DD 11/3/06 Landowner Dodges Subjacent Support Liability by Hiring Independent Contractor

Daily Development for Friday, November 3, 2006 Elmer F. Pierson Professor of Law UMKC School of Law Of Counsel: Blackwell Sanders Peper Martin Kansas City, Missouri dirt@umkc.edu

NUISANCE; LATERAL AND SUBJACENT SUPPORT; IMPROVED LAND; NEGLIGENCE: A landowner who negligently removes lateral supports may be held liable for damage to improvements on an adjoining property, but a landowner who hires an independent contractor is generally not liable if the independent contractor negligently removes lateral supports necessary to sustain those improvements unless, by statute or otherwise, the excavating landowner has an absolute duty to provide support for a neighbor's wall. But state statutes in some cases, as here, convert the landowner’s liability for such excavations to absolute liability.

Great Northern Insurance Company v. Leontarakis, 387 N.J. Super. 583, 904 A.2d 846 (App. Div. 2006); August 21, 2006.

A property owner sued an adjacent property owner for damages to a brick privacy wall. The damage happened when the adjacent property owner had excavation work performed. The excavating property owner had hired an architect/general contractor who had hired two sub-contractors (one of whom hired a sub-subcontractor) to perform the foundation and basement excavation for a new home. The complaining property owner had a brick privacy wall constructed along the common boundary line separating the two properties. After the adjacent property owner's excavation work was completed, some of the soil supporting the complaining property owner's privacy wall slid down into the basement excavation. The architect and sub-contractor attempted to protect the privacy wall by installing steel sheeting. This did not prevent sections of the privacy wall from collapsing onto the adjacent land.

The lower court entered a directed verdict in favor of the excavating property owner relying on the independent contractor rule, which holds that a landowner who hires an independent contractor is generally not liable at common law if the independent contractor negligently removes lateral support necessary to sustain improvements on an adjoining lot. It concluded that the only legal basis for the claims against the adjacent property owner was negligence, and the complaining property owner failed to establish any negligence on the part of the adjacent property owner. The property owner settled suits against the architect, sub-contractors, and its insurance carrier.

On appeal, the Appellate Division explained that while, under the common law, a landowner who negligently removes lateral supports may be held liable for damage to improvements on an adjoining property, a landowner who hires an independent contractor is generally not liable if the independent contractor negligently removes lateral support necessary to sustain those improvements. When one hires an independent contractor, the hiring party has no right or control over the manner in which the work will be performed. The manner in which the work is to be done is the contractor's own enterprise, and the contractor is the proper party to be charged with the responsibility of preventing the risk. The Court added that in cases involving a significant risk of grave harm, the duty owed to the public may be too important to allow its delegation to an independent contractor. This exception was not implicated here.

A number of states, including New Jersey, have enacted statutes codifying or altering this law of lateral support. The New Jersey statute provides, in sum, that whenever "excavations for buildings or other purposes shall be intended to be carried to a depth of more than eight feet below the curb or grade of the street, and there shall be any party on adjoining land, the person causing the excavations to be made, if afforded the necessary license to enter on the adjoining land, shall, at all times, from the commencement until the completion of such excavations, preserve, at his own expense, such party from injury, and the party should remain as stable as before such excavations were commenced." This duty is absolute. The excavating property owner did not dispute that the excavation conducted was deeper than eight feet below the curb or grade of the street, or that excavating property owner was the person causing the excavation to be made.

The Court held that a reasonable jury could have concluded that the excavating property owner was liable under the statute and did breach the nondelegable duty to provide lateral support to the property, even if the excavation work was performed by an independent contractor. Therefore, the dismissal of the complaining property owner's case was plain error.

The Court also noted that the complaining property owner's settlement with the architect, sub-contractors, and its insurance company did not necessarily release the excavating property owner from liability, even if excavating property owner's liability was wholly vicarious.

In addition, the lower court ordered the excavating property owner to commence construction of a reinforced or better retaining wall meeting municipal specifications. After the wall was rebuilt, the complaining property owner claimed the wall did not meet the specifications of the complaining property owner's experts. However, the complaining property owner had agreed to the specifications that were included as part of the consent order. For this reason, the lower court granted a pretrial motion to limit the complaining property owner's damage claim. The Court saw no reason to intervene.

The Court reversed the order dismissing property owner's case and remanded for further proceedings in accordance with its decision, and affirmed the pretrial order limiting the complaining property owner's damage claim.

Comment 1: The “independent contractor” doctrine was a new one to the editor, and perhaps news to some readers.

Comment 2: Note that the common law rule imposing only a duty of due care for excavations that affect lateral support applies only when the slippage occurs solely because of the additional weight of the affected improvements on the neighboring property. Under the common law, a landowner has an absolute duty to provide lateral support to neighboring land in its natural state, and this liability would lead to liability for injury to any improvements affected when the land under them slips due to a breach of this absolute duty.

Comment 3: Although the common law rule would have excused the excavating landowner, the court reversed, of course, because of the New Jersey statute, which the court suggests exists in other states as well. Even if there is no state statute, there may well be local zoning ordinances or building codes that set up specific requirements for excavation and, if nothing else, provide a definition of “negligence per se,” thus turning a duty of care into an absolute liability if the regulations are not satisfied.

Great Northern Insurance Company v. Leontarakis, 387 N.J. Super. 583, 904 A.2d 846 (App. Div. 2006); August 21, 2006.

Comment 1: The “independent contractor” doctrine was a new one to the editor, and perhaps news to some readers.

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