Real Estate Litigation

By:  Kevin J. Parker

In a recent Arizona Court of Appeals case, the court clarified the rules for liability of a property owner to a person injured on the premises. In Lee v. M & H Enterprises, Inc. and Wal-Mart Stores, Inc. (filed April 21, 2015), the Arizona Court of Appeals addressed the question whether Wal-Mart as the property owner was liable for injuries suffered by an employee of an independent contractor performing construction services on the premises. The injured person sued both Wal-Mart and his employer, the construction company. The court reiterated the general rule that a landowner is not liable for the negligent conduct of an independent contractor on the premises unless the landowner has been independently negligent. The court also noted, however, that there are many exceptions to the rule of nonliability so that even where the party hiring the independent contractor is not personally negligent, the hiring party may, in certain circumstances, be vicariously liable for the independent contractor’s negligence. The court identified three main categories of potential liability: (1) negligent selection, instruction, or supervision of the contractor, (2) non-delegable duties of the property owner arising out of some relation toward the public or the particular plaintiff, and (3) work which is specifically, peculiarly, or inherently dangerous. The court also discussed liability of the property owner under a “retained control” theory. The court discussed Restatement (Second) of Torts § 414, which addresses direct liability of a landowner based on a theory of retained control: “One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care.” Based upon the facts of the case, the trial court granted summary judgment in favor of Wal-Mart on all of plaintiff’s legal theories. The Court of Appeals affirmed.