Employer Liability for Contractor Negligence in Montana

At HagEstad Law Group, we consistently receive questions from insurance carriers and their insureds regarding liability for the negligent acts of an independent contractor. The purpose of this article is to provide guidance to help others understand Employer Liability for Contractor Negligence in Montana.

The General Rule and Its Exceptions

The general rule is that an employer is not liable for the wrongful or negligent acts of an independent contractor. Ulmen v. Schwieger, 92 Mont. 331, 12 P.2d 856, 859 (1932). Like most areas of law, there are exceptions to the general rule. Those exceptions include (1) where there is a nondelegable duty based on a contract; (2) where the activity is inherently or intrinsically dangerous; and (3) where the general contractor negligently exercises a reserved right of control over a subcontractor's work. Paull v. Park Cty., 2009 MT 321, ¶ 19, 352 Mont. 465, 469–70, 218 P.3d 1198, 1201. Whether an activity is inherently dangerous is a question of law. Id. at ¶ 21.

Nondelegable Duties Established by Contract

The first exception involves a scenario where the employer has assumed a specific duty by contract. Ulmen v. Schwieger, 92 Mont. 331, 12 P.2d 856, 860 (1932)(overruled on other grounds by Beckman v. Butte-Silver Bow Cty., 2000 MT 112, ¶ 24, 299 Mont. 389, 399, 1 P.3d 348, 353); See also Stepanek v. Kober Const., 191 Mont. 430, 434, 625 P.2d 51, 53 (1981).

In Stepanek, the general contractor, had a contract with Yellowstone County that included the control of job safety. Because the contract contained a contractual safety obligation, that duty could not be delegated to a subcontractor. Stepanek v. Kober Const., 191 Mont. 430, 437, 625 P.2d 51, 55 (1981)  Therefore, the general contractor retained direct control over the safety procedures and was liable for the injuries of its independent contractors' employees. Id.

Inherently Dangerous Activities

An employer is vicariously liable for injuries to others caused by a subcontractor's failure to take precautions to reduce the unreasonable risks associated with engaging in an inherently dangerous activity. Beckman v. Butte-Silver Bow Cty., 2000 MT 112, ¶ 24, 299 Mont. 389, 398, 1 P.3d 348, 353.

According to Montana law, an inherently dangerous activity involves a “peculiar risk of harm” or a “special danger to others.” Paull v. Park Cty., 2009 MT 321, ¶ 20, 352 Mont. 465, 470, 218 P.3d 1198, 1201. However, an employer is not liable for all actions of an independent contractor engaging in inherently dangerous activities. Id. Instead, the Montana Supreme Court finds liability only where injuries to others are caused by a subcontractor's failure to take precautions to reduce the unreasonable risks associated with engaging in an inherently dangerous activity. Id.

Negligent Exercise of Retained Right of Control

An owner-contractee may be liable for injuries sustained by a subcontractor's employee if the owner retains sufficient control over the property on which the work is performed, though the owner need not retain control over the specific manner in which the worker himself performs. Cunnington v. Gaub, 2007 MT 12, ¶ 19, 335 Mont. 296, 300, 153 P.3d 1, 4.

In Cunnington, the court addressed the facts of the case in determining whether a fact issue existed to preclude summary judgment by saying:

"The facts of the case before us, when considered in the light most favorable to Cunnington, show genuine issues of material fact concerning whether Hale negligently exercised control it retained over Gaub's work. Hale, like the representatives for Big Sky in Shannon, was at the construction site almost every day and, additionally, unlike Big Sky, was responsible for a large portion of the work, including the excavation, plumbing, electrical, and concrete work. Specifically, Hale was in charge of backfilling the area surrounding the accident site, including the window pit which Cunnington fell into. Gaub testified that he asked Hale three or four times to backfill around the windows so that he could complete the siding.

Also, as in Shannon, there was an approaching deadline (the contract called for the house to be completed in 120 days) and Hale may have been pushing Gaub to work faster as Gaub was behind schedule to finish the house on time.¶ 25 Additionally, Hale testified in his deposition that he acted as “general contractor” for the Whitefish house, and admitted that he built the house himself, with his father. Hale performed the same jobs (excavation, plumbing, electrical, and concrete) during construction of the house at issue here, which is evidence not only of control, but also of Hale's general house building experience. As further evidence of control and general knowledge of construction, Hale took over after Gaub quit and subcontracted what work remained."

Cunnington v. Gaub, 2007 MT 12, ¶¶ 24-25, 335 Mont. 296, 302, 153 P.3d 1, 5.

Based on the court's understanding of the facts available, they remanded the case to be determined on the merits. This, if nothing else, shows just how fact intensive a court's inquiry can become.

Have Questions About Montana Employer Liability? Give Us a Call

At HagEstad Law Group, we regularly represent insurance carriers and their insureds throughout the State of Montana in various matters involving liability of employers for the acts of their employees and independent contractors. Our attorneys have successfully represented countless employers in a wide array of matters. If you have questions about liability for the actions of one your employees or independent contractors, or you have questions about the liability of an insured, give HagEstad Law Group a call today.