premises free of unreasonable safety hazards, we will allow suit by the employee of the independent contractor.2 In general, we adhere to the rule that the owner of premises or the general contractor thereon owes to the servants of its independent contractors the duty to avoid endangering the employee by his own negligence or affirmative act, but owes no duty to protect the employee from the negligence of the employee's own master. See Epperly v. City of Seattle, 65 Wn.2d 777, 399 P.2d 591, 597 (1965); E.L. Jones Constr. Co. v. Noland, 105 Ariz. 446, 466 P.2d 740, 749 (1970). The purpose of the vicarious liability exception is to insure that the employer did not "escape" liability in the sense that no financially responsible party is left available to compensate the injured workman. Under Alaska's system of workmen's compensation, there is by definition a financially responsible party, thus the purpose of vicarious liability has already been served. See Matanuska Elec. Ass'n v. Johnson, 386 P.2d 698, 702 (Alaska 1963).

We are of the view that ARCO's purported liability under the facts of this case would be essentially vicarious. Any independent negligence in connection with Sloan's death was in reality that of Ramstad Construction Company or its employees. Ramstad was the subcontractor who employed Moses Sloan. Thus Sloan's proper remedy is via the workmen's compensation system. As a result, we vacate our earlier reversal of this case. The judgment of the superior court is affirmed.

One further point remains which was not decided in our original opinion: the award of attorney's fees.

Appellant asks that she be relieved from the award against her of attorney's fees in the sum of $10,750. First, she asserts that such fees should not be awarded in favor of a party who is provided with legal representation by an insurance carrier, as ARCO was here. The argument is that ARCO expended nothing other than insurance premiums which it would have paid regardless of whether this action had or had not been filed. But ARCO demonstrated below that under a retrospective premium rating basis it does suffer a "cost" in defending this and other like suits. Appellant's argument, therefore, is unpersuasive in this regard.

Appellant next asserts that subjecting her to any award of attorney's fees should not be permitted where, as here, a good faith claim is put forward. To do so, she argues, has a chilling effect upon the use of our legal system by herself and others who have bona fide claims. She asks that we so hold as an extension of the reasoning set forth in Malvo v. J.C. Penney Company, Inc., 512 P.2d 575, 587-88 (Alaska 1973). Unlike our dissenting colleague, we do not view this case as falling within an exceptional category. The issue we now decide was closely balanced. But we note that appellant asserted and lost on other theories of recovery which have not been presented in this appeal.

We are unwilling to effect such a major alteration of Rule 82 by judicial decision. We note that the trial judge granted less than half the amount requested by appellee. We find no abuse of discretion.

AFFIRMED.

BOOCHEVER, Chief Justice (partially dissenting).

I dissent from the portion of the opinion pertaining to the appeal from the award of attorney's fees. The court awarded ARCO $10,750.00 in attorney's fees plus $822.40 in costs. It can also be assumed that Mrs. Sloan was required to pay substantial expenses incurred by her counsel even if the case was handled on a contingency fee basis.

In reviewing awards of attorney's fees, we have stated:

In Malvo v. J.C. Penney Company, Inc., 512 P.2d 575 (Alaska 1973), we held that it was manifestly unreasonable under the facts there involved to award full attorney's fees incurred by the defense, stating:

The court here did not award full attorney's fees to ARCO since $20,900.00 was requested. Nevertheless, the comment of Malvo that it would be manifestly unreasonable to award such a sizeable allowance against a party who has brought suit in good faith appears applicable here. In Malvo, we were concerned that access to the courts might be governed by the size of one's bank account. We quoted Justice Cardozo's warning against "laying too heavy a burden on the unsuccessful litigant".2

Here Mrs. Sloan brought suit seeking to recover damages arising out of the death of her husband. Based on an extremely difficult and closely balanced issue of first impression in this jurisdiction involving the construction of the term "other" used in the Restatement of Torts (Second) sec. 422, we have concluded that her right of action against ARCO is barred. Foreknowledge that such a sizeable sum would be awarded as attorney's fees in the event of her losing could well have constituted an impediment to access to the courts preventing litigation of an issue which she had every right to have resolved.

I do not agree with the majority that to award no fees in a situation such as this would constitute a major alteration of the provisions of Civil Rule 82 which specifies:

The award of fees where no recovery is had is not mandatory since the rule uses the term "may" rather than "shall". Further, the amount to be awarded is left to the discretion of the trial court.

In determining the "reasonable amount", a court must give consideration to the nature of the claim and the need for making courts available to resolve disputes without the imposition of intolerable burdens. Unfortunately, other than stating broad policy considerations, I am unable to delineate specific guidelines for a trial judge to follow in awarding attorney's fees in cases where the defendant prevails3 The award of $10,500.00 in this case, however, appears to me to be an abuse of discretion.

While we have indicated our reluctance to interfere with the trial court's discretion in awarding attorney's fees,4 we overcame that reluctance in Davidsen v. Kirkland, 362 P.2d 1068, 1070 (Alaska 1961), to reduce an award from $1,700.00 to $800.00.

Here I would remand for a redetermination of the amount of the fee to be awarded, if any, to an amount not in excess of $2,500.00. This is admittedly an arbitrary figure but would constitute the maximum that I think could be awarded without unduly limiting access to the courts under the facts of this case. Specifically, I could uphold as within the trial court's discretion the award of any sum up to $2,500.00 or the refusal to award any fee.