No Agency Liability for Independent Contractor Negligence

Negligence liability presupposes some measure of control over the operational details of an unreasonably dangerous condition or conduct that caused a plaintiff's injury. Under the traditional "Master/Servant Rule" and "vicarious liability" doctrine, the master will be held responsible for the negligent acts of his or her servants committed within the scope of the servant's authority. In other words, an agency will be liable for the negligent acts of its agents, both employees and volunteers, when such negligence was related or incidental to an agent's responsibilities.

On the other hand, unlike agents, the master will not be liable when the negligence that causes a plaintiff's injury is caused by an independent contractor. Unlike a servant/agent, a master/agency does not exercise sufficient control over the manner in which an independent contractor operates or accomplishes a task. The Restatement (Second) of Agency § 2 provides the following definitions that distinguish "Master, Servant and In- dependent Contractor":

(1) A master is a principal who employs an agent to perform service in his affairs and who controls or has the right to control the physical con- duct of the other in the performance of the service.

(2) A servant is an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.

(3) An independent contractor is a person who contracts with another to do something for him, but who is not controlled by the other nor with respect to his physical conduct in the performance of the undertaking.

The cases described herein illus- trate these general legal principles and the legal analysis applied by a federal and a state court to determine whether independent contractor re- lationships existed when two public park and recreation departments ar- ranged for security at a state fair and entertainment at a medieval festival. In both instances, the courts cited expressed language in the contract as significant evidence in establishing an independent contractor relation- ship. Under such circumstances, the agency is not responsible or held li- able for the alleged negligence of the independent contractor.

Free Bird

In the case of Thomas v. Oregon State Police, 2013 U.S. Dist. LEXIS 90938 (Dist. Ore. 6/25/13), the issue before the federal district court was whether defendant Oregon Parks and Recre- ation Department (OPRD) was lia- ble for the alleged negligence of an agency and individuals providing se- curity services at a state fair.

On August 14, 2009, OPRD en- tered into a contract with Starplex Corporation for the provision of security, crowd management and related services at the Oregon State Fair (OSF). On September 3, 2010, Starplex provided security services at a Lynyrd Skynyrd concert during the Fair. Plaintiff Robert Thomas (Thomas) attended that concert and, while there, participated in a physical altercation with another attendee.

Following the altercation, Starplex employees asked Thomas to leave the premises and escorted him to the center aisle. Thomas responded by demanding that security remove the other attendee as well. While moving toward the exit, Thomas was taken to the ground mul- tiple times and placed in handcuffs by Starplex employees, resulting in Thom- as' fractured collarbone.

Thomas conceded that Starplex was not an employee of OPRD. In- stead, Thomas argued that Starplex was acting on behalf of OPRD and, therefore, Starplex employees were agents of OPRD. As a result, Thom- as claimed OPRD should be held vicariously liable for the alleged neg- ligence of Starplex security officers. In response, OPRD maintained that Starplex and its employees were not acting as OPRD agents during the Fair. As characterized by OPRD, "nothing in the security contract with Starplex nor any other evidence established that OPRD had a right or duty to monitor Starplex employees." As a result, OPRD claimed it was en- titled to summary judgment, which would effectively dismiss Thomas' negligence claims against OPRD.

Agency Relationship?

The issue before the federal district court was, therefore, "whether a rea- sonable jury could find that Starplex was a nonemployee agent of defen- dant." For Starplex to be considered a nonemployee agent of OPRD, the court would require Starplex to: (1) be subject to OPRD's control and (2) act on behalf of OPRD.

Moreover, the court noted that a principal, in this case OPRD, "can be liable for the torts of a nonem- ployee agent [in this case Starplex] only if those actions are within actu- al or apparent authorization of the principal":

[A] principal is vicariously liable for an act of its nonemployee agent only if the principal intended or au- thorized the result or the manner of performance of that act. Intention or authorization over the manner of performance must include the right to control the physical details of the conduct of the agent that gave rise to the tort claim.

In this particular instance, Thomas had argued that Starplex was subject to OPRD's control, and thus was OPRD's agent based on "the terms of the Contract."

Applying "general principles of contract interpretation," the federal district court noted that "contract terms are to be given their ordinary meaning." Further, "when the terms of a contract are clear, the intent of the parties must be ascertained from the contract itself." Examining the terms of OPRD's contract with Starplex, the court found OPRD's "methods of control" stated in the contract did not affect "the perfor- mance of Starplex or its employees in a way that would establish an agency relationship."

Although the plain language of the Contract does allow for OPRD to determine and modify the deliv- ery schedule, as well as to evaluate the quality of the completed perfor- mance, these provisions do not serve as evidence that Starplex was subject to OPRD's control.

Most importantly, the court not- ed that the contract specifically stated that "OSF cannot and will not control the means or manner of Contractor's performance." Fur- ther, the court found "[t]he remain- der of the Contract also serves as evidence that OPRD did not pos- sess control sufficient to establish an actual agency relationship with Starplex."

All transportation, scheduling and management of employees was to re- main the sole responsibility of Star- plex. OPRD could not hire Starplex employees; OPRD merely retained the right to "request" that Starplex remove an employee "[i]n the event that Contractor's employees are found to be violating...any other pro- visions of the Contract."

As characterized by the court, these provisions were merely "a means for OPRD to enforce the Contract pro- visions," not evidence of OPRD's contractual right to exercise control over Starplex. In particular, the court found "nothing in the Contract gives OPRD the authority to hire, train, manage, monitor or supervise Star- plex employees, nor is there any ev- idence in the record that OPRD ac- tually did so." As a result, under such circumstances, the federal district court concluded "a reasonable jury could not find that Starplex was sub- ject to OPRD's control, such that an actual agency relationship existed."

In addition, the court found "in- sufficient evidence in the record to establish that Starplex was acting on behalf of OPRD." In so doing, the court noted that "Starplex employees never affirmatively indicated or iden- tified themselves to plaintiff as em- ployees or representatives of OPRD."

[W]hile providing security services at the OSF, Starplex employees wore cloth- ing that "clearly identifies the individu- al as being employed by Contractor." Further, plaintiff specifically stated that he could distinguish between Starplex employees and state employees.

Accordingly, under the circum- stances, the federal district court con- cluded that a jury could not reason- ably find that Starplex was acting on behalf of OPRD.

"Even if an actual agency rela- tionship existed between OPRD and Starplex," the federal district court found no vicarious liability could be attributed to OPRD because "nothing in the Contract suggests that OPRD 'intended or authorized' either the 'result' (plaintiff's bro- ken collarbone) or 'the manner of performance' of Starplex's employ- ees." Instead, the court noted that the contract specifically stated that "OSF cannot and will not control the means and manner of Contrac- tor's performance."

[A]lthough the Contract authoriz- es the means and manner of perfor- mance to some extent by allowing Starplex employees to physically escort individuals out of the ven- ue, it nonetheless does not support the conclusion that OPRD had the right to control the physical manner in which Starplex employees carried out their actual duties.

Accordingly, the federal district court concluded "plaintiff 's claim fails to the extent it is premised on the theory that an actual agency rela- tionship existed between OPRD and Starplex."

Apparent Agency?

Absent an "actual agency relation- ship," the federal district court then considered Thomas' claim that "Star- plex was an apparent agent of OPRD and, therefore, should be vicariously liable." According to the court, "for apparent authority to support poten- tial liability," Thomas would have to demonstrate "(1) OPRD represented, or 'held out,' Starplex as its agent; and (2) plaintiff actually and justifi- ably relied on those representations":

Apparent authority can be created only by some conduct of the princi- pal that, when reasonably interpret- ed, causes a third party to believe that the principal consents to have the apparent agent act for him on that matter. The third party must also rely on that belief.

Under the circumstances of this case, the federal district court found no evidence of apparent authority ex- isted that would reasonably indicate Starplex was OPRD's agent.

The Contract specifies that Star- plex personnel were not OPRD's employees; the Contract also prohib- ited Starplex from taking any action that would create the appearance it was OPRD's agent. The record be- fore the Court reveals that Starplex acted in accordance with these pro- visions and, additionally, OPRD did nothing to give the appearance that the Starplex security personnel involved in plaintiff's injury were its agents.

Specifically, Starplex employees did not indicate in any way that they were state employees or wear any apparel indicating they were agents of OPRD, and OPRD did not provide Starplex with vehicles, logos or marks for vehicles or ap- parel that might lead a reasonable person to believe Starplex employees were agents of OPRD.

As a result, the federal district court found no evidence on the re- cord indicating OPRD represented to Thomas that "the security per- sonnel working at the OSF on Sep- tember 3, 2010, were acting under its authority." Moreover, the court found no evidence that Thomas in fact relied upon "OPRD's alleged representation that Starplex was its agent." Further, the court found any such reliance would not have been reasonable to think Starplex was OPRD's agent. The federal dis- trict court, therefore, concluded that Thomas' claim also failed "to the ex- tent it is premised on the theory that an apparent agency relationship ex- isted between OPRD and Starplex."

As a result, the federal district court granted OPRD's motion for summary judgment and dismissed OPRD from the case.

Medieval Mishap

In the case of Grant v. Washington Heights and Inwood Development Corp., 2009 N.Y. Misc. LEXIS 5384; 2009 NY Slip Op 31665(U) (7/21/2009), Matthew Grant, age 10, was injured while attending the "Medieval Festi- val" with his mother, Susan Taylor, at Fort Tryon Park on October 8, 2006.

The festival drew throngs of peo- ple and featured numerous enter- tainment events for both children and adults. As part of one of these events, about 100 children were di- vided into two groups: the light and the dark. The children were all giv- en foam swords and were told to hit with swords the children from the opposing team. A stricken child was to act "dead" by lying motionless on the ground. Grant participated in the play and was injured when he tripped on one of the "dead" children lying on the ground.

Taylor brought a cause of action against the City on behalf of Grant for negligent supervision and over- sight of the event. In response, the City claimed it was entitled to sum- mary judgment because the City's actions were not the legal cause of Grant's injuries. In so doing, the City argued that it "owed Grant no special duty to protect him from the alleged negligent supervision" of co-de- fendants Washington Heights and Inwood Development Corporation (WHID) and the Wayfinder Experi- ence Inc. (Wayfinder). Specifically, the City contended that it "did not breach a duty of care" owed to Grant because "WHID was an independent contractor under the terms of a con- tract between the City and WHID." Pursuant to the terms of the con- tract, the City contended WHID had "assumed the responsibility for orga- nizing and overseeing the Medieval Festival, including making arrange- ments for the services of instructors who supervised the 'jousting' play during which Grant was injured." Moreover, the City asserted that WHID had subsequently "contract- ed with Wayfinder, which provided its employee Rufus Griffin Johnston and an apparent independent con- tractor Jacques Covell as the instruc- tors for the subject 'jousting' event."

As a general rule, the court noted that "a principal is not vicariously li- able for the independent contractor's negligent acts or omissions, absent appreciable amount of supervision, oversight and control exercised by the principal over the contractor's performance." Moreover, the court acknowledged that "mere retention of general supervisory powers over an in- dependent contractor is insufficient to impose vicarious liability on the prin- cipal." In this particular instance, the court found evidence that the City's "involvement with, and participation at, the Medieval Festival was limited."

The City granted WHID a facil- ity permit and had several onsite meetings and walkthroughs with WHID contacts in preparation for the festival. The City also provided pole taps, put up the banners on the light poles, and arranged for the re- cycling services before and during the event. Additionally, the City set up the stage and the bleachers for the musical entertainment. The New York Police Department and the Parks and Recreation enforce- ment patrol provided security.

More significantly, the court noted that the City "did not take upon itself any tasks involving the provision of entertainment and vending services."

None of the City's employees un- dertook participating in or supervising the plays, games and other recreation- al activities. Nor did the City direct the actions of Rufus Johnston or Jacques Covell of Wayfinder before or during the "jousting" game, at which Grant was unfortunately injured.

Accordingly, the court concluded that "the City did not exercise suf- ficient control over the recreational activities at the Medieval Festival to raise a triable issue of fact [i.e., un- resolved questions warranting a trial] as to whether it was vicariously liable for the acts of the instructors provid- ed by WHID and Wayfinder."

Having found the City owed no le- gal duty to supervise or provide over- sight to this particular event in which Grant was injured, the court ordered plaintiff 's claims to be dismissed and summary judgment to be entered in favor of the defendants the City of New York and City of New York Parks and Recreation.

Premises Exception

The above cases illustrate the gener- al nonliability rule for independent contractors providing services such as security and supervision at events. In contrast, as described below, an excep- tion to the general rule exists, which may impose landowner liability when the injury arises out of an unsafe con- dition on the premises of an agency created by the independent contractor.

In the case of Patton v. Spa Lady Inc., 772 P.2d 1082 (Ak. 4/28/1989), the issue before the Alaska state supreme court was "whether the employer of an inde- pendent contractor is vicariously liable to a person who is injured on the employer's business premises by an unsafe condition in the premises as a result of the independent con- tractor's negligence."

Plaintiff James Patton was visiting a fitness center operated by defendant Spa Lady when he received an elec- trical shock from an electrical outlet while leaning over a vanity sink to inspect himself in the mirror. The electrical outlet had been installed by two independent contractors, J.D.'s Electric Inc. (J.D.'s) and Alyeska Electrical Inc. (Alyeska). The parties all agreed that Spa Lady would be entitled to a summary judgment dis- missing Patton's claims if Spa Lady was not vicariously liable for the neg- ligence of J.D.'s and Alyeska.

As noted by the state supreme court, "[t]he general common-law rule, embodied in section 409 of the Restatement (Second) of Torts (1965), sometimes called the 'independent contractor rule,' is that an employer is not vicariously liable for the torts of its independent contractor." On the other hand, the court acknowl- edged that "[t]his rule is subject to a host of exceptions, codified in sec- tions 410-29 of the Restatement." In this particular instance, Patton ar- gued that "the exception set forth in section 422" would "impose liability vicariously on Spa Lady for the neg- ligence of J.D.'s and/or Alyeska."

As cited by the state supreme court, section 422 of the Restate- ment regarding "Work on Buildings and Other Structures on Land" pro- vided as follows:

A possessor of land who entrusts to an independent contractor con- struction, repair or other work on the land, or on a building or other structure upon it, is subject to the same liability as though he had re- tained the work in his own hands to others on or outside of the land for physical harm caused to them by the unsafe condition of the structure (a) while the possessor has retained possession of the land during the progress of the work, or (b) after he has resumed possession of the land upon its completion.

According to the state supreme court, "vicarious liability is a doc- trine designed to ensure that a finan- cially responsible party is available to compensate the injured victim." In this particular instance, the court found Patton was one of the "others on or outside of the land" to whom Spa Lady is vicariously liable under section 422 of the Restatement. In addition to section 422 of the Re- statement, the state supreme court provided the following reasoning for its holding that an "employer of an independent contractor may be held vicariously liable for injuries caused by the negligence of the latter":

Between an innocent possessor of land and an innocent third party in- jured because of the negligence of the possessor's independent contractor, the possessor should bear any loss be- cause the possessor is in a better posi- tion to know what risks of injury ex- ist and to take steps to guard against them. Spa Lady was also in a better position than was Patton to contract for insurance or indemnification to cover any damages caused by an in- dependent contractor's negligence.

As cited by the state supreme court, "utilizing the rule stated in section 422 of the Restatement com- ports with decisions from several other states." In particular, the court noted that numerous decisions have held "business owners liable for in- juries sustained on their premises by persons other than employees of independent contractors where the injuries were caused by the indepen- dent contractors' negligence."

As a result, the state supreme court reversed the summary judgment of the trial court in favor of Spa Lady and re- manded (i.e., sent back) the case to the trial court for further proceedings to consider whether Spa Lady was vicar- iously liable for the alleged negligence of its independent contractors.

An agency will be liable for the negligent acts of its agents, both employees and volunteers, when such negligence was related or incidental to an agent's responsibilities.

Under the circumstances of this case, the federal district court found no evidence of apparent authority existed that would reasonably indicate Starplex was OPRD's agent.

In this particular instance, the court found evidence that the City's "involvement with, and participation at, the Medieval Festival was limited."

The legal role and limitations of independent contractors operating in parks hinges on the relationship and apparent authority of each party.

Having found the City owed no legal duty to supervise or provide oversight to this particular event in which the plaintiff was injured, the court ordered plaintiff's claims to be dismissed.

According to the state supreme court, "vicarious liability is a doctrine designed to ensure that a financially responsible party is available to compensate the injured victim."

By James C. Kozlowski, J.D., Ph.D.

James C. Kozlowski, J.D., Ph.D., is an attorney and associate professor in the School of Recreation, Health and Tourism at George Mason University (jkozlows@gmu. edu). Webpage with link to Law Review articles archive (1982 to present): http:// mason.gmu.edu/~jkozlows.