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RYAN v. U.S.

December 11, 2002

KENNETH RYAN, PLAINTIFF,
V.
UNITED STATES OF AMERICA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Simandle, District Judge:

  OPINION

Two motions are presently before this Court. The first is the motion of defendants United States of America, United States Air Force, United States Army, and United States Army Corps of Engineers ("federal defendants") for summary judgment on the claims contained in the complaint of plaintiff Kenneth Ryan and the cross-claims contained in the answer of defendant Volmar. The second is the motion of defendant A.R.G.C. Corporation for summary judgement in its favor on the cross-claims contained in the answer of defendant Volmar.

In the first motion, the federal defendants assert that summary judgment should be entered in their favor and that plaintiff Ryan's complaint and Volmar's cross-claims should be dismissed with prejudice as to them because the claims against them are barred by the doctrine of sovereign immunity. While the Federal Tort Claims Act (FTCA) waives such immunity over negligence claims, they argue that this case falls under the independent contractor and the discretionary function exceptions to the Act's waiver. Volmar and plaintiff Ryan, however, contend that summary judgment should not be entered because the discretionary function exception does not insulate the government here because government actors breached mandatory contractual duties. Volmar further argues that summary judgment should not be entered because the independent contractor exception does not apply here since Volmar's own status was that of an employee rather than a contractor.

In the second motion, defendant A.R.G.C. Corporation ("A.R.G.C.") asserts that summary judgment should be entered in its favor as to defendant Volmar's cross-claims because it is not liable for contribution or indemnity under the New Jersey Workers' Compensation bar. Volmar, however, argues that summary judgment is not appropriate because A.R.G.C. agreed in their subcontract to indemnify Volmar for claims arising from the negligence of A.R.G.C. or its employees.

This Court will grant in part and deny in part the federal defendants' motion for summary judgment. This Court will grant it to the extent that it asserts claims against the United States Air Force, the United States Army, and the United States Army Corps of Engineers because the FTCA only waives sovereign immunity to allow negligence claims to proceed against the United States itself, and not against its agencies. This Court will also grant it to the extent that it asserts claims against the United States for the negligence of its contractor, Volmar, or the subcontractor, A.R.G.C. because the claims are shielded by the independent contractor exception to the FTCA, and will grant it to the extent that it asserts claims against the United States for breach of a landowner duty of care because a landowner does not have a duty to inform a contractor about obvious risks of hazardous work. However, this Court will deny the motion for summary judgment to the extent that it asserts claims against the United States for the direct negligence of United States employees with respect to contractual duties to inspect and survey the work site.

PROCEDURAL AND FACTUAL BACKGROUND

On April 20, 1998, plaintiff Kenneth Ryan fell while he was removing copper wiring from ceiling joists at a housing unit at the Fort Dix, New Jersey, military base. (Cordry Decl., Ex. A at Tr. 59:11-14, 66:12-69:6.) At the time of the fall, he was employed by defendant American Removal General Contracting (A.R.G.C.), a company that defendant Volmar Services, Inc. (Volmar) had subcontracted to work on the demolition project that Volmar had contracted with defendant United States Army Corps of Engineers to complete.

A. The Renovation Project

On September 30, 1997, defendant United States Army Corps of Engineers ("Corps of Engineers"), as contracting officer for the United States, entered into contract number DACA51-97-C-0059 with Volmar for the renovation of military housing units at Fort Dix owned by defendant United States. (Kara Decl. ¶ 2.) Under the contract, Volmar was to make major interior and exterior renovations to 142 existing three- and four-bedroom housing units in the Garden Terrace Family Housing Area on Fort Dix so that they could be used as housing for Air Force personnel and their families. (Kara Decl. ¶ 3.)

The 790-page, eleven-million-dollar contract detailed with precision the job requirements. (Corboy Decl., Ex. A, Ex. B; Kara Decl., Ex. 1.) This Court will recount the contract's clauses that are pertinent to the present motions for summary judgment in the discussion section of this Opinion.

Volmar subcontracted necessary demolition work to A.R.G.C., whose president was Peter Young. (Ruyman Decl., Ex. 2 at Tr. 9:12-20.) The federal defendants did not have a contract with A.R.G.C. and did not participate in hiring A.R.G.C. (Ruymann Decl., Ex. 2 at Tr. 18:14-21, Ex. 3 at Tr. 41:1-21.) A.R.G.C. president Young took his directions from Volmar employees Andy Abdallah and Bill DiGiacomo. (Ruymann Decl., Ex. 2 at Tr. 20:24-23:17.) Mr. Abdallah was Volmar's Quality Control Manager and Mr. DiGiacomo was Volmar's Superintendent and Safety Officer for the Fort Dix project. (Ruymann Decl., Ex. 3 at Tr. 9:18-11:10.)

The demolition work began around the end of January 1998. (Ruymann Decl., Ex. 2 at Tr. 19:3-5.) The project was divided into phases. (Corboy Decl., Ex. K at 4.) During phase one, the parties worked on ten units in accordance with the original terms of the contract that required renovations of the units. Some portions of the exterior and interior of the housing units were demolished during phase one, but the housing structures were saved.*fn1 (Kara Decl., Ex. 6 at Sheet 41, Gen. Demolition Notes 8 and 11.) During the work on the units in phase one, though, termite-damaged wood was discovered to a different extent in all of the units. (Ruymann Decl., Ex. 4 at Tr. 110:2-22; Corboy Decl., Ex. K at 10.) Each time it was found, A.R.G.C. notified Volmar which notified the Corps of Engineers and the parties would modify the contract so the termite-damaged wood could be replaced. (Ruymann Decl., Ex. 4 at Tr. 110:9-112:7, Ex. 3 at Tr. 159:10-160:22, 197:15-200:1.) After plaintiff's fall, because so much termite-infested wood had been found in the phase one housing units, the parties amended the contract to require complete demolition of the remaining housing units so all termite-damaged wood would be eliminated. (Ruymann Decl., Ex. 3 at Tr. 51:2-52:5.)

B. Plaintiff's Fall

During phase one, before the contract was amended to require complete demolition because of the termite-damaged wood, plaintiff Ryan was working for A.R.G.C. on Building 1201, the eighth housing unit to be demolished at Fort Dix. (Ruymann Decl., Ex. 1 at Tr. 59:6-63:12.) Ryan had worked on the demolition work at the project on-and-off for about one month and had performed demolition work before. (Cordry Decl., Ex. A at Tr. 51:17-25; Ruymann Decl., Ex. 1 at Tr. 11:9-12:4, 191:8-18.) Ryan remembers that on April 20, 1998, either Rodney Williams, the A.R.G.C. foreman, or Peter Young, A.R.G.C.'s president, asked him to go into the eighth unit and remove electrical wire that ran from the ceiling lamps. (Ruymann Decl., Ex. 1 at Tr. 63:3-20.) He claims that he was not told how to remove the wire, but admits that he did not need training on how to remove wiring from joists. (Ruymann Decl., Ex. 1 at Tr. 63:3-65:5, 213:24-214:16.) He decided to climb up the side of the walls to the ceiling joists and walk across them to reach the wire which was stapled to the ceiling joists. (Ruymann Decl., Ex. 1 at Tr. 64:20-66:15, 75:22-25.) Ryan says that when he was in the middle of the room, with his right foot on one ceiling joist and his left foot on another, he felt one joist begin to crack. (Ruymann Decl., Ex. 1 at Tr. 66:16-78:8.) As he started to fall, he says he grabbed another ceiling joist, but it also broke, so he fell to the ground, fractured his left foot, and was hit in the head by falling debris. (Cordry Decl., Ex. A at Tr. 77:7-78:8.)

Once on the ground, Ryan says that he noticed termite damage in the broken ceiling joists. (Cordry Cert., Ex. A at Tr. 85:1-17.) He and Mr. Abdallah, who was in charge of the day-to-day demolition, say that the termite damage was not visible from the exterior of the ceiling joists.*fn2 (Ruymann Decl., Ex. 1 at Tr. 85:18-86:21, Ex. 3 at Tr. 161:22-162:24.) Ryan was alone in the housing unit at the time of the accident. (Ruymann Decl., Ex. 1 at Tr. 69:10-15.)

D. Procedural History

On July 29, 2002, the claims of plaintiff Ryan against defendant A.R.G.C. and the cross-claims of the federal defendants against A.R.G.C. were dismissed with prejudice. [Docket Item 38-1.] The remaining claims at this time, therefore, are the claims of plaintiff Ryan against the federal defendants and against Volmar, the cross-claims of the federal defendants against Volmar, the cross-claims of Volmar against the federal defendants and against A.R.G.C., and the cross-claims of A.R.G.C. against the federal defendants and against Volmar. The two present motions for summary judgment will decide whether there remains any question of fact material to the resolution of the claims and cross-claims against the federal defendants by Ryan, Volmar, and A.R.G.C., or to the resolution of the cross-claims against A.R.G.C. by Volmar.

DISCUSSION

A. Summary Judgment Standard

Summary judgment is appropriate when the materials of record "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A dispute is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the non-moving party." See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is "material" only if it might affect the outcome of the suit under the applicable rule of law. Id. Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment. Id.

In deciding whether there is a disputed issue of material fact, the court must view the evidence in favor of the non-moving party by extending any reasonable favorable inference to that party; in other words, "[T]he nonmoving party's evidence `is to be believed, and all justifiable inferences are to be drawn in [that party's] favor.'" Hunt v. Cromartie, 526 U.S. 541, 552 (1999) (quoting Liberty Lobby, 477 U.S. at 255). The threshold inquiry is whether there are "any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Liberty Lobby, 477 U.S. at 250; Brewer v. Quaker State Oil Refining Corp., 72 F.3d 326, 329-30 (3d Cir. 1995) (citation omitted).*fn3

B. Federal Defendants' Summary Judgment Motion

The federal defendants argue that all claims must be dismissed against them under the doctrine of sovereign immunity. They first argue that such immunity may only be waived under the Federal Torts Claims Act for suits against the United States, so that the claims against the United States Army, United States Air Force, and United States Army Corps of Engineers must be dismissed. Second, they argue that even though immunity may be waived under the Federal Torts Claims Act for certain suits arising in negligence against the United States, it is not waived in this case because it fits within the independent contractor and discretionary function exceptions. Finally, they argue that even if their immunity was waived, they were not negligent because they did not owe a duty of care to plaintiff.

Under the doctrine of sovereign immunity, the United States and its agencies cannot be sued unless there is consent to a waiver of sovereign immunity. United States v. Sherwood, 312 U.S. 584, 586 (1941); Stehney v. Perry, 101 F.3d 925, 933 (3d Cir. 1996). The terms of the waiver, which must be "unequivocally expressed," define the court's jurisdiction over such suits. United States v. Nordic Village, 503 U.S. 30, 33 (1992); Sherwood, 312 U.S. at 586. Waivers should not be liberally construed, but must be "construed strictly in favor of the sovereign . . . and not enlarged beyond what the language requires." Nordic Village, 503 U.S. at 34 (quoting McMahon v. United States, 342 U.S. 25, 27 (1951); Ruckelshaus v. Sierra Club, 463 U.S. 680, 685 (1983)). If there is no waiver, then the court does not have subject matter jurisdiction over the case. United States v. Bein, 214 F.3d 408, 415 (3d Cir. 2000); Richards v. United States, 176 F.3d 652, 654 (3d Cir. 1999).

The Federal Tort Claims Act (FTCA) provides a partial waiver of sovereign immunity, allowing suit against the United States for certain negligent acts of federal employees. 28 U.S.C. § 2674.*fn4 As a waiver of sovereign immunity, it must be strictly construed. Terrill Manor Ass'n. v. U.S. Dept. of Housing and Urban Devel., 496 F. Supp. 1118 (D.N.J. 1980) (citing Sherwood, 312 U.S. at 590-91). The extent of the waiver is at issue here.

1. Claims against the United States Air Force, Army, and Army Corps of Engineers

The FTCA waiver only waives immunity as to claims against the United States itself; it does not waive immunity for a claim brought against a government agency in its own name. Scheimer v. Nat'l Capital Region, 737 F. Supp. 3, 4 (D.D.C. 1990) (citing Sprecher v. Graber, 716 F.2d 968 (3d Cir. 1983); Hughes v. United States, 701 F.2d 56 (7th Cir. 1982)); Lomax v. United States, 155 F. Supp. 354, 356 (E.D.Pa. 1957). This is because the FTCA allows a plaintiff to bring an action against the United States that alleges that the acts or omissions of United States employees or agencies were negligent. The actions of federal employees and agencies are thus still very relevant to the action, but the United States is sued for them in its role as respondeat superior.

The federal defendants, thus, correctly argue that the only proper federal defendant in this case is defendant United States. As a result, because sovereign immunity has not been waived to allow the present claims against the United States Air Force, the United States Army, and the United States Army Corps of Engineers, this Court will dismiss all claims against them.

Claims against United States of America

The FTCA does provide a partial waiver of sovereign immunity to allow certain negligence actions to proceed against defendant United States. 28 U.S.C. § 2674. Here, plaintiff Ryan has alleged that the United States is liable for injuries caused (1) by the negligence of its contractor, Volmar, and of Volmar's subcontractor, A.R.G.C., and (2) by the negligence of its own federal employees. The United States argues that both claims are precluded by the independent contractor and the discretionary function exceptions to the FTCA's waiver of sovereign immunity. However, it is clear that the independent contractor exception, if applicable, can only shield the United States from liability for the acts of the contractor and subcontractor. See Logue, 412 U.S. at 532-33; Norman v. United States, 111 F.3d 356, 358 (3d Cir. 1997). The discretionary function exception, therefore will determine whether it can be sued for its own alleged negligence.

(a) Independent Contractor Exception

This Court finds that the independent contractor exception shields the United States from suit regarding any negligent actions of its general contractor, Volmar, or subcontractor, A.R.G.C. The independent contractor exception stems from the definition of "employee" in the FTCA. Under the FTCA, the United States is liable to the same extent as a private party for injuries that are "caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment . . ." 28 U.S.C. § 2671 (emphasis added). The definition of "employee of the Government" specifically excludes "any contractor [working] with the United States." Id. The "independent contractor exception" therefore means that the United States has not waived its sovereign immunity — and cannot be sued — if the claim alleges a negligent or wrongful action by an independent contractor. United States v. Orleans, 425 U.S. 807, 814 (1976).

The principal distinction between an independent contractor and an employee is the extent to which the federal government "control[s] the detailed physical performance" of the job.*fn5 Logue v. United States, 412 U.S. 521, 528 (1973); Norman v. United States, 111 F.3d 356, 357 (3d Cir. 1997). If a federal actor supervises the day-to-day operations of the job, the contractor is generally considered an employee of the government. Orleans, 425 U.S. at 815. However, if the contractor manages the daily functioning of the job, with the federal actor just exercising broad supervisory powers, the contractor is likely an independent contractor, even if the government has reserved the right to inspect the contractor's work and monitor its compliance with federal law. Orleans, 425 U.S. at 815; Lipka v. United States, 369 F.2d 288, 291 (2d Cir. 1966). The government can reserve such authority without transforming the contractor into an employee of the government because "[b]illions of dollars of federal money are spent each year on projects performed by people and institutions which contract with the Government," and the government did not intend to accept responsibility for all of them under the FTCA. Orleans, 425 U.S. at 815-16.

Applying the independent contractor exception to this case requires this Court to determine whether Volmar was an employee of the government or an independent contractor. If Volmar was an employee, the United States waived immunity for a claim regarding Volmar's negligence. If, however, Volmar was an independent contractor, summary judgment in favor of the United States is proper on claims seeking to hold the United States liable for Volmar's or its subcontractor A.R.G.C.'s negligence because this Court would lack subject matter jurisdiction over the claim under the FTCA's independent contractor exception.

In his brief, plaintiff Ryan's counsel seems to admit that Volmar was an independent contractor under the FTCA as it argues that the United States should be held liable for its direct negligence, rather than for the negligence of Volmar and A.R.G.C.*fn6 (Pl.'s Br. at 12-13.) Volmar, however, argues that the government can be held liable for its negligence because it was an "employee of the government" since the government retained day-to-day control over its actions through the provisions of an extensive and detailed contract.

This Court finds that Volmar was an independent contractor under the FTCA. While the contract between Volmar and the Corps of Engineers was extensive, it still relinquished day-to-day control of the work site to Volmar. The contract required Volmar to "directly superintend the work or assign and have on the work site a competent superintendent who is satisfactory to the Contracting Officer and has authority to act for [Volmar]." (Kara Decl., Ex. 2.) The contract also required Volmar to "be responsible for all damages to persons or property that occur as a result of the Contractor's fault or negligence." (Id.) Volmar was responsible for ensuring the quality of materials delivered and work performed. (Id.) To do so, Volmar was required, under the contract, to "maintain an inspection system and perform such inspections as will ...


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