Liability for Independent Contractor’s ‘Inherently Dangerous’ Work

February 12, 2014

Under Wisconsin law, an employer generally isn’t liable for the torts (wrong­ful acts) of an independent contractor. An exception to that rule exists when the em­ployer hires an independent contractor to perform “inherently dangerous” work. The Wisconsin Supreme Court recently agreed to clarify what constitutes “inherently dan­gerous” work. The court’s ruling could have a significant impact on employers because of the very broad definition of inherently dangerous work used by the Wisconsin Court of Appeals in the decision that’s being reviewed.

Contractor Damages Neighbor’s Property

Kelli and Bruce Brandenburg own property next to Robert Luethi. Their neighbor hired Briarwood Forestry Ser­vices, LLC, to apply herbicides to his property. However, something went wrong, and the herbicides made their way onto the Brandenburgs’ prop­erty, causing damage to their trees and plants.

The Brandenburgs sued Luethi and his insurer, McMillan-Warner Mutual Insurance Company, alleging that Briar­wood negligently applied the herbicides by failing to follow the manufacturer’s instructions. Luethi asked the court to dismiss the case, arguing that under Wisconsin law, he couldn’t be held liable for Briarwood’s negligence because it was an independent contractor and Wisconsin follows the rule that an em­ployer generally isn’t liable for the torts of independent contractors. The Bran­denburgs agreed that Briarwood was an independent contractor but argued that an employer may be liable for the torts of an independent contractor if its activities are “inherently dangerous.”

The trial court granted Luethi’s re­quest for dismissal. After concluding that Wisconsin law doesn’t provide a clear definition of what constitutes an inherently dangerous activity, the court looked to other jurisdictions’ laws gov­erning “ultrahazardous” or “abnor­mally dangerous” activities. The court considered several factors, including:

  1. The existence of a high degree of some risk of harm;
  2. The likelihood that the harm that results from the activity will be great;
  3. The inability to eliminate the risk by the exercise of reasonable care;
  4. The extent to which the activity is not common;
  5. Whether the activity was carried out in an inappropriate place; and
  6. The extent to which the value of the activity outweighs its dangerous attributes.

After an evidentiary hearing, the trial court con­cluded that the Brandenburgs couldn’t demonstrate that applying herbicide is an abnormally dangerous or ultra­hazardous activity. The Brandenburgs appealed, and the Wisconsin Court of Appeals reversed the trial court’s decision.

Disagreement Over ‘Inherently Dangerous’

The court of appeals concluded that the trial court applied the wrong legal standard. According to the court of appeals, an inherently dangerous activity is different from an abnormally dangerous or ultrahazardous activ­ity. The court ruled that under Wisconsin law, an inher­ently dangerous activity is any activity in which “one can naturally expect harm to arise unless something is done to avoid the harm.”

By contrast, an activity is ultrahazardous only if “the risk of harm remains unreasonably high no mat­ter how carefully [the activity] is undertaken.” The court explained that examples of ultrahazardous activities include transporting nuclear waste or working with toxic gas. On the other hand, inherently dangerous ac­tivities include “general construction, demolition, and excavation.”

The court of appeals held that an employer may be liable to a third party for an independent contractor’s negligence under Wisconsin law if the independent contractor was performing inherently dangerous work. The higher standard for ultrahazardous activities ap­plies only when an independent contractor’s employee is suing the principal employer.

The court of appeals then concluded that applying herbicide was an inherently dangerous activity because it posed a natural risk of expected harm and it was pos­sible to reduce the risk of harm by taking precautions. Therefore, the court of appeals reversed the trial court’s dismissal of the case in favor of Luethi.

Supreme Court Will Decide Dispute

Luethi asked the Wisconsin Supreme Court to re­view the court of appeals’ decision and determine the correct scope of the “inherently dangerous” exception to the general rule that principal employers aren’t liable for the torts of independent contractors. The Wisconsin Su­preme Court agreed to hear the case.

Luethi argued before the supreme court that the “in­herently dangerous” exception is “inherently problem­atic.” He asserted that as it’s applied by the court of ap­peals, the exception is so broad that it swallows the rule and essentially makes a principal employer liable for virtually any type of activity performed by an indepen­dent contractor. Therefore, he asked the supreme court to either change or replace the “inherently dangerous” exception.

Alternatively, Luethi asked the supreme court to rule that the “inherently dangerous” exception doesn’t apply to a private landowner who isn’t a “traditional employer.” Brandenburg v. Luethi, No. 2012AP002085, 348 Wis. 2d 265, 831 N.W.2d 825 (Ct. App., 2013) (petition for review granted Oct. 30, 2013).

Bottom Line

The Wisconsin Supreme Court’s decision in this case will have a significant impact on employers in Wis­consin. If the court upholds the court of appeals’ decision, employers will lose one of the benefits of hiring an inde­pendent contractor instead of having an employee perform a task. If something as ubiquitous and mun­dane as general construction constitutes an inherently dangerous activity, then we’re hard-pressed to think of an activity that doesn’t meet the standard.

Indeed, the court of appeals’ view of the “inherently dangerous” rule basically equates such activity with negligence. That is, according to the court of appeals’ reasoning, anytime an activity presents a risk of harm that can be eliminated through the exercise of reason­able care, it must be deemed inherently dangerous. But because all negligence claims involve activities with some risk of danger that can be eliminated through the exercise of reasonable care, the court of appeals’ defini­tion of inherently dangerous activities makes employers liable whenever an independent contractor is negligent. The exception swallows the rule.

Businesses would fare no better if the Wisconsin Su­preme Court adopts Luethi’s alternative argument and holds that the “inherently dangerous” exception applies only to traditional employers. Ultimately, the supreme court’s decision will come down to whether it believes it’s better policy to allow an injured third party to re­cover directly from a principal employer for an injury by an independent contractor or whether it’s more impor­tant to protect employers from such lawsuits. The court likely won’t issue a decision until this summer.

Whatever the court decides, you can protect your company by demanding proof that independent con­tractors have general liability insurance coverage for their work operations. Alternatively, you can demand that an independent contractor agree to indemnify your company for any losses caused by its activities.

This article was featured in the February 2014 issue of the Wisconsin Employment Law Letter, which is edited by Attorney Timothy Barber and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.

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