Recovering from the General Contractor for Negligence of a Subcontractor

The rule in New York is that “Generally, a party who retains an independent contractor, as distinguished from a mere employee or servant, is not liable for the independent contractor’s negligent acts.” [1]   However, fortunately for the subrogation practitioner in New York, there are many exceptions to this general rule, as we will see in a moment.

Victoria Subin retained Castle Oil to service her heating system, which she believed included annual maintenance on her boiler and burner.   Unbeknownst to Ms. Subin, Castle Oil retained independent contractor Dynamic Plumbing (“Dynamic”) to perform an initial cleaning and evaluation of her boiler and burner.   A contract between Castle Oil and Dynamic required that Dynamic use “an unmarked… van” when performing services.  Dynamic serviced the Subin boiler and burner January 19, 2010.  Approximately three weeks later, a severe puff back occurred which caused over $100,000 in damages to the residence.  Ms. Subin’s carrier, Nationwide, paid and brought a lawsuit against Castle Oil and another lawsuit against Dynamic.  Castle Oil moved for summary judgment, arguing that Dynamic was an “independent contractor” and thus Castle Oil could not be held liable for the alleged negligence of a third party.

The Court noted that exceptions to the general “rule” governing independent contractors fell into three broad categories:  (1) negligence of the GC in selecting, instructing or supervising the subcontractor; (2) nondelegable duties of the GC arising out of some relation to the particular plaintiff or toward the public; and (3) work which is specially, peculiarly or inherently dangerous. [2]   The second exception (the “nondelegable duty” exception) involves situations where the GC: (a) is under a statutory duty to perform or control the work; (b) has assumed a specific duty by contract; (c) is under a duty to keep premises safe; or (d) has assigned work to an independent contractor which the GC knows or has reason to know involves special dangers inherent in the work or dangers which should have been anticipated by the GC. [3]   The most commonly relied upon category is “b”:  where the GC has “assumed a specific duty by contract.”  The client’s “reasonable expectations and beliefs about who will render a particular service are a significant factor in identifying duties that should be deemed to be nondelegable.” [4]

The Court found that Nationwide’s subrogor, Ms. Subin, thought she had retained Castle Oil (not Dynamic) to perform an initial cleaning and evaluation of her boiler and burner.  Castle Oil held itself out as the provider of these services and even went so far as to require Dynamic to use “unmarked vans” (presumably so the homeowner did not know the name of the actual company performing the work).  All of Ms. Subin’s communications were with Castle Oil, not Dynamic.  Ms. Subin submitted an affidavit to the Court in opposition to summary judgment stating that she did not even know who “Dynamic Plumbing” was.  Thus, the court denied Castle Oil’s motion for summary judgment, finding there were issues of fact with regard to Castle Oil’s control over Dynamic.

Dynamic moved for summary judgment based on statute of limitations.  I will leave that discussion for next month’s newsletter.

Bottom Line:  While the “rule” in New York is that general contractors may not be held liable for the negligence of independent sub-contractors, there are many exceptions.  If the work involves “special dangers” then the GC cannot relieve itself of liability by delegating it to another company.   If the GC “has assumed a specific duty by contract,” that duty may not be delegated to another.   While the facts of the Castle Oil case are unique, the Court’s analysis is instructive on how to hold a GC responsible for poor work done by a subcontractor.

[1] Brothers v. NYSEG, 11 NY3d 251 (2008)
[2] Nationwide Mut. Ins. Co. a/s/o Subin v. Castle Oil et al., 2013 NY Misc.LEXIS 3970 (Westchester SCt September 9, 2013)
[3] Id. at *12.
[4] Id. at *13, quoting Kleeman v. Rheingold, 81 NY2d 270, 276 (1993) (Emphasis supplied).