Court of Appeal: Privette Doctrine Does Not Apply to Landlord-Tenant Relationships

We’ve talked a fair bit about the Privette doctrine which provides for a rebuttable presumption that a hirer is not liable for workplace injuries sustained by employees of hired parties.

We’ve also talked about its two exceptions: (1) The Hooker exception which provides for liability if the hirer retained control over the work being performed, negligently exercised that control, and its negligent exercise of that control contributed to an employee’s injury; and (2) the Kinsman exception which provides for liability if the hirer knew or should have known of a concealed hazard, that the hired party did not know of and could not have reasonably discovered, and the hirer failed to warn the hired party of the hazard.

The Privette doctrine is not the end all be all of landowner liability, however, as discussed in Ramirez v. PK 1 Plaza 580 SC LP, 85 Cal.App.5th 252 (2022).

The Ramirez Case

Kimco Realty Corporation owns a shopping center in Livermore, California. Freeway Insurance Services, Inc. leased an office suite in the center from Kimco. In October 2017, Freeway vacated its suite. Under the lease, Freeway was responsible for removing the exterior signage from the suite. Kimco offered to handle the removal and bill the cost to Freeway but Freeway opted to do it on its own.

Freeway hired Francisco Ramirez, a self-employed contractor, to remove the signage. On November 6, 2017, Ramirez arrived at the suite to remove the sign, however, no one arrived. After about 20 minutes, a woman from Kimco’s office arrived and gave him the keys to the suite. While he had been waiting, Ramirez noticed that the sign was powered by a low voltage electrical cable that would need to be disconnected for him to complete the job, and asked if a security guard or maintenance worker was onsite  with “all the keys including for the attic access.” The woman responded that she did not know.

Once inside the suite, Ramirez searched for the electrical box to disconnect the low voltage electrical cable. Not finding the box, he decided to look for it on the roof. He went to the rear of the building and used his own ladder to climb onto the roof. While on the roof, he noticed a cupola that had an unlocked and open access door. Believing the electrical box might be in the cupola, he opened the access door and used a flashlight to look inside. Inside the cupola he saw a “big opening” in the drywall where he thought the electrical box might be located.

Unknown to Ramirez, nine feet from the access door, the cup floor “transitions to an opening with [two foot by six foot joists” which were two feet apart from each other. After traveling 12 feet into the cupola, Ramirez fell through the opening and the drywall below of the ceiling below, landing on the sidewalk and sustaining serious injuries.

In January 2019, Ramirez sued Kimco alleging causes of action for negligence, premises liability, negligence per se, and negligent inflection of emotional distress. Ramirez’ wife also brought a separate cause of action for negligent infliction of emotional distress, based on the allegation that she witnessed Ramirez fall, and loss of consortium. Kimco later brought a motion for summary judgment claiming that the “opening was neither a concealed condition nor . . . unascertainable by Ramirez” and that its duty to “tak[e] proper precautions to protect against obvious hazards in the workplace . . . was delegated to [him] under the Privette doctrine.” Ramirez, in opposition, argued that the Privette doctrine was inapplicable because there was no employment relationship between Ramirez and Kimco.

The trial court granted Kimco’s motion for summary judgment concluding that Kimco “had no duty to ensure [Ramirez’s] safety” because the Privette doctrine applied even though Kimco had not directly hired Ramirez. Ramirez appealed.

The Appeal

In a split decision, the 1st District Court of Appeal agreed with Ramirez and held that the Privette doctrine was inapplicable because Kimco did not hire either Ramirez or Freeway. Thus, explained the Court, “Kimco did not delegate a responsibility for ensuring the worksite’s safety, either directly or ‘through the chain of delegation.’ Accordingly, the bedrock presumption of the Privette doctrine is absent in this case.”

The Court of Appeal was not finished though. Addressing Kimco’s contention in its motion for summary judgment that it had delegated responsibility for workplace hazards under its lease agreement with Freeway, the Court stated that, “the trial court apparently accepted this argument, but we do not.” Under the lease, explained the Court, “no aspect of the lease establishes that Kimco delegated a duty involving the roof’s condition to Freeway.”

First, while the lease provided that that Freeway would “have the non-exclusive right to use the Common Area,” which was defined to include the shopping center’s “roofs,” Kimco retained possession and control of the roof, including responsibility for maintenance and, therefore, did not delegate to Freeway a general duty of reasonable care with regard to dangerous conditions on the roof.

Second, under the lease, Kimco did not delegate to Freeway a duty to ensure the safety of the site where Ramirez performed his work. “Privette delegation is project-specific,” explained the Court of Appeal, “meaning it involves a duty limited not only to the contracted-for work but also to the place where that work occurs.” “At oral argument, Kimco claimed that in requiring Freeway to remove the sign, the lease necessarily delegated to Freeway the duty to ensure the safety of the area where that work was performed,” but explained the Court, “[e]ven assuming, without deciding, that the roof was reasonably included in that area, we reject the notion that a landowner may absolve itself of liability for conditions in a space over which it retains possession and control merely by assigning its tenant a task that could involve that space.”

Third, explained the Court of Appeal, “[a]pplication of the Privette doctrine is also not justified on a theory that Kimco and Freeway’s relationship with regard to the sign removal was analogous to an employer-independent contractor relationship”:

True, Kimco purported to “control[] [only] the results of [the sign removal] and not the means by which it [was] accomplished”, which might otherwise suggest that Freeway functioned like an independent contractor. But Freeway had no special “ability to perform the contracted work safely and successfully” compared to Kimco, and such an ability is a “major principle” that underlies the presumption that a hirer delegates responsibility for workplace safety to an independent contractor. Nor was Freeway in any business—whether as a general contractor, project manager, or otherwise—that had anything to do with the work Ramirez was hired to perform. Thus, even if an employer-independent contractor relationship can coexist with a lessor-lessee relationship, one of the main “hallmarks of an employer-independent contractor relationship”—that “the [lessor] hired [the lessee] to perform work”—is missing.

Finally, held the Court of Appeal, “the sign benefited Freeway more than it did Kimco, and Kimco did not directly or indirectly pay Freeway to install or remove it.” “The lease explicitly provided that the sign’s installation would be ‘at [Freeway’s] sole cost and expense’ and that its removal was ‘the responsibility of [Freeway],'” explained the Court, “Thus, Kimco did not effectively ‘hire’ Freeway to perform the work at issue”:

In closing, we reiterate that the Privette doctrine is not the only path by which Kimco may ultimately avoid liability, or even the only path by which it may be deemed to have owed no duty to Ramirez. We hold only that Kimco cannot prevail based on this particular doctrine, which has never been applied in circumstances such as these. If the doctrine is to be expanded as the dissent contemplates, it should be the Supreme Court, not us, that does so.

The Dissent

Justice Banke dissented. In his dissent, Justice Banke disagreed that the landlord-tenant relationship, as reflected by the lease, was not equivalent to a hirer-independent contractor relationship:

In my view the salient inquiry in this case is whether the fact that the request that the lessee both install and remove the electrical signage (through the anticipated hiring of an independent contractor to perform the work) was included in the lease, rather set forth in a separate contract, removes this case from the ambit of the Privette doctrine. . . . If in substance the provisions of a lease call for the lessee to do work that will be performed by a specialized independent contractor, it would seem to be the height of form over substance to say the Privette doctrine does not apply and the independent contractor can sue the landowner/lessor under common law premises liability principles, which, of course, the contractor could not do if the landowner/lessor, rather than the lessee, hired the contractor directly or if the landowner/lessor entered into a separate contract with the lessee for the work. . . . So, as I see it the question here is whether the signage provisions in the lease are in substance a contract for the work, giving rise to presumptive delegation, ultimately to the independent contractor, of the duty to provide a safe workplace. Were there a provision that the lessee was to be paid, credited, or reimbursed for this work (as there is for other work the lessee might do), it would seem evident that the request that the work be done would in substance be a contract for the work.

While agreeing with the majority that the California Supreme Court “has never decided – in fact, never considered – whether Privette applies in a situation like that presented here, where a lease obligates a lessee to have work done on the property and expressly contemplates that work will be performed by an independent contractor,” Justice Banke concluded that it should:

I see no reason why the result should be different where, as here, a lease requires the lessee to do work on the property that the parties contemplate will be done by an independent contractor, than where the landowner/lessor, itself, hires the independent contractor or enters into a separate contract with the lessee to arrange for the work to be done by an independent contractor. In each of these scenarios, the independent contractor has been presumptively delegated the duty for workplace safety and it is up to the independent contractor to make a reasonable inspection of the portions of the property that will be accessed in performing the work and either take precautions in light of those conditions or elect not to do the work.

Concluding that the Privette doctrine should apply, Justice Banke examined whether either the Hooker or Kinsman exceptions applied. Under the Kinsman exception, explained Justice Banke, an injured worker must show that the landowner (a) “knew, or should have known, of a latent or concealed hazardous condition on its property,” (b) “the contractor did not know and could not have reasonably discovered this hazardous condition,” and (c) “the landowner failed to warn the contractor about this condition.” “Plaintiff’s case indisputably falters as to the second requirement – that he did not know or could not have known of the allegedly hazardous condition,” explained Justice Banke, because when opening the cupola Ramirez knew that the cupola floor “transitions to an opening with [two foot by six foot] joists.” Thus, explained Justice Banke, “once plaintiff became aware of the allegedly hazardous condition, even it could not be rectified, it was his responsibility to take steps to complete the work safely I light of the hazardous condition, or to refuse to do the work.”

Conclusion   

Ramirez is an interesting case that may presage a future California Supreme Court decision as to whether landlord-tenant relationships are or are not the same as hirer-independent contractor relationships for purposes of application of the Privette doctrine. Until then, unless a different California appellate court reaches a different conclusion, which would create an appellate court split, the Privette doctrine does not apply to landlord-tenant relationships.