Who’s in Control? A Subcontractor’s Duty of Care Is Limited Under McCormick v. Nikkel & Associates, Inc.

by Ryan Koopmans | May 30, 2012

By Ryan Koopmans

The Iowa Supreme Court recently decided a case involving the duty of care owed by a subcontractor which highlighted a split in the Court over duty of care analysis in negligence actions. In McCormick v. Nikkel & Associates, Inc., the Court, by a 4-3 vote, affirmed summary judgment in favor of the defendant on the basis that the defendant owed no duty of care. The majority, in a decision authored by Justice Mansfield, ruled that a subcontractor who properly performs the job and transfers control of the property to the owner owes no duty of care to an employee of the owner who was injured after the subcontractor’s job was complete. Chief Justice Cady and Justices Waterman and Zager joined in the majority opinion.

Justice Hecht authored a separate opinion which concurred in part and dissented in part with the majority. In contrast to the majority, Justice Hecht determined that the subcontractor did owe a general duty of care to exercise reasonable care in the present case. Justices Wiggins and Appel joined in this separate opinion.

Plaintiff Troy McCormick (“McCormick”), an employee of Little Sioux Corn Processors, sustained a serious electrical shock while he was working on equipment that had been repaired by Defendant Nikkel & Associates, Inc. (“Nikkel”). Under the scope of Nikkel’s work, Nikkel was to install fault indicators on the switchgear boxes at Little Sioux. But it was discovered that the fault indicators could not be installed due to the size of the mounting brackets that were provided. Nikkel offered to drill new holes and install the fault indicators, but Little Sioux declined this work, and instead, opted to perform the work on its own. Nikkel completed the remainder of the work onsite and secured the switchgear cabinets. Those cabinets also included warning signs of hazardous high voltage.

Six days after Nikkel left the worksite, Little Sioux’s maintenance manager directed one of its electricians to install the fault indicators. The electrician sought additional help from Little Sioux employees, including McCormick who lacked electrical training. The maintenance manager believed that the switchgears were not energized at the time and he passed this information on to McCormick. This was a disputed issue in the summary judgment pleadings as Nikkel asserted that it informed Little Sioux’s maintenance manager that the switchgear box had power. The maintenance manager disputed this version of the events. It was not disputed, however, that Little Sioux’s lock out and tag out procedures and OSHA safety regulations were not followed at the time McCormick was injured.

McCormick and his spouse brought suit against Nikkel, alleging that Nikkel exercised control over the switchgear box and it was negligent in failing to inform McCormick that the box had power at the time of the accident. Nikkel moved for summary judgment on the grounds that it owed no duty to McCormick because Nikkel was not in control of the switchgear box when McCormick was injured. Nikkel asserted that liability rested with the employer, Little Sioux.

The district court granted Nikkel’s summary judgment motion. The court agreed that Nikkel owed no duty to McCormick because Nikkel did not have control of the switchgear box at the time of McCormick’s injury. The district court ultimately found that whether Nikkel informed anyone that the switchgear box was energized was immaterial because the employer had a duty to provide a safe workplace which included following lock out and tag out procedures and OSHA regulation.

The Iowa Court of Appeals reversed the district court’s grant of summary judgment, concluding that Nikkel was in control of the switchgear box at the time the failure to warn or negligent action occurred. Nikkel then sought further review before the Iowa Supreme Court.

A majority of the Court concluded that under traditional duty analysis, courts must consider the relationship between the parties, the foreseeability of harm, and public policy. The majority appears to be stepping back from Thompson v. Kaczinski, in which the Court held that foreseeability doesn’t factor into the “duty” analysis. The majority opinion notes other cases have “made clear again that our previous law of duty was otherwise still alive and well.” The majority cited Van Fossen v. MidAmerican Energy Co., which similar to Thompson is a 2009 opinion authored by Justice Hecht, for the proposition that independent contractors only have a limited duty of care that turns upon whether the independent contractor retained control.

The majority cited to Van Fossen when it explained:

The limited nature of the duty owed by employers of independent contractors takes into account the realities of the relationship between employers and their contractors. One of these realities is that employers often have limited, if any, control over the work performed by their contractors . . . . the contractors’ knowledge and expertise places them in the best position to understand the nature of the work, the risks to which workers will be exposed in the course of performing the work, and the precautions best calculated to manage those risks.

The majority found that the instant case presented the flip side of the control principal. Nikkel contracted the job site back to Little Sioux when it left the worksite a week prior to the accident. At that time the switchgear box was locked and in a safe condition. “Just as the contractor is typically in a better position to manage risks when it is in control, the employer is typically in a better position to manage risks when the contractor left the site a week ago and the employer is now in control.” The majority relied upon Van Fossen to conclude that Nikkel owed no duty in the present case. In addition, the majority argued that public policy supported a finding that no duty was owed.

The majority also addressed the fact that there was no allegation in the present case that Nikkel’s work was somehow defective. Had Nikkel created the risk of harm, then Nikkel may owe a general duty of care. Rather McCormick’s negligence claim was based on Nikkel’s alleged failure to warn of the hazard. The Court’s majority opinion found that the control analysis applies in failure to warn cases.

Ultimately, the majority concluded that summary judgment in favor of Nikkel was appropriate because a subcontractor does not owe a duty of care when the subcontractor properly performs electrical work and then locks up and transfers control of the site back to the property owner.

Justice Hecht’s separate minority opinion takes issue with the majority’s analysis regarding a general duty of care. In contrast with the majority, Justice Hecht’s opinion finds that a duty of care exists “whenever a risk of injury to others arises from the contractor’s work without regard to whether the work is performed badly.” As a result, Justice Hecht concluded, Nikkel owed a general duty of care because it created a risk of severe injury by energizing the switchgears.

According to Justice Hecht, the majority decision demonstrates a “fundamental misunderstanding of the distinction between duty and scope of liability”. As a result the majority opinion conflates those two issues. The majority’s decision is largely based upon specific factors, such as the fact that Nikkel completed the work and left the worksite and that Little Sioux employees failed to follow lock out and tag out procedures. That analysis is more appropriate, according to Justice Hecht, when determining the scope of liability, and because Nikkel did not raise the scope-of-liability issue on summary judgment, Justice Hecht would remand the case to the district court.

Relying upon Thompson, Justice Hecht notes that when considering the issue of duty “in most cases involving physical harm, courts ‘need not concern themselves with the existence or content of this ordinary duty,’ but instead may proceed directly to the elements of liability.” Further, questions of foreseeability do not factor into the duty analysis.

Justice Hecht also took exception to the majority’s use of a bright-line rule. He believes that such rules should be reserved for the most in “exceptional cases,” and that the fact-specific nature of this case does not fall into that category.

The minority opinion shows that a group of Justices on the Court would find against Nikkel on the duty of care issue at the summary judgment stage. Nevertheless, the majority opinion, which included the new Justices to the Court, reached the opposite conclusion. Despite the split opinion, the McCormick case will likely be used to limit the duty of care owed by subcontractors. Whether a defendant subcontractor will be successful with this defense does indeed turn upon the facts, particularly whether the subcontractor continued to exercise control over the worksite.




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