A Challenge to the Privette Doctrine Defense – the Retained Control Doctrine Carves out an Exception

Author: David Ramirez

Guest Editor: Catie R. Johnson

February 11, 2019 4:00pm

The Privette Doctrine arises from a 1993 California Supreme Court case entitled Privette v. Superior Court (1993)5 Cal.4th 689, which provides that a higher-tiered party such as an owner or general contractor is not liable for injuries sustained by employees of a lower-tiered party such as a subcontractor on a construction project. There are, however, a number of exceptions to the Privette Doctrine. One of these exceptions is known as the “retained control doctrine.”

Under the retained control doctrine, a higher-tiered party cannot avoid liability under the Privette Doctrine if the higher-tiered party: (1) retains control over the conditions of the work; (2) negligently exercises control over such conditions; and (3) its negligent exercise of control contributes to the injuries sustained by the employee of the lower-tiered party.

However, in the recent case of Sandoval v. Qualcomm Incorporated (2018)28 Cal.App.5th 381, the Fourth District Court of Appeals held the retained control doctrine did not apply where an employee of a subcontractor was severely burned by an “arc flash” from a live circuit breaker even though: (1) the higher-tiered party had informed the lower-tiered contractor that certain live circuit breakers were energized; (2) the higher-tiered party had not authorized the lower-tiered contractor to remove a panel that resulted in the arc flash; and (3) employees of the higher-tiered party were not in the room when the accident happened.

Facts of the Case      

Plaintiff Jose Sandoval was an employee of ROS Electrical Supply (“ROS”),a subcontractor to TransPower Testing, Inc. (“TransPower”) which was hired by Qualcomm Incorporated (“Qualcomm”) to upgrade its power generation system. While performing an inspection of the power generation system, Mr. Sandoval was severely burned by an “arc flash” from a live circuit breaker.

TransPower was hired by Qualcomm to upgrade the amperage of certain components of its power generation system, called “bus bars,” from 1,200 amps to 2,000 amps. Personnel on behalf of TransPower initially inspected the breaker system to see if the bus bars were rated to handle 2,000 amps or if they needed to be upgraded. Unable to see the bus bars inside the panel, TransPower contacted ROS who sent Sandoval for a second inspection.

TransPower did not tell Mr. Sandoval to bring any personal protective equipment since the panel would be de-energized by Qualcomm.  On the day of the re-inspection, Mr. Sandoval and employees on behalf of TransPower and Qualcomm went to the breaker room to re-inspect the bus bars.  The Qualcomm employees told the TransPower employee that half of the breakers were de-energized but half were not.  The Qualcomm employees left the room while the inspection was being conducted.

After the Qualcomm employees left the room, a TransPower employee, who was wearing personal protective equipment, removed a panel on the utility side of the breaker.  The utility side was still energized but Mr. Sandoval was not told. While the TransPower employee crawledbelow the breaker to photograph the bus bars from behind the removed panel, he heard a booming sound and a scream. When he came out, he saw Mr. Sandoval covered in blue flames from an arc flash that had occurred from the backside of the breaker where the panel had been removed.

Mr. Sandoval filed suit against Qualcomm, TransPower and ROS.  At trial, Qualcomm argued it was immune from liability under the Privette Doctrine, and argued it had not retained control over the safety conditions since Qualcomm employees had told a TransPower employee half the breakers were energized, had not authorized the TransPower employee to remove the panel on the utility side of the breaker, and were not in the room when Mr. Sandoval was injured by the arc flash.

The jury found Qualcomm had negligently retained control over the safety conditions and awarded more than $1 million in economic damages and $6 million in noneconomic damages to Mr. Sandoval, finding that Qualcomm was 46 percent at fault, TransPower was 45 percent at fault, and Mr. Sandoval was 9 percent at fault.  Qualcomm filed a Motion for Directed Verdict asking the judge change the jury’s verdict and also filed a Motion for New Trial based on apportionment of liability. The trial court denied Qualcomm’s Motion for Directed Verdict but granted Qualcomm’s Motion for New Trial on the ground that the apportionment of fault between Qualcomm and TransPower was excessive because the facts did not support that TransPower was less liable than Qualcomm.  Qualcomm timely appealed the trial court’s denial of its Motion for Directed Verdict.

Court of Appeal’s Ruling

The Court of Appeal found an opinion it had previously issued was instructive.  In Regalado v. Callaghan (2016) 3 Cal.App.5th 582, a homeowner, who himself was a licensed subcontractor, acted as an owner-builder on a pool project at his home.  He had a pool contractor install a concrete vault underground to hold propane.  A year later, he had a second pool contractor install a propane tank in the vault.  Neither the homeowner nor the pool contractor read the instruction manual which said not install the tank in a pit because of the risk of explosion.  When one of the pool contractor’s employees turned on the propane tank, it exploded.

In the Regalado matter during trial, the homeowner argued the employee was required to show that the homeowner “affirmatively contributed” to the employee’s injury to be liable. On appeal, the Court of Appeals held that a hirer’s “affirmative contribution” to an injury not only encompassed active acts by a hirer but also negligent omissions to act.

In the instant matter, the Court of Appeals noted while Qualcomm’s employees informed a TransPower employee that certain breakers had been de-energized but others had not, “that such information needed to be given not only to the contractor or subcontractor, but also to its respective employees who would be working in the switchgear room.”

Although a Qualcomm employee, during the safety briefing, told everyone, including Mr. Sandoval, that certain segments of the switchgear remained energized and later, after the lockout/tagout procedure, used his hand to show the TransPower employee which breakers remained energized and which were de-energized, there is no record evidence that the Qualcomm employee specifically gave Mr. Sandoval this information once they were all inside the mezzanine, just prior to TransPower’s inspection.

The Court of Appeal concluded this evidence alone was substantial and supported the jury’s finding Qualcomm negligently exercised its retained control over the safety conditions at the worksite, and warranted denial of Qualcomm’s Motion for Directed Verdict.

Takeaway

The Sandoval decision puts higher tiered contractors in a difficult position.  Under Regalado, the retained control doctrine applies to both affirmative acts as well as negative omissions to act, the Court of Appeal’s conclusion that Qualcomm’s employees had an obligation to inform TransPower and ROS which breakers “were hot and others not” as well their specific employees at the job site, creates practical concerns.  This situation creates a need for stronger indemnity and defense provisions in even the simplest service contracts.

 

David P. Ramirez is Senior Counsel at TYSON & MENDES, LLP, and primarily represents clients in complex litigation, including construction defect, insurance law, property disputes, and product liability.  Mr. Ramirez was named as a “Top Lawyer” in San Diego for “Litigation” in March 2018 by San Diego Magazine.

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