Attorney for Appellants Attorney for Appellee
Lane C. Siesky Daniel L. Siewers
Barber & Shoulders Hart Bell Cummings Ewing & Stuckey
Evansville, Indiana Vincennes, Indiana
____________________________________________________________________________
__
In the
Indiana Supreme Court
_________________________________
No. 42S01-0301-CV-24
Wayne A. Peters and Helen Peters,
APPELLANTS (PLAINTIFFS BELOW),
v.
Donald Forster,
Appellee (Defendant below).
_________________________________
Appeal from the Knox Superior Court II, No. 42D02-0005-CT-117
The Honorable Jim R. Osborne, Judge
_________________________________
On Petition To Transfer from the Indiana Court of Appeals, No. 42A01-0109-
CV-350
_________________________________
March 11, 2004
Rucker, Justice.
Case Summary
Sustaining injury after slipping on a ramp attached to a home that he
was visiting, Wayne Peters sued the contractor who installed the ramp. The
trial court granted summary judgment in the contractor’s favor on grounds
that the “acceptance rule” precluded liability. On review the Court of
Appeals reversed relying on an exception to the rule. Today we grant
transfer and join those jurisdictions that have abandoned what has been
described as an outmoded relic. In so doing we reverse the judgment of the
trial court.
Facts and Procedural History
Earl and Avonda Hamm owned a home in Vincennes, Indiana. Because Mr.
Hamm was bedridden and because Mrs. Hamm’s own ability to climb steps was
declining, the Hamms decided to install a ramp on the front of their
residence. A neighbor of the Hamms’ daughter had constructed a ramp for
his handicapped wife who had since passed away. Having no further use for
the ramp, he sold it to the Hamms for less than a hundred dollars.
Donald Forster owned several rental properties and was the landlord
of the Hamms’ daughter. He also engaged in construction work as an
independent contractor. By agreement with the Hamms, Forster transported
the ramp from its original location to the Hamm residence where he and a
few of his employees attached it to the front of the house with “a couple
of screws.” Appellants’ App. at 35. Forster was aware the ramp did not
meet building code requirements for a wheelchair ramp, but he was unaware
of code requirements for other types of ramps. After installation, the
Hamms’ daughter attached carpeting to the ramp.
On March 15, 1999, Wayne Peters delivered a meal to the Hamm
residence. Using the ramp to enter the house Peters apparently encountered
no difficulty. Upon leaving however, Peters slipped and fell sustaining
serious injury. Thereafter, he filed a complaint for damages against the
Hamms for negligence in maintaining the ramp. Peters’ wife joined in the
complaint on a loss of consortium claim. The complaint was later amended
to include Forster as a party defendant.[1] Thereafter Forster moved for
summary judgment which the trial court granted on grounds that as a matter
of law Forster owed no duty to Peters because the Hamms “accepted and paid
for” the work Forster performed. Appellants’ App. at 1. On review, the
Court of Appeals reversed relying on an exception to the general rule of
nonliability where an owner accepts a contractor’s work. Peters v.
Forster, 770 N.E.2d 414, 419 (Ind. Ct. App. 2002). We grant transfer and
abandon the rule.
Discussion
In order to prevail on a claim of negligence, a plaintiff is required
to prove: (1) a duty owed by the defendant to the plaintiff; (2) a breach
of that duty by the defendant; and (3) an injury to the plaintiff
proximately caused by the breach. Benton v. City of Oakland City, 721
N.E.2d 224, 232 (Ind. 1999). Duty is a question of law for the court to
decide. Absent a duty, there can be no breach of duty and thus no
negligence or liability based upon the breach. Wilson v. Haimbaugh, 482
N.E.2d 486, 487 (Ind. Ct. App. 1985).
Generally, Indiana has followed the rule that “contractors do not owe
a duty of care to third parties after the owner has accepted the work.”
Blake v. Calumet Constr. Corp., 674 N.E.2d 167, 170 (Ind. 1996); Citizens
Gas & Coke Util. v. Am. Econ. Ins. Co., 486 N.E.2d 998, 1000 (Ind. 1985).
This rule, commonly referred to as the “acceptance rule” or the “completed
and accepted rule,” has its origins in English common law under which
“architects and builders were immune from civil liability to third persons
who were injured as a result of their negligence in design or
construction.” George Anthony Smith, Recent Statutory Developments
Concerning the Limitations of Actions Against Architects, Engineers, and
Builders, 60 Ky. L.J. 462, 463 (1972). Immunity was based on privity of
contract. “Without this relationship one could not sue.” Id. The
authority most often cited for injecting a privity requirement into what
was otherwise a negligence claim is Winterbottom v. Wright, 152 Eng. Rep.
402 (Ex. 1842). In that case, a party entered into a contract with the
Postmaster General to keep the mail coach in good repair. A mail coach
driver was injured when the coach collapsed and he sought damages from the
party charged with maintaining the vehicle. Denying relief and
articulating the sentiment of the members of the Court of Exchequer, Lord
Abinger declared in pertinent part:
There is no privity of contract between these parties; and if
the plaintiff can sue, every passenger, or even any person
passing along the road, who was injured by the upsetting of the
coach, might bring a similar action. Unless we confine the
operation of such contracts as this to the parties who entered
into them, the most absurd and outrageous consequences, to which
I can see no limit, would ensue . . . .
Id. at 405. Early American common law mirrored the English common law rule
requiring privity of contract. Accordingly, although a contractor was held
liable for injury that resulted from his negligence before his work was
completed, “his responsibility was terminated, and he was not liable to any
third person once the structure was completed and accepted by the owner.”
W. Page Keeton et al., Prosser & Keeton on the Law of Torts § 104A, at 722
(5th ed. 1984).
The acceptance rule first appeared on Indiana’s legal landscape with
this Court’s opinion in Daugherty v. Herzog, 145 Ind. 255, 44 N.E. 457
(1896). In that case the appellant’s daughter was fatally injured when the
wall of a building collapsed, striking her. Seeking recovery for the loss
of his daughter’s services, the father filed an action in negligence
against the contractor who had reconstructed the building. Affirming the
trial court’s grant of a demurrer, this Court determined that the father
had no cause of action against the contractor. The Court reasoned that the
contractor was liable only to the party to whom he owed a duty. In that
case it was the person with whom he was in privity, namely the owner with
whom the contractor had contracted. This Court also noted that “[t]he
repairs had been completed and accepted long before appellant’s daughter
was injured.” Id. at 457. Continuing, the Court gave the following
examples and explanation for its ruling:
There must be causal connection between the negligence and the
hurt; and such causal connection is interrupted by the
interposition, between the negligence and the hurt of any
independent human agency. . . . Thus, a contractor is employed
by a city to build a bridge in a workmanlike manner; and after
he has finished his work, and it has been accepted by the city,
a traveler is hurt when passing over it by a defect caused by
the contractor’s negligence. Now the contractor may be liable
to the city for his negligence, but he is not liable in an
action on the case for damages. The reason sometimes given to
sustain such conclusion is, that otherwise there would be no end
to suits. But a better ground is that there is, no causal
connection, as we have seen, between the traveler’s hurt and the
contractor’s negligence . . . [B]etween the contractor and the
traveler intervened the city, an independent responsible agent,
breaking the causal connection.
Id. at 457–58 (quotations omitted). Relying on Daugherty and its progeny,
our courts have articulated two primary reasons supporting the acceptance
rule: (1) the application of the doctrine of privity to cases involving
negligence;[2] and (2) the owner’s control of the entity when the injury
occurred.[3]
The privity of contract requirement in the law of negligence has
largely eroded. In a watershed decision Judge Cardozo, speaking for a
majority on the New York court of last resort, ruled that a manufacturer of
automobiles could be held liable in negligence to the ultimate purchaser of
the vehicle, not just the immediate purchaser—the retail dealer.
MacPherson v. Buick Motor Co., 111 N.E. 1050, 1053 (N.Y. 1916). In
essence, at least in the area of manufacturer’s liability, MacPherson
stripped the privity requirement of Winterbottom from its lofty position.
Our courts have done likewise. See, e.g., Perdue Farms, Inc. v. Pryor, 683
N.E.2d 239, 241 (Ind. 1997) (“Privity of contract is no longer required if
a personal injury action for a defective product sounds in tort.”); Coca
Cola Bottling Works of Evansville v. Williams, 111 Ind. App. 502, 37 N.E.2d
702, 706 (1941) (citing MacPherson with approval and declaring that “the
rule now in the best reasoned cases is that the manufacturer of foods or
bottled goods sold for human consumption may be held liable to the ultimate
consumer for injuries caused by foreign deleterious substances in such
goods regardless of whether or not there was privity of contract between
them”). Still, the privity of contract requirement in the area of
contractors and builders has lingered in Indiana and apparently in several
other jurisdictions as well.[4] However even for contactors and builders,
privity as an absolute defense is subject to numerous exceptions. For
example, even absent privity of contract, a contractor remains liable where
(i) the contractor turns over work “in a condition that was dangerously
defective, inherently dangerous or imminently dangerous such that it
created a risk of imminent personal injury”, Citizens Gas, 486 N.E.2d at
1000, or where (ii) “the thing sold or constructed be not imminently
dangerous to human life, but may become such by reason of some concealed
defect [and the] vendor or constructor . . . knew of the defect and
fraudulently concealed it.” Holland Furnace Co. v. Nauracaj, 105 Ind. App.
574, 14 N.E.2d 339, 342 (1938). [5]
The declining role of privity in the area of manufacturer’s
liability, along with the growing list of exceptions to the privity
requirement, has contributed to the increasing number of jurisdictions that
have abandoned the acceptance rule. See, e.g., Strakos v. Gehring, 360
S.W.2d 787, 791 (Tex. 1962) (characterizing the rule as an “oft-repudiated
and emasculated doctrine” that has become “enveloped by complex exceptions
to cover such situations as nuisance, hidden danger, and inherently
dangerous conditions”); Lynch v. Norton Constr., Inc., 861 P.2d 1095, 1099
(Wyo. 1993) (observing “the rule of nonliability with its many exceptions
is more cumbersome than traditional negligence analysis, while leading us
to the same conclusion in most cases”). In addition, the “control”
rationale in support of the acceptance rule has also waned in importance as
an exculpatory factor. As one court explained:
[The acceptance rule] has the undesirable effect of shifting
responsibility for negligent acts or omissions from the
negligent party to an innocent person who paid for the negligent
party’s services. Furthermore, the shifting of responsibility
is based on the legal fiction that by accepting a contractor’s
work, the owner of the property fully appreciates the nature of
any defect or dangerous condition and assumes responsibility for
it. In reality, the opposite is usually true. Contractors,
whether they be building contractors, or architects, are hired
for their expertise and knowledge. The reason they are paid for
their services is that the average property owner does not have
sufficient knowledge or expertise to design or construct real
property improvements safely and soundly. . . . How then can we
logically conclude that simply because the professional has
completed his or her services and the contractee has paid for
those services, liability for the contractor’s negligence should
shift to the innocent and uninformed contractee? We cannot.
Pierce v. ALSC Architects, P.S., 890 P.2d 1254, 1262 (Mont. 1995).
Consistent with this reasoning a number of jurisdictions have abandoned the
acceptance rule in favor of what has been described as the so-called
“modern rule” or “foreseeability doctrine.”[6]
As Professor Prosser observes:
It is now the almost universal rule that the contractor is
liable to all those who may foreseeably be injured by the
structure, not only when he fails to disclose dangerous
conditions known to him, but also when the work is negligently
done. This applies not only to contractors doing original work,
but also to those who make repairs, or install parts, as well as
supervising architects and engineers. There may be liability
for negligent design, as well as for negligent construction.
Keeton et al., supra, § 104A, at 723. This trend also is reflected in the
Restatement (Second) of Torts:
One who on behalf of the possessor of land erects a structure or
creates any other condition thereon is subject to liability to
others upon or outside of the land for physical harm caused to
them by the dangerous character of the structure or condition
after his work has been accepted by the possessor, under the
same rules as those determining the liability of one who as
manufacturer or independent contractor makes a chattel for the
use of others.
Restatement (Second) of Torts § 385 (1965).
In essence instead of applying the non-liability rule, a number of
courts have embraced the rule that a contractor is liable for injuries or
death of third persons after acceptance by the owner where the work is
reasonably certain to endanger third parties if negligently completed. See
id. This view adopts the rationale that there are insufficient grounds to
differentiate between liability of a manufacturer of goods and that of a
building contractor. See id. We think this is the better view and today
we endorse it as well. A rule that provides that a builder or contractor
is liable for injury or damage to a third person as a result of the
condition of the work, even after completion of the work and acceptance by
the owner, where it was reasonably foreseeable that a third party would be
injured by such work due to the contractor’s negligence, is consistent with
traditional principles of negligence upon which Indiana’s scheme of
negligence law is based.
We hasten to add that a contractor’s liability under this reasoning is
not absolute, but predicated upon negligence, that is, duty, breach of
duty, and injury proximately caused by the breach. Thus for example, there
is no breach of duty and consequently no negligence where a contractor
merely follows the plans or specifications given him by the owner so long
as they are not so obviously dangerous or defective that no reasonable
contractor would follow them. Keeton et al., supra, § 104A, at 723-24; see
also Ross v. State, 704 N.E.2d 141, 145 (Ind. Ct. App. 1998) (noting that
where a contractor is not following his or her own plans, but those
provided by the owner, “liability is imposed only where the plans are so
obviously defective that no reasonable contractor would follow them”).
In this case Peters alleged among other things that Forster installed
the ramp in violation of applicable building codes. The trial court
granted summary judgment in favor of Forster on grounds that he owed Peters
no duty as a matter of law based on the acceptance rule. Because we have
abandoned the rule, Forster’s liability must be evaluated under traditional
principles of negligence.
In general a contractor has a duty to use reasonable care both in his
or her work and in the course of performance of the work. See Computer
Co., 623 N.E.2d at 1076. However, “[t]he duty of reasonable care is not,
of course, owed to the world at large, but rather to those who might
reasonably be foreseen as being subject to injury by the breach of the
duty.” Thiele v. Faygo Beverage, Inc., 489 N.E.2d 562, 574 n.4 (Ind. Ct.
App. 1986). Thus, Forster contends that even if the acceptance rule is
abandoned, the judgment of the trial court nonetheless should be affirmed.
Forster points out that even under the so-called modern rule a contractor
is still not liable unless it is reasonably foreseeable that a third person
would be injured by the contractor’s action. According to Forster the
chain of causation in this case was broken between his action and Peters’
injury thus rendering the injury unforeseeable. In support Forster
asserts: (i) the Hamms controlled the ramp at the time Peters fell; (ii)
the Hamms’ daughter altered the ramp by installing carpet on it; and (iii)
there was no evidence presented that the ramp was likely to cause injury.
We view Forster’s claim as an argument that his alleged conduct was
not the proximate cause of Peters’ injury. Although a rigorous definition
is elusive, proximate cause has been defined as “that cause which, in
natural and continuous sequence, unbroken by any efficient intervening
cause, produces the result complained of and without which the result would
not have occurred.” Orville Milk Co. v. Beller, 486 N.E.2d 555, 559 (Ind.
Ct. App. 1985). The foreseeability of an intervening cause and, thus,
whether the defendant’s conduct is the proximate cause of the plaintiff’s
injuries, is generally a question of fact for the jury to decide. Nat’l
R.R. Passenger Corp. v. Everton by Everton, 655 N.E.2d 360, 366-67 (Ind.
Ct. App. 1995), trans. denied; see also Conder v. Hull Lift Truck, Inc.,
435 N.E.2d 10, 15 (Ind. 1982) (“[T]he question concerning foreseeability of
intervening third party misconduct is most often held to be a question of
fact for the jury’s determination.”). Only in plain and indisputable
cases, where only a single inference or conclusion can be drawn, are the
questions of proximate cause and intervening cause matters of law to be
determined by the court. Crull v. Platt, 471 N.E.2d 1211, 1215 (Ind. Ct.
App. 1984). The facts of this case do not lead us to the conclusion that
the foreseeability of the intervening causes Forster articulates is a
question for the court to decide. Rather, this is a question for the jury.
Conclusion
The trial court entered summary judgment in favor of Forster on
grounds he owed no duty to Peters based on the acceptance rule. Today we
abandon the rule in favor of traditional principles of negligence. As such
we conclude Forster owed Peters a duty of reasonable care. Because in this
case neither breach of duty nor proximate cause can be determined as a
matter of law, summary disposition is inappropriate. We therefore reverse
the judgment of the trial court.
Shepard, C.J., and Dickson, Sullivan and Boehm, JJ., concur.
-----------------------
[1] Subsequently Peters and the Hamms entered an agreed settlement. As a
result the Hamms are not parties to this appeal.
[2] See, e.g., Citizens Gas & Coke Util. v. Am. Econ. Ins. Co., 486 N.E.2d
998, 1000 (Ind. 1985) (articulating the general rule announced in
Daugherty); Travis v. Rochester Bridge Co., 188 Ind. 79, 122 N.E. 1, 2
(1919) (citing Winterbottom and declaring “[i]t may be stated as a general
rule that the manufacturer of products . . . rests under no duty to
exercise care in their manufacture for the safety of persons with whom he
has no privity of contract.”); Computer Co., Inc. v. Davidson Indus., Inc.
623 N.E.2d 1075, 1079 (Ind. Ct. App. 1993) (criticizing Winterbottom and
Daugherty but declaring “Indiana law currently favors limited liability in
this area. The intricacies of an elimination of the privity requirement in
a case such as this are not for us, as we may not overrule our supreme
court’s precedent.”).
[3] See, e.g., Blake, 674 N.E.2d at 171 (noting that in the one hundred
years since adoption of the acceptance rule, this Court has not spoken on
the rule’s underlying rationale or how the rule should be applied; however
“[i]n evaluating ‘acceptance’ for these purposes, the focus is on whether
the owner was better able than the contractor to prevent injury to third
parties at the time the harm occurred”); Snider v. Bob Heinlin Concrete
Constr. Co., 506 N.E.2d 77, 82 (Ind. Ct. App. 1987) (“Any danger which may
have presented itself was within the sole control of . . . the manager of
the pool. We have noted that one who lacks possession and control of
property . . . should not be held liable for injuries he is no longer in a
position to prevent.”), trans. denied; cf. Hill v. Rieth-Riley Constr. Co.,
670 N.E.2d 940, 944 (Ind. Ct. App. 1996) (“The rationale behind [the
acceptance rule] is that the owner or general contractor has greater
knowledge concerning the construction than the independent contractor.”).
[4] See, e.g., Mendendez v. Paddock Pool Constr., 836 P.2d 968 (Ariz. Ct.
App. 1991); Sanchez v. Swinerton & Walberg Co., 55 Cal. Rptr. 2d 415, 418-
20 (Cal. Ct. App. 1996); Ray’s Plumbing Contractors, Inc. v. Trujillo
Constr., Inc., 847 So. 2d 1086, 1088 (Fla. Dist. Ct. App. 2003); Flager Co.
v. Savage, 368 S.E.2d 504 (Ga. 1988); Griffin v. Int’l Ins. Co., 727 So. 2d
485, 491 (La. Ct. App. 1998); Couch v. City of D’Iberville, 656 So. 2d 146
(Miss. 1995); Gast v. Shell Oil Co., 819 S.W.2d 367 (Mo. 1991); Dvorak v.
Bunge Corp., 590 N.W.2d 682, 687 (Neb. 1999); Thrift v. Food Lion, Inc.,
442 S.E.2d 504 (N.C. 1994); Schlender v. Andy Jansen Co., 380 P.2d 523
(Okla. 1962); Bromaghim v. Furney, 808 A.2d 615, 617 (R.I. 2002); First
Church of Christ Scientist v. City of Seattle, 964 P.2d 374, 377 (Wash. Ct.
App. 1998); Roush v. Johnson, 80 S.E.2d 857, 873-74 (W. Va. 1954); Wolfe v.
Oliver Constr. Co., 114 N.W.2d 441 (Wis. 1962).
[5] Although Indiana has had occasion to address only two exceptions to the
rule, other exceptions include: (1) the contractor creates a situation
which he or she knows or should know is inherently dangerous, (2) the
contractor’s conduct may be regarded as an implied invitation to third
persons to come in contact with defective work, and (3) the finished work
constitutes a nuisance per se. See 41 Am. Jur. 2d Independent Contractors §
74 (1995) (compiling cases from other jurisdictions).
[6] See McFadden v. Ten-T Corp., 529 So. 2d 192, 200 (Ala. 1988); Brent v.
Unicol, Inc., 969 P.2d 627, 630 (Alaska 1998); Suneson v. Holloway Constr.
Co., 992 S.W.2d 79, 85 (Ark. 1999); Wright v. Creative Corp., 498 P.2d
1179, 1181 (Col. Ct. App. 1972); Minton v. Krish, 642 A.2d 18, 21 (Conn.
App. Ct. 1994); Virden v. Betts & Beer Constr. Co., Inc., 656 N.W.2d 805,
807 (Iowa 2003); Talley v. Skelly Oil Co., 433 P.2d 425, 432, 434 (Kan.
1967); Gilbert v. Murray Paving Co., Inc., 2003 WL 22519537, __ S.W.3d ___
(Ky. Ct. App. 2003); Carven v. Hickman, 763 A.2d 1207, 1211-13 (Md. Ct.
Spec. App. 2000); McDonough v. Whalen, 313 N.E.2d 435, 439 (Mass. 1974);
Feaster v. Hous, 359 N.W.2d 219, 223 (Mich. Ct. App. 1984); Pierce, 890
P.2d at 1262; Russell v. Arthur Whitcomb, Inc., 121 A.2d 781, 782 (N.H.
1956); Juliano v. Gaston, 455 A.2d 523, 525 (N.J. Super. Ct. App. Div.
1982); Tipton v. Clower, 356 P.2d 46, 49 (N.M 1960); Colonno v. Executive I
Assocs., 644 N.Y.S.2d 105, 107 (N.Y. App. Div. 1996); Dinger ex rel. Dinger
v. Strata Corp., 607 N.W.2d 886, 891 (N.D. 2000); Sumner v. Lambert, 121
N.E.2d 189, 195-96 (Ohio Ct. App. 1953); Thompson v. Coats, 547 P.2d 92, 95
(Or. 1976); Masciangelo v. Dolente, 295 A.2d 98, 99-100 (Pa. Super. Ct.
1972); Stanley v. B.L. Montague Co., Inc., 382 S.E.2d 246, 249 (S.C. Ct.
App. 1989); McMacken v. South Dakota, 320 N.W.2d 131, 133 (S.D. 1982),
overruled on other grounds; Johnson v. Oman Constr. Co., Inc., 519 S.W.2d
782, 788 (Tenn. 1975); Strakos, 360 S.W.2d at 791; Tallman v. City of
Hurricane, 985 P.2d 892, 894 (Utah 1999); Lynch, 861 P.2d at 1099.