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In early 2012, the Illinois Appellate Court held that an off-site steel fabricator could not be held liable for an injury to an employee of its subcontractor because it did not retain supervisory or contractual control over its subcontractor’s steel erection work.  In rendering its decision, the Illinois Appellate Court determined that the conduct of the parties in carrying out the provisions of the relevant contracts demonstrated that the steel erection sub-contractor assumed responsibility for the supervision and safety of its own erection work.

The plaintiff, Anwar Oshana, was an ironworker employed by JAK Ironworks, a steel erector and installer.  He was injured when he fell from a steel beam while working at a construction site commonly referred to as the Willow Inn Project.  Oshana filed a negligence action against the general contractor, FCL Builders, Inc., and the steel fabricator, Suburban Ironworks, Inc.  His claim was based on Section 414 of the Restatement of Torts.  FCL originally contracted with Suburban wherein Suburban agreed to fabricate and erect the structural steel for the project.  Suburban subcontracted the steel erection work to the plaintiff’s employer, JAK Ironworks. The plaintiff’s lawsuit alleged that both FCL and Suburban breached their duties of care to him in that both failed to exercise reasonable care to ensure his safety on the project.  Suburban filed a Motion for Summary Judgment arguing that it did not retain sufficient control under Section 414 to give rise to a duty to the plaintiff.  The Circuit Court agreed, granting Summary Judgment in favor of Suburban.  The Illinois Appellate Court affirmed.

In deciding that the Circuit Court was correct in granting Suburban’s Motion for Summary Judgment, the Illinois Appellate Court focused on two things:  (1) the contractual language governing relationship between the relevant parties and (2) the conduct of the relevant parties in carrying out the provisions of those contracts.  The court determined that the conduct of the parties in carrying out the provisions of the relevant contracts established that the parties intended that the plaintiff’s employer, JAK, would be responsible for the supervision and safety of the erection work.  The court noted specifically Suburban’s lack of experience as a general contractor, its lack of expertise to supervise steel erection work and its limited presence on the project.  Additionally, the deposition testimony established that all of JAK’s employees took their direction from the JAK foreman, that JAK was responsible for ensuring the safety of its workers on the project and that Suburban, while on the project, did not direct JAK regarding job site safety.  Furthermore, it was noted that FCL worked directly with JAK on a daily basis, understood that Suburban subcontracted the erection work to JAK, and spoke with JAK directly on the site about any safety concerns relative to the steel erection.

FCL and the plaintiff opposed Summary Judgment in favor of Suburban.  They both argued that the terms of the subcontract between Suburban and JAK did not support Summary Judgment.  Specifically, they pointed out various provisions in the contract which stated that:  Suburban retained the right to inspect JAK’s work and materials; Suburban retained the right to stop JAK’s work, if necessary; Suburban required JAK to conform to its safety policy; Suburban had the authority to issue safety directives to JAK; and Suburban had the authority to replace or correct any work of JAK’s that did not conform to Suburban’s requirements.  The court dismissed these arguments holding that while Suburban may have had a general right to order work stopped, make inspections or make suggestions, there was no evidence indicating that JAK was not free to do its work in its own way.  In fact, JAK’s foreman testified that it would have been unsafe to have someone from Suburban on the steel inspecting work and issuing directives.  The court determined that while Suburban may have retained control over the fabrication of the steel which took place off-site, it subcontracted the steel erection portion of the job to JAK, including all safety responsibility relative thereto.  As a result, it could not be said that Suburban owed any duty to the plaintiff and Summary Judgment was appropriate.

While this case is generally in line with the progeny of Section 414 retained control cases, it clarifies the importance of acting in accordance with contractual obligations and not overstepping your bounds as a contractor.  In rendering its opinion, the court strongly considered Suburban’s hands-off approach, its limited jobsite presence and its delegation of steel-erection work to a subcontractor more suited to perform it.

Contractors can take a couple of lessons from the court’s ruling in this case.  First, contractors should always include explicit language in their contracts identifying the exact scope of work being delegated to a subcontractor and whether that delegation includes supervisory and safety responsibilities attendant to that work.  Second, if a subcontractor contracts with someone to perform work outside its area of expertise, there is usually a reason for it.  Sometimes contractors are better off trusting their sub-contractor to do the work they hired them to do.  If a contractor over steps its bounds and micro-manages a subcontractor’s work to the point that the sub-contractor is not free to do the work as it sees fit, the contractor is likely increasing its liability exposure in doing so.