Case of the Day – Tuesday, May 31, 2016

BROTHERS, CAN YOU COLLECT A DIME?

dime160531One of the first rules personal injury lawyers learn in law school is “find the deep pocket.” After all, what good’s a million-dollar judgment against some guy whose earthly assets consist of a 1998 pickup truck and a rusty chain saw?

Today’s victim, one of the Brothers brothers, was hurt while he performed tree trimming. An employee of Tamarack Forestry Services, Bro was struck by an aerial lift truck operated by another Tamarack employee. Of course, workers comp would have covered the accident, and at the same time would prohibit him from suing his employer (one of the tradeoffs demanded by the workers comp system, which is intended to stand in place of the old “sue and score” personal injury lawsuit). That just wouldn’t do, because without a good negligence lawsuit, how could Brothers’ personal injury find a pocket to pick?

Lucky for Brothers that his employer, Tamarack, had been hired by New York State Electric and Gas Corp., a public utility that had plenty of money: just look at your light and gas bills if you doubt that. NYEG was no patsy, pointing out that Tamarack was merely an independent contractor, a fact which normally would make NYEG not responsible for the accident.

It seems, however, New York law has an exception where the employer of an independent contractor had a contractual duty that it couldn’t delegate, such as where it had agreed to be liable for a contractor’s negligence. It turned out NYEG was working on a DOT right-of-way, and it annually got a blanket license from the State allowing it to do so. The license had some boilerplate in it that NYEG would comply with federal and state worker safety regulations.

“Ah-ha!” cried Brothers’ lawyer, “a nondelegable duty!”

pocket160531“Ah-ha nothing!” cried the New York Court of Appeals (the state’s highest court), holding that the non-exclusive license to trim trees created no duty that NYEG owed DOT. Besides, the court said, public policy (which is  what the court cites when it knows where it wants to g0 but doesn’t know exactly how to get there) argues against such an unreasonable expansion of the “nondelegable duty” doctrine.

Which is not to say that the Court was wrong. It concluded that making NYSEG liable simply because the State of New York required it to buy boilerplate permits around the station would completely disrupt the company’s use of contractors to perform work, would bring utility maintenance to a screeching halt, at least until rate increases were approved to cover all of the

Brothers v. New York State Elec. and Gas Corp., 11 N.Y.3d 251 (N.Y. Court of Appeals, 2008). Mr. Brothers sued New York State Elec. & Gas to recover damages for injuries he sustained as an employee when he was struck by an aerial lift truck operated by a coworker. The public utility had contracted with Brothers’ employer, Tamarack Forestry Service, Inc., to furnish all necessary labor, supervision and equipment to clear trees and brush along electric lines. NYEG routinely obtained annual blanket highway work permits from the New York State Department of Transportation for work to be performed along state highways. Under the permit, NYEG was required to comply with various federal and state worker safety regulations. The trial court refused the grant NYEG summary judgment dismissing Brothers’ action. Brothers appealed, and the intermediate appellate court affirmed the trial court. Brothers then appealed to the state’s highest court.

Held:   NYEG could not be sued by Brothers. It’s true that in the work permit, NYSEG “assumed a specific duty by contract” to comply with federal and state worker safety regulations, but such a permit is not a typical “bargained-for exchange.” Although the State charges a fee for the permit, the fee is nominal consideration. A permit holder’s “breach” of the permit’s conditions does not give rise to the usual contract remedies. In fact, DOT may revoke the permit at any time whether or not there is a breach.

Nevertheless, the permit imposed certain obligations on the permit holder. Its terms and conditions are not meaningless or optional; instead, the permit holder agrees to abide by them in order to obtain DOT’s permission to work in the highway right-of-way. The Court said that key issue was whether NYSEG has undertaken a nondelegable duty to comply with the safety regulations enumerated in the permit for Brothers’ benefit.

Gen. Robert E. Lee knew something about duty ... and even he couldn't have found that NYSEG owed one to Mr. Brothers.

Gen. Robert E. Lee knew something about duty … and even he couldn’t have found that NYSEG owed one to Mr. Brothers.

Whether a particular duty is properly categorized as ‘nondelegable’ necessarily entails a sui generis inquiry where “the conclusion ultimately rests on policy considerations.” And here, several policy considerations argued against sticking NYSEG for Tamarack’s negligence. First, the Court said, “expanding vicarious liability to cover these work permits would make NYSEG potentially liable to a large class of plaintiffs, thus extending its duty beyond any reasonable limit.” Every year, public utilities pull highway work permits covering extensive areas and, for practical reasons, routinely hire hundreds of independent contractors to perform the construction or maintenance needed. The Court said that while an injured employee’s recovery from an independent contractors is limited by workers’ compensation, “this is not sufficient justification to impose vicarious liability on a utility that does not supervise or control the injury-causing work.”

After all, New York law requires utilities to obtain permits, and they do not have the power to bargain for terms and conditions of those permits. Brothers complained that NYSEG should be liable because it voluntarily assumed a duty to comply with the safety regulations recited in the permit, the Court said “NYSEG does not really have a choice in the matter; it cannot shirk maintenance work in state highway rights-of-way.”

TNLBGray

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