Indiana Supreme Court rules that a construction manager may contractually limit or exclude liability for jobsite safety

On March 22, 2012, the Indiana Supreme Court issued its opinion in Hunt Constr. Group, Inc. v. Garrett.  The decision affords good news to construction managers and designers who provide construction management-type services.

In Hunt, Hunt Construction Group (“Hunt”) was the construction manager for the Lucas Oil Stadium Project.   Garrett, a subcontractor’s employee on the Project,  was injured when he struck by a piece of forming material being removed by a co-worker.

Hunt’s contract with the Project owner obligated Hunt to: routinely inspect whether the contractors erected and implemented appropriate safety measures, notify the contractors of violations, and notify the owner and architect if the contractors failed to take corrective measures.  Hunt’s contract also obligated Hunt to develop and coordinate a safety program for the Project but expressly stated that such actions should not be construed as Hunt’s assumption of the individual contractor’s safety obligations.  The contract further stated that Hunt’s services were solely for the benefit of the project’s owner and that Hunt’s review of the contractor safety programs did not equate to direct control over the acts and omissions of the contractors.

Garrett sued Hunt on grounds that it had assumed a non-delegable duty to her through its contract with the Project owner and on grounds that it had assumed a duty to her through its conduct.  The trial court granted summary judgment in favor of Garrett on both grounds.

That decision was affirmed by the Indiana Court of Appeals, which concluded that Hunt was liable despite the contract language limiting Hunt’s jobsite safety duties. The reasoning behind the Indiana Court of Appeals’ conclusion was that Hunt had “significant duties regarding safety on the jobsite.”

Judge Frielander dissented from the decision.  He concluded that Hunt did not assume a duty to Garrett based on contract or conduct and reasoned that the majority’s opinion rendered meaningless the contract language limiting Hunt’s safety duties.  He further noted that “the Majority’s holding will fundamentally alter contracts of this nature and make it virtually impossible for a contractor taking on the role of construction manager to limit its liability so as not to become an insurer of safety for workers of other contractors.”

On appeal, the Indiana Supreme Court sided with Judge Frielander.   It noted that, in light of the limiting language included in Hunt’s contract,  Hunt’s safety obligations to the project’s owner did not extend to all jobsite workers. Further, the Court concluded that Hunt’s contract limited and excluded Hunt’s liability for subcontractor jobsite safety.  Accordingly, the Court found that Hunt did not contractually assume a duty of jobsite safety to Garrett.

The Court next addressed whether Hunt assumed a duty to Garrett through its actions. Garrett argued that Hunt’s actions resulted in a voluntary or gratuitously assumed duty to provide a safe jobsite. The evidence indicated that Hunt’s safety representative completed daily safety observation reports with Hunt’s safety observations, including the activities of the subcontractors on the project. The safety reports were sent to all subcontractors and included a description of any corrective action required. Garrett relied upon Plan-Tec, Inc. v. Wiggins and a series of similar cases for the proposition that because Hunt undertook these types of actions the court was obligated as a matter of law to find that a duty of care was assumed by the construction manager.

The Indiana Supreme Court disagreed with Garrett’s bright-line interpretation of Plan-Tec, Inc. but agreed that Plan-Tec, Inc. provides a “durable template for resolving” cases involving post-contract conduct resulting in assumed duties for jobsite safety.  The Court concluded that “for a construction manager not otherwise obligated by contract to provide jobsite safety to assume a legal duty of care for jobsite-employee safety, the construction manager must undertake specific supervisory responsibilities beyond those set forth in the original construction documents.” In Plan-Tec, Inc., the construction manager agreed to take on specific supervisory responsibilities beyond those set forth in the original construction documents after the project was underway. There was no evidence that Hunt undertook any jobsite-safety actions beyond those initially required by its contract. Therefore, the Indiana Supreme Court concluded that Hunt did not assume by its actions any legal duty of care for jobsite-employee safety.

Lessons learned from the Hunt case include:

  • A construction manager can shield itself from jobsite safety liability to onsite contractor and subcontractor employees even when certain provisions of the construction manager’s contract with the owner charge it with duties pertaining to onsite safety measures (including enforcing OSHA safety requirements and offering safety programs).
  • A construction manager accomplishes this by inserting language “explicitly disclaiming duties concerning onsite safety with respect to all parties except the owner, most notably including subcontractors.” All construction managers should carefully review the language of their standard form or negotiated contracts, subcontracts, general conditions and safety programs with a competent construction law attorney to confirm whether the contract sufficiently disclaims or excludes liability to all contractors, subcontractors and their employees for jobsite safety pursuant to the State laws where the project is constructed, unless the contract documents explicitly provide that another State’s law shall govern.