NO. 94-029
IN THE SUPREME COURT OF THE STATE OF MONTANA
1995
RUSSELL B. GIBBY,
Plaintiff & Respondent,
v.
NORANDA MINERALS CORPORATION,
Defendant & Appellant.
APPEALS FROM: District Court of the Eighth Judicial District,
1n and for the County of Cascade,
The Honorable John McCarvel, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Dana Christensen, Murphy, Robinson, Heckathorn &
Phillips, Kalispell, Montana; Richard Ranney,
Williams & Ranney, Missoula, Montana
For Respondent:
Tom L. Lewis, Andrew D. Huppert, Lewis, Huppert &
Slovak, Great Falls, Montana
Submitted on Briefs: June 15, 1995
Decided: October 16, 1995
Filed:
Justice William E. Hunt, Sr., delivered the Opinion of the Court.
Appellant, Noranda Minerals Corporation appeals from a jury
verdict in favor of the plaintiff, Russell Gibby, and trial court
orders from the Eighth Judicial District Court, Cascade County. We
affirm.
We consider the following issues to be dispositive;
1. Did the District Court err in concluding that Noranda
Minerals Corporation had a nondelegable duty to ensure safety at
the Libby Adit?
2. Did the District Court err in instructing the jury that
Noranda Minerals Corporation had a nondelegable duty to provide
Russell Gibby a safe place to work under the Montana Safe Place to
Work statute rather than leave this issue to the jury as a question
of fact?
3. Did the District Court err in instructing the jury that
Noranda Minerals Corporation had a nondelegable duty to follow
safety standards promulgated under the authority of the Mine Safety
and Health Act (MSHA), 30 U.S.C., 5 801, and that violation of this
standard was evidence of negligence?
4. Did the District Court err in concluding there was
sufficient evidence to support the jury's verdict that Noranda
Minerals Corporation was negligent and that Noranda's negligence
was a proximate cause of Russell Gibby's damages?
FACTS
In 1988, Noranda Minerals Corporation (Noranda) and Montana
Reserves Company entered into a Mining Venture agreement for the
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purpose of acquiring property and developing mining facilities in
the Cabinet Mountains of Northwest Montana. Noranda maintained a
55% interest in the ownership of the venture and was designated
manager of operations. The venture agreement allowed Noranda to
contract out the work of excavating tunnels.
Gilbert Corporation of Delaware, Inc. and the Dynatech Mining
Company formed a joint venture to bid on one of Noranda's
excavating projects. Gilbert-Dynatech (Gilbert) was hired by
Noranda to drive an exploration tunnel into the side of the Cabinet
Mountains (the Libby Adit). Noranda and Gilbert entered a
"Purchase Order Agreement MP 11001 for the Underground Evaluation
of Montana Project Montanore" (the POA).
Plaintiff and respondent, Russell Gibby (Gibby), filed this
action after injuring his back while working on the Libby Adit.
Gibby was employed by Gilbert in August 1989 as a shift
superintendent. On September 12, 1990, Gibby was using a hand held
jack-hammer, a type of drill which was known to hang up on
fractured rock and loose debris. Gibby injured his back while
pulling this hand-operated rock drill out of an anchor hole. Gibby
sought and received workers' compensation benefits through Gilbert.
He then brought this action against Noranda in tort for his
injuries.
Noranda filed an answer generally denying all allegations
contained in Gibby's complaint in April 1992. In July 1993, Noranda
filed a motion for summary judgment on the grounds that Noranda had
either delegated or discharged all duties to provide the plaintiff
a safe place to work. This motion was denied in October 1993.
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Trial was held on October 25, 1991, and the jury returned a verdict
in favor of Gibby for $1.3 million.
Noranda appeals the pre-trial denial of the motion for summary
judgment, the denial of the motions for a judgment as matter of
law, to alter or amend the judgment or for a new trial, and the
District Court's jury instructions.
ISSUE 1
Did the District Court err in concluding that Noranda Minerals
Corporation had a nondelegable duty to ensure safety at the Libby
Adit?
The question of whether a duty exists is a question of law.
Therefore, when reviewing a District Court's conclusions we must
determine whether the interpretation of the law was correct. In re
Marriage of Barnard (1994), 264 Mont. 103, 106, 870 P.2d 91,93,
(citing In re Marriage of Burris (19931, 258 Mont. 265, 269, 852
P.2d 616, 619).
Montana recognizes the general rule that owners or general
contractors of a construction project will not be held liable for
injuries to the subcontractor's employees. Shannon v. Howard S.
Wright Construction Co. (1979), 181 Mont. 269, 593 P.2d. 438.
However, the general rule has become the subject to a "catalog" of
exceptions. Shannon, 593 P.2d at 441 (citing Wells v. Thill
(1969), 153 Mont. 28, 33, 452 P.2d 1015, 1017-18). One of these
exceptions arises out of contracts, because Montana has long
recognized that certain contractual obligations are nondelegable.
See, e.g. Ulman v. Schweiger (1932), 92 Mont. 331, 347, 12 P.2d
856, 859.
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In 1979 we held that an owner or general contractor could be
held liable for the subcontractor's employee's injuries. Shannon,
593 P.2d. 438. In that case, we found that the owner and the
general contractor could be held liable given evidence of owner
control over the subcontractor's workplace environment. Shannon,
593 P.2d at 444. In 1981, we reaffirmed this holding and held that
a nondelegable duty under Montana's Safe Place to Work statute
could arise out of a contract. Stepanek v. Kober Construction
(1981), 191Mont. 430, 625 P.2d 51. In Stepanek general contractor
had assumed a nondelegable duty to a subcontractor when it
contractually agreed to maintain and supervise job safety.
Steuanek, 625 P.2d at 53.
Following Steoanek, in 1994, we found the Montana Department
of Highways (MDOHI) held a nondelegable duty of safety to the
employees of a subcontractor. Steiner v. Department of Highways
(1994), 269 Mont. 270, 887 P.2d 1228. In that case, a contract
with the Federal Highway Administration required MDOH to monitor a
highway project and assure compliance with safety regulations.
Subsequently, we held that the provisions of the contract had
created a nondelegable duty to provide a safe place to work for the
employees of a subcontractor. Steiner, 887 P.2d at 1232.
In the instant case, the District Court looked at the
contracts Noranda had signed in connection with the Libby Adit
project. The record shows, first, the terms of the joint venture
agreement with Mineral Reserves Company designate Noranda as the
majority owner and manager of operations. Second, under the terms
of the Purchase Order Agreement (POA) with Gilbert, Noranda had
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retained supervisory authority over Gilbert's employees and the
methods of operations, including employee safety. The POA provides
a protracted list of provisions detailing the balance of power
between Noranda and Gilbert. The POA gives Noranda the authority
to:
a) Interpret the agreement and define intent and meaning and
judge its performance,
b) make decisions on all matters relating to the execution
and progress of the work,
C) stop the work whenever in Noranda's opinion such stoppage
may be necessary,
d) order the issuance of reports, data and other information
as deemed necessary,
e) order Gilbert-Dynatec employee's attendance at meetings
and request assistance and cooperation on matters
pertaining to the project,
f) perform safety inspection at the work site at any time,
9) remove from the job any subcontractor whose work did not
meet Noranda's approval,
h) make changes by altering, adding to or deducting from the
work,
i) order and direct Gilbert-Dynatec to increase or improve
the plant or equipment, improve methods, increase and
employ additional force or to perform night work or
overtime work when Noranda deemed any of Gilbert-
Dynatet's methods to be unsafe, inefficient or
inadequate, or should Noranda deem that Gilbert-Dynatec
was not proceeding with the work with sufficient
diligence,
j) prevent the removal of any equipment form the job site
without prior approval,
k) order Gilbert-Dynatec to expedite the work, work
overtime, add additional shifts, employ additional men or
provide additional equipment in the event that Gilbert-
Dynatec fails to complete any part of the work in the
time specified in the construction schedule,
stop the work or give whatever instruction were necessary
to correct conditions which Noranda deemed a threat to
the safety of life or the safety of any part of the work
or joining property or if any emergency arose which
affected or threatened to affect the safety of life or
the safety of any part of the work or any adjoining
property and then determine whether Gilbert-Dynatec was
entitled to any extension of time or extra compensation
due to the delay,
inspect the work and progress thereof,
order the removal and re-execution of all work which
failed to conform to the agreement,
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0) take possession of and use any completed or partially
completed portions of the work, not withstanding that the
period of time for completing may not have expired,
P) accelerate the work, delete portions of the work and/or
use Noranda's own forces or employ other contractors to
correct any portion of the work which Noranda deemed
improperly performed,
q) terminate the work in whole or in part for Noranda's
convenience at any time by written notice,
r) require an organized and effective safety program at
every location where work was performed, and
s) monitor Gilbert-Dynatec's performance, including safety
and health violations, conduct unannounced periodic
inspection with emphasis on safety and health and halt
any/all work performed at the construction site or area
until employees practices are changed or physical hazards
were corrected.
In addition to this contractual grant of authority testimony
offered at trial reflects that this authority was then exercised
extensively at the job site. In considering both the contracts and
Noranda's exercise of authority there is a clear indication of
"actual control" arising out of a contract. Steoanek, 625 P.2d at
Because Noranda exercised the requisite control, we hold that
the District Court's conclusion that Noranda had retained control
over the Libby Adit project and subsequently owed a nondelegable
duty of safety to the respondent, was a correct interpretation of
the law.
ISSUE 2
Did the District Court err in instructing the jury that
Noranda had a nondelegable duty to provide Russell Gibby a safe
place to work as under the Montana Safe Place to Work statute
rather than leave this issue to the jury as a question of fact?
The District Court has discretion over jury instructions and
we will not overturn a lower court's decision absent an abuse of
discretion. Chambers v. Pierson (1994), 266 Mont. 436, 880 P.2d
1350. When examining whether jury instructions were properly given
or refused, we must consider the jury instructions in their
entirety and in connection with the other instructions given and
the evidence introduced at trial. Feller v. Fox (1989), 237 Mont.
150, 772 P.2d 842.
In this case Noranda disputes the District Court's Jury
Instruction 16A, which read as follows:
As a matter of law Noranda Minerals Corporation had
a nondelegable duty to provide Russell Gibby a reasonably
safe place to work. This nondelegable duty required:
(1) that Noranda furnish a place of employment that
is reasonably safe for all persons working in the mine;
(2) that Noranda adopt and use practices, means,
method, operations and processes that were reasonable
adequate to render the place of employment safe; and
(3) that Noranda did any other thing reasonably
necessary to protect the life, health and safety of
Gilbert-Dynatec employees working in the mine.
This instruction contains the provisions of Montana Safe Place to
Work statute, § 50-71-201, MCA, which reads:
Employer to provide safe workplace and to purchase,
furnish, and require use of health and safety items --
safe practices. Each employer shall:
(1) furnish a place of employment that
is safe for each of his employees;
(2) with the exception of footwear,
purchase, furnish, and require the use of
health and safety devices, safeguards,
protective safety clothing, or other health
and safety items, including but not limited to
air masks, hardhats, and protective gloves,
that may be required by state or federal law,
the employer, or the terms of an employment
contract, unless the terms of a collective
bargaining agreement provide otherwise;
(3) adopt and use practices, means,
methods, operations, and processes that are
reasonably adequate to render the place of
employment safe; and
(4) do any other thing reasonably
necessary to protect the life, health, and
safety of his employees.
Noranda argues this instruction left the jury with the impression
that Noranda was illegally and wrongfully attempting to delegate
duties concerning safety in the workplace to Gilbert and
furthermore Montana's Safe Place to Work statute does not apply to
Noranda because it is an owner, not an "employer."
However, the statute is applicable to Noranda. Following the
logic in Shannon, Steoanek, and Steiner, where a nondelegable duty
has been created through a contract, the provisions of the Safe
Place to Work statute apply. Steoanek, 625 P.2d at 55. As was
discussed previously in Issue One, Noxanda retained both the right
and the duty to control job safety at the Libby Adit. This was a
question of law for the court, not a question of fact for the jury.
Therefore, Noranda had a nondelegable duty under Montana's Safe
Place to Work statute, 5 50-71-201, MCA, to provide Russell Gibby
with a safe working environment.
Furthermore, we must consider the instructions in their
entirety. The legal principle of causation requires a two-tiered
analysis. Kitchen Krafters v. Eastside Bank (19901, 242 Mont. 171,
789 P.2d 576. The first tier is a determination of whether the
action in question was the "cause-in-fact" of the damages, the
second tier requires a determination of whether the actions
proximately caused the damages. Kitchen Krafters, 789 P.2d at 574.
The Distxict Court concluded that it properly instructed the jury
that Noranda's conduct was a "cause-in-fact" of Gibby's injuries
"if it was a material element and substantial factor in bringing
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about the injuries." An instruction on Montana's Safe Place to
Work provides the jury with a "cause-in-fact" instruction, this
does not alleviate the jury's duty to find Noranda's actions (or
inaction) as the proximate cause of Gibby's injuries.
Therefore, we do not find reversible error upon review of the
jury instructions. The District Court adequately instructed the
jury on the applicable law, we affirm the District Court's
Instruction 16A.
ISSUE 3
Did the District Court err in instructing the jury that
Noranda had a nondelegable duty to follow safety standards
promulgated under the authority of the Mine Safety and Health Act,
(MSHA) , 30 U.S.C., 5 801, and that violation of this standard was
evidence of negligence?
The District Court has discretion over jury instructions and
we will not overturn a lower court's decision absent abuse of
discretion. Chambers, 880 P.2d 1350. Instruction 16B read as
follows:
The purpose of the Federal Mining Safety and Health Act
('lMHHA") is the protection of life, the promotion of
health and safety, and the prevention of accidents.
Under MSHA, Noranda had the nondelegable duty to:
(1) correct hazardous conditions at the mine
(section 57.3200);
(2) provide experienced persons to examine ground
conditions, haulage ways, travel ways, and surface areas
both prior to commencement of work and periodically
during performance of work in the mine (section 57.3401);
(3) inspect equipment and correct defects in the
equipment, machinery, and tools that affect safety to
prevent the creation of hazards to persons working in the
mine (section 57.141000);
(4) prohibit use of machinery, equipment,and tools
beyond the design capacity intended by the manufacturer,
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where such use may create a hazard to persons (section
57.14205);
(5) provide a competent person designated to examine
each working place at least once each shift for
conditions which may adversely affect safety or health
and initiate appropriate action to correct such
conditions (section 57.18002); and
(6) initiate appropriate action to correct such
conditions (section 57.18002).
In Stepanek we concluded that a violation of federal
regulations intended to protect the plaintiff could be considered
by the trier of fact as evidence of negligence. Stewanek, 625 P.2d
at 56. In this case Instruction 16B sets forth the nondelegable
duties any "operator" of a mining operation has under the Federal
Mine Safety and Health Act. The code defines an operator as:
[an1 o w n e r , lessee, or other person who operates,
controls, or supervises a coal or other mine or any
independent contractor performing services or
construction at such mine; 30 U.S.C. 5 802(d).
This was then read in conjunction with Instruction 16C which
stated: "Failure to discharge nondelegable duties imposed by MSHA
is evidence of negligence in Montana." Following Steoanek, the
jury could consider a violation of the Mine Safety and Health Act
as evidence when determining negligence.
We hold that the instructions were correctly presented to the
jury, and there was no abuse of discretion in giving Instructions
16B and 16C, and we therefore affirm the District Court in giving
those instructions.
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ISSUE 4
Did the District Court err in concluding there was sufficient
evidence to support the jury's verdict that Noranda was negligent
and that Noranda's negligence was a proximate cause of the
plaintiff, Russell Gibby's damages?
"[Tlhis court will affirm the verdict of a jury if there is
substantial credible evidence on the record to support the
verdict." Interstate Production Credit Association v. DeSaye
(1991), 250 Mont. 320, 322-23, 820 P.2d 1285, 1287. In a
negligence claim there are four elements: duty, breach, cause and
damages. Whitfield v. Therriault Corporation (1987), 229 Mont.
195, 745 P.2d 1126.
We have already held that Noranda owed the respondent a duty
to provide a safe work environment, thus satisfying the first
element of negligence. Beyond this, evidence was introduced to
show Noranda had breached this duty in failing to provide the
appropriate equipment. Gibby was injured while using a hand held
drill, a drill that was inappropriate for the task. This evidence
satisfies the second element.
The third element of causation breaks down into "cause-in-
fact" and proximate cause. Kitchen Krafters, 789 P.2d at 547.
Again, we have already held that Noranda could be held legally
responsible under the Safe Place to Work statute, the next question
is whether this negligence was then the proximate cause of Gibby's
injuries.
The District Court's Instruction 17 read as follows:
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The defendant's conduct caused the plaintiff's injuries
if the conduct was a "cause-in-fact" and "proximate
cause" of the plaintiff's injuries . . . The defendant's
conduct was a "proximate cause" of the plaintiff's
injuries if it appears from the facts and circumstances
surrounding the incident that an ordinarily prudent
person could have reasonably foreseen that injury or
damage would be a natural and probable consequence of the
conduct.
A review of the record supports a finding that Noranda knew of the
loose debris at the mine site, knowing of these conditions it was
generally known the type of hand held drill Gibby was using would
be inappropriate. Therefore, there is substantial credible
evidence to support a finding that Noranda's failure to provide the
proper equipment could reasonably lead to the type of injury Gibby
suffered.
We hold there was substantial credible evidence to support the
jury verdict, and no abuse of discretion in the District Court's
jury instructions on proximate cause.
Affirmed.
We Concur:
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