In Hughes General Contractors, Inc. v. Utah Labor Commission, 2014 UT 3, the Supreme Court of Utah rejected the multi-employer worksite doctrine under the Utah Occupational Safety and Health Act (“UOSHA”). UOSHA requires that “[e]ach employer . . . furnish each of the employer’s
employees employment and a place of employment free from recognized hazards that are causing or are likely to cause death or physical harm to the employer’s employees . . .” Utah Code § 34A-6-201(1). UOSHA is similar to the federal Occupational Safety and Health Act (“OSHA”). Under OSHA, general contractors are subject to citations and fines for OSHA violations on the worksite even if a subcontractor, not the general contractor, committed the violation. This is known as the multi-employer worksite doctrine.
In the Hughes case, the Utah Labor Commission fined Hughes for failing to inspect and correct UOSHA violations committed by the masonry subcontractor. Hughes challenged its fine for several reasons including Hughes’s contention that Hughes was not responsible for the safety of the subcontractor’s employees.
Noting significant differences between UOSHA and OSHA, the Supreme Court of Utah agreed with Hughes that UOSHA limits the responsibility of worksite safety to each employer’s own employees. Accordingly, a general contractor may not be fined for its subcontractor’s UOSHA violations.
This offers some but not much comfort to general contractors because the multi-employer worksite doctrine still applies under OSHA. Accordingly, general contractors must still exercise great caution to ensure subcontractors comply with OSHA requirements on their worksites.
Copyright © Daniel L. Day 2014
In Cromwell v. A & S Construction, Inc., 2013 UT App 240, Cromwell, a subcontractor to A & S Construction, Inc. brought a negligence claim against A & S after he fell down an empty elevator shaft and suffered severe injuries. A & S was the general contractor on the project and had subcontracted with Guns and Hoses to install doors to the empty elevator shaft. Guns and Hoses secured the doors and posted a warning sign, but Cromwell fell down the shaft when he opened the doors to putty the trim. Seeking to avoid some or all of the liability for Cromwell’s injuries, A & S gave notice of intent to allocate fault to Guns and Hoses. Accordingly, Guns and Hoses became entangled in the litigation.
The district court, however, determined that Guns & Hoses owed no duty to Cromwell to secure the doors. The district court also determined that even if Guns & Hoses owed Cromwell such a duty, Guns & Hoses did not breach that duty because Guns & Hoses did secure the doors and did post warnings.
On appeal, the Court of Appeals recognized for the first time in Utah that
subcontractors owe a duty to perform work without creating an unreasonable risk to another subcontractor. The Court of Appeals, however, limited the extent of the subcontractor’s duty by the scope of the subcontractor’s contract. Guns & Hoses contracted to install the elevator doors. Guns & Hoses therefore had a duty to exercise reasonable care to protect other workers from dangerous conditions created by that work only. The Court of Appeals accordingly held that the duty of Guns & Hoses did not extend to securing the shaft. Implied by the Court of Appeals opinion is the conclusion that A & S and perhaps the subcontractor contractually responsible for and in control of the empty shaft shared the duty to protect Cromwell and other subcontractors from the dangerous condition created by the empty shaft.
The decision in Cromwell highlights the importance of care in contracting. By carefully spelling out the scope of work, the general contractor and subcontractors can allocate the risk of liability for site injuries. Leaving ambiguity in the scope of work, however, exposes all contracting parties to a higher risk of expensive litigation over the allocation of fault. From Cromwell, we also infer that carrying adequate general liability insurance is essential in the construction industry. Above all, parties to construction contracts should learn that they must exercise great care in warning of and mitigating dangerous conditions on job sites.
Copyright © Daniel L. Day 2013
From time to time, I have clients who suffer from cities that fail to fulfilled reasonable expectations owners and builders have with regard to the issuance of building permits. But, as demonstrated by Cloud v. Washington City, 2012 UT App 348, owners and builders face uphill battles when seeking relief for those reasonable, but unfulfilled expectations.
Washington City issued a building permit to Cloud for the construction of a warehouse. Presumably, Washington City issued the permit based on plans and specifications proposed by Cloud, which did not provide for the installation of an automatic fire sprinkling system.
Throughout the construction, Washington City building officials inspected the construction but did not mention that an automatic fire sprinkling system must be installed to comply with the fire code. Accordingly, Cloud completed the building without installing a sprinkling system.
Upon completion of the construction, the Fire Chief inspected the building and found no sprinkling system. Accordingly, he determined the warehouse did not comply with the fire code. Based on the Fire Chief’s determination, Washington City refused to issue a certificate of occupancy to Cloud.
In a lawsuit against Washington City, Cloud brought several claims for relief including breach of contract, breach of the implied covenant of good faith and fair dealing and federal civil rights claims. The state district court was inclined to rule in favor of Cloud, but the U.S. District Court dismissed the federal claims and the Utah Court of Appeals granted leave for Washington City to appeal before trial.
Following prior appellate decisions, the Court of Appeals ruled that Cloud’s claims for breach of contract, including breach of the implied covenant of good faith and fair dealing were not viable claims. The Court of Appeals explained that the issuance of a building permit does not contractually bind a city in any way. The Court of Appeals further noted that recognizing building permits as contractual obligations would undermine the City’s ability to protect public health and safety.
One would think that Cloud should have been more disappointed by his architects and engineers and perhaps he was. Architects and engineers, however, generally do not warrant the accuracy and sufficiency of their plans and specifications. Consequently, pursuing a relief from architects and engineers under these types of circumstances can be similarly challenging. For this reason, owners should insist that their architects and engineers, as a minimum, warrant that their plans and specifications will satisfy all applicable building codes.
Copyright © Daniel L. Day 2013
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