(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of
the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity,
portions of any opinion may not have been summarized).
Argued October 7, 1997 -- Decided March 11, 1998
GARIBALDI, J., writing for a majority of the Court.
This case involves the issue of an employer's vicarious liability for the negligence of an independent contractor.
Alice Mavrikidis was severely burned in an automobile accident when her vehicle was struck by a truck driven by
Gerald Petullo and registered to Petullo Brothers, Inc. The truck had run a red light, struck a telephone pole, and
overturned, spilling its contents of hot asphalt on Mavrikidis's car. At the time of the accident, Gerald was transporting the
asphalt to a job site at Clar Pine Servicenter, a retail gasoline and automotive repair shop.
Clar Pine's owner, Karl Pascarello, had hired Gerald's father, Angelo Petullo, to perform asphalt and concrete work
as part of the renovation of the service station. Pascarello had known Angelo as a customer since 1972, and Petullo Brothers
was indebted to Clar Pine for between $12,000 and $20,000. In exchange for the asphalt work, the parties orally agreed that
Petullo Brothers would receive a $6,800 credit toward its debt.
On the morning of the accident, Gerald ordered twenty tons of asphalt from Newark Asphalt's plant. Newark
Asphalt loaded 10.99 tons of asphalt onto Gerald's truck, and 9 tons on a second truck. At the scene of the accident, Gerald
stated to the responding police officer that he was unable to stop at the red light because of the load on his truck.
The officer issued two summonses to Gerald -- one for driving while on the suspended list and another for failure to
stop at a red light. Angelo arrived on the scene to assist in cleaning up the asphalt, and identified himself as the owner of
Petullo Brothers. The officer issued three summonses to Angelo -- one for driving while suspended, one for having no vehicle
insurance, and one for allowing an unlicensed driver (Gerald) operate the vehicle.
An inspection of Gerald's truck revealed two weight violations: the truck's weight at the time of the accident
exceeded the gross vehicle weight for which it was registered; and the combined weight per axle of the cargo and vehicle
exceeded the statutory limit. In addition, the truck's right rear brake was "non-existent." The testimony of plaintiff's expert
indicated that the cause of the accident was primarily due to the truck being excessively overloaded.
The Petullos pleaded guilty in municipal court to driving while on the suspended list. Gerald also pleaded guilty to
disregarding a traffic signal and failing to have insurance. Petullo Brothers, through Gerald, pleaded guilty to operating an
unsafe and overweight vehicle.
Pascarello testified that the Petullos' trucks appeared to be "junks" and would often break down. Specifically, he
observed dents, loosened grills and tailgates, and bald tires. Pascarello never repaired or inspected the dump trucks and did
not know that they were uninsured or that Angelo and Gerald had suspended licenses.
The jury awarded Mavrikidis $750,000 in damages and $30,000 to her husband per quod. It determined that Gerald
was 48 percent negligent; Angelo 24 percent negligent; Newark Asphalt 11 percent negligent; and Clar Pine 17 percent
negligent. In answer to special interrogatories, the jury found that Clar Pine was negligent in engaging a reckless contractor,
that Clar Pine retained control of the "manner and means" of performing the paving work, and that such work was "an
inherently dangerous activity." Based on the jury's finding that Clar Pine was vicariously liable for the Petullos' negligence,
the court entered judgment against Clar Pine for 89 Percent of the total damages awarded.
The Appellate Division reversed with respect to Clar Pine, holding that there was insufficient evidence to support a
finding of vicarious liability. It further found insufficient evidence to support a finding that Clar Pine was independently
negligent in hiring the Petullo Brothers. The Supreme Court granted certification.
HELD: There was insufficient evidence to support a finding of vicarious liability on the part of Clar Pine for the negligent acts
of the Petullos.
1. Ordinarily, an employer that hires an independent contractor is not liable for the negligent acts of the contractor. There
are three exceptions to the general rule of nonliability, however, as delineated by the Supreme Court in Majestic Realty
Associates, Inc. v. Toti Contracting Co.,
30 N.J. 425 (1959): (a) where the principal retains control of the manner and means
of the work; (b) where the principal engages an incompetent contractor; or (c) where the activity contracted for constitutes a
nuisance per se. (Pp. 12- 17)
2. In respect of the first exception, supervisory acts performed by the employer will not give rise to vicarious liability where
the supervisory interest relates only to the result to be accomplished, not to the means of accomplishing it. Pascarello's
actions here did not exceed such general supervisory powers. (Pp. 17-19)
3. Because the second Majestic prong may include causes of action for both direct and vicarious liability, there is no reason
to set out a separate tort for negligently hiring an independent contractor. To hold an employer liable under the second
Majestic exception, it is necessary to show both (1) that the contractor was incompetent or unskilled to perform the job, and
(2) that the principal knew or had reason to know of the contractor's incompetence. There is no evidence that the Petullos
were unqualified to perform the work. The dissent asserts that Pascarello's knowledge about the Petullos' lack of financial
stability might make him liable. A lack of financial responsibility, however, is not equivalent to or a category of
incompetence. To hold otherwise would hurt fledgling independent contractors trying to enter the marketplace and impose
prohibitive obligations on employers of independent contractors. And, Pascarello's observation of the trucks in no way
indicated knowledge that the brakes might be defective. In addition, it is undisputed that Pascarello had no knowledge that
Angelo and Gerald Petullo had suspended licenses or that the trucks were uninsured. Imposing a duty on a principal to
check the driving record and credentials of the contractor's employees or to inspect the contractor's equipment would impose
a very onerous burden. (Pp. 19-28)
4. As to the third Majestic exception, "nuisance per se" can be equated with "inherently dangerous." The danger must inhere
in the activity itself, be peculiar, and require special precautions. In cases where the work involves the transport of materials,
the principal is not responsible for the ordinary risks or dangers associated with faulty brakes or poor driving. Mavrikidis's
injuries resulted from the ordinary risk of Gerald's driving and poor vehicle maintenance, not from risks that are peculiar to
paving. (Pp. 29-33)
5. The jury's interrogatory responses do not warrant a remand for a new trial. (Pp. 34-35)
Judgement of the Appellate Division is AFFIRMED and the matter is REMANDED for a reallocation trial. If the
parties agree, the percentage of liability attributed to Clar Pine can be apportioned to the remaining defendants on a pro rata
basis.
STEIN, J., dissenting, is of the view that the jury verdict against Clar Pine was based in part on a jury finding that
Clar Pine negligently hired an incompetent contractor, a finding that was supported by substantial evidence.
CHIEF JUSTICE PORITZ and JUSTICES POLLOCK and COLEMAN join in JUSTICE GARIBALDI's opinion.
JUSTICE STEIN filed a separate dissenting opinion, in which JUSTICES HANDLER and O'HERN join.
SUPREME COURT OF NEW JERSEY
A-21/
22 September Term 1997
ALICE I. MAVRIKIDIS and
KONSTANTINOS MAVRIKIDIS,
her husband,
Plaintiffs-Appellants
and Cross-Respondents,
v.
GERALD PETULLO, PETULLO BROS.,
INC., ITS AGENTS, SERVANTS AND/OR
EMPLOYEES, ANGELO PETULLO,
GERALDINE PETULLO, OTTAVIO PETULLO
AND/OR GERALD PETULLO, trading as
PETULLO BROS., INC., an alleged
corporation and CLAR PINE
SERVICENTER, ITS AGENTS, SERVANTS
AND/OR EMPLOYEES,
Defendants-Respondents
and Cross-Respondents,
and
NEWARK ASPHALT CORP., ITS AGENTS,
SERVANTS AND/OR EMPLOYEES,
Defendant-Respondent
and Cross-Appellant,
and
"ABC" (a fictitious name),
Defendant.
____________________________________
MOTOR CLUB OF AMERICA INSURANCE
COMPANY AS SUBROGEE OF
KONSTANTINOS MAVRIKIDIS AND
MOTOR CLUB OF AMERICA INSURANCE
COMPANY,
Plaintiffs-Appellants
and Cross-Respondents,
v.
PETULLO BROTHERS, INC., GERALD
PETULLO a/k/a JERRY PETULLO
and ANGELO PETULLO, GERALDINE
PETULLO, OTTAVIO PETULLO AND/OR
GERALD PETULLO t/a PETULLO BROTHERS,
INC., an alleged corporation and
CLAR PINE SERVICENTER,
Defendants-Respondents
and Cross-Respondents,
and
NEWARK ASPHALT CORP.,
Defendant-Respondent
and Cross-Appellant,
and
JOHN DOES 1 through 10 AND
ABC, DEF AND GHI CORPORATIONS
(fictitious names),
Defendants.
Argued October 7, 1997 -- Decided March 11, 1998
On certification to the Superior Court, Appellate
Division.
David B. Glazer argued the cause for
appellants and cross-respondents (Glazer &
Luciano, attorneys; Mr. Glazer and Michael A.
Luciano, of counsel and on the briefs).
Paul A. Spina argued the cause for respondent
and cross-appellant (Paul Seligman, attorney;
Mr. Spina and Manuel J. Almedia, Jr., on the
brief).
William T. Connell argued the cause for
respondent and cross-respondent Clar Pine
Servicenter (Dwyer, Connell and Lisbona,
attorneys).
William J. Ewing submitted a brief on behalf
of respondents and cross-respondents Gerald
Petullo, Petullo Bros., Inc., its agents,
servants and/or employees, Angelo Petullo,
Geraldine Petullo, Ottavio Petullo and/or
Gerald Petullo, trading as Petullo Bros.,
Inc., an alleged corporation.
The opinion of the Court was delivered by
GARIBALDI, J.
In this case, we revisit the parameters of the vicarious
liability doctrine as it pertains to whether a contractee may be
vicariously liable for the negligence of its independent
contractor under the three separate bases of liability delineated
in Majestic Realty Associates, Inc. v. Toti Contracting Co.,
30 N.J. 425 (1959). Furthermore, we consider the additional issue
of an employer's direct liability for the negligent hiring of an
independent contractor.
Brothers), drove through a red light, struck plaintiff's car, hit
a telephone pole, and then overturned, spilling the truck's
contents onto Mavrikidis's car. At the time of the accident,
Gerald was transporting 10.99 tons of hot asphalt, which had been
loaded onto the truck by Newark Asphalt Corporation (Newark
Asphalt), to his job site at Clar Pine Servicenter (Clar Pine), a
retail gasoline and automotive repair shop in Montclair.
Prior to the accident, Clar Pine's owner, Karl Pascarello
(Pascarello), decided to renovate the station because he was
switching gasoline brands from Getty to Gulf Oil. Those
renovations included the installation of new pumps and canopies.
Palisades Resources, a distributor for Gulf Oil, retained an
architect for Clar Pine and supplied Pascarello with blueprints,
new pumps, and canopies for the station. The canopies were
installed by Fashion Design, a construction company engaged by
Palisades Resources. Pascarello obtained the required approval
from the Montclair zoning board. He purchased and assembled a
metal frame that was placed around the gasoline pumps, assisted
his father in some of the plumbing work, and installed a
protective device necessary to make the pump island explosion-proof. He also hired a contractor to do the electrical work.
Because Pascarello had no experience in the construction or
paving business, he hired Gerald's father, Angelo Petullo, to
perform the asphalt and concrete work as part of the renovation
of his service station. Pascarello had known Angelo since 1972
and, prior to hiring him, Pascarello examined other paving jobs
that Angelo had completed. Pascarello hired Angelo by verbal
agreement to participate in the station's renovations based on
Angelo's reputation as an excellent mason and, to a lesser
extent, the debt owed Clar Pine under the Petullo Brothers
account. Over the years, Angelo and Gerald had charged gas and
small repairs to their company account. In exchange for the
asphalt work, both parties orally agreed that the Petullos would
receive a $6,800 credit toward a $12,000 to $20,000 debt that
Petullo Brothers had accumulated.
At trial, there was conflicting testimony whether Angelo or
Gerald operated Petullo Brothers, a corporation that had been
dissolved in 1978 by the New Jersey Secretary of State for
nonpayment of annual fees. Although Angelo and Gerald both
testified that Gerald had been running the company since 1982 and
that Angelo formally transferred ownership to his son in 1989,
Pascarello testified that he considered Angelo to be the company
head and Gerald to be an employee who worked "hand in hand" with
his father. Furthermore, a police officer testified that, at the
accident site Angelo identified himself as the owner of Petullo
Brothers. The jury concluded that Pascarello hired Angelo and
Petullo Brothers to complete the asphalt and concrete work at the
Clar Pine job site.
The Petullos supplied the labor, equipment, concrete, and
most of the asphalt needed for the job, until Angelo "ran out of
money" in the midst of the renovations. As a result, Pascarello
provided him with a blank check made out to Newark Asphalt to
purchase the asphalt on the day of the accident. Pascarello
testified that he supplied Angelo with a check because he "[was]
the type of person you don't give cash to." Nevertheless, it is
undisputed that Pascarello was not involved in supervising the
Petullos' work on a daily basis. Other than general supervision
and periodic consultation, Pascarello's limited participation in
the asphalt work consisted of payment for three loads of asphalt,
including the one involved in this accident, as well as his
direction to lay the asphalt in front of the service station's
bay doors first to enable him to continue his automotive repairs
while the gas station was out of service. As part of its regular
course of business, Clar Pine repaired cars and small trucks.
During completion of the paving job, Clar Pine remained open for
business, servicing cars but not selling gasoline.
On the morning of the accident, Gerald ordered twenty tons
of asphalt from Newark Asphalt's plant. The employees of Newark
Asphalt loaded 10.99 tons of asphalt, at a temperature between
300 and 310 degrees Fahrenheit, onto Gerald's truck and 9 tons
onto a second truck. The vice-president of the asphalt supplier,
Michael Manno, testified that its workers did not physically
inspect its customers' vehicles to ensure their ability to carry
a given load. Rather, he explained, Newark Asphalt is "like a
grocery store." Its employees "are not policemen, we don't
inspect anything." If the customer is able to pay, the customer
will receive what is ordered.
The employees at Newark Asphalt, however, do conduct visual
inspections of a truck to determine whether it can accommodate
the requested load. According to Manno's testimony, such a
visual inspection of Gerald's truck would lead to the conclusion
that it could haul up to fifteen tons of asphalt in its truck
bed. Yet, at the scene of the accident, Gerald admitted to the
responding police officer that he was unable to stop at the red
light because of the load on his truck.
The police also learned at the scene of the accident that
Gerald's driver's license had been suspended. The officer issued
two summonses to Gerald -- one for failure to stop at a red light
and the other for driving while on the suspended list. Shortly
after the collision, Angelo arrived on the scene to assist in
cleaning up the asphalt before it cooled and stuck to the
roadway. The officer issued three summonses to Angelo, whose
license had also been suspended -- one for driving while
suspended, one for having no vehicle insurance, and one for
allowing an unlicensed driver (Gerald) to operate a vehicle. At
trial, the officer explained that he issued the second and third
tickets to Angelo because, as noted before, he identified himself
as the owner of Petullo Brothers. Although Gerald and Angelo
dispute their speaking with the officer at the scene of the
accident, it was stipulated at trial that on February 26, 1991,
both Petullos pleaded guilty in Bloomfield Municipal Court to
driving while on the suspended list on September 11, 1990. At
that same municipal hearing, Gerald also pleaded guilty to
disregarding a traffic signal and failing to have insurance on
the date of the accident. Furthermore, Petullo Brothers, through
Gerald, pleaded guilty to operating an unsafe and overweight
vehicle on September 11, 1990.
As a result of an inspection of Gerald's truck, conducted two days after the accident by a member of the commercial vehicle inspection unit of the Essex County Police Department, two weight violations were uncovered: (1) the truck's weight at the time of the accident exceeded the gross vehicle weight (GVW) of 32,000 pounds, for which it was registered with the Division of Motor Vehicles, by 866 poundsSee footnote 3 and (2) the combined weight of the cargo plus the axle exceeded the statutory limit by 5,106 pounds.See footnote 4 The officer who inspected the truck explained that owners can register their trucks for whatever GVW they choose. The GVW is the weight of the vehicle plus its cargo. The officer testified, however, that the truck's GVW of 32,000 pounds was "an inordinately high figure." In his deposition testimony, which was read to the jury at trial, Gerald testified that the GVW of the truck was actually 18,000 pounds. At trial, however, Gerald
testified that the GVW of the truck was 27,000 pounds. In
addition, the truck's right rear brake was "non-existent" and
wooden side boards had been added to the truck to increase its
holding capacity. Moreover, the testimony of plaintiff's expert
indicated that the cause of the accident was primarily due to the
truck being excessively overloaded by eighty-two percent. His
calculation was based on Gerald's deposition testimony that the
actual GVW for the truck was 18,000 pounds. The expert further
testified that had the truck not been overloaded, Gerald would
have maintained better control and required a shorter braking
distance.
Pascarello testified that the Petullos' trucks appeared to
be "junks" and would run for three to five days before breaking
down. Specifically, Pascarello observed that the trucks had
dents in the bumpers and fenders, loosened grills and tailgates,
and frequent bald tires. None of those observations, however,
implicated faulty brakes. Pascarello never repaired or inspected
the dump trucks that the Petullos used to transport asphalt. He
did not know that the trucks were uninsured. He also did not
know that Angelo and Gerald had suspended licenses or that Gerald
was a reckless or careless driver.
On December 6, 1990, Mavrikidis and her husband filed a
complaint against Gerald, Angelo, Petullo Brothers, Geraldine
Petullo (Angelo's wife), Ottavio Petullo (Angelo's brother),
Newark Asphalt, and Clar Pine. One year later, an action brought
by Motor Club of America Insurance Company (MCA) against
defendants for recovery of property and medical benefits paid to
plaintiff was consolidated with the present action. The jury
trial was conducted between April 7 and April 15, 1994. At the
close of testimony, the trial judge denied Newark Asphalt's
request that the jury charge and verdict sheets be modified to
incorporate its contention that N.J.S.A. 39:4-77 and DeBonis v.
Orange Quarry Co.,
233 N.J. Super. 156 (App. Div. 1989), place
the burden of properly loading a truck on the owner/operator of
the truck and not on the loader.
In special interrogatories, the jury found that Gerald
operated his truck negligently on September 11, 1990 and that his
negligence was a proximate cause of the accident. The jurors
further found that Gerald was acting as an agent, servant and/or
employee of Angelo at the time of the accident. In addition, the
jury found that Newark Asphalt was negligent in overloading the
truck and that its negligence was also a proximate cause of
plaintiff's injuries. Although the jury found Angelo and Petullo
Brothers to be competent to perform the work for which they were
engaged, it also found Clar Pine "negligent in engaging a
careless, reckless or incompetent contractor" and that its
negligence was a proximate cause of the accident and plaintiff's
injuries. Furthermore, the panel found that Clar Pine retained
control of the "manner and means" of performing the paving work
at the station and that such work, "i.e. the transport and/or
paving of hot asphalt, [was] an inherently dangerous activity."
Specifically, the jury determined that Gerald was 48" negligent; Angelo was 24" negligent; Newark Asphalt was 11" negligent; and Clar Pine was 17" negligent. The jury awarded
$750,000 in damages to plaintiff and $30,000 to her husband per
quod. In the consolidated action, the jury found Gerald solely
liable for its award to MCA of $14,000 in property damages and
$36,000 in medical expenses. Subsequently, the trial court
molded the verdict. In that verdict, the court found Angelo
vicariously liable for all of Gerald's negligence. Therefore,
Angelo was liable for the 24" share attributed to him by the jury
as well as the 48" attributed to Gerald. Based on the finding
that Clar Pine was vicariously liable for its independent
contractor, Angelo, the court entered a judgment against Clar
Pine for 89" of the total damages awarded, including the 17" attributed directly to Clar Pine by the jury, the 24" attributed
to Angelo, and the 48" attributed to Gerald. The court also
entered judgment against Newark Asphalt for eleven percent of the
total damages awarded. Clar Pine and Newark Asphalt appealed.
The Appellate Division reversed with respect to Clar Pine,
holding there was insufficient evidence to support a finding of
vicarious liability on the part of Clar Pine for the negligent
acts of Gerald, Angelo, and Petullo Brothers, under any of the
three relevant exceptions outlined in Majestic, supra.
Therefore, the jury should not have considered those three
exceptions. The court further found that there was insufficient
evidence to support a finding that Clar Pine was independently
negligent in hiring Petullo Brothers. Finally, the Appellate
Division rejected Newark Asphalt's argument as clearly without
merit. In accordance with its decision, the court remanded for a
reallocation trial to determine the degree of responsibility of
Gerald, Angelo, and Newark Asphalt.
We granted certification to Clar Pine and Newark Asphalt,
148 N.J. 460 (1997), and now affirm the Appellate Division
decision.
must be approached with an awareness of the long settled doctrine that ordinarily where a person engages a contractor, who conducts an independent business by means of his own employees, to do work not in itself a nuisance (as our cases put it), he is not liable for the negligent acts of the contractor in the performance of the contract.
See also Bahrle v. Exxon Corp.,
145 N.J. 144, 156 (1996)
("Ordinarily, an employer that hires an independent contractor is
not liable for the negligent acts of the contractor in the
performance of the contract."); Baldasarre v. Butler,
132 N.J. 278, 291 (1993) ("Generally . . . the principal is not
vicariously liable for the torts of the independent contractor if
the principal did not direct or participate in them.").
The initial inquiry in our analysis is to examine the status
of the Petullos in relation to Clar Pine. Despite plaintiff's
alternate theories to the contrary, the Petullos were independent
contractors rather than servants of Clar Pine.
The important difference between an employee
and an independent contractor is that one who
hires an independent contractor 'has no right
of control over the manner in which the work
is to be done, it is to be regarded as the
contractor's own enterprise, and he, rather
than the employer is the proper party to be
charged with the responsibility for
preventing the risk, and administering and
distributing it.' (quoting Prosser & Keeton,
supra, § 71).
In contrast, a servant is traditionally one who is "employed to
perform services in the affairs of another, whose physical
conduct in the performance of the service is controlled, or is
subject to a right of control, by the other." W. Page Keeton,
Prosser & Keeton on the Law of Torts § 70 at 501 (5th ed. 1984).
In determining whether a contractee maintains the right of
control, several factors are to be considered. The Restatement
(Second) of Agency sets forth these factors, including:
(a) the extent of control which, by the
agreement, the master may exercise over the
details of the work;
(b) whether or not the one employed is
engaged in a distinct occupation or business;
(e) whether the employer or the workman
supplies the instrumentalities, tools, and
the place of work for the person doing the
work;
(f) the length of time for which the person
is employed;
(g) the method of payment, whether by the
time or by the job;
(h) whether or not the work is a part of the
regular business of the employer; [and]
(i) whether or not the parties believe they
are creating the relation of master and
servant . . . .
[Restatement (Second) of Agency § 220(2)
(1958).]
Applying those Restatement factors, it is evident that neither
Angelo nor Gerald was a servant of Clar Pine. The masonry work
required a skilled individual. Although Pascarello paid for
three loads of asphalt, the Petullos provided their own tools and
the remainder of the needed materials, other than bolts and
plywood supplied by Pascarello to install the canopies. Their
work did not involve the regular business of Clar Pine. In
addition, the period of employment spanned only the time it took
to lay the asphalt and concrete. Following the accident, the
Petullos continued the job for which they were hired, which was
approved by the Building Inspector of Montclair. In exchange for
their services, the Petullos were not paid by the hour or month;
instead, they received a discharge of the portion of their debt.
Based on that threshold determination, we now must determine
whether this case falls within any exceptions to the general rule
of nonliability of principals/contractees for the negligence of
their independent contractors. There are three such exceptions,
as delineated by the Majestic Court: "(a) where the landowner [or
principal] retains control of the manner and means of the doing
of the work which is the subject of the contract; (b) where he
engages an incompetent contractor; or (c) where . . . the
activity contracted for constitutes a nuisance per se."
Majestic, supra, 30 N.J. at 431.
Plaintiffs contend, albeit not too strongly, that Clar Pine
also is guilty of the tort of negligently hiring an independent
contractor. This Court recognized the tort of negligently hiring
an incompetent, unfit, or dangerous employee in DiCosala v. Kay,
91 N.J. 159, 174 (1982). No New Jersey case, however, has
extended that doctrine to hold that a contractee will be directly
liable for his or her own negligence in selecting the contractor.
See, e.g., DiCosala, supra, 91 N.J. at 174; Schultz v. Roman
Catholic Archdiocese,
95 N.J. 530, 534 (1984); Lingar v. Live-In
Companions, Inc.,
300 N.J. Super. 22, 29-30 (App. Div. 1997);
Johnson v. Usdin Louis Co.,
248 N.J. Super. 525, 529-31 (App.
Div.), certif. denied,
126 N.J. 386 (1991).
In DiCosala, supra, 91 N.J. at 172, as one of the principal
bases for that decision, we cited section 317 of the Restatement
(Second) of Torts (1963), which states: "A master is under a
duty to exercise reasonable care so to control his servant while
acting outside the scope of his employment as to prevent him from
intentionally harming others or from so conducting himself as to
create an unreasonable risk of bodily harm to them." (emphasis
added). Comment a to that section expressly provides that the
rule is "applicable only when the servant is acting outside the
scope of his employment." Id. § 317 comment a. If the employee
were acting within the scope of his employment, then the master
may be vicariously liable under standard agency principles.
Ibid. In this case, however, there is no dispute that Gerald
was acting wholly within his contractual duties.
In addition, the doctrine of respondeat superior does not
ordinarily apply in the context of an independent contractor.
Indeed, the status of an independent contractor is
"'characterized by the attributes of self-employment and self-determination in the economic and professional sense.'" Ibid.
(quoting Rokos v. State, Dep't of Treasury,
236 N.J. Super. 174,
181 (App. Div. 1989)). By definition, then, the work done by an
independent contractor is not overseen or controlled by the
contractee. Accordingly, the basic premises underlying the tort
of negligent hiring of an employee are lacking in the hiring of
an independent contractor.
A prominent commentator, in discussing the negligence of the
contractee, addressed a number of situations in which contractees
are liable for their own negligence rather than that of their
contractors:
Where there is a foreseeable risk of harm to
others unless precautions are taken, it is
his duty to exercise reasonable care to
select a competent, experienced, and careful
contractor with the proper equipment . . . .
So far as he in fact gives directions for the
work, furnishes equipment for it, or retains
control over any part of it, he is required
to exercise reasonable care for the
protection of others; and he must likewise
interfere to put a stop to any unnecessarily
dangerous practices of which he becomes
informed, and make a reasonable inspection of
the work after it is completed, to be sure
that it is safe. . . . In all of these cases,
he is liable for his personal negligence,
rather than that of the contractor.
[Prosser & Keeton, supra, § 71 at 510-11
(footnotes omitted).]
The above analysis comports with the imposition of liability on a
principal under the three Majestic exceptions. We address more
fully the question of whether this state recognizes a separate
tort of negligently hiring an independent contractor in our
discussion of the second Majestic exception.
However, supervisory acts performed by the contractee will not give rise to vicarious liability under that exception. As indicated by the language of the exception, application of principles of respondeat superior are not warranted where the contractee's "supervisory interest relates [only] to the result
to be accomplished, not to the means of accomplishing it."
Majestic, supra, 30 N.J. at 431; see also Marion v. Public Serv.
Elec. & Gas Co.,
72 N.J. Super. 146, 154-55 (App. Div. 1962)
(explaining that retention of broad supervisory power rather than
"right to direct and control" did not subject contractee to
vicarious liability for independent contractor's actions);
Trecartin, supra, 18 N.J. Super. at 386 (recognizing that "[a]
general contractor . . . exercising only such general
superintendence as is necessary to see that the subcontractor
performs the contract, ordinarily has no duty to protect an
employee of the subcontractor").
Pascarello's actions did not exceed the scope of general
supervisory powers so as to subject Clar Pine to vicarious
liability for Gerald's negligence. Providing blueprints, paying
for some of the asphalt, and directing that a portion of the
concrete be completed first are clearly within the scope of a
contractee's broad supervisory powers. In addition, Pascarello's
actions with regard to assembling and placing the metal frame
around the gasoline pumps and installing an explosion-proof
system around the island did not amount to retention of control
over the Petullos' work. Pascarello's actions related to the
overall renovations of the station and not to the specific work
for which the Petullos were engaged. The Petullos were hired to
do the paving for the station and were not involved in the
renovation other than the paving. The Appellate Division,
therefore, correctly determined that there was insufficient
evidence to present this issue to the jury. When the evidence is
viewed in the light most favorable to plaintiffs, Pascarello's
actions arose from a general supervisory power over the result to
be accomplished rather than the means of that accomplishment.
In creating the second exception, the Majestic Court relied on an earlier Appellate Division decision in Barnard v. Trenton-New Brunswick Theatres Co., 32 N.J. Super. 551 (1954). In Barnard, the court explained that:
'Where the work to be done is not per se a nuisance and injury results from the negligence of an independent contractor or his servants in the execution of it, the contractor alone is liable unless the owner is in default in employing an unskillful or improper person as the contractor.'
[Id. at 558 (quoting Terranella v. Union
Bldg. & Constr. Co.,
3 N.J. 443, 446-47
(1950)).]
The Barnard court concluded that there was no basis for holding
the principal liable in that case, noting there was no evidence
making "known to the [principal that the contractor was]
unskillful or incompetent at the time of the employment." Ibid.;
see also Terranella, supra, 3 N.J. at 447 (rejecting imposition
of liability on principal where there was no suggestion that "the
contractor lacked the requisite skill or qualifications for the
work undertaken"). Here, too, there is no evidence that the
Petullo Brothers were not skillful in executing the work for
which they were hired: paving the service station. Rather, the
proximate cause of the injuries to plaintiff was the negligence
of Gerald in driving an overloaded truck with defective brakes
through a red traffic light.
Because the second Majestic prong may include causes of
action for both direct and vicarious liability, there is no
reason to set out a separate tort for negligently hiring an
independent contractor. To hold an employer liable under the
second Majestic exception to the general rule of nonliability of
principals for the negligence of their independent contractors,
it is necessary to show both (1) that the contractor was
incompetent or unskilled to perform the job for which he was
hired, and (2) that the principal knew or had reason to know of
the contractor's incompetence. The Petullos were skilled and
experienced paving contractors. There is no evidence that the
Petullos were unqualified to perform the masonry work for which
they were hired. In fact, Pascarello visited other job sites
that Angelo paved in order to check the quality of his work.
Viewing the evidence most favorably to plaintiffs, we find that
the evidence does not support a finding that the Petullos were
incompetent to perform the paving work for which they were
engaged; hence, there is no basis for holding Clar Pine liable,
either vicariously or directly, for plaintiff's injuries.
Moreover, the only knowledge attributed to Pascarello,
emphasized by the dissent, falls into two categories: (i)
Pascarello hired the Petullos to recoup the monies they owed him,
post at ___ (slip op. at 11-13), and (ii) Pascarello repaired
some of Petullos' trucks and deemed them to be "junks" based on
several exterior flaws, post at ___ (slip op. at 14-16). As to
the first point, we reject the notion that financial
irresponsibility is either equivalent to or a category of
incompetence. Cassano, supra, 226 N.J. Super. at 116; see also
Restatement (Second) of Torts § 411 comment g (1965) ("The rule
stated in this Section makes the employer responsible only for
his failure to exercise reasonable care to employ a contractor
who is competent and careful. It has no application where the
contractor, although competent . . . is financially
irresponsible."). The dissent, however, asserts that there is
sufficient evidence for a jury to conclude that Pascarello was
negligent in hiring the Petullos because he knew they were
incompetent contractors. In essence, the dissent asserts that a
contractee who fails to consider a contractor's lack of financial
stability may be guilty of hiring an incompetent contractor.See footnote 5
In doing so, however, the dissent erroneously equates the
Petullos' financial status with incompetence.
In 1978, the Third Circuit in Becker v. Interstate
Properties,
569 F.2d 1203, 1209 (1977), cert. denied,
436 U.S. 906,
98 S. Ct. 2237,
56 L. Ed.2d 404 (1978), predicted that this
Court would "hold that the failure to engage a properly solvent
or adequately insured subcontractor is a violation of the duty to
obtain a competent independent contractor." In Robinson v. Jiffy
Executive Limousine Co.,
4 F.3d 237, 240 (3d Cir. 1993), however,
the Third Circuit expressly overruled its earlier holding in
Becker that financial irresponsibility could be considered as
evidence of incompetence. In Robinson, the court expressed
strong policy reasons why the Becker position should be
overturned. It relied on the strong dissent in Becker that
stated:
To my knowledge, New Jersey courts have never
defined the scope of a tort duty on the basis
of an individual's financial capabilities.
The majority's decision will, I think, cause
uncertainty and doubt for every financial
strata and every court, as well as hinder the
employment opportunities of an independent
contractor trying to enter the marketplace
but lacking much in the way of start-up
capital.
Behind this "duty" that the majority imposes
lie significant policy questions relating to
economic and social costs and benefits.
[Becker, supra, 569 F.
2d at 1216-17 (Hunter,
J., dissenting).]
In Robinson, supra, the Third Circuit reiterated the reasoning of
the Becker dissent that such a rule would hurt fledgling
independent contractors trying to enter the marketplace and would
also impose prohibitive obligations on employers of independent
contractors, 4 F.
3d at 242, such as average homeowners who retain
an independent contractor through the yellow pages. Homeowners
and business people, in order to protect themselves before hiring
a plumber, painter, or other independent contractor, would need
to investigate that contractor's financial background. Equating
lack of insurance and financial responsibility with incompetence
might also wreck havoc in particular industries, such as
transportation, because persons or entities contracting for
transportation services would be required to make continuing
inquiry into the financial qualifications of the contractor. See
Robinson, supra, 4 F.
3d at 242.
Two Appellate Division panels also have rejected the Becker
holding and have declined to rule that a contractor's lack of
insurance or financial stability can be considered in determining
whether the contractor is incompetent. See Cassano v. Aschoff,
226 N.J. Super. 110 (App. Div.), certif. denied,
113 N.J. 371
(1988); Miltz v. Borroughs-Shelving,
203 N.J. Super. 451 (1985).
In Cassano, supra, an employee of an independent
contractor's tree removal business sought to impose liability on
the landowners for his injuries, which were sustained while
working on the landowners' property at the landowners' direction.
Although the independent contractor represented to the landowners
that he was fully insured, he in fact was covered by neither
liability nor workers' compensation insurance. Cassano, supra,
226 N.J. Super. at 113. The plaintiff contended that the
landowners should be vicariously liable for hiring an incompetent
contractor "and in particular, a financially unstable one." Id.
at 114. Rejecting that argument, the court explained that "[t]he
fact that a contractor is negligent or incompetent in the manner
in which he performs a particular job does not mean that he is
incompetent generally. More to the point, [the independent
contractor's] poor performance was only known . . . in
retrospect." Ibid. Further, the court stated:
Although no court in this state, either
before Majestic, or in the intervening
nineteen years had chosen to apply [the
concept of a tort duty based on financial
capacity], the majority in Becker
nevertheless predicted that future New Jersey
courts would do so. No court has since
chosen to follow that lead. In these
circumstances, nor do we.
The Cassano court also recognized that because the injured employee was covered by workers' compensation, the plaintiff already had a remedy for his accidental loss. Imposing liability on the landowners would adversely impact the workers' compensation system and subvert the parties' reasonable expectations. Id. at 117; see also Jones v. Chevron U.S.A., Inc., 718 P.2d 890, 899 (Wyo. 1986) ("The owner should not have to pay for injuries caused by the contractor when the worker[s'] compensation system already covers those injuries."). Although
the public policy underlying the workers' compensation system is
inapplicable to the facts in this case, a similar argument may be
made with regard to uninsured motorist coverage. The Legislature
has provided for protection of an innocent driver injured in an
accident by an uninsured motorist by requiring auto insurers to
provide uninsured motorist coverage in all automobile liability
policies. See Gorton v. Reliance Ins. Co.,
137 N.J. Super. 558,
563-64 (App. Div. 1975), rev'd on other grounds,
77 N.J. 563
(1978).
The Appellate Division also rejected the theory that
liability should be imposed against a general contractor because
the subcontractor was "judgment-proof" in a case involving an
injured third party rather than an employee of the contractor.
Miltz, supra, 203 N.J. Super. at 466. In Miltz, supra, the
plaintiff was injured on negligently installed steps in a
department store and based her action against the general
contractor on the financial insolvency of the subcontractor hired
by that general contractor. In rejecting the plaintiff's lack of
financial responsibility theory, the Appellate Division
emphasized that "plaintiff cites no authority for the proposition
that barring a plaintiff from recovery against a contractor or
sub-contractor where the sub-subcontractor who has been found
liable for [the] plaintiff's injuries is insolvent is contrary to
New Jersey public policy." Ibid. The financial status of a
contractor cannot be the basis for imputing liability to the
principal who retained the contractor. A lack of insurance or
lack of financial responsibility is not the equivalent or a
category of incompetence. Accordingly, the court's charge to the
jury in this regard was erroneous.
With regard to the second point, Pascarello's observation of
the trucks in no way indicated that the right rear brake was
defective. Although Pascarello admitted that the trucks used by
Petullo Brothers were "junks," his observations of the vehicles
were based on their exterior appearance and in no way indicated
that the brakes on the truck were faulty. Indeed, Pascarello
testified that all of Petullos' vehicles looked like "typical
mason contracting trucks." The Petullos had several vehicles,
including cars, small trucks, and large dump trucks. The
testimony cited by the dissent refers primarily to the Petullos'
small trucks. The evidence is undisputed that Pascarello never
worked on the dump truck involved in this accident. Post at ___
(slip op. at 18). Moreover, the investigating officer of the
commercial vehicle unit testified that the problems with the
truck could not have been discovered without placing the truck on
a lift, removing the wheels, and looking underneath the vehicle.
The record demonstrates that Pascarello's automotive repair shop
did not have the lift necessary to inspect the dump truck
involved in the accident and Pascarello had no knowledge that the
right rear brake was inoperative. In addition, it is undisputed
that Pascarello did not know that Angelo and Gerald had suspended
licenses, were reckless or careless drivers, or that the trucks
were uninsured. There was also no evidence in the record that
Gerald ever had a prior automobile accident.
Imposing a duty on a contractee to check the driving record and credentials of the contractor's employees or to inspect the contractor's equipment would impose a very onerous burden on the contractee. Most, if not all, independent contractors transport their equipment and supplies to the contractee's premises. In the event that the contractor is involved in an automobile accident on the way to the job site, there is no precedent holding the contractee liable simply because the contractor was en route to the job location. A hypothetical applying a contrary result illustrates the fairness of that conclusion. For instance, if a construction contractor were hired to build an addition to a residence and he collided with another car on his way to the house, the property owner would not be liable for injuries to the passenger in the other car. Moreover, if the construction contractor's truck were carrying heavy planks and equipment necessary to perform its task, which fell off the truck during the accident and injured the third party, there would still be no basis for imposing liability on the property owner. The only distinction between the hypothetical and this case is the content of the truck driven by Gerald Petullo. Although plaintiff's injuries were particularly grim because the hot asphalt carried in Gerald's truck spilled onto her car, that fact bears no relevance as to the competence or incompetence of the Petullo Brothers. Logically, then, the contents of the truck should not change the liability of the employer. The contractee does not and should not be deemed negligent if he or she does not inquire and inspect the independent contractor's mode of
transportation, unless the equipment or transportation consists
of an inherently dangerous condition. As discussed below, the
transport of asphalt does not constitute such a condition.
'where work is to be done that may endanger others, there is no real hardship in holding the party for whom it is done responsible for neglect in doing it. Though he may not be able to do it himself, or intelligently supervise it, he will nevertheless be the more careful in selecting an agent to act for him.'
[Majestic, supra, 30 N.J. at 440 (quoting
Covington & Cincinnati Bridge Co. v.
Steinbrock,
55 N.E. 618, 621 (Ohio 1899)).]
We observed that "nuisance per se" could be equated with
"inherently dangerous." Id. at 434-35. Namely, work can be
considered to be inherently dangerous if it is
an activity which can be carried on safely
only by the exercise of special skill and
care, and which involves grave risk of danger
to persons or property if negligently done.
The term signifies that danger inheres in the
activity itself at all times, so as to
require special precautions to be taken with
regard to it to avoid injury. It means more
than simply danger arising from the casual or
collateral negligence of persons engaged in
it under particular circumstances.
[Ibid. (citations omitted) (emphasis added).]
See also Prosser & Keeton, supra, § 71 at 512-16.
The definition of inherently dangerous set forth in Majestic
comports with the discussion in sections 413, 416, and 427 of the
Restatement (Second) of Torts (1965) regarding a contractee's
nondelegable duty to take special precautions against dangers
that arise from inherently dangerous work. The comments and
illustrations following those sections explain that in cases in
which the work relates to the transport of materials, the
contractee is not responsible for the ordinary risks or dangers
associated with faulty brakes or poor driving. In discussing the
meaning of "[p]eculiar risk and special precautions," comment b
to section 413 states:
It is obvious that an employer of an
independent contractor may always anticipate
that if the contractor is in any way
negligent toward third persons, some harm to
such persons may result. Thus one who hires
a trucker to transport his goods must, as a
reasonable man, always realize that if the
truck is driven at an excessive speed, or
with defective brakes, some collision or
other harm to persons on the highway is
likely to occur. . . . [Routine] precautions
are the responsibility of the contractor . .
. .
A peculiar risk is different "from the common risks to which
persons in general are commonly subjected by the ordinary forms
of negligence." Id. § 416 comment d. As a result, "the
[contractee] is not liable for the contractor's failure to
inspect the brakes on his truck, or for his driving in excess of
the speed limit, because the risk is in no way a peculiar one,
and only an ordinary precaution is called for." Ibid.
In Ek v. Herrington,
939 F.2d 839 (1991), the Ninth Circuit
applied the three sections of the Restatement (Second) of Torts
discussed above. In that case, the plaintiff's decedent sued an
independent contractor who was hired to haul logs and the owner
of the logging operation, after the logs broke loose from the
truck, landing on decedent's vehicle and causing her death.
There, the brakes on the truck were defective and the truck was
overloaded by at least 10,000 pounds. Addressing the issue of
whether vicarious liability should be imposed on the logging
operation for the hauler's negligence, the court held:
We accept the Restatement's suggestion that
the risk posed by malfunctioning brakes is an
ordinary one that an employer of an
independent contractor has no duty to provide
against. Similarly, we hold that the risk
posed by overloading a logging truck is not a
peculiar risk that arises in the normal
course of logging and for which special
precautions must be taken. It is a risk that
would not arise, but for the independent
contractor's negligence, and which can be
avoided by the ordinary precaution of not
overloading the truck. An employer of an
independent contractor is justified in
presuming that a careful contractor will not
create that risk . . . . The duty rests
solely on the shoulders of the independent
contractor.
Moreover, in a case with facts almost identical to those presented here, a California appellate court refused to impose vicarious liability on a contractee whose independent contractor struck and killed the plaintiff's decedent with his dump truck, which was loaded with asphalt. A. Teichert & Son, Inc. v. Superior Court, 225 Cal. Rptr. 10 (Ct. App. 1986). In its decision, the court noted that "[the truck driver's] negligence,
if any, entailed nothing more than ordinary failure to exercise
due care in the operation of a motor vehicle. This is not
sufficient to invoke the 'special risk' exception to the rule of
non-liability for the negligence of an independent contractor."
Id. at 12.
Analogously, in this case, neither Gerald's negligent
driving nor overloading the truck were inherent in the work being
performed by Petullo Brothers. Clar Pine was justified in
presuming that the Petullos would operate their vehicles safely
and in accordance with the traffic laws; Clar Pine was further
justified in presuming that the Petullos and their supplier would
not overload their trucks. The risk of an accident between
Gerald and an innocent third party was unrelated to the
transportation of asphalt. Rather, the risk was directly
connected to his negligent and careless driving (running the red
light) as well as the failure of the brakes, which resulted from
the overloading of the truck and/or its disrepair. Although the
consequences of the accident were more severe due to the contents
of the truck at the time of the accident, the accident itself did
not arise out of any peculiar risk inherent to the transportation
of asphalt.
Poor driving, faulty brakes, and overloading are ordinary
risks associated with motor vehicles and the transport of
materials, and as such, are the responsibility of the contractor.
Clar Pine did not have a nondelegable duty to take special
precautions to prevent those risks. Absent proof that the
contractee was aware of an enhanced risk that Petullo Brothers
would drive negligently or would overload their vehicles, Clar
Pine will not be held vicariously or independently liable for the
ordinary dangers that arise from normal human activity, in this
case, driving. Plaintiff's injuries in this case resulted "from
the casual or collateral negligence," Majestic, supra, 30 N.J. at
435, of the Petullos, which is not normal or inherent in paving.
The dissent agrees that the Majestic three exception does
not imply. We suggest that without holding that a contractor who
transports asphalt is engaged in an inherently dangerous
condition, and therefore, subject to a "peculiar risk," a
contractor cannot be held liable for accidents that occur during
the transport of asphalt. See A. Teichert, supra, 225 Cal. Rptr.
at 12.
We observe that the trial court erroneously framed special
interrogatory 9 to the jury as follows: "Was the work to be
performed . . . i.e. the transport and/or paving of hot asphalt,
an inherently dangerous activity?" As the Appellate Division
correctly found, the activity contracted for by Clar Pine was
paving; transporting the asphalt to the job site was solely the
responsibility of the Petullos. Similarly, one would not expect
a contractee to be liable for injuries caused by a plumber who,
while in transit from purchasing a sink to be installed on the
contractee's premises, had an automobile accident.
In this case, reasonable men could not differ that the work
for which Clar Pine contracted with Petullo Brothers, paving, was
not inherently dangerous. As a matter of law, Clar Pine was not
vicariously liable under that exception.
We note that the jury's interrogatory responses do not warrant a remand for a new trial. Relevant to our discussion, the jury was presented with several special interrogatories, including:
6. a. Did Defendant, Clar Pine Servicenter, engage Gerald Petullo to perform construction/paving at its business premises and/or to transport asphalt?
6. b. Did Defendant, Clar Pine Servicenter,
engage Angelo Petullo to perform
construction/paving at its business premises
and/or to transport asphalt?