MENTZER v. OGNIBENE

BECK, Judge1:

Appellant, David R. Mentzer, appeals from an order granting summary judgment in favor of defendants Frank A. Ognibene ("Frank"), Joel Galinn ("Galinn"), Arthur Ognibene ("Arthur") and F.A.O. Land Management and Development Co., Inc. ("FAO"). Mentzer filed a complaint seeking to hold defendants liable for the negligence of an independent contractor, Leonard S. Fiore, Inc. ("Fiore"), under several theories of negligence set forth in Sections 411, 416 and 427 of the Restatement (Second) of Torts, as well as under a third-party beneficiary breach of contract theory. Mentzer also asserted that the defendants were directly personally negligent in failing to prevent the negligence of Fiore.

The Court of Common Pleas of Centre County granted defendants' motion for summary judgment and Mentzer filed this timely appeal.2 We affirm the trial court's order.

The undisputed facts of this case were appropriately summarized by the trial court as follows:

Trial Court Opinion, 5/14/90, at pp. 1-2. Additionally, it is undisputed that the opening which was to form the internal stairwell through which Mentzer fell was not surrounded by railings or standard toeboards or a sufficient floor hole covering.

On review of an order granting summary judgment, we must determine whether the moving party has established that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Pa.R.C.P. 1035(b). Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 412 A.2d 466, 468-69 (1979). In making this determination, we must examine the record in the light most favorable to the non-moving party, who is entitled to the benefit of all reasonable inferences. Pennsylvania Gas & Water Co. v. Nenna & Frain, Inc., 320 Pa.Super. 291, 467 A.2d 330 (1983). All doubts as to the existence of a factual dispute must be resolved in favor of the non-moving party and the entry of summary judgment is appropriate only in the clearest of cases. Thompson Coal, supra.

Against this backdrop, we analyze Mentzer's allegations of error seriatim.

I. Restatement (Second) Torts § 411

Mentzer sought to impose liability on Frank and Galinn, as owners of the land, for their selection of Fiore as the general contractor. As authority for this theory of liability, Mentzer relied on section 411 of the Restatement, which provides:

The central issue posed in this case is whether an employee of a contractor is to be included within the definition of "third persons" to whom the property owner owes a duty under section 411. We agree with the trial court that such an employee is not within the protected class of persons.

There is no binding Pennsylvania precedent dealing with the scope of the phrase "third persons" as used in section 411. Although there are two cases that address the question in dicta, unfortunately these cases do not discuss the issue in any depth and moreover do not steer a consistent course.

The first of these cases is Wilk v. Haus, 313 Pa.Super. 479, 460 A.2d 288 (1983). In Wilk, an employee of a contractor was killed while working on a roofing job at defendant's premises. The employee's estate sued defendant on a number of theories, one of which was that the contractor was an independent contractor who had been negligently selected by the defendant owner. This theory was based on section 411. The court found summary judgment in favor of the defendant inappropriate for several reasons, including the fact that the evidence did not clearly show whether the contractor was in fact an independent contractor. The court further noted that on the factual record before it, there was an arguable basis for further proceedings against the defendant based on section 411.

Appellant urges us to construe Wilk as establishing that liability under 411 may be found even where the plaintiff is an employee of the contractor. We cannot adopt this construction. The Wilk court did not address whether liability under section 411 might eventually be barred because the plaintiff was an employee of the contractor. In fact, the Wilk court specifically refused to analyze this issue in any detail because the factual record before it did not clearly establish independent contractor status, which is a prerequisite to the applicability of section 411. Wilk, 313 Pa.Super. at 489-90 n. 2, 460 A.2d at 293-94 n. 2. Thus, we do not find that any implication regarding the scope of section 411 can be gleaned from the Wilk court's remand of that case for further proceedings.3

The second case in which the applicability of section 411 to claims by a contractor's employee has been discussed, and on which appellee herein relies, is Dudash v. Palmyra Borough Authority, 335 Pa.Super. 1, 483 A.2d 924 (1984). Dudash involved a personal injury claim by an employee of a sub-contractor against several defendants, including the owner of the property where the employee was injured. The court was asked to review several orders of the trial court, including an order granting partial summary judgment for the owner on the employee's claim under section 411. The trial court had determined that the employee was not within the class of "third persons" to whom the owner's duty under section 411 ran. This court held that the order of partial summary judgment was interlocutory and refused to review it on its merits, although at another point in the opinion the court appeared impliedly to approve of the trial court's holding on section 411. As in the case of Wilk, Dudash does not establish any binding precedent regarding the scope of section 411 liability.

Given the lack of binding precedent on the issue presented, we must analyze it as one of first impression in this Commonwealth. We turn, therefore, to an examination of the language of section 411 and the comments thereto, the opinions of other jurisdictions construing section 411, and general principles of Pennsylvania law concerning the duties of property owners to employees of independent contractors working on the property.

Section 411 by its own terms imposes liability on a property owner for negligent hiring of a contractor only to "third persons" who are harmed as a result of such negligence. Although this phrase is not defined, the comments and illustrations to section 411 clearly suggest that it is intended to apply to persons who are not involved in the construction project itself and yet who are injured as a result of the negligent act of the contractor. None of the many illustrations accompanying section 411 include any examples of how the liability of the owner would run to an employee of the contractor. See, e.g., illustration 1 (customer injured by violent employee of contractor); illustration 2 (passing driver injured by negligent contractor); illustrations 3 & 4 (hotel guests injured by negligent contractor hired by innkeeper); illustration 5 (pedestrian injured by negligent driver employed by contractor); illustrations 6, 7 & 8 (passerby or pedestrian injured due to negligence of contractor).

Moreover, in comment f to section 411, the operation of the section is specifically explained in the context of either repair or construction of a building on the owner's property. Comment f limits the liability to be imposed under section 411 to those situations where the injured person is "a person to whom the possessor owes a duty to exercise reasonable care to prepare and maintain a safe building." Pennsylvania law imposes no general duty on a property owner to prepare and maintain a safe building for the benefit of a contractor's employees who are working on that building. See discussion of common law duties of a property owner, infra, at 587-590.

This limitation on the scope of the duty imposed by section 411 has been adopted in many of the jurisdictions that have considered the question of whether section 411 imposes liability on the employee of the negligently hired contractor. For example, in Payne v. Lee, 686 F.Supp. 677 (E.D.Tenn.1988), the district court held that section 411 does not protect employees of the negligently hired contractor. The court based this construction of section 411 in part on the limiting nature of the illustrations and comments referred to above. However, the court also relied on policy grounds, i.e., that section 411 should operate to protect those innocent third persons who are themselves unaware of and unable to protect themselves against the negligence of the improperly hired contractor. In contrast, section 411 should not operate to protect those who, like employees of the contractor, are well aware of and fully able to protect themselves against the negligence of the contractor. See also Valdez v. Cillessen & Son, Inc., 105 N.M. 575, 734 P.2d 1258 (1987); Chapman v. Black, 49 Wn.App. 94, 741 P.2d 998 (1987).

We agree that the scope of section 411 is properly limited to claims by third persons other than employees of the negligent independent contractor itself. This construction is not only supported by the language of section 411 and its comments and illustrations. It is also in accordance with the general principle and policy of Pennsylvania law which insulates a property owner from liability for the negligence of its independent contractor and, moreover, which places responsibility for the protection of the contractor's employees on the contractor and the employees themselves, since they, rather than the owner, are in control of the workplace, have expertise in the performance of the work, and are in the best position to afford such protection. See Hader v. Coplay Cement Mfg. Co., 410 Pa. 139, 150-51, 189 A.2d 271, 277 (1963); Mathis v. Lukens Steel Co., 415 Pa. 262, 203 A.2d 482 (1964).

II. Restatement (Second) Torts, Sections 416 and 427

Mentzer also asserted that the owners were liable under sections 416 and 427 of the Restatement,4 which impose the following duties:5

The trial court granted summary judgment for defendants on this theory of liability because it found that under the facts presented there could be no section 416/427 liability as a matter of law. This finding was grounded upon the trial court's view that this case does not involve harm resulting from a peculiar risk or special danger of which the defendants had reason to know. We find no error in this conclusion.6

We begin our discussion with the following accurate statement of general principles of Pennsylvania law, to which sections 416 and 427 of the Restatement are an exception:

Marshall v. Southeastern Pennsylvania Transportation Authority, 587 F.Supp. 258, 261-62 (E.D.Pa.1984).

The foregoing principles are well-grounded in reason. They recognize that the owner who has entrusted the responsibility for the work to a qualified contractor justifiably depends upon the contractor's expertise. The owner relinquishes control to the contractor and should not be held liable for harm resulting from unforeseen risks arising from the ordinary negligence of the contractor.

Sections 416 and 427 carve out a limited exception to this general rule of non-liability. Our analysis of the scope of this exception must be circumscribed by the rationale supporting the general rule, lest we allow the exception to emasculate the rule.

The key to the proper application of sections 416 and 427 lies in the definition of what is a "peculiar risk" or a "special danger."7 Shortly after the adoption of the exception in Pennsylvania law, this court explained the limited nature of the type of risk or danger that might be considered to fall within the exception:

McDonough v. United States Steel Corp., 228 Pa.Super. 268, 275-76, 324 A.2d 542, 546 (1974) (quoting Van Arsdale v. Hollinger, 68 Cal.2d 245, 252, 66 Cal.Rptr. 20, 24-25, 437 P.2d 508, 512-13 (1968)) (emphasis added).

This distinction, between those risks that arise from the ordinary or collateral negligence of the contractor and those that inhere in the peculiar nature of the work, was further developed by the District Court for the Eastern District of Pennsylvania in Marshall v. Southeastern Pennsylvania Transportation Authority, supra. There, the court noted that guidance as to the meaning of peculiar risk might be found in comment b to section 413 of the Restatement, which the Restatement cites as being equally applicable to section 416 and which was expressly adopted in Pennsylvania in Hargrove v. Frommeyer, 229 Pa.Super. 298, 323 A.2d 300 (1974). Comment b states:

See also Brletich v. United States Steel Corp., 445 Pa. 525, 532-33, 285 A.2d 133, 136-37 (1971) (citing comment b with approval and denying liability under section 416 where employee of contractor injured due to negligence of employee of sub-contractor in operation of crane).

Against this backdrop, in Ortiz v. Ra-El Development Corp., 365 Pa.Super. 48, 528 A.2d 1355, alloc. denied, 517 Pa. 608, 536 A.2d 1332 (1987), a panel of this court formulated the following definition of the terms "peculiar risk" and "special danger":

Id., 365 Pa.Superior Ct. at 53, 528 A.2d at 1358.

Stated another way, this definition of peculiar risk and special danger requires that "... the risk be recognizable in advance and contemplated by the employer at the time the contract was formed.... [and that] it must not be a risk created solely by the contractor's `collateral negligence'.... [i.e.,] negligence consisting wholly of the improper manner in which the contractor performs the operative details of the work." Marshall, 587 F.Supp. at 263.

Application of these definitional requirements to the facts of this case leads to the conclusion that the harm suffered by Mentzer did not arise from a peculiar risk or special danger as the courts of this Commonwealth have defined those terms. Here, Mentzer fell allegedly because a stairwell opening in a two story building did not have a railing or toeboards around its perimeter at the time Mentzer was working near the opening. Clearly, the lack of such protective devices at the perimeter of the stairwell opening is the result of ordinary negligence by the contractor in the operative details of the work and is a classic example of collateral negligence by the contractor which the property owner did not and should not foresee and for which the property owner is not responsible.

There is nothing about the existence of a stairwell opening at a two-story building construction site that presents a peculiar risk to those working on the building. The risk of falling through such an opening is an incident of such work and the customary procedure for protecting such an opening to guard against falling is well within the normal expertise of a qualified contractor. There was nothing about this particular construction project, or the surroundings or circumstances of its performance, that either created or heightened this risk. Moreover, the owner should not be charged with anticipating that the contractor would fail to erect the customary railings or toeboards because in hiring the contractor the owner relinquished control of the work site and shifted to the contractor the responsibility to take precisely this kind of normal precaution.

A contrary holding would expand the definition of peculiar risk and special danger beyond reasonable bounds. It would effectively allow liability to be imposed on property owners for every conceivable failing of the independent contractor in charge of a construction project. As the Marshall court has so persuasively explained:

Marshall, 587 F.Supp. at 264. See also Fisher v. United States, 441 F.2d 1288 (3d Cir.1971) (risk of falling from catwalk on construction project is ordinary risk that would attend any construction project and, therefore, not within section 416); Ortiz, supra (risk of falling from 14 foot scaffold during construction work is ordinary risk not within sections 416/427).

We find no error in the trial court's grant of summary judgment for defendants on those counts of Mentzer's complaint asserting liability under sections 416 and 427.

III. Personal Negligence of Defendants

Mentzer also asserted that the defendants were personally negligent in failing to prevent the contractor's negligence or to warn Mentzer of the dangers allegedly created by that negligence. The trial court granted summary judgment on this theory because it found that Pennsylvania law imposed no duty on a property owner to protect an employee of an independent contractor against that contractor's negligence in the performance of the work or to provide the employee with a reasonably safe place to work.

This is undoubtedly a correct interpretation of Pennsylvania law. We have previously stated the duty of a property owner to an independent contractor and its employees as follows:

Colloi v. Philadelphia Electric Co. 332 Pa.Super. 284, 291-92, 481 A.2d 616, 619-20 (1984) (citations omitted). See also Mathis v. Lukens Steel Co., 415 Pa. 262, 272-73, 203 A.2d 482, 487-88 (1964); Young v. Eastern Engineering and Elevator Co., 381 Pa.Super. 428, 554 A.2d 77, alloc. denied, 524 Pa. 611, 569 A.2d 1369 (1989).

On the basis of these authorities, we have no difficulty in concluding that none of the defendants had any responsibility to prevent or warn of the dangers presented by the contractor's own negligence in the manner in which the construction work was done. The allegedly dangerous condition was not a pre-existing defect in the owners' premises which the owner had a duty to make safe or of which they had to warn. There is no evidence in this record that any of the defendants had the right to or did exercise any control over the operative details of the work or the condition of the worksite. There is also no evidence that any of the defendants had knowledge of the danger posed by the unguarded stairwell opening through which Mentzer fell. Finally, it is clear that this highly visible dangerous condition was one which was well known to the contractor, who in fact created it, and equally obvious to Mentzer, who was working in its vicinity. This is not a case where there was any latent danger on the owner's premises of which he, and not the contractor or his employee, had knowledge. This is an obvious condition, created after the owner relinquished control to the contractor, as to which there is no duty to warn.

The trial court did not err in entering summary judgment for all defendants on Mentzer's allegations of personal negligence.

IV. Third Party Beneficiary Breach of Contract

Lastly, Mentzer argues that he should be considered a third party beneficiary of an oral contract between the owners and their agents, Arthur and FAO, pursuant to which the agents were charged with the responsibility of insuring that the work was being performed in a safe manner. Mentzer alleges that the agents breached this contract and that he, as a third party intended beneficiary of the contract, has a right of recovery against them for that breach.

We need not devote any lengthy analysis to this argument to reveal its flaws. First, there is no record evidence to support Mentzer's allegation that such an oral agreement in fact ever existed. In addition, there is no record evidence to show that even if such an agreement existed, that it was the intent of the contracting parties to benefit Mentzer by their agreement. It is, of course, a fundamental principle of Pennsylvania law that third party beneficiary status cannot be found to exist in the absence of proof that both parties to the agreement intended it to benefit the third party and indicated that intention in the agreement. See Manor Junior College v. Kaller's Inc., 352 Pa.Super. 310, 507 A.2d 1245, 1246-47 (1986). Lacking such evidence of intent, Mentzer's allegation of third party beneficiary status cannot be sustained.

The trial court order granting summary judgment for defendants on all counts of Mentzer's complaint is affirmed in all respects.

OLSZEWSKI, J., files a concurring and dissenting opinion.

TAMILIA, J., concurs in the result.

OLSZEWSKI, Judge, concurring and dissenting:

I concur in so much of the majority opinion as dismisses the counts based on § 411 of the RESTATEMENT (SECOND) TORTS, the third-party beneficiary contract theory and the allegation of personal negligence by the defendants. I wholeheartedly agree that the duty imposed by § 411 does not run to the benefit of an employee of the independent contractor who was negligently selected by the property owner. Further, I agree that Mentzer has not established personal negligence on the part of the defendants nor third-party beneficiary contract status. I vigorously dissent from the majority's disposition of the count based upon §§ 416 and 427 of the RESTATEMENT (SECOND) TORTS.

Initially, I believe the analytical model first announced in Marshall v. SEPTA, 587 F.Supp. 258 (1984), and adopted by this court in Ortiz v. Ra-El Development Corp., 365 Pa.Super. 48, 528 A.2d 1355, alloc. denied, 517 Pa. 608, 536 A.2d 1332 (1987) is seriously flawed. The initial inquiry is proper. The risk and need to take special precautions must be foreseeable at the time of contracting. Ortiz, supra, 365 Pa.Superior Ct. at 52-54, 528 A.2d at 1358. The flaw lies in the second inquiry which requires that the risk be substantially out of the ordinary before it can be considered a peculiar risk within the meaning of the sections. I believe this prong of the test flies in the face of the language of the sections and the comments explaining them.

The majority states that "[t]here is nothing about the existence of a stairwell opening at a two-story building construction site that presents a peculiar risk to those working on the building. The risk of falling through such an opening is an incident of such work1 and the customary procedure for protecting such an opening to guard against falling is well within the normal expertise of a qualified contractor." At 592-593. The majority also states that the failure of the contractor to protect against this risk is "collateral negligence" which does not come within the scope of the sections. Id., citing Marshall, supra. I am unable to reconcile this characterization of the risk as beyond the scope of the sections with the following language of the sections:

RESTATEMENT (SECOND) TORTS, § 416.

RESTATEMENT (SECOND) TORTS, § 427 (emphasis added).

I agree that the risk of a serious fall is incident to construction work. It is precisely this type of risk which is covered by these sections: a risk common in the work to be done but "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." RESTATEMENT (SECOND) TORTS, § 416, comment (d). The work need not be extra-hazardous, abnormally dangerous or involve a very high degree of risk. Id. "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..." RESTATEMENT (SECOND) TORTS, § 427, comment (b).

Thus, the language of the sections and the comments indicate that it is a risk inherent in the work which is not commonly encountered in the community which is within the scope of these sections. A two-story fall at a construction site is just such a risk. The flaw in the approach employed by the majority is an unnecessary limitation of the population of events by which peculiarity of risk is measured. Peculiarity of risk must be measured by the frequency of occurrence in the total community, not frequency of occurrence in the specific work environment at issue. It is not enough to say that the risk of falling is inherent to construction work and so not substantially out-of-the ordinary. The proper formulation is that the risk is inherent to the work but not commonly encountered in the community in general. A risk need not be substantially out-of-the-ordinary in a specific work environment to be substantially out-of-the-ordinary to the community in general.

Further, I cannot agree that this is "collateral negligence" by the contractor. This was a failure to take precautions against the very risk which triggers the applicability of the sections. "Collateral negligence" is that which involves no peculiar risk. RESTATEMENT (SECOND) TORTS § 427, comment (d). See also, RESTATEMENT (SECOND) TORTS § 416, Illustrations 1 and 2 (imposing liability on owner for contractor's failure to take precaution to abate risk known to be inherent in work to be performed). This failure to adequately protect the opening was "intimately connected with the work authorized and as such reasonably likely from its nature." McDonough v. United States Steel Corp., 228 Pa.Super. 268, 276, 324 A.2d 542, 546 (1974) (citation omitted).

The majority holds that the owner "shifted to the contractor the responsibility to take precisely this kind of normal precaution." At 593 (emphasis in original). The Restatement is clear, however, that it is just this risk which the owner cannot shift to the contractor: "[T]he 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 the employer from the liability stated in this Section." RESTATEMENT (SECOND) TORTS § 416, comment (e). "The duties defined in these sections [referring to §§ 416, 427] are said to be `non-delegable'; they impose vicarious liability for the negligence of an independent contractor upon one who employs the contractor to do work involving heightened risks of physical harm to third parties." Colloi v. Philadelphia Electric Co., 332 Pa.Super. 284, 296, 481 A.2d 616, 622 (1984) (citations omitted). Thus, the risk which was present at the construction site is clearly within the duty imposed by the sections at issue.

Moreover, I believe the test employed is irreconcilable with Pennsylvania precedent. In Colloi, supra, it was held that evidence indicating that an excavation was performed at an electrical substation without precautions to prevent contact with power transmission lines was sufficient to allow the case to go to a jury under § 416. Not so under the majority's test, because contact with the electrical lines would be a risk inherent to the excavation at the substation and the failure to provide precautions would be collateral negligence in the operational details of the work. In Heath v. Huth Engineers, Inc., 279 Pa.Super. 90, 420 A.2d 758 (1980), an owner was held liable under § 416 for the death of a contractor's employee killed in a trench collapse when the trench was not adequately braced or shored in violation of safety regulations. Applying the majority's test, recovery would have been disallowed because collapses are a risk inherent to trench digging and the failure to properly brace or shore the trench was collateral negligence in the operational details of the work. Finally, in McDonough, supra, recovery against the owner was allowed under § 416 where an employee of the contractor was killed when his vehicle slipped off the edge of an ore pile due to insufficient lighting provided by the contractor. Again, the majority's test would dictate a contrary result as the evidence established that the edge of the ore pile often shifted due to sagging and slippage creating an inherent risk and the failure to provide lighting would be classified collateral negligence. Accordingly, I must disagree with the formulation employed by the majority here.

Philosophical differences with the majority as to the measurement of the peculiarity of the risk at issue aside, I believe that the procedural posture of this case precludes the grant of summary judgment. The determination of what is and is not a peculiar risk is a mixed question of law and fact. While it is true that this determination may be made by the trial judge in clear cases, the absence of required safety precautions creates a situation where reasonable minds may differ. See, McDonough, supra, 228 Pa.Super. at 276 n. 6, 324 A.2d at 546 n. 6, and cases cited therein. Here it was undisputed that there were no toeboards, railings or covering on the stairwell at the time of the fall. Thus, required safety precautions were lacking and reasonable minds may differ as to whether or not a peculiar risk was present. Under these circumstances, the determination was for the jury not the trial judge.

The majority expresses its concern that the scope of the exceptions to the general rule outlined in § 416 and § 427 must be circumscribed to prevent the exceptions from emasculating the rule. Similarly, I believe that the exceptions must be given force where applicable lest they be swallowed by the general rule and so rendered "not worth a Continental."2 I respectfully dissent.