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Third Party Liability

by Teresa Anderson

THIRD PARTY LIABILITY. The California Supreme Court has ruled that a landowner may be responsible for the injuries to a contractor's employee under certain circumstances. According to the court, the landowner need not be in control of the employee's activities to trigger liability.

In the early 1950s, Ray Kinsman worked as a carpenter at a Unocal refinery in Wilmington, California. Kinsman was employed by an independent contractor, Burke & Reynolds, hired by Unocal to do repairs to the refinery.

Kinsman's work exposed him to air-borne asbestos, stirred up by other workers who were insulating pipes and machinery. Kinsman later developed mesothelioma, a malignant cancer of the lungs caused by exposure to asbestos. He sued product manufacturers, distributors, and Unocal.

Through years of litigation, several facts emerged. One was that Unocal knew that asbestos was harmful by the late 1930s but did not take steps to protect employees or contractors working on its property at the time. Another was that Burke & Reynolds did not provide safety equipment to its contractors, but there is no evidence that the contractor knew that asbestos was dangerous.

Kinsman sued Unocal for negligence. Unocal argued that the levels of asbestos Kinsman was exposed to did not exceed the safety limits set at the time. A jury found in favor of Kinsman and awarded him $3.7 million compensatory damages. Unocal appealed the decision.

The California Court of Appeal overturned the jury verdict, finding that Unocal could only be held liable if it had supervisory control over Kinsman's work. Unocal did not direct Kinsman's work in any way, determined the court, so it could not be held responsible for his injuries. Kinsman appealed.

The California Supreme Court ruled that Unocal could be held liable even if it did not supervise Kinsman's work. According to the court, Unocal could be responsible if three conditions were met.

First, the landowner knew or reasonably should have known of a hazardous condition on its premises. Second, the contractor must not have known about the condition and must have had no way to reasonably ascertain the hazard. And third, the landowner must have failed to warn the contractor.

This three-part test addresses a previous loophole in the case law, according to the court. In the written opinion of the case, the court elaborated. "If the landowner knew or should have known of the hazard and the contractor did not know and could not have reasonably discovered it, then the landowner delegated the responsibility for employee safety to the contractor without informing the contractor of critical information that would allow the contractor to fulfill its responsibility. Under such circumstances, the landowner may be liable." (Kinsman v. Unocal Corporation, Supreme Court of California, No. S118561, 2005)