In CBRE v. The Superior Court of San Diego County/Johnson, No. D083130 (June 4, 2024), the court determined that a written contract is not required to apply the Privette doctrine. The court found that the hirers delegated control over tenant improvements to the contractor before the litigant's injury occurred. Additionally, the court found that no exceptions to the Privette doctrine applied in this case.
Background of the Case
Jake Johnson, working as an electrician for PCF Electric, was injured on a construction project managed by Property Reserve, Inc. (PRI) and CBRE. PCF was a subcontractor hired by Crew Builders, the general contractor. Johnson filed a lawsuit against PRI, CBRE, Crew and PCF.
PRI and CBRE sought summary judgment based on the Privette doctrine, which generally shields entities that hire independent contractors from liability for injuries to the contractor's employees. The trial court denied this motion, citing a disputed fact regarding the timing of Crew's hiring. PRI and CBRE petitioned for a writ of mandate, arguing that the trial court wrongfully focused on the contract's execution date.
The higher court agreed, stating that a written contract isn't necessary for the Privette doctrine to apply, and that control was delegated to Crew before Johnson's injury. The court also found no exceptions to the Privette doctrine, as there was not a "concealed hazardous condition", and the Petitioners did not "retain control" over PCF's work at the time of the injury.
The Privette Doctrine
The Privette doctrine generally protects entities that hire independent contractors from liability for injuries sustained by employees of the independent contractor while working on a project. Privette v. Superior Court (1993) 5 Cal.4th 689. The Privette doctrine stands for the proposition that an entity who hires an independent contractor "ordinarily delegates to that independent contractor all responsibility for the safety of the contractor's workers." Sandoval v. Qualcomm Incorporated (2021) 12 Cal.5th 256, 264.
The doctrine "is grounded in two major principles:
- Independent contractors ordinarily control the manner of their own work; and
- Hirers typically hire independent contractors precisely for their greater ability to perform the contracted work safely and successfully." Id. at 269
Exceptions to the Privette Doctrine
Courts recognize two exceptions to the Privette doctrine:
- The hirer withholds critical information regarding a concealed hazard, or
- The hirer retains control over the contractor's work in a way that affirmatively contributes to the worker's injury." Sandoval at 264.
Is a Written Contract Necessary for Privette to Apply?
According to Petitioners, the evidence demonstrated that they had previously hired Crew for numerous tenant improvement projects on the property. Petitioners and Crew had an understanding that Crew would start projects before a formal contract was finalized. Following this understanding, Petitioners asked Crew to immediately start the project at issue here. Crew defined the project's scope in its detailed bid and created the construction schedule, with input from Petitioners.
It is undisputed that Crew subcontracted all electrical work to PCF and that the injured worker, Johnson, was working as a PCF employee on the day of the incident. Petitioners argue that they hired Crew and implicitly delegated complete control of the worksite, including safety, to Crew before Johnson's injury.
Johnson asserted two main arguments: (1) testimony from PRI's asset manager claiming no personal knowledge of an oral contract with Crew before the formal agreement, and (2) the effective date of the written contract between Crew and Petitioners suggested that CBRE retained control until the written contract took effect.
However, Petitioner argued that the asset manager's testimony is irrelevant. Whether the asset manager "knew" of any informal agreement and whether such agreements were against PRI policy do not preclude their existence, especially since the asset manager stated he would "wash his hands" after the lease was signed, transferring responsibility to CBRE to contract with the contractor. Given the asset manager's lack of personal knowledge about the Crew contract, his statement held no evidentiary value.
The Court determined that a written contract is not necessary for the Privette doctrine to apply because the doctrine is not based on the terms of a contract, but rather on the implied delegation that occurs when a hirer relinquishes control of the worksite to the contractor to complete the work. This implication is present whether or not a written contract is in place. Thus, the court concluded that the lack of a written contract when Johnson was injured was immaterial to its examination of the case.
Exception to Privette: Failure to Disclose a Concealed Hazard
In Kinsman v. Unocal Corp., the California Supreme Court established that a landowner can be liable for a contractor's employee's injury if:
- The landowner knew, or should have known, of a latent or concealed preexisting hazardous condition on the property.
- The contractor did not know and could not have reasonably discovered this hazardous condition, and
- The landowner failed to warn the contractor about this condition.
Kinsman v. Unocal Corp., (2005) 37 Cal.4th 659, 664.
In his argument, Johnson focused on potential information that permit inspections and as-built drawings may have revealed rather than what could have been independently discovered. He contended that the absence of permits or related plans should be considered a "hazardous condition" due to potential non-compliance with current codes. Petitioners argue that this condition was reasonably discoverable by PCF simply by inquiring about the existence of permits, as-built drawings, and engineering plans. The court agreed with the Petitioners as Johnson provided no evidence that such an inquiry was impractical or impossible.
Regarding the non-compliant junction box itself, the experts agreed that the energized wire was easily discoverable by metering it or using a hot stick. In fact, PCF's preconstruction manager noted it was standard practice to test each electrical item with a hot stick, even after initial inspection and lockout/tagout. The evidence supported the contention that reasonable and straightforward methods existed for Johnson or any PCF employee to detect the dangerous 277-volt wire in the 120volt junction box. Johnson offered no contrary evidence. Thus, the court concluded that the Kinsman exception is inapplicable as a matter of law.
Privette Exception: Retained Control
Johnson also contended that the retained control exception to the Privette doctrine, as established in Hooker v. Department of Transportation (2002) 27 Cal.4th 198, applied. In Hooker, the California Supreme Court determined that a hirer could not be held liable simply because it retained the ability to control safety at the worksite. Instead, liability depends on whether the hirer retained control in a way that affirmatively contributed to the injury of the contractor's employee.
Since Hooker was decided, the California Supreme Court has further clarified the retained control exception. A hirer retains control when "it has sufficient authority over the manner in which the contractor performs the contracted work." Sandoval, supra, 12 Cal.5th at p. 274. This control must limit the contractor's freedom to perform the work in their own manner. Id. at 275.
The court further noted that authority over noncontract work does not establish a retained control duty unless it directly affects contracted work. Actual exercise of retained control involves the hirer "directing, participating in, or inducing reliance on the manner of work, and even a failure to act can suffice." Gonzalez v. Mathis (2021) 12 Cal.5th 29. In Gonzalez the Supreme Court also provided a non-exhaustive list of situations in which courts have concluded retained control was exercised, including “directing the manner or methods in which the contractor performs the work; interfering with the contractor’s decisions regarding the appropriate safety measures to adopt; requesting the contractor to use the hirer’s own defective equipment in performing the work; contractually prohibiting the contractor from implementing a necessary safety precaution; 15 or reneging on a promise to remedy a known hazard.” Gonzalez at 47.
The court here was also instructed by SeaBright Ins. Co. v. US Airways, Inc. (2011) 52 Cal.4th 590 and Seabright and Delgadillo v. Television Center, Inc. (2018) 20 Cal.App.5th 1078, both of which held that, “even where an unsafe condition exists on the premises due to the landowner’s failure to comply with specific statutory and regulatory duties, the landowner is not liable because it is the contractor who is responsible for its own workers’ safety.”
Court's Conclusion
Based on this controlling precedent and undisputed evidence presented by the parties, the appellate court concluded that the retained control exception does not apply as Petitioners only retained control over noncontract work, which did not create authority over the contracted work. Although Crew initially included permits in its bids, permits were never part of the contracted work. Evidence showed that Crew and PCF had ample freedom to perform their tasks and maintain safety, even without permits. The court determined that Johnson's claims regarding time constraints and control over electrical room access did not demonstrate that Petitioners retained control over the project's safety measures.
Therefore, the Privette doctrine applied and no triable issue of fact remained regarding any exceptions to the rule.