Factual and Procedural Background
Jake Johnson was an electrical foreman employed by PCF Electric (PCF). Property Reserve, Inc. (PRI) owned an office building that needed renovations to prepare for a new tenant. PRI signed the lease agreement with the new tenant on April 9, 2019, with the move-in scheduled for June 1. CBRE managed the building owned by PRI. PRI accepted a bid by Crew Builders to serve as the general contractor and perform the upgrades, and Crew hired PCF Electric as a subcontractor to perform the electrical work.
In its bid, Crew included permitting. However, PRI did not believe the project required permits. On March 22, CBRE asked for a new bid without permits and stated the project should get started immediately. Crew submitted a revised bid on April 9 without permitting, which was approved on April 9. When Crew solicited for subcontractors, it indicated the project wouldn’t be permitted. PCF was awarded the job for the electrical work and began working on April 10. However, the subcontract was not reduced to writing until April 15. PCF’s bid included work researching the existing electrical system and performing a logout/tagout procedure. The subcontractor’s site superintendent performed that work and completed the logout/tagout process before demolition began.
Johnson was working as the foreman on April 26 to install the electrical work in the suite that was being renovated. He knew a 277-volt circuit was on to power the building’s lights but believed it was separate from the 120-volt system he was working on. He didn’t know the lockout/tagout work had been removed the previous day. While working on a ladder, he contacted a live wire, which shocked him and caused him to fall. He suffered serious injuries.
Johnson subsequently filed a personal injury lawsuit against CBRE, PCF, and Crew. His claim against PCF was dismissed because his sole remedy was workers’ compensation, so he collected workers’ compensation benefits.
During a deposition, PCF’s site superintendent testified that best practices required electricians to test every wire before working to see if it was hot. He said this was necessary despite any lockout/tagout procedures. The preconstruction manager also agreed and testified that it was part of PCF’s protocols. CBRE’s expert also testified that best practices required electricians to assume every wire was live until they could verify the wire didn’t have power running through it.
Crew and PCF’s formal agreement was executed on May 13 and required PCF to pull all permits and licenses required to perform the work. The contract indicated that it covered any work performed before it was formalized.
CBRE filed a motion for summary judgment, and Johnson opposed the motion. CBRE argued that Johnson’s claims were barred under the Privette doctrine. Johnson argued there still was an issue of triable fact about whether an exception to the Privette doctrine was applicable and that no contract existed between PCF and Crew or CBRE at the time Johnson’s accident occurred. The court denied the motion for summary judgment, and CBRE filed an appeal.
Issues: 1) Whether the lack of a written contract prevented the Privette doctrine from applying? 2) Whether an exception to the Privette doctrine applied?
CBRE filed an appeal and requested a writ of mandate from the Court of Appeal to have the trial court reverse its summary judgment order. It argued the court erred when it denied the summary judgment motion and that the Privette doctrine barred all of Johnson’s claims.
Rule: The Privette doctrine holds that companies that hire independent contractors are generally not liable to third parties who are injured because of the contractors’ negligence while performing the work. However, the company can be liable if an exception to the Privette doctrine applies.
The California Supreme Court has held that a company that hires an independent contractor is not liable when a third party is injured because of the negligent actions of the contractor. This is because the company will typically delegate all of the responsibility for ensuring the safety of the contractor’s workers to the contractor. However, there are two exceptions. First, a company can be liable if one of the contractor’s workers is injured because of a hidden hazard they were not previously informed about. Second, the company can be liable if they retain control over the work instead of delegating it.
Analysis
The Court of Appeal first noted that trial courts must grant a motion for summary judgment if there isn’t any triable material fact. Since CBRE filed the motion for summary judgment, it had the initial burden to show that Johnson did not have enough evidence to support each claim or that a complete defense to the claims existed. Since CBRE argued the Privette doctrine served as a complete defense, the burden shifted to Johnson to show an exception applied.
The court then reviewed the trial court’s reasoning when it denied CBRE’s summary judgment motion. The trial court found that since the written contract was not executed until after Johnson’s injury, the Privette doctrine did not apply. However, the California Supreme Court recently held that a written contract wasn’t necessary for the Privette doctrine to apply.
Johnson argued the trial court accurately identified a triable issue of material fact about CBRE’s delegation of safety duties to PCF and when that occurred. He also argued the removal of the lockout/tagout process the day before his accident constituted a hidden hazard that wasn’t communicated to him. Finally, he argued that by instructing Crew to move forward without a permit, CBRE retained control over the manner of work.
The court of appeal agreed with CBRE about the execution date of the contract based on the California Supreme Court’s ruling that a written contract isn’t necessary for Privette to apply. The Court of Appeal also found that CBRE had delegated authority to Crew before the written contract. CBRE and Crew had an established relationship through which Crew regularly performed work as a general contractor in the building. The court noted that it was undisputed that Crew was a licensed general contractor, had previously performed work in the building, and had subcontracted with PCF on April 10th to begin work immediately. Based on that evidence, the Court of Appeal found that CBRE implicitly delegated control to Crew.
The court then considered whether the removal of the lockout/tagout process constituted a hidden hazard that CBRE failed to communicate with Johnson about. However, it found that Johnson could have discovered the hazard through reasonable efforts by appropriately using a hot stick to test the wire before contacting it. Finally, the court found that CBRE did not retain control over how Crew or PCF performed their work as independent contractors.
Conclusion
The court reversed the trial court’s ruling and issued a mandate for the court to grant CBRE’s motion for summary judgment and dismiss the case. CBRE was granted its costs on appeal.
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