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A Party That Assumes the Role of the General Contractor on a Project May Have a Duty to Ensure Worksite Safety

Article

Construction Group Newsletter

January 3, 2011

The recent New Jersey Appellate Division case of Costa v. Gaccione, 408 N.J. Super. 362 (App. Div. 2009) is noteworthy in the area of workplace safety and liability law because the Appellate Division held that since there was sufficient evidence to demonstrate a property owner on a construction project where Plaintiff was injured acted as the de facto general contractor, genuine issues of material fact existed to warrant a trial on the developer’s liability for the Plaintiff’s injuries. The Court further affirmed the prevailing view set forth in the New Jersey Supreme Court case of Alloway v. Bradlees, Inc. that while violations of Occupational Safety & Health Act regulations (29 U.S.C.A. §§ 651-658) (“OSHA”) are pertinent in determining the nature and extent of the duty of care for worksite safety, OSHA violations do not provide an independent basis for assigning negligence. 157 N.J. 221, 236 (1999).

In Costa, an employee of a framing subcontractor fell and sustained serious injury when climbing makeshift scaffolding used on the construction project. The employee claimed that the property owner, Salvatore Gaccione (“Gaccione”), acted as the project general contractor, and that Gaccione’s failure to ensure worksite safety constituted negligence and a violation of OSHA. Regarding Gaccione’s role as the general contractor, the employee demonstrated that Gaccione obtained building permits as the project owner, but indicated on the permit form that he considered himself the “person responsible for the work.” In addition, Gaccione performed many of the general contractor functions on the project, such as hiring an architect and various subcontractors, scheduling subcontractors’ work and purchasing building materials. Gaccione also frequented the jobsite, oversaw the work and performed some managerial tasks. Nevertheless, the trial court granted Gaccione’s motion for summary judgment dismissing all claims against him, relying principally upon Alloway and Slack v. Whalen, 327 N.J. Super. 186 (App. Div. 2000). The trial court reasoned that a duty of care is not automatically placed on an owner or contractor based exclusively on a finding that OSHA regulations had been violated, and that although Gaccione may have had more construction experience than the average person, he had only built three homes over the last 20 years and those homes were almost exclusively for his family. As such, the trial court held that Gaccione did not have a duty to ascertain whether the scaffolding posed a risk of injury and, instead, was entitled to rely on the subcontractor to oversee its employee’s work.

The employee appealed the grant of summary judgment to the Appellate Division. On appeal, the Appellate Division closely examined the facts of the two principal cases that provided the basis for which the appeal was considered, and the trial court’s decision – Alloway and Slack. In Alloway, in deciding whether a paving subcontractor was liable for injuries sustained by an employee of its subcontractor, the Court framed the issue as whether the subcontractor owed a duty as a “prime or general contractor” to ensure worksite safety. To answer this question, the court considered the following factors: the foreseeability of the injury; the relationship of the parties; the nature of the risk; the opportunity and the ability to exercise care; and, other public interest concerns. The court in Slack applied this same legal framework expressed in Alloway and held that the defendant homeowners did not owe a duty of care to a subcontractor’s employee because the homeowners had no contractual agreement with the subcontractor for which the employee worked, they did not agree to supervise the work, were not required to be on the job site, and in fact did not frequent the site daily.

Applying the reasoning of the Alloway and Slack cases, the Court in Costa reversed the trial court’s grant of summary judgment. Although the Appellate Division noted that the trial court properly considered the OSHA violations relevant in determining Gaccione’s duty of care to workers on the project, it found the trial court did not lend enough weight to the facts of that case which distinguished it from the unique facts in the Slack case and demonstrated that Gaccione acted as the de facto general contractor. Significantly, Gaccione visited the site daily and oversaw operations and, much like a general contractor, purchased materials requested by builders and actively discussed building plans with workers that he hired. Gaccione clearly possessed more knowledge and experience in construction than the average homeowner having built three other homes over a twenty year span. The Appellate Division concluded that sufficient evidence existed to create genuine issues of material facts and ordered a trial on the issues of control and negligence.

The important lesson to be learned from the Costa case for parties on a construction project site is that taking on the responsibilities normally assumed of a general contractor, even in the absence of the official designation of such, may give rise to a duty of care to ensure worksite safety. Further, the Appellate Division reaffirmed that compliance or non-compliance with OSHA regulations, while not dispositive in determining whether that duty of care for worksite safety exists, is relevant to the determination.