ILNEWS Indiana Supreme Court considers general contractor’s duty of care to subcontractors

Olivia Covington for www.theindianalawyer.com

In oral arguments on a petition to transfer a case regarding a general contractor’s duty of care to its subcontractors, the justices of the Indiana Supreme Court considered the meaning of the phrase “monitor and implement.”

That phrase was used in the contract general contractor TCI Architects signed with its subcontractors when they were hired to work on a Lafayette Gander Mountain project. Specifically, TCI wrote that its duty was to assume “all responsibility for implementing and monitoring all safety precautions and programs related to the performance of the Work.” Further, the contract said TCI would “designate a safety Representative with the necessary qualifications and experience to supervise the implementation and monitoring of all safety precautions and programs related to the Work.”

That language came into play when Michael Ryan, an employee of one of TCI’s subcontractors who fell off of an eight-foot ladder while on the job. In the case of Michael Ryan v. TCI Architects/Engineers/Contractors, Inc., et al., 49A02-1508-CT-1198, Ryan claimed that TCI had a non-delegable duty of care to him, but both the trial court and a divided Indiana Court of Appeals found in favor of TCI.

In Ryan’s argument as to why the high court should grant transfer in his case, attorney John Daly focused on another section of the contract, which read that TCI “recognizes the importance of performing the Work in a safe manner so as to prevent damage, injury or loss to … all individuals at the site, whether working or visiting.” The use of the word “all” in that language, as well as in other parts of the contract where TCI agreed to monitor and implement safety precautions, implies that TCI had assumed a duty of care for its subcontractors, Daly said.

Further, Daly told the justices there were three “magic ingredients” in the contract that, in other cases, had led courts to believe that a general contractor had a non-delegable duty of care to its subcontractors. First, the contractor included a provision requiring a safety representative. Second, the language called for TCI to assume responsibility for implementing safety precautions related to all work and, third, for the safety of everyone at the job site.

But Donald Orzeske, counsel for TCI, told the justices that Indiana law does not require a general contractor to assume any duty for its subcontractors, so any duty that is assumed is voluntary.

In this situation, Orzeske said each subcontractor was required to submit its own safety programs unique to the work it would be performing, and TCI’s job would be to help implement that plan. The phrase “monitor and implement” implies that someone else – in this case, the subcontractors – would take safety precautions unique to their work, and TCI’s job was to  help the subcontractors adhere to their individual safety plans, not to assume a safety duty over all of them.

Requiring TCI to constantly follow and monitor every subcontractor would be chaos, Orzeske said, which is why Indiana law does not force general contractors to assume a duty but instead allows them to assume as much duty as they deem necessary.

In a similar vein, Justice Robert Rucker pointed to a different part of the contract which provided that “TCI’s responsibility for safety … is not intended in any way to relieve Subcontractors and Sub-Subcontractors of their own contractual and legal obligations and responsibility for … taking all necessary measures to implement and monitor all safety precautions.”

Rucker asked Daly how that language could fit into his argument that TCI had a non-delegable duty, but the attorney said it implied that there were overlapping duties shared between the general and subcontractors.

Robert Brown with the Indiana Trial Lawyers Association, who argued as amicus counsel for Ryan, told the justices that the case was unique because it involved a Design-Build Institute of America Contract. In those contracts, the design builder – here, TCI – acts as the designer, engineer and construction company on a single project and, thus, assumes a consolidated responsibility and duty, Brown said.

Ryan’s case is the first DBIA opinion from an appellate court, he said, so the Supreme Court’s decision would be the first in both Indiana and the United States.