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Geoff Trachtenberg
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Business Owners Now Owe Nondelegable Duties to Keep Premises Reasonably Safe

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“Attention Safeway shoppers, business owners now owe nondelegable duties to their invitees to keep their premises reasonably safe.”

Steven H. Simon sued Safeway after he was injured during a store altercation with a security guard who “physically and sexually” assaulted him. The guard was employed by a third-party company who had contracted with Safeway. He mistakenly concluded that Mr. Simon had stolen some items, Mr. Simon then asked to speak to the manager and the altercation began.

Mr. Simon sued Safeway in Simon v. Safeway, Inc. on the grounds that Safeway was vicariously liable under theories of respondeat superior and because it had a nondelegable duty to train, supervise and “employ properly licensed and trained security guards.” Safeway filed a motion for summary judgment on the issue of whether they were vicariously liable for the intentional torts of the third-party security guard. Mr. Simon opposed the motion and requested the trial court continue the matter to allow for additional discovery under Rule 56(f). After initially denying Safeway’s motion, the trial court granted Safeway’s subsequent motion for reconsideration, denied Mr. Simon’s request for Rule 56(f) relief and the Court of Appeals reversed.

Before getting into the opinion, as an important footnote, the Court’s opinion assumes no independent negligence on the part of Safeway. The Court stated that, although Mr. Simon “clearly raised an independent negligence claim in his original complaint, and the parties discussed it in their initial summary judgment filings . . . we can find no record that the trial court considered or ruled on this claim when it reconsidered and ruled on Safeway’s motion for summary judgment. Therefore, we decline to consider any argument about Safeway’s independent negligence on appeal.” This will be important later.

The Court first addressed the trial court’s denial of Mr. Simon’s Rule 56(f) motion to continue. Mr. Simon argued that he needed discovery to determine the precise nature of the relationship between Safeway and the security guard and requested time to depose three witnesses–the guard, the Safeway store manager and a Safeway employee who allegedly told the guard that Mr. Simon might be shoplifting.

I won’t spend a lot of time talking about Rule 56(f) because it is so fact-specific, but it bears mentioning that Mr. Simon clearly did not adhere to the requirements of Rule 56(f), which requires an affidavit containing very specific information about “who, what, where and when” additional discovery would be completed. Typically, defects in Rule 56(f) affidavits are fatal, but not this time. Not only did fail to raise the issue of a missing affidavit in the trial court, but significantly the Court of Appeals concluded that failure to raise such a defect caused a waiver of the issue because “any technical deficiency in the form of the motion would have been easily remedied had Safeway done so.”

So on that note, “good to know,” I thought – “failure to file an affidavit in compliance with Rule 56(f) is a mere defect in ‘form.'” Hallelujah, right? Wrong. In a footnote, buried at the end of the section, the Court deftly back-peddles, stating “[w]e do not suggest that courts should overlook a party’s failure to follow the technical requirements of Rule 56(f). Our conclusion is limited to the specific facts of this case, where the motion substantially complied with the rule’s requirements, the opposing party did not object on technical grounds, and the trial court addressed the motion on the merits despite the technical deficiency.” So beware, Rul 56(f) requirements remain critical.

Anyway, before turning to the substance, the Court went on to make some important points about independent contractor law in Arizona – namely, whether someone is an independent contractor versus an employee. Although anyone reading our case law should come to the same conclusion as the Court, nothing I know of says it in as plain terms as the following:

We recognize many of the factors that suggest an independent contractor rather than master-servant relationship between Safeway and [the guard] are also present in this case. Safeway compensated [the guard’s third-party employer] for its services every four weeks, and [that company] was responsible for hiring, training, and certifying its own employees, including [the guard], and for providing employee compensation and benefits. However, our case law distinguishes a servant from an independent contractor primarily based on the employer’s right to control how the work is performed.

The right-to-control test requires an examination of whether the employer reserves the right to supervise or control the method of performing the contracted service or whether the employer’s control is limited to the result, leaving the method to the other party.

So the Court concluded, that “even if the evidence in the record is not sufficient, standing alone, to raise a material question of fact, it provides a reasonable basis for Simon’s request to conduct additional discovery on the existence of a master-servant relationship.” “We therefore cannot say that granting Simon’s timely request for additional disclosure could not have led to admissible evidence on this issue, and the trial court thus abused its discretion in denying Simon’s motion for time to conduct additional discovery.”

Remember, all this has to do with whether Mr. Simon could prove that the guard was, in fact, an employee. However, the balance of the opinion renders this issue moot, because the Court finds that, even if the guard was an employee, Safeway owed nondelegable duties to protect Mr. Simon from the guard and that “Safeway will be vicariously liable for [the guard’s] actions if [the guard] is found liable in the first instance.”

So next, turning to the meat and potatoes of the case, the Court addressed Mr. Simon’s argument that “Safeway had a non-delegable duty to provide safe premises for its business invitees and is liable for the torts of independent contractors it retains to work on its premises.” Although the trial court found Safeway could not be vicariously liable because “there was no evidence it had attempted to delegate a nondelegable duty,” Division Two disagreed.

In my favorite part of the opinion, the Court of Appeals explained that the analysis of the case was not limited to the traditional independent contractor rule and exceptions in the Restatement (Second) Torts §§ 409-429. The Court explained that, under those sections, the independent contractor was hired to perform “physical construction or maintenance on land or premises or the work to be performed is peculiarly or inherently dangerous.” Those sections “do not directly address, much less resolve, the issue presented in this case, where [a third-party contractor] was hired to provide ongoing services for Safeway on Safeway’s premises and where, in the performance of those services, [the third-party contractor’s] employees are required to interact personally with business invitees of Safeway.”

The Court concluded that “the facts of this case are more akin to premises liability under Restatement (Second) of Torts § 344 (1965) than independent contractor liability under §§ 409-429.” In relevant part, Restatement § 344 provides that “[a] possessor of land who holds it open to the public for entry for his business purposes is subject to liability to members of the public while they are upon the land for such a purpose, for physical harm caused by the accidental, negligent, or intentionally harmful acts of third persons . . . and by the failure of the possessor to exercise reasonable care to (a) discover that such acts are being done or are likely to be done.”

The Court then went on to address several opinions on this issue, concluding that while they were “distinguishable from the present case because they deal with a landowner’s direct liability for its own tortious acts and not a landowner’s vicarious liability for an independent contractor’s torts . . . . they do stand for the limited proposition that a landowner’s duty of care to business invitees encompasses activities on the land and is not limited to dangerous conditions, as Safeway suggests.”

Most significantly, the Court noted that comment c to § 344 expressly provides: “The rule stated applies to the acts of independent contractors . . . who are employed or permitted to carry on activities upon the land. The possessor is required to exercise reasonable care, for the protection of the public who enter, to supervise the activities of the contractor . . . .” “Therefore, a business owner may not escape liability for his failure to exercise reasonable care merely because the aggrieved party was injured by an independent contractor who was employed to provide services for the business owner on the business premises.”

So the Court then “turn[ed] . . . to the question of vicarious liability and whether Safeway may be held liable in the absence of its own negligence.”

Are you confused? I am, and I think they goofed a little.

Comment c to § 344 does not say that a possessor is liable for independent contractors per se. It says the possessor is “required to exercise reasonable care . . . to supervise the activities of the contractor.” That necessarily means that, for Safeway to be liable, Safeway must have been independently negligent in supervising the activities of its contractors. So it’s not accurate to say that Safeway was being held liable “in the absence of its own negligence,” and by addressing this issue, the Court is necessarily reviewing “argument about Safeway’s independent negligence on appeal.”

Anyway, it’s about to get even more confusing because, instead of focusing on whether Safeway negligently supervised the activities of the security guards, the Court and parties went down the rabbit hole of nondelegable duty. As you’ll see, this is good for plaintiffs, but may prove to be reversible error if the Supreme Court ever sees the case (Quarles & Brady handled the appeal, so watch for a petition for review).

Safeway relied primarily on Myers v. City of Tempe, 212 Ariz. 128, 128 P.3d 751 (2006), to support its argument that it cannot possess a nondelegable duty where no duty existed in the first place. Safeway argued that, “because it had no obligation to provide security services in the first instance, the fact it undertook to do so does not create a ‘nondelegable duty.'” Specifically, Safeway argued that, since there was no inherent duty to provide security, “it could delegate any duty it assumed to an independent contractor without incurring vicarious liability.”

The Court noted that a nondelegable duty is one “for which the employer must retain responsibility, despite proper delegation to another.” The Court held that, “[s]uch duty arises in those ‘special situations in which the law prescribes a duty requiring a higher degree of care,’ such as the affirmative duty of a landowner‘to protect those described as his invitees by making and keeping the premises safe.'” The Court went on to explain the well-known rule that, “[t]his exception to the general rule of nonliability for employers of independent contractors is ‘premised on the principle that certain duties of an employer are of such importance that he may not escape liability merely by delegating performance to another.'”

Is this correct? Is the affirmative duty of a landowner to protect invitees a higher degree of care? It may have been so at one time, but as Judge Lankford notes in his negligence treatise, Arizona has really abandoned the old “status distinctions” in premises cases. Anyway, even if that is true, what does that have to do with whether Safeway properly supervised its contractors? Is the duty to supervise contractors providing security or the common law duty keep the premises safe to invitees of such importance that it cannot be delegated to another? The wheels feel like they’re coming off this opinion.

Anyway, the Court stated that, while “[w]e agree that . . . Safeway had no inherent duty to provide some of the security services performed by [the third-party contractor], . . . . [Safeway did have] a common law duty . . . ‘. . . to keep [its] premises reasonably safe for invitees.” The Court thereby concluded that, “[w]hereas, in Myers, the city owed no special duty to provide emergency medical services, the nondelegable common law duties of business owners to their invitees are undoubtedly implicated in this case.”

The Court explained itself as follows:

Here Safeway did not initially have a specific, nondelegable duty to provide security services. Instead, it voluntarily assumed that duty within the context of the heightened duty it already owed to its business invitees. Having [voluntarily] assumed the task of providing security services on its premises, Safeway thus created for itself a personal, nondelegable duty to protect its invitees from the intentionally tortious conduct of those with whom it had contracted to maintain a presence and provide security on its premises. Safeway cannot now disclaim liability merely because the individuals it permitted to interact so closely with its customers had been hired by an independent contractor. Were we to hold otherwise, the potential for abuse would be great. Therefore, we hold that when, as here, a business owner assumes a duty to provide security services, that duty is nondelegable, and the owner will not be insulated from liability for the tortious acts of security personnel hired as independent contractors.

So, according to Division Two, business owners now owe nondelegable duties to their invitees to keep the premises reasonably safe, which includes the conduct of third-party security. Significantly, and despite my snarky comments about the Court’s reasoning, in a footnote the Court noted that this is the law in the majority of other jurisdictions considering the issue, so maybe our Supreme Court will agree.

[Ed: At least on appeal, anyway, Steven H. Simon represented himself. It’s not often that a pro se litigant is successful on these types of issues, but it appears that Mr. Simon is not an attorney.]