General contractors need to be cautious in the language of project agreements as to not assume a duty of care to employees of subcontractors and sub-subcontractors.
In April this year the Indiana Supreme Court ruled in Ryan v. TCI Architects/Engineers/Contractors Inc. that, even if a duty of care is passed to subcontractors in later contracts, a general contractor assumes a non-delegable duty to provide a reasonably safe work environment to all employees working on the project if the general contractor assumes responsibility for the safety of the workplace in its original contract.
In Ryan, TCI entered into an agreement with Gander Mountain to serve as general contractor for the renovation of its retail store located in Lafayette, Indiana. The contract between the parties directed TCI to “assume[] responsibility for implementing and monitoring safety precautions and programs related to the performance of the Work.” In TCI’s contracts with its subcontractors, TCI charged each subcontractor with implementing safety precautions and maintaining liability for any workplace accidents. TCI went on to hire BMH Enterprises (“BMH”) as a subcontractor for the project and BMH further sub-contracted with B.A. Romines Sheet Metal (“Romines”).
On June 26, 2016, Michael Ryan, an employee for Romines, sustained serious injuries when he fell 8-10 feet off a ladder when performing ductwork for the project. Ryan sued TCI, claiming the general contractor had a duty to provide him a safe workplace. The Indiana Court of Appeals sided with TCI, ruling that the contract between TCI and Gander Mountain did not create this safety responsibility for TCI.
However, the Supreme Court of Indiana reversed this decision and held that, although a general contractor ordinarily does not owe a duty of care to a subcontractor’s employees, it can contractually assume a duty to provide a safe work environment that requires the general contractor to oversee the safety of the entire project. The high court found that the language in the contract between TCI and Gander Mountain showed that TCI assumed this burden and was responsible for the safety of all subcontractor employees, including Michael Ryan.
This ruling serves as a warning that if a general contractor does not wish to assume a duty for the safety of any and all subcontractor employees, it should not include language in the contract that indicates it is assuming such a duty. Further, in view of this ruling, the best practice is to include well-drafted contract language specifically setting forth that the general contractor is not assuming this duty.
For additional information regarding this or any related area of law, please contact attorney Shannon Frank at sfrank@KDDK.com or (812) 423-3183, or contact any member of the KDDK construction law practice team.
About the Author
Shannon S. Frank, a Partner at Kahn, Dees, Donovan & Kahn, LLP (KDDK), in Evansville, Indiana, has more than 25 years’ experience in the practice of business law, construction law, estate planning and probate administration, health care law, and real estate law. Shannon takes prides in giving exceptional service to her clients, recognizing that relationships with clients play a significant and essential role in providing tailored and comprehensive legal advice.
(Jordan Heck, a law clerk for KDDK, contributed to this article.)
