Opinion
No. 04-00-00222-CV
Delivered and Filed: April 3, 2002
Appeal from the 293rd Judicial District Court, Dimmit County, Texas, Trial Court No. 97-02-08680-CI, Honorable Cynthia L. Muniz, Judge Presiding.
Panel: ALMA L. LOPEZ, Justice PAUL W. GREEN, Justice, KAREN ANGELINI, Justice
REVERSED AND RENDERED
Victoria Electric Cooperative, Inc. appeals a judgment finding it liable for negligence in the transportation of utility poles by its independent contractor. Because we hold there is no evidence demonstrating Victoria Electric retained a right to control the activity leading to the injury and because the trial court erred holding Victoria Electric vicariously liable for the negligence of its independent contractor, we reverse the trial court's ruling and render judgment in favor of Victoria Electric.
Background
Victoria Electric is a rural electric cooperative operating under a statutorily authorized franchise granted by the City of Victoria "to construct, maintain, and operate electric light and power lines, with all necessary or desirable appurtenances (including underground conduits, poles, towers, wires, and transmission lines, and telegraph and telephone wires for its own use) for the purpose of supplying electricity within the City limits of the City of Victoria, Texas." In carrying out its franchise obligations, Victoria Electric entered a contract with Urban Electrical Services, Inc. to construct and maintain electrical distribution lines in the franchise area.
The evening before the accident, Urban employees loaded six utility poles onto a truck and trailer. The next morning, before sunrise, one of the employees, Troy Allen Baze, drove the truck and trailer onto a public highway for the trip to the installation location. The utility poles extended beyond the end of the trailer and, although the trailer was equipped with proper marker lights, some warning devices required to be affixed to extended loads were not attached. As Baze attempted to cross a highway at an intersection, a vehicle driven by Elvin Ray Williams struck one of the poles extending past the end of the trailer. Williams was killed.
Williams's survivors ("Williams") brought this wrongful death action against Victoria Electric, Urban, and Baze. Before trial, Williams settled her claims against Urban and Baze for $2 million. After trial, the jury found actual damages in the amount of $5.016 million and assigned responsibility fifty percent to Victoria Electric, twenty-five percent to Urban, and twenty-five percent to Baze. After applying the settlement credit, the trial court awarded judgment against Victoria Electric for the remaining balance by imputing Urban's and Baze's negligence to Victoria Electric. The trial court found: (1) Victoria Electric retained the right to control Urban's activities; (2) Victoria Electric had a non-delegable duty of care under the "peculiar risk" and "inherently dangerous activity" exceptions; and (3) Victoria Electric had a non-delegable duty of care under the franchise exception.
The trial court made a separate finding that Victoria Electric admitted it had not delegated its contractual duties to Urban and Baze.
Right to Control
The trial court found Victoria Electric was negligent for failure to exercise its right to control the activities of Urban and Baze as required by section 414 of the Restatement. Victoria Electric claims the evidence is legally and factually insufficient to support Williams's section 414 negligence claim. Typically a general contractor has no duty to ensure an independent contractor performs his work in a safe manner. Elliot-Williams Co., Inc. v. Diaz, 9 S.W.3d 801, 803 (Tex. 1999). In Redinger v. Living, Inc., 689 S.W.2d 415 (Tex. 1985), the supreme court adopted section 414 of the Restatement (Second) of Torts:
One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care. Redinger, 689 S.W.2d at 418 (citing Restatement (Second) of Torts § 414 (1977)). Thus, "when a general contractor exercises some control over a subcontractor's work he may be liable unless he exercises reasonable care in supervising the subcontractor's activity." Id. In this case, the issue is whether Victoria Electric retained a degree of control over either the means, methods, or details of Urban's or Baze's work sufficient to give rise to a duty of care. See Elliot-Williams Co., 9 S.W.3d at 804.
The comments to section 414 discuss the degree of control needed to create a duty:
It is not enough that [the general contractor] has merely a general right to order the work stopped or resumed, to inspect its progress or receive reports, to make suggestions or recommendations which need not necessarily be followed, or to prescribe alterations and deviations. Such a general right is usually reserved to employers, but it does not mean that the contractor is controlled as to his methods of work, or as to operative detail. There must be such a retention of a right of supervision that the contractor is not entirely free to do the work in his own way.
Id. (quoting Restatement (Second) of Torts § 414 cmt. c (1965)); see Hoechst-Celanese Corp. v. Mendez, 967 S.W.2d 354, 356 (Tex. 1998). Additionally, the control of the general contractor "must relate to the condition or activity that caused the injury." Clayton W. Williams, Jr., Inc. v. Olivo, 952 S.W.2d 523, 528 (Tex. 1997).
The trial court found Victoria Electric owed a duty of care because it "retained the contractual right to control the activities of [Urban] and [Baze]." The contract reserves Victoria Electric the right to inspect, test, and approve of the "manner of performance of the work, and all equipment used therein." Contrary to Williams's argument, however, such provisions control Urban's work in relation to constructing electrical distribution line extensions. The franchise granted to Victoria Electric by the City of Victoria was for the specific purpose of building and maintaining an electrical distribution system for the City of Victoria. In carrying out that task, Victoria Electric provided the materials to build and maintain the system, and it contracted with Urban to perform the labor. Victoria Electric was entitled under the contract not only to make sure the services being performed were in compliance with the minimum standards required under its franchise with the city, but also that the work was done in a safe manner. In reserving the right to inspect the work, Victoria Electric did not control either the means, methods, or details of Urban's work in a way that gave rise to a duty of care. See Elliot-Williams Co., 9 S.W.3d at 804. Further, any control retained with regard to the construction and maintenance of an electrical distribution system does not "relate to the condition or activity that caused the injury." Clayton W. Williams, 952 S.W.2d at 528.
The contract also provides that Urban is required to:
take all reasonable precautions for the safety of employees on the work and of the public, and shall comply with all applicable provisions of Federal, State, and Municipal safety laws and building and construction codes, as well as the safety rules and regulations of the Owner.
The requirement that the work be performed safely and in compliance with all state and local laws and guidelines does not involve control over the details of the activity. It is, instead, a general safety requirement that is enforceable through termination of the contract in the event safe practices are not followed. Further, when the purported right of control relates to safety measures, we have held:
Koch Refining Co. v. Chapa, 11 S.W.3d 153, 155 (Tex. 1999) (stating "merely exercising or retaining a general right to recommend a safe manner for the independent contractor's employees to perform their work is not enough to subject the [general contractor] to liability"); Traylor Bros., Inc. v. Garcia, 49 S.W.3d 430, 434 (Tex.App.-San Antonio 2001, no pet.).
In Hoechst-Celanese Corp. v. Mendez, the issue before the court was: "What is an employer's duty to an independent contractor's employees when the employer requires the contractor to observe general workplace safety guidelines." The court found that if a contractor requires a subcontractor to comply with its safety regulations, the contractor owes a narrow duty of care — that is, that its safety requirements and procedures do not unreasonably increase the probability and severity of injury.
Traylor Bros., 49 S.W.3d at 435. In this case, Williams presented no evidence demonstrating the safety measures imposed by Victoria Electric "unreasonably increase[d] the probability and severity of injury." Rather, the evidence demonstrates the opposite. Victoria Electric required that Urban comply with federal, state, and city regulations. Further, the contract provided that if Victoria Electric gives Urban written notice of a violation and Urban fails to take action, Victoria Electric may correct the violation at Urban's expense.
Williams argues Victoria Electric was aware that Urban had previously violated safety regulations and claims a duty arises from this knowledge. Williams relies on the following language of Hoechst-Celanese Corp.: "an employer who is aware that its contractor routinely ignores applicable federal guidelines and standard company policies related to safety may owe a duty to require corrective measures to be taken or to cancel the contract." Hoechst-Celanese Corp., 967 S.W.2d at 357. However, the only evidence relied on by Williams that refers to Victoria Electric's knowledge of Urban's previous violations is a general statement made by a Victoria Electric mechanic, who said he had seen Urban haul poles before daylight without lights attached. Williams admitted no evidence demonstrating how many times the mechanic observed the violation, when the violation or violations occurred in reference to the date of the accident, and what resulted from the observed violations. We decline to hold that this statement is sufficient to demonstrate Victoria Electric was aware that Urban "routinely ignored" safety guidelines and, consequently, had the duty to "require corrective measures be taken." Because we hold the trial court erred in holding that Victoria Electric retained a "contractual right" to control the activities of Urban and Baze, we sustain Victoria Electric's first four issues.
"Peculiar Risk" "Inherently Dangerous Activity" Exceptions
The trial court found that because the transportation of electrical poles poses a "peculiar risk" and is an "inherently dangerous activity," Victoria Electric has a non-delegable duty of care and is vicariously liable for the negligence of Urban and Baze. Section 416 of the Restatement provides:
One who employs an independent contractor to do work which the employer should recognize as likely to create during its progress a peculiar risk of physical harm to others unless special precautions are taken, is subject to liability for physical harm caused to them by the failure of the contractor to exercise reasonable care to take such precautions, even though the employer has provided for such precautions in the contract or otherwise.
Restatement (second) of Torts § 416; see Scott Fetzer Co. v. Read, 945 S.W.2d 854, 862 (Tex.App.-Austin 1997), aff'd, 990 S.W.2d 732 (Tex. 1998). Also, if a general contractor fails to take reasonable precautions when the independent contractor's work involves an inherently dangerous activity, it will be held liable for the negligence of the independent contractor. Restatement (second) of Torts § 427. Importantly, despite the applicability of the "peculiar risk" and "inherently dangerous activity" exceptions, the general contractor will not be held vicariously liable for an independent contractor's negligence if: (1) the negligence consists solely in the improper manner in which he does the work; (2) it creates a risk of such harm which is not inherent in or normal to the work; and (3) the employer had no reason to contemplate the negligence when the contract was made. Restatement (second) on Torts § 426; 427 cmt. d.
Considering relevant case law, we decline to hold that the transportation of utility poles is a "peculiarly risky" or "inherently dangerous activity." Arlen v. The Hearst Corp., 4 S.W.3d 326, 328 (Tex.App.-Houston [1st Dist.] 1999, pet. denied) (declining to recognize the "peculiar risk" doctrine); Burton-Lingo Co. v. Armstrong, 116 S.W.2d 791, 796 (Tex.Civ.App.-Amarillo 1938, writ ref'd) (stating the hauling of "lumber and material with a motortruck is not intrinsically dangerous"). Further, Victoria Electric could not have reasonably contemplated the new risk created by the actions of Urban and Baze that was not inherent had the poles been transported in the "ordinary or prescribed way." See Restatement (second) on Torts § 426; 427. We sustain Victoria Electric's fifth, sixth, and eighth issues.
Franchise Exception
The trial court also held Victoria Electric vicariously liable under the franchise exception found in section 428 of the Restatement. Section 428 provides a general contractor carrying on an activity, "which can be lawfully carried on only under a franchise granted by public authority and which involves an unreasonable risk of harm to others," is liable for the negligence of its independent contractors. Restatement (second) of Torts § 428. The rule in section 428 does not apply to "the carrying on of activities which involve no special danger, and which could be lawfully carried on by private persons without liability for the misconduct of the contractors to whom they are entrusted." Id. cmt. a. We decline to hold that the transportation of utility poles is an activity that can only be carried out under a franchise. See Tirres v. El Paso Sand Prods., Inc., 808 S.W.2d 672, 678 (Tex.App.-El Paso 1991, writ denied) (holding that oversize load permits are not analogous to franchise permits obtained from the Texas Railroad Commission or the Interstate Commerce Commission because "anyone, not just a common carrier, . . . has a right, to obtain a special permit"). As such, the trial court erred in finding Victoria Electric vicariously liable under the franchise exception. We sustain Victoria Electric's eighth issue.
Conclusion
We hold there is no evidence demonstrating Victoria Electric retained a right to control the activities causing Williams's death. Further, we hold the transportation of utility poles is not a peculiarly risky activity, an inherently dangerous activity, or an activity that may only be lawfully carried out under a franchise. As such, we reverse the judgment of the trial court and render judgment in favor of Victoria Electric on all claims. We need not address Victoria Electric's remaining issues.