Becker v. Poling Transportation

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DMC/SandT/04/33
Becker v. Poling Transportation Co.
United States Court of Appeals for the Second Circuit: Judges Winter, Katzman and Goldberg: 356 F.3d 381 (2d Cir. 2004): 2 February 2004
independent contractor: negligent hiring: vicarious liability: direct liability: proximate or intervening cause
Summary
The Second Circuit affirmed a decision of the District Court which had found a corporation liable for injuries suffered by two barge crewmen, while they were working with an independent contractor hired by the corporation. However, the Second Circuit held that the corporation was directly liable for the injuries since it had been negligent in hiring the contractor, and not merely vicariously liable for the contractor’s actions.

DMC Category Rating: Developed

Case Note submitted by Healy & Baillie, LLP, New York. Healy & Baillie are the International Contributors to the website for the United States of America.

Facts
Poling Transportation Co., the owner of a defunct barge, agreed to give Metro, a fuel and oil company, all the petroleum remaining on board the barge if Metro arranged for the petroleum to be removed from the barge. Poling’s agent notified Metro that a vacuum truck would be needed to transfer the petroleum, because the barge’s pumping mechanism was not operable. Metro hired Ultimate, a fuel transportation corporation, to pick up the petroleum, even though Metro knew that Ultimate did not have a vacuum truck.

Plaintiffs, employees of Poling, suffered severe burns when a fire broke out while they were transferring petroleum from the barge to Ultimate’s truck using a portable pump. Plaintiffs sued Poling, Metro and Ultimate under the Jones Act, 46 U.S.C. §688 and under the general maritime law. Ultimate settled with plaintiffs before trial. After a jury trial on the remaining claims, the District Court for the Eastern District of New York found that Ultimate had been at fault for the plaintiffs’ damages and found that, although Ultimate had been a contractor (for whose acts the contractor’s employer is not ordinarily responsible), the activity had been "inherently dangerous" which took the case outside this normal rule. Thus, Metro was found vicariously liable for the negligence of its contractor, Ultimate. On the basis of this finding, the court allowed a set-off on the judgment to account for Ultimate’s settlement payment. Metro appealed, contending inter alia that it was not vicariously liable for Ultimate’s fault and that Ultimate’s settlement barred any further recovery against Metro. Plaintiffs argued that allowing the set-off was improper because Metro was directly liable on the basis of its negligent hiring of Ultimate, and not merely vicariously liable for its contractor’s negligent acts.

Judgment
The Second Circuit, quoting Kleeman v. Rheingold, 81 N.Y.2d 270 (N.Y., 1993), and citing Robinson v. Gov’t of Malaysia, 269 F.3d 133 (2d Cir. 2001), held that "a party is liable to an injured plaintiff where the party itself was negligent ‘in selecting, instructing, or supervising the contractor.’" Such negligence is a form of direct rather than vicarious liability and is subject to a demonstration of causation. Because the jury found that a) Ultimate lacked the competence to perform the task for which it was hired by Metro; b) Metro knew or should have known that Ultimate was not qualified to undertake the job, and c) the causal connection requirement was met, Metro was found directly liable to the plaintiffs.

The Second Circuit further ruled that the plaintiffs’ choice to use the portable pump was not a superseding or intervening cause of their injuries, which would have absolved Metro of liability. Quoting the rule established in Derdiarian v. Felix Contracting Corp., 51 N.Y.2d 308, 315 (N.Y., 1980), the court found that because the plaintiffs’ choice of using the portable pump was normal and foreseeable by Metro under the circumstances, the act did not cause a break in the chain of causation between Metro’s negligence and the plaintiffs’ injuries.

On the basis of the foregoing, the Second Circuit held that Metro was directly liable to plaintiffs for its own negligence and not merely vicariously liable for its contractor’s negligence. The court declined to consider the implications of this finding on the lower court’s decision to set off Ultimate’s settlement against Metro’s liability, however, because plaintiffs had failed to file a cross-appeal on this point.

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