California Supreme Court Limits Premise Owner's Liability in Asbestos Cases

Introduction 

In a much awaited decision, the California Supreme Court has enunciated a new premise liability rule applicable to owners or possessors of land who are sued by employees of hired independent contractors for injuries arising out of hazardous conditions on the owner’s or possessor’s property.  Kinsman v. Unocal, 2005 Daily Journal DAR 14539, ___ Cal.4^th ___ (2005)  The court’s holding limits an owner’s liability for injuries to a contractor’s employee that result from dangerous conditions, including airborne asbestos, even if it does not retain control over the work if:  1) the landowner knows or reasonably should know of a latent or concealed, preexisting hazardous condition on its premises; 2) the hired contractor does not know and could not reasonably ascertain the condition; and 3) the owner or possessor fails to warn the contractor of the hazardous condition.

The Law Before Kinsman

In Privette v. Superior Court, 5 Cal.4^th 689 (1993) the California Supreme Court held that a premise owner should not be liable for injuries to the employee of an independent contractor when the contractor negligently performs work that creates a peculiar risk of harm because the contractor’s own liability is limited to providing workers’ compensation coverage.  Finding the premise owner liable is unfair because it results in the owner having greater liability than the negligent contractor, equitable indemnity is not available to the owner, and the injured employee is entitled to workers’ compensation benefits for his injuries without a showing of fault.

Subsequent decisions of the California Supreme Court have rebuffed the efforts of plaintiffs’ counsel to avoid the effect of the Privette principles of fairness, i.e.: liability based on the theory that the owner negligently hired the contractor has been rejected, Camargo v. Tjaarda Dairy, 25 Cal. 4^th 1235 (2001); liability based on the theory that the hirer is directly, as opposed to vicariously, liable under the peculiar risk of harm doctrine has been rejected, Toland v. Sunland Housing Group, Inc., 18 Cal. 4^th 253 (1998), and; hirer liability based on the mere right to control safety conditions at a work site has been rejected, Hooker v. Dept. of Transportation, 27 Cal. 4^th 198 (2002). 

Despite Privette and its progeny,  California law has long held that an owner or possessor of property has a general duty to repair or warn of known or knowable concealed hazards on the property and that the failure to do so constitutes negligence.  Rowland v. Christian, 69 Cal.2d 102 (1968); California Civil Code § 1714; Restatement of Torts (Second) § 343.  Thus, the question answered by the California Supreme Court in Kinsman was how to apply general priniciples of premises liability to circumstances where the employee of an independent contractor is injured by a hazardous condition on the premises.  The Court’s answer to this question is the rule of law set forth below.

The Kinsman Case

The Kinsman case addresses the collision between the limitations on a premise owner’s liability to the employee of an independent contractor under Privette and its progeny and a premise owner’s general duty to maintain its property in a reasonably safe condition to avoid injury or harm to others.

In Kinsman, an independent contractor was hired by Unocal to perform scaffolding work at a Unocal refinery.  This work exposed the contractor’s employee to airborne asbestos in three ways: 1) from Plaintiff’s clearing of asbestos-containing insulation debris from the planks of the scaffolding caused by insulators working on the scaffolding; 2) asbestos dust caused by Kinsman’s tying in of the scaffolding to existing insulated pipes or equipment; and 3) asbestos fibers released by other trades working nearby.  At trial, Kinsman argued two theories of liability:  premises liability and negligent exercise of retained control over the manner and methods of work performed by Kinsman.  The jury found in favor of Kinsman on the premises liability theory only.  Unocal appealed.  After reviewing the decisions of Privette, Toland, Camargo and McKown, the Court of Appeal concluded that a contractor’s employee cannot recover under a premises liability theory unless the landowner controls the dangerous condition and affirmatively contributed to the employee’s injury.  The jury verdict was reversed for a new trial with instructions to apply the new liability standard.  The California Supreme Court granted review. 

The California Supreme Court reaffirmed the Privette line of cases and its application to landowners who hire independent contractors.  The court noted that this line of cases stands for the general proposition that when the hirer does not completely delegate the task of providing a safe working environment to independent contractors, but in some way affirmatively contributes to the employee’s injuries, the hirer may be liable in tort to the employee.  Where there is complete delegation, however, the hirer cannot be liable. 

Despite reaffirming the Privette doctrine and its progeny, the Court ultimately held that even in the absence of any retained control over the work of the hired contractor, a premise owner or possessor can still be liable based on premise liability principles under certain limited circumstances   The court held that a landowner may be liable to a contractor’s employee if it knew or should have known of a latent or hidden preexisting hazardous condition on its property, the contractor did not know and could not reasonably discover this hazardous condition, and the landowner failed to warn the contractor about the harmful condition.    The court noted its holding would not require an owner to warn of a  hazard created by the independent contractor itself, if that hazard was one that the contractor should be aware.   It also held that a landowner who has not retained control over the work cannot be derivately or vicariously liable for injuries caused by other independent contractor’s work on another contractor’s employee.  However, the court cautioned that this rule would not apply to hazardous conditions created by independent contractors, which after the passage of time, become latent hazards on the premises that the owner is aware of or should have reasonably discovered. 

What Does Kinsman Mean To You?

Kinsman is important because it holds:

(1)    liability will not attach if the independent contractor had actual or constructive knowledge of the hazard;

(2)    the premises liability principles it articulates apply only to preexisting concealed  hazardous conditions on the property; and

(3)    it reaffirms the right of hirers, including premise owners or possessors, “to delegate to independent contractors the responsibility of ensuring the safety of their own workers.”

  It is expected that employees will argue that their employers did not know of and could not reasonably discovery the latent or concealed hazards of asbestos-containing building materials that were incorporated in most premises prior to the ban of the use and manufacture of asbestos in the majority of building materials.   This shift  to what was known or should have been known by both the premise owner and the contractor may make it more difficult to prevail on summary judgment as this issue is one that is typically a disputed fact in asbestos cases. 

The new focus of the Kinsman decision on what was known or should have been known of a hazardous condition on the property by both the owner and independent contractor at a given point in time will become important facts to develop in each and every case for owners and possessors.  As to the particular hazard of asbestos, the Kinsman court noted that the state of the general public’s knowledge of this hazard during the 1950s according to Kinsman’s own expert was scant at best.  Moreover, Kinsman’s own expert acknowledged that the health hazards associated with asbestos exposure were not generally known to the public until the 1970s as a result of the environmental movement and the creation of federal agencies like the EPA and OSHA. Thus a premise owner without knowledge obtained from its own industry or other nonpublic sources of information about the hazards of asbestos may arguably have the same or possibly less actual or imputed knowledge of the contractor which would suggest no duty to warn under these circumstances.    What was thought to be unsafe levels of exposure to asbestos under prevailing industry or regulatory standards at the time of the alleged exposure should also be relevant to both the owner’s and contractor’s knowledge of this hazard. 

As a result of Kinsman, it is also expected that a contractor’s employee will aggressively attempt to develop facts demonstrating that a premise owner did not fully delegate the task of providing a safe work environment to its hired contractor and in some way contributed affirmatively to the injuries of the contractor’s employees.  In addition, contractor’s employees will also attempt to develop facts demonstrating the existance of concealed or latent hazardous conditions existing on the premises at the time of the injured employee’s work. 

January 2006