Posts Tagged ‘contractors’

In 2008, a worker was performing maintenance on the conveyor system at the Lancaster Municipal Authority Waste Water Treatment Plant when a large chunk of debris got caught in a roller at the end of a conveyor.  The worker tried unsuccessfully to clear the debris by spraying it with a hose.  When that didn’t work, the worker used his putty knife, while the conveyor was still running, to scrape the debris away from the roller.  In the process, the worker’s arm became caught in the conveyor’s pulley system and was amputated just below the elbow.

[Tip:  Employers, employees should be trained in safety procedures and advised never to attempt to make repairs while a machine is running.  Violations of safety procedures should be taken seriously and addressed in accordance with the company’s policies.] 

Following his injury, the worker sued several parties on theories of negligence and strict liability.  The sued parties included: (1) the engineering company that developed and designed the specifications for the conveyor system (“Buchart Horn, Inc”); (2) the company that manufactured the conveyor system and sold it to the construction company (“WRC”);  (3) the construction company that sold and installed the pre-assembled conveyor to the plant (“Johnston Construction Company”); (4)  the company that designed and manufactured the safety stop mechanism for the conveyor (“Material Control” parent company of “Conveyor Components”);  and (5) the company that represented the manufacturer of the conveyor system in the sale of the conveyor to the construction company (“Kappe Associates, Inc.”).  The defendants tried to have the case dismissed before it went to trial.  Here are the lessons to be learned:

Lesson No. 1:  If you sell any product to an owner as part of your construction or installation contract, you might be held strictly liable for defects in the product.   

The court refused to dismiss the strict liability action against Johnston Construction Company because Pennsylvania has adopted Section 402A of the Restatement (Second) of Torts, which says that one who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer.  Although the term “seller” is not defined in Section 402A, the Lancaster County Court of Common Pleas court found that Johnston Construction Company was clearly a seller within the meaning of Section 402A because it sold the conveyor to the Plant as part of the installation contract.

For this same reason the court refused to dismiss the company that designed and manufactured the safety stop mechanism for the conveyor.  Despite these holdings, but for the case settling, a jury still would have had to decide whether the Johnston Construction Company’s failure to install a guard at the point on the conveyor where the plaintiff was injured did, in fact, render the conveyor defective and unsafe for its intended purposes.

Lesson No. 2:  Engineers not in the business of manufacturing or distributing equipment may not be held strictly liable, but may be held liable for negligent design.    

With regard to the defendant that developed and designed the specifications for the conveyor system, the court stated that in Pennsylvania, engineers have a duty to exercise that degree of skill and care in performing those services that ordinary and reasonable members of the engineering profession would exercise in the same or similar circumstances.  Here, Buchart was the engineering firm designated by the City of Lancaster to develop and design the conveyor system at issue.  Based on the findings in the plaintiff’s expert report, the court stated that whether Buchart breached its duty to employees of the Plant to use due skill in the design of the conveyor system raises a material question of fact.  Accordingly, the court found that there was sufficient evidence for a jury to consider whether Buchart negligently designed the conveyor system.

However, the court held that Buchart could not be subjected to a strict liability claim because it was not a seller within the meanings of Section 402A of the Restatement (Second) of Torts because it was not in the business of manufacturing or distributing equipment.

Lesson No. 3:  Manufacturer’s agents may be held strictly liable: 

Kappe, the company that represented the manufacturer of the conveyor system in the sale of the conveyor to the construction company, unsuccessfully argued that it was not a seller within the meaning of Section 402A and therefore could not be subject to the claim of strict liability.  In rejecting this argument, the court noted that the Pennsylvania Superior Court has held that all entities in the chain of distribution may be strictly liable for a defective product.   In another case, a manufacturer’s agent was found to be subject to a strict liability claim, despite the agent never having taken title to or possession of the product, because the court reasoned that it was not the means of marketing, but rather the fact of marketing which is fundamental to the rule of strict liability.  Here, Kappe represented WRC, the manufacturer, in finding a buyer/installer for the conveyor.  Kappe is in the business of selling and marketing maintenance equipment to wastewater treatment plants.  Kappe facilitated the sale of the conveyor between WRC and Johnston.  Accordingly, while Kappe did not select the particular product to be sold, it introduced the manufacturer to the purchasers or installer and helped to facilitate the marketing chain in the sale of a particular product.  As such, the court held that Kappe was subject to claims of strict liability.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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Under the Pennsylvania Public Works Employment Verification Act (“the Act”), a new law that takes effect on January 1, 2013, public works contractors and subcontractors working on projects (funded at least in part by a public body) with an estimated value of $25,000 or more, will be required to enroll and participate in the federal E-Verify electronic employment eligibility verification system (“E-Verify”).  E-Verify is an internet based system that confirms the legal work authorization status of newly hired employees by comparing information on the employee’s Form I-9 with records on file with the U.S. Department of Homeland Security and Social Security Administration.  Specifically, as a precondition to being awarded a public works contract, the Act mandates that before the execution of the contract, the contractor and its subcontractors provide the contracting agency with a Verification Form, certifying the contractor’s and subcontractor’s compliance with the E-Verify requirement.    

Contractual Language.   The Act also requires that contracts between a public works contractor and its subcontractors contain information regarding the requirements of the Act.  Thus, it is highly recommended that Public Works contractors revise theirs subcontracts before January 1, 2013 to comply with the Act.    

Enforcement of the Act.  To ensure compliance with the Act, the Department of General Services has been granted the authority to conduct random and complaint-based project audits.  The penalties for failing to comply with the Act include monetary fines and debarment from public work. 

Good Faith Defense.  Notably, the Act contains a “Good Faith” defense clause that shields employers from liability if the employer takes adverse action against a newly hired employee in reliance on an E-Verify determination that the individual is not authorized for employment. 

The attorneys at Harmon & Davies are available to assist public contractors with revising their subcontractors to comply with the Act. 

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