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Federal Ins. Co. v. Westurn Cedar Supply, Inc.: US District Court : TORT - contractor's liability for subcontractor's acts

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UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
FEDERAL INSURANCE CO.
as subrogee of Lecy Construction, Inc.,
Plaintiff,
v.
WESTURN CEDAR SUPPLY, INC.,
Defendant.
Case No. 06-CV-0614 (PJS/JJG)
ORDER DENYING DEFENDANT’S
MOTION FOR SUMMARY JUDGMENT
James I. Tarman, Jr., and S. Ellyn Farley, COZEN O’CONNOR; James C. Erickson, Sr.,
JENSEN BELL CONVERSE & ERICKSON, PA, for plaintiff.
Victor E. Lund and Richard P. Mahoney, MAHONEY DOUGHERTY AND
MAHONEY, PA, for defendant.
In April 2004, fire destroyed a house that Lecy Construction, Inc. (“Lecy”) was building
for the Sedley family in Minnetonka, Minnesota. Plaintiff Federal Insurance Co. (“Federal”),
Lecy’s insurer, paid the Sedleys for the loss. Federal contends that the fire was caused by the
negligence of defendant Westurn Cedar Supply, Inc. (“Westurn”) or someone working for
Westurn. Federal, as Lecy’s subrogee, brings this suit to recover from Westurn what Federal
paid to the Sedleys. Westurn moves for summary judgment.
I. BACKGROUND
The Sedley family hired Lecy as a general contractor to build the family a new home in
Minnetonka, Minnesota. Lecy subcontracted the siding work to Westurn. Mahoney Aff. Ex. A
[Docket No. 36]. Westurn, in turn, hired various people to do the actual siding.
1There is some dispute over who moved the lamp. For purposes of this motion, the Court
assumes that it was Tulkki.
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Shortly before the fire, a Westurn employee, Chad Sigafoos, contacted one of Westurn’s
regular subcontractors, Mike McGuiggan of Buckshot Exteriors, to see if McGuiggan could
work on the Sedleys’ house. Mahoney Aff. Ex. G (“McGuiggan Dep.”) at 25-28. McGuiggan
could not, but he offered to put a siding worker he knew in touch with Sigafoos. Id. at 25-26
(“So I told Westurn that I have a guy that maybe could do it. I said, ‘I’ll give him your address
and I’ll have him call you.’”), 31 (“I said [to Sigafoos], ‘But I have a guy that you could use,’ or,
you know, ‘I’ll see if I can get ahold of him for you.’”).
McGuiggan called Dave Tulkki, a self-employed siding worker, and told him about the
job. Id. at 32-33. McGuiggan gave Tulkki the address of the job site and told him to call
Sigafoos if he wanted the work. Id. at 32; Mahoney Aff. Ex. E (“Tulkki Dep.”) at 10, 52. Tulkki
did not call Sigafoos, but simply showed up at the job site with an assistant. After talking to
Lecy’s on-site manager (Tim Haunty), Tulkki and his assistant started work on the siding.
Tulkki Dep. at 10, 12, 51-52. In the course of putting up the siding, Tulkki moved a halogen
lamp that was attached to the side of the house.1 Mahoney Aff. Ex. B at 2. That night, a fire
destroyed the house. An inspector for the fire department later determined that the fire had been
started by the halogen lamp that Tulkki moved. Mahoney Aff. Ex. B.
II. ANALYSIS
A. Standard of Review
Summary judgment is appropriate “if the pleadings, the discovery and disclosure
materials on file, and any affidavits show that there is no genuine issue as to any material fact
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and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). A dispute
over a fact is “material” only if its resolution might affect the outcome of the suit under the
governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A
dispute over a fact is “genuine” only if the evidence is such that a reasonable jury could return a
verdict for either party. Ohio Cas. Ins. Co. v. Union Pac. R.R., 469 F.3d 1158, 1162 (8th Cir.
2006). In considering a motion for summary judgment, a court “must view the evidence and the
inferences that may be reasonably drawn from the evidence in the light most favorable to the
non-moving party.” Winthrop Res. Corp. v. Eaton Hydraulics, Inc., 361 F.3d 465, 468 (8th Cir.
2004).
B. Westurn’s Liability for Its Subcontractors’ Actions
Westurn argues that because Tulkki was not Westurn’s employee, but “at best a
subcontractor, i.e., perhaps merely a meddling interloper,” Westurn cannot be held liable for
damages resulting from Tulkki’s negligence. Def. Mem. Supp. Mot. S.J. (“Def. SJ Mem.”) at 9
[Docket No. 37]. Westurn is incorrect.
Tulkki was probably not a “meddling interloper.” Sigafoos (a Westurn employee) called
McGuiggan, and McGuiggan, with Sigafoos’s knowledge and acquiescence, called Tulkki.
Tulkki and his assistant then traveled to the job site and, with the knowledge and acquiescence of
Haunty (a Lecy employee), started doing the siding work that Westurn had been hired to do. It
seems unfair to say that Tulkki was “interloping” or “meddling” at the job site. That said, the
Court does agree with Westurn that the undisputed facts establish that Tulkki was not Westurn’s
employee. See id.; Def. Reply Mem. at 5-9 [Docket No. 42]. Rather, Tulkki was probably an
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independent contractor. See Def. SJ Mem. at 15 (“Tulkki was at best a non-agent subcontractor
of Westurn.”).
Under Minnesota law, a party who hires an independent contractor is not, as a general
matter, liable for the negligence of that independent contractor. See, e.g., Pac. Fire Ins. Co. v.
Kenny Boiler & Mfg. Co., 277 N.W. 226, 228 (Minn. 1937); see also Restatement (Second) of
Torts § 409 (1965). But there are so many exceptions to this general rule that seventy years ago
the Minnesota Supreme Court was already warning that “it would be proper to say that the rule is
now primarily important as a preamble to the catalog of its exceptions.” Kenny Boiler, 277 N.W.
at 228.
Westurn contends that no exception is applicable in this case and that Westurn therefore
cannot be held liable for Tulkki’s negligence. But in Kenny Boiler, the Minnesota Supreme
Court established that contractors (here, Westurn) are liable to those who hire them (here, Lecy)
for the negligent actions of their subcontractors (here, Tulkki). In particular, Kenny Boiler said:
Where one person [e.g., Westurn] owes another [e.g., Lecy] a
contractual duty to act, the law imposes upon the person owing
that duty the further duty of acting with due care in the
performance of his contract so as not to injure the contractee’s
person or property. This duty is nondelegable. That is, the
performance of the contract may be delegated to another [e.g.,
Tulkki], but this delegation does not relieve the contractor of the
duty to act, or of his duty to act with due care. Consequently
defendant [the contractor] is subject to liability for damage
suffered by the contractee as a result of the negligence of the
independent subcontractor.
Id. (citations omitted; emphasis added). Subsequent cases have applied this rule in situations
almost indistinguishable from this case.
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Perhaps the most significant case in this area — at least since Kenny Boiler — is Brasch
v. Wesolowsky, 138 N.W.2d 619 (Minn. 1965). Brasch, like this case, involved construction of a
house. The plaintiff, Marie Brasch, hired the defendant, Gabriel Wesolowsky, as a general
contractor to build her a custom house. Id. at 621. Wesolowsky hired a subcontractor to
excavate the building site so that the foundation could be poured. The excavation was badly
done, and once the house was built, significant cracks appeared in the walls and the garage floor.
Brasch sued Wesolowsky for the cost of repairing the cracks. Id. at 622.
Wesolowsky contended that he was not liable because “he was merely the agent of
plaintiff with implied authority to engage sub-agents to perform those services outside his
general type of work.” Id. at 623. The Minnesota Supreme Court rejected this argument because
the record established that Wesolowsky “held himself out as a general contractor and agreed,
among other things, to construct a solid foundation.” Id. The court said:
On this state of the record, the defendant’s claims are controlled by
Pacific Fire Ins. Co. v. Kenny Boiler & Mfg. Co., . . . where we
held that a contractor owes his contractee a duty to use due care in
the performance of his undertaking and that his duty is
nondelegable. Thus, defendant’s admitted agreement bound him
to respond in damages to plaintiff for unworkmanlike performance
within the scope of his undertaking, notwithstanding the fact that
someone else may have actually performed the work.
Id. (citation and footnote omitted).
Westurn attempts to distinguish Brasch, arguing that it stands for the “unexceptional”
proposition that “the general contractor who fails to deliver the house that he promised to build
in a workmanlike manner is responsible for defects even if subcontractors did the work.” Def.
Reply Mem. at 3-4. But this principle covers this very case: If a contractor is liable for a
subcontractor’s negligence when the negligence results in a cracked foundation, then surely a
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contractor is liable for a subcontractor’s negligence when the negligence results in a homedestroying
fire.
The Minnesota Court of Appeals followed both Brasch and Kenny Boiler in Theissen-
Nonnemacher, Inc. v. Dutt, another case involving defective construction of a custom home. 393
N.W.2d 397 (Minn. Ct. App. 1986). In Theissen-Nonnemacher, the homeowner sued the general
contractor for a defective roof. Id. at 400-01. The trial court refused to award damages for the
roof, finding that, because the roofing subcontractor had provided a warranty for the roof, the
general contractor was not liable for the subcontractor’s deficient work. Id. The court of appeals
reversed based on Brasch and Kenny Boiler, observing that Kenny Boiler “makes explicit the
relationship of the various contractors when defective construction occurs” and quoting the
passage from Kenny Boiler quoted at length above. Id. at 401.
It is apparent from Brasch, Theissen-Nonnemacher, and numerous other cases that the
Minnesota Supreme Court meant what it said in Kenny Boiler: If an employer hires a contractor
to do a job, the contractor has a nondelegable duty to do the job for which he was hired, and the
contractor is therefore liable to the employer for the negligence of any subcontractors hired by
2See, e.g., Bagot v. Airport & Airline Taxi Cab Corp., No. C1-00-1291, 2001 Minn. App.
LEXIS 132, at *10-11 (Minn. Ct. App. Jan. 30, 2001) (discussing Kenny Boiler); Nelson v. Vogt,
Nos. C9-97-670, C4-97-1161, 1998 Minn. App. LEXIS 65, at *6-7 (Minn. Ct. App. Jan. 20,
1998) (“Nelson, as the general contractor, was ultimately responsible for damages that occurred
because of defective construction or materials provided by the various subcontractors.”); Nichols
v. Metro. Bank, 435 N.W.2d 637, 640 (Minn. Ct. App. 1989) (citing Brasch for proposition that
“contractors owe their contractees a nondelegable duty to use due care in the performance of
their undertakings”); Marshall v. Marvin H. Anderson Constr. Co., 167 N.W.2d 724, 727 (Minn.
1969) (relying on Brasch in holding that a homebuilder’s “agreement bound it to respond in
damages for unworkmanlike performance within the scope of its undertaking”); Larsen v.
Minneapolis Gas Co., 163 N.W.2d 755, 762 (Minn. 1968) (holding that “[the contractor’s]
liability to third parties for damages resulting from [its subcontractor’s] negligence in the
performance of work under its contract with [the contractor] can only be vicarious”).
This is not to say that contractors are liable for all of the actions of their subcontractors.
In particular, if a subcontractor’s negligence causes injury to one of that subcontractor’s own
employees, the contractor cannot be held vicariously liable to the subcontractor’s employee for
the subcontractor’s negligence. See Conover v. N. States Power Co., 313 N.W.2d 397, 403
(Minn. 1981) (“The next issue . . . is whether the employer of an independent contractor is
vicariously liable, under a nondelegable duty theory, for negligence of the contractor which
causes injury to the contractor’s employee. We hold the employer is not.”); Vagle v. Pickands
Mather & Co., 611 F.2d 1212, 1219 (8th Cir. 1979).
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the contractor.2 Accordingly, if Tulkki was negligent, Westurn cannot escape liability to Lecy
for that negligence on the basis that Tulkki was Westurn’s subcontractor.
C. Lecy’s Fault
Westurn also contends that Lecy was at fault for the fire because a Lecy employee
installed the incendiary halogen lamp in the first place and Lecy’s on-site manager (Haunty) told
Tulkki to move the lamp. Def. SJ Mem. at 15-17. Even if this is true, it is not a basis for
summary judgment. The degree of comparative fault between Lecy and Westurn presents a
question of fact for the jury.
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ORDER
Based on the foregoing and on all of the files, records, and proceedings herein, IT IS
HEREBY ORDERED THAT defendant Westurn Cedar Supply, Inc.’s motion for summary
judgment [Docket No. 35] is DENIED.
Dated: March 13, 2008 s/Patrick J. Schiltz
Patrick J. Schiltz
United States District Judge
 

 
 
 

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