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NATIONWIDE MUT. INS. CO. v. PHILADELPHIA ELEC. CO.

November 30, 1977

NATIONWIDE MUTUAL INSURANCE COMPANY
v.
PHILADELPHIA ELECTRIC CO. and CARR & DUFF ELECTRICAL POLE LINE CONSTRUCTION, INC. and BELLMONT FUND, INC. and CURTIS JONES



The opinion of the court was delivered by: BRODERICK

 BRODERICK, J.

 In this action based on diversity of citizenship, the plaintiff, Nationwide Mutual Insurance Company (Nationwide) brought suit against Philadelphia Electric Company (PECO), Carr & Duff Electrical Pole Line Construction, Inc. (Carr & Duff), Bellmont Fund, Inc. (Bellmont), and Curtis Jones (Jones) to recover contribution pursuant to the Pennsylvania Uniform Contribution Among Joint Tortfeasors Act.

 This action was tried before a jury which returned a verdict in favor of the plaintiff against Bellmont and Carr & Duff. The Court granted PECO's motion for a directed verdict at the close of the plaintiff's case. At the close of all the evidence the Court granted Jones' motion for a directed verdict. Bellmont has moved this Court for a new trial and/or for a judgment n.o.v.; the plaintiff has moved for an award of interest; Carr & Duff has moved for a new trial; and all parties have requested the Court to mold the verdict. After carefully considering the grounds urged in these motions, the Court has determined that it must deny Bellmont's motion for judgment n.o.v., grant plaintiff's motion for an award of interest, and deny Carr & Duff's motion for a new trial and/or a judgment n.o.v.

 The parties stipulated to the following facts: Sometime during the year 1966, Bellmont engaged Jones to construct an apartment building on a site located near the intersection of Red Lion and Clare Roads in Philadelphia. Bellmont was the owner of the project and Jones was the general contractor. In order to provide electric power for workers at the construction site, PECO was requested to install temporary electric service. In response to this request, on October 20, 1966 PECO installed a transformer on a pole on the north side of Red Lion Road which reduced the voltage normally carried on the overhead lines along Red Lion Road so that electricity could be provided at the construction site. After this service was provided, Bellmont and/or Jones complained to PECO that they were not able to secure sufficient electric power to operate their power tools, and asked PECO for an estimate to relocate the electric service to a point closer to the work being performed. At the request of Bellmont and/or Jones, Carr & Duff, an electric pole and line contractor, installed three power poles at the site and strung wire between them. Thereafter, PECO connected the wires erected by Carr & Duff with the power lines running along Red Lion Road and changed the location of the transformer.

 At trial before this Court, plaintiff contended that not only was its insured, Hinkle, negligent, but that the defendants were also negligent and that their negligence was a proximate cause of the accident. As a joint tortfeasor, plaintiff claimed the right to contribution from its fellow joint tortfeasors pursuant to the Uniform Contribution Among Joint Tortfeasors Act, 12 P.S. § 2082 et seq. This Act provides:

 
§ 2082.
 
For the purpose of this act, the term "joint tortfeasors" means two or more persons jointly or severally liable in tort for the same injury to persons or property, whether or not judgment has been recovered against all or some of them.
 
§ 2083.
 
(1) The right of contribution exists among joint tortfeasors; (2) A joint tortfeasor is not entitled to a money judgment for contribution until he has by payment discharged the common liability or has paid more than his pro rata share thereof; (3) A joint tortfeasor who enters into a settlement with the injured person is not entitled to recover contribution from another joint tortfeasor whose liability to the injured person is not extinguished by the settlement.

 As stated by Justice Eagen in Swartz v. Sunderland, 403 Pa. 222, 225, 169 A.2d 289, 291 (1961):

 
. . . a reading of the act signifies that only two conditions must exist before the right of contribution arises, namely, (1) that one joint tort-feasor has discharged the common liability or paid more than his prorata share; (2) that the liability of the other joint tort-feasor to the injured persons has been extinguished by the settlement.

 In addition, as stated by Judge Scalera in W.D. Rubright v. International Harvester Co., 358 F. Supp. 1388, 1392 (W.D. Pa. 1973):

 
When . . . settlement occurs before the injured plaintiff has proven his original case at trial, the settling tortfeasor cannot enforce his right to contribution unless in a separate proceeding he proves that:
 
(1) The settlement figure was reasonable.
 
(2) The parties from whom he seeks contribution were in fact joint tortfeasors. Swartz v. Sunderland, 403 Pa. 222, 169 A. 2d 289 (1961), Restatement Restitution § 86(d).

 At trial the defendants did not question the reasonableness of the settlement. It was stipulated that "reasonableness" had been agreed to at the time the settlement was made. It was also stipulated that the liability of all defendants had been extinguished by the plaintiff's payment at settlement. The sole question presented to the jury was whether the defendants were in fact joint tortfeasors, the parties having agreed that the Court should mold the verdict. The jury returned a verdict in favor of the plaintiff, Nationwide, against the defendants, Carr & Duff, and the defendant, Bellmont.

 Bellmont's Motion For A Judgment n.o.v.

 Plaintiff Nationwide based its case against Bellmont solely upon Restatement (Second) of Torts, § 416 which provides:

 
One who employs an independent contractor to do work which the employer should recognize as likely to create during its progress a peculiar risk of physical harm to others unless special precautions are taken, is subject to liability for physical harm caused to them by the failure of the contractor to exercise reasonable care to take such precautions, even though the employer has provided for such precautions in the contract or otherwise.

 The charge to the jury as to Bellmont's liability was based solely on § 416. And, as we have heretofore pointed out, the jury returned a verdict against Bellmont. Bellmont now seeks a judgment n.o.v. on the ground that § 416 was not applicable. We hold that § 416 is applicable and deny Bellmont's motion for judgment n.o.v.

 Section 416 was adopted in Pennsylvania in Philadelphia Electric Co. v. Julian, 425 Pa. 217, 228 A.2d 669 (1967). This section provides an exception to the general rule that one who engages an independent contractor is not responsible for the negligent acts or omissions of the contractor or its employees. As stated by the Pennsylvania Superior Court in McDonough v. United States Steel, 228 Pa. Super. 268, 324 A.2d 542 (1974),

 
When an employer has exercised care in choosing a careful and competent contractor to do work on the employer's premises, and has entrusted the control and possession of the premises, and the performance of the task to that contractor, the employer is generally shielded from liability to third parties due to the negligence of the contractor. An employer, however, must use reasonable care to make the premises safe, or warn the contractor of any dangerous condition thereon. Grace v. Henry Disston & Sons, Inc., 369 Pa. 265, 85 A.2d 118 (1952).
 
There are, however, exceptions to this general rule of non-liability . . . . The exception does not rest upon any personal negligence of the employer, but is a rule of vicarious liability. The rule is stated in Section 416 of the Restatement of Torts, 2d [supra].

 324 A.2d at 545.

 Judge Hoffman continued, stating the situations in which this exception would apply:

 
Section 416 is . . . applicable only to situations in which the negligence of the independent contractor consists of the failure to take the precautions necessary for the safe performance of a task. The risk of harm must arise from the peculiar or inherent nature of the task or the manner of performance, and not the ordinary negligence which might attend the performance of any task. "Liability does not ordinarily extend to so called 'collateral' or 'casual' negligence on the part of the contractor or his servants in the performance of the operative details of the work. The negligence for which the employer [of a general contractor] is liable . . . must be such as is intimately connected with the work authorized and such as is reasonably likely from its nature." Van Arsdale v. Hollinger, 68 Cal.2d 245, 252, 66 Cal.Rptr. 20, 24, 437 P.2d 508, 512 (1968) (quoting Harper, Law of Torts (1933) § 292); see Thorne v. United States, 479 F.2d 804 (9th Cir. 1973). Prosser has stated that the principle is applicable "to work in which there is a high degree of risk in relation to the particular surroundings, or some rather specific risks or set of risks to those in the vicinity . . . The emphasis is on the peculiar character of the risk, and the need for special care." Prosser, Law of Torts, 3rd Ed. (p. 486).

 324 A.2d at 546. Likewise in Jacobini v. IBM, 57 Pa. D & C 2d 8 (1972), the court stated that § 416 is applicable only to injuries resulting from conditions bearing an unusual risk of physical injury.

 As stated in McDonough, supra, and Moss v. Swann Oil Co., 423 F. Supp. 1280 (E.D. Pa. 1977), for this vicarious liability to apply, it is first necessary that the independent contractor commit an act of negligence which causes the plaintiff's injury. Here, the jury found that Carr & Duff, an independent contractor, was negligent in failing to insulate the wires and that this negligence was the proximate cause of George Baker's death. In imposing § 416 liability it is also necessary that the work in question presents a peculiar risk of harm unless special precautions are ...


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