FROZEN SMILES: BURST PIPE DRENCHES DENTAL OFFICE

Commercial General Liability	Independent Contractor Distinction
Breach of Contract/Negligence	Failure to Produce Witnesses

Glen Williams solely owned and managed Williams Company Construction, Inc.(Williams). In the spring of 2008, Williams entered into a contract to remodel the Friendly Smiles Cosmetic Dentistry Office owned by Dr. Brenda Barfield. Barfield had leased the building from Glen Williams for approximately five years before she purchased the property from him in 2008. Barfield hired Williams to remodel the building because of its construction experience and knowledge of the building. At Barfield’s request, Williams was to serve as the general contractor to “oversee the whole project and make sure that [the construction] was all done correctly and everything was followed the way that it should be.”

During the remodel, Williams hired subcontractors to do various construction tasks. He hired SKL, Inc., doing business as Home Heating, Plumbing & Air Conditioning, Inc. (collectively SKL), to install the plumbing. Williams also subcontracted the framing to McIntosh & Associates, Inc.(McIntosh). Williams did not perform any physical construction during the remodeling project. Williams charged Dr. Barfield a 10% markup in price for the projects he coordinated and a 25% markup for the projects he supervised daily, including the installation of the plumbing.

As part of the project, Barfield wanted a new vanity room for her office, which required installing plumbing pipes. SKL installed the water pipes in the new room. McIntosh installed a plumbing wall to house the pipes. Another subcontractor installed the Sheetrock on the plumbing wall. Williams approved the location of the plumbing wall. The project was completed in the fall of 2008.

In December 2008, a section of a water pipe installed in the vanity room froze and burst. The break caused minor water damage and SKL repaired the damage. During the repair process, a SKL employee cut a hole in the wall to locate the leak and discovered that the air in the plumbing wall was cold. The employee was concerned that the pipe could freeze again and notified Dr. Barfield about the cold air.

Barfield contacted Williams to express her concern about the pipes refreezing from the cold air. Williams went to Barfield’s office, examined the hole in the wall, and observed the pipes. According to testimony, Williams told Barfield not to worry about the pipes freezing again because of circulating warm air around the hole. Barfield also wanted the hole in the wall patched but had difficulty in getting Williams or SKL to fix it. About one week after the pipe was fixed, the water pipe froze and broke again. This time it caused extensive water damage to the dental office.

Barfield and her insurance company, Travelers Casualty Insurance Company (Travelers) brought suit against Williams, SKL, and McIntosh. Barfield sued Williams for breach of contract and negligence. She also sued SKL and McIntosh for negligence.

Before trial, the parties stipulated that the total amount of damages was $220,046.09. Williams asked the trial court to instruct the jury concerning the independent contractor distinction and also to instruct the jury concerning a party failing to produce witnesses. The court denied these two requests.

The parties stipulated that the case would be tried before the jury based on comparative fault. The jury was instructed to make special findings of fact concerning the respective percentages of fault, if any, allocated to each of the parties. The jury found Williams 70% at fault, SKL 25% at fault, McIntosh 0% at fault, and Barfield 5% at fault. Judgment was entered against Williams. Williams subsequently filed a motion for a new trial. The district court denied the motion and Williams appealed.

On appeal, Williams argued that the court erred in not giving its requested independent contractor jury instruction. Williams essentially contended that it should have been allowed to argue that SKL was an independent contractor of Williams and that Williams could not be held liable for any defective work that SKL performed.

The appellate court stated the following:

• Jury instruction on the independent contractor/employee distinction was not warranted at trial
• There was no evidence that Travelers or any other party sought to impute purported negligence of a subcontractor to a general contractor.
• That Williams was able to put forward its own theory of the case

As to the jury instruction on failure to produce a witness, the court held that it was not warranted at trial because Williams had the opportunity to subpoena subcontractors (including the plumbers) and did not do so.

The court next considered Williams’ argument that there was insufficient evidence at trial for the jury to find Williams 70% at fault for the damage related to the broken water pipe. The court rejected this argument. It pointed out that both subcontractors and expert witnesses had testified that Williams failed to appropriately supervise the construction of the plumbing wall to provide adequate insulation for the pipes.

The appellate court affirmed the district court’s judgment and the order that denied the motion for a new trial.

Travelers Cas. Ins. Co. of America v. Williams Co. Constr., Inc. Supreme Court of North Dakota. July 31, 2014. No. 20140020