In California there is a rebuttable presumption that a hirer is not liable for workplace injuries sustained by employees of hired parties. This is known as the Privette Doctrine, which is named after the case that established the presumption.
There are two exceptions to the Doctrine: (1) there is liability if the hirer retained control over the work being performed, negligently exercised that control, and its negligent exercise of that control contributed to an employee’s injury (known as the “Hooker Exception”); and (2) there is liability if the hirer knew or should have known of a concealed hazard, that the hired party did not know of and could not have reasonably discovered, and the hirer failed to warn the hired party of the hazard (known as the “Kinsman Exception.”).
The Privette doctrine does not mean a landowner who hires a contractor is not liable to an injured subcontractor’s employees. This is starkly exemplified in California Court of Appeal case Ramirez v. PK 1 Plaza 580 SC LP (“Ramirez”). In that case Kimco Realty Corporation owned a shopping center in Livermore, California. Freeway Insurance Services, Inc. leased an office suite in the center from Kimco. In October 2017, Freeway vacated its suite. Under the lease, Freeway was responsible for removing the exterior signage from the suite. Kimco offered to handle the removal and bill the cost to Freeway, but Freeway opted to do it on its own.
Freeway hired Francisco Ramirez, a self-employed contractor, to remove the signage. On November 6, 2017, Ramirez arrived at the suite to remove the sign, however, no one arrived. After about 20 minutes, a woman from Kimco’s office arrived and gave him the keys to the suite. While he had been waiting, Ramirez noticed that the sign was powered by a low voltage electrical cable that would need to be disconnected for him to complete the job, and asked if a security guard or maintenance worker was onsite with “all the keys including for the attic access.” The woman responded that she did not know.
Once inside the suite, Ramirez searched for the electrical box to disconnect the low voltage electrical cable. Not finding the box, he decided to look for it on the roof. He went to the rear of the building and used his own ladder to climb onto the roof. While on the roof, he noticed a cupola that had an unlocked and open access door. Believing the electrical box might be in the cupola, he opened the access door and used a flashlight to look inside. Inside the cupola he saw a “big opening” in the drywall where he thought the electrical box might be located.
Unknown to Ramirez, nine feet from the access door, the cup floor “transitions to an opening with [two foot by six foot joists” which were two feet apart from each other. After traveling 12 feet into the cupola, Ramirez fell through the opening and the drywall below the ceiling below, landing on the sidewalk and sustaining serious injuries.
In January 2019, Ramirez sued Kimco for negligence, premises liability, negligence per se, and negligent inflection of emotional distress. Ramirez’ wife also brought a separate cause of action for negligent infliction of emotional distress, based on the allegation that she witnessed Ramirez fall, and loss of consortium. Kimco later brought a motion for summary judgment claiming that the “opening was neither a concealed condition nor . . . unascertainable by Ramirez” and that its duty to “tak[e] proper precautions to protect against obvious hazards in the workplace . . . was delegated to [him] under the Privette doctrine.” Ramirez, in opposition, argued that the Privette doctrine was inapplicable because there was no employment relationship between Ramirez and Kimco.
The trial court granted Kimco’s motion for summary judgment concluding that Kimco “had no duty to ensure [Ramirez’s] safety” because the Privette doctrine applied even though Kimco had not directly hired Ramirez. Ramirez appealed.
In a split decision, the 1st District Court of Appeal held the Privette doctrine was inapplicable because Kimco did not hire either Ramirez or Freeway. Thus, explained the Court, “Kimco did not delegate a responsibility for ensuring the worksite’s safety, either directly or ‘through the chain of delegation.’ Accordingly, the bedrock presumption of the Privette doctrine is absent in this case.”
It continued and expressly disagreed with the trial court and did not accept Kimco’s contention in its motion for summary judgment that it had delegated responsibility for workplace hazards under its lease agreement with Freeway. The Appellate Court found, “no aspect of the lease establishes that Kimco delegated a duty involving the roof’s condition to Freeway.”
First, while the lease provided that that Freeway would “have the non-exclusive right to use the Common Area,” which was defined to include the shopping center’s “roofs,” Kimco retained possession and control of the roof, including responsibility for maintenance and, therefore, did not delegate to Freeway a general duty of reasonable care with regard to dangerous conditions on the roof.
Second, under the lease, Kimco did not delegate to Freeway a duty to ensure the safety of the site where Ramirez performed his work. “Privette delegation is project-specific,” explained the Court of Appeal, “meaning it involves a duty limited not only to the contracted-for work but also to the place where that work occurs.” “At oral argument, Kimco claimed that in requiring Freeway to remove the sign, the lease necessarily delegated to Freeway the duty to ensure the safety of the area where that work was performed,” but explained the Court, “[e]ven assuming, without deciding, that the roof was reasonably included in that area, we reject the notion that a landowner may absolve itself of liability for conditions in a space over which it retains possession and control merely by assigning its tenant a task that could involve that space.”
Third, explained the Court of Appeal, “[a]pplication of the Privette doctrine is also not justified on a theory that Kimco and Freeway’s relationship with regard to the sign removal was analogous to an employer-independent contractor relationship”:
Kimco purported to “control[] [only] the results of [the sign removal] and not the means by which it [was] accomplished”, which might otherwise suggest that Freeway functioned like an independent contractor. But Freeway had no special “ability to perform the contracted work safely and successfully” compared to Kimco, and such an ability is a “major principle” that underlies the presumption that a hirer delegates responsibility for workplace safety to an independent contractor. Nor was Freeway in any business—whether as a general contractor, project manager, or otherwise—that had anything to do with the work Ramirez was hired to perform. Thus, even if an employer-independent contractor relationship can coexist with a lessor-lessee relationship, one of the main “hallmarks of an employer-independent contractor relationship”—that “the [lessor] hired [the lessee] to perform work”—is missing.
Finally, held the Court of Appeal, “the sign benefited Freeway more than it did Kimco, and Kimco did not directly or indirectly pay Freeway to install or remove it.” “The lease explicitly provided that the sign’s installation would be ‘at [Freeway’s] sole cost and expense’ and that its removal was ‘the responsibility of [Freeway],’” explained the Court, “Thus, Kimco did not effectively ‘hire’ Freeway to perform the work at issue”:
The Appellate Court went on to expressly state that the Privette doctrine is not the only path by which Kimco may ultimately avoid liability, or even the only path by which it may be deemed to have owed no duty to Ramirez.
Ramirez illustrates the need for property owners and landlords to include express delegation of responsibility and indemnity provisions, and a robust insurance provision, in leases and construction contracts. If you lease property or anticipate a construction project, make sure you connect with your business or real estate attorney to review and potentially, revise, your leases and contracts.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
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