COLUMBIA, S.C. (Legal Newsline) - Answering for the first time the question of whether a company can be liable for hiring the wrong independent contractor, the South Carolina Supreme Court said “yes.”
The state high court was asked for its opinion by the federal Fourth Circuit Court of Appeals after a lower federal court dismissed a lawsuit by a woman who was injured in an accident with a truck under contract to a Nucor subsidiary. In a June 21 decision, the Supreme Court said basic principles of tort law dictate that a company can be liable for failing to exercise reasonable care in hiring a contractor to do dangerous work.
Rejecting complaints by the trucking industry and the South Carolina Chamber of Commerce that it would “open the floodgates” to litigation, the Supreme Court said it was merely bringing South Carolina law in line with a majority of other states. Plaintiffs still must prove the negligent hiring of a contractor caused their injuries, the court noted. A wholly independent mistake by the contractor, such as failing to read a warning label, won’t suffice.
Lucinda Ruh sued Metal Recycling Services, a Nucor unit, after she was hurt by a vehicle operated by independent Norris Trucking. The case was removed to federal court, which dismissed her claim with leave to amend. She added a claim for negligent hiring against Metal Recycling, but the court dismissed her case again. She appealed to the Fourth Circuit, which sought the South Carolina Supreme Court’s opinion on state law.
“Our answer should come as no surprise to even a casual student of the law,” the Supreme Court said. More than 30 states recognize liability for negligent hiring of a contractor and a predecessor to the South Carolina Supreme Court ruled in 1868 that an owner “might be made responsible for the misconduct or negligence of a contractor known to be unworthy of trust.”
Metal Recylcing argued it would “open the floodgates” for lawsuits against any company that doesn’t “turn every stone to investigate and analyze the independent contractor's background, resources, and qualifications.”
The court rejected that complaint, saying plaintiffs must prove the company failed to exercise reasonable care in hiring a “competent and careful contractor” to do dangerous work and that failure caused the plaintiff’s injury. A hiring company isn’t liable for accidents that are wholly due to a contractor’s mistake.
“Reasonable care” means the standard for investigating contractors in that industry, the court explained. “A contractor hauling toxic chemicals on public highways, for example, needs expertise and equipment, and must act with a level of care, that would not be required for a contractor hauling paper products,” the court said.
The phrase “competent and careful” means the contractor has the skills and experience to do the work safely, the court said. It doesn’t include whether the contractor is financially irresponsible.
“Nothing we say in this opinion affects the general rule that a principal is not liable for the negligence of its independent contractor,” the court concluded. “There can be no recovery against the principal unless the plaintiff separately proves the negligence of the principal in selecting that particular independent contractor and that the principal's negligence was a proximate cause of the alleged injuries.”