CARMEN CONTI et al. v. CNS CLEANING CO., INC. et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6176-03T56176-03T5

CARMEN CONTI and EVELYN CONTI,

Plaintiffs-Appellants,

v.

CNS CLEANING CO., INC. and

HORACE ROBINSON t/a ROBINSON'S

ENTERPRISES,

Defendants-Respondents.

________________________________________________________________

 

Argued October 26, 2005 - Decided March 1, 2006

Before Judges Fall, Parker and Sapp-Peterson.

On appeal from the Superior Court of New

Jersey, Law Division, Camden County, L-7661-01.

Brian O'Connor argued the cause for appellants

(Ginsberg & O'Connor, attorneys; Mr. O'Connor,

on the brief).

Guy Mercogliano argued the cause for respondents

(Sweeney & Sheehan, attorneys; Mr. Mercogliano

and L. Arsinoe Shook, on the brief).

PER CURIAM

Plaintiffs Carmen and Evelyn Conti appeal from an order entered on May 14, 2004 granting summary judgment in favor of defendant CNS Cleaning Co., Inc. (CNS), dismissing the complaint without prejudice, and an order entered on June 25, 2004 denying plaintiffs' motion for reconsideration. Although we ordinarily do not consider a dismissal without prejudice to be a final order, R. 2:2-3(a), the denial of the motion for reconsideration appears to render the dismissal final, allowing us to assume jurisdiction. R. 2:2-3(a)(1); see In re Berkeley, 311 N.J. Super. 99, 101 (App. Div. 1998). We reverse and remand.

The facts relevant to this appeal are as follows. Plaintiff was employed as a toll collector by the Delaware River Port Authority (DRPA) and was assigned as a toll collector at the Benjamin Franklin Bridge in Camden. He was injured when he slipped and fell on leaves that had accumulated at the top of the stairway from the toll booth to the subterranean tunnel connecting the toll booths to the administration building.

Defendant CNS was under contract to the DRPA to provide cleaning and maintenance services for the facility. CNS sub-contracted the work to defendant Robinson's Enterprises (Robinson's).

The contract between the DRPA and CNS provided:

Sub-Contractor's/Sub-Consultant's Insurance

If any part of the work is to be performed by a sub-contractor or sub-consultant, the contractor shall be responsible for each sub-contractor or sub-consultant maintaining insurance as specified in Paragraphs (a), (b), and (c).

. . . .

SUB-CONTRACTOR ASSIGNING OR SUB-LETTING

Prior written approval of DRPA is required for subcontracting any services covered by this Agreement other than those included in the CONTRACTOR's Proposal. Requests for authorization to subcontract, must be submitted in writing to the DRPA's Chief Operating Officer accompanied by a description of the specific work to be subcontracted, the total value of such sublet work, and proof that the organization which will perform the subcontracted work is particularly equipped and capable to perform such work. The right to qualify, accept or reject any subcontractor is reserved expressly to the DRPA.

Robinson's carried $300,000 general liability coverage as required by the Agreement between DRPA and CNS.

Plaintiff filed a workers' compensation claim against the DRPA and recovered for permanent disability. He filed the complaint against CNS on November 21, 2001, and amended the complaint on February 28, 2003 to include Robinson's as a defendant. The matter was submitted to mandatory non-binding arbitration on October 29, 2003, and Carmen Conti was awarded the net amount of $605,018.40. On her per quod claim, Evelyn Conti was awarded $42,500. The arbitrator found defendants 85% jointly liable and plaintiff 15% comparatively at fault. Both defendants moved for a trial de novo.

Plaintiff subsequently settled with Robinson's for the $300,000 policy limit. The DRPA, however, asserted a subrogation lien for the workers' compensation award, pursuant to N.J.S.A. 34:15-12(b), against any third-party action brought by plaintiff. As of May 3, 2004, the amount of the lien was $233,667.18.

After extensive discovery, CNS moved for summary judgment which was granted on May 14, 2004. After his motion for reconsideration was denied, plaintiff appealed, arguing that the trial court erred in (1) finding that CNS did not reserve control over the manner and means of Robinson's work; (2) finding that CNS could not be held vicariously liable for the negligent acts of Robinson's; and (3) determining there were no genuine issues of material fact requiring submission to a jury.

The contract between CNS and Robinson's clearly indicates that Robinson's was an "independent contractor and not [ ] an agent, employee or co-venturer with CNS." Plaintiff's arguments focus on the nature of the CNS-Robinson's relationship and whether CNS can be held vicariously liable for the negligent acts of Robinson's.

As a general matter, "an employer that hires an independent contractor is not liable for the negligent acts of the contractor in the performance of the contract." Bahrle v. Exxon Corp., 145 N.J. 144, 156 (1996) (citing Majestic Realty Assoc., Inc. v. Toti Contracting Co., 30 N.J. 425, 431 (1959)). There are three exceptions to the general rule, however: "(a) where the [principal] retains control of the manner and means of doing of the work which is the subject of the contract; (b) where [the principal] engages an incompetent contractor; or (c) where . . . the activity contracted for constitutes a nuisance per se." Majestic, supra, 30 N.J. at 431.

Plaintiff concedes that the routine maintenance work performed by Robinson's cannot constitute a nuisance per se. He further concedes that there is no evidence that CNS knew that Robinson's was incompetent before it entered the subcontractor agreement. But, he maintains that "there is abundant evidence CNS knew or should have known Robinson's was incompetent once the work began." We reject this argument as a basis for vicarious liability of a principal for a subcontractor's negligence because "[n]o presumption as to the negligence of an employer in hiring an independent contractor arises from the fact that, after being hired, the contractor is negligent in the performance of his duties and injures the person or property of another." Mavrikidis v. Petullo, 153 N.J. 117, 136 (1998).

Plaintiff next argues that CNS should be vicariously liable for the negligent acts of Robinson's because CNS "directed and controlled" the work performed by Robinson's. To support his contention, plaintiff focuses on evidence that (1) CNS provided work specifications to Robinson's; (2) Robinson's used a CNS checklist which included "cleaning requirements"; (3) the DRPA Director inspected Robinson's work with CNS staff; (4) CNS reprimanded Robinson's for poor performance; and (5) CNS was responsible for "quality control" at the work site.

In considering vicarious liability, the Court in Majestic distinguished between a "supervisory interest" and "the means of accomplishing it" for the purpose of imposing vicarious liability. 30 N.J. at 431. The record demonstrates that CNS was involved on a supervisory level "for the purpose of seeing that the work [was] done in accordance with the contract and specifications." Ibid. CNS was responsible for "quality control" and, accordingly, inspected the site and reprimanded Robinson's for poor performance. These activities, however, do not demonstrate that CNS controlled the "manner and means" of doing the work. Plaintiff failed to allege any facts to support his argument that CNS falls within the first Majestic exception to the general rule of non-liability for sub-contractors.

Notwithstanding the Majestic exceptions, plaintiff next argues that CNS can be held vicariously liable for Robinson's negligence because Robinson's was acting with the apparent authority of CNS. We find this argument more persuasive. "[N]either the general rule nor the [Majestic] exceptions relate to a situation in which the independent contactor is allowed to become the apparent agent of the employer." Hill v. Newman, 126 N.J. Super. 557, 562 (App. Div. 1973), certif. denied, 64 N.J. 508 (1974).

Plaintiff bears the burden of proving "the apparent authority and the agency relationship." Mercer v. Weyerhaeuser, 324 N.J. Super. 290, 318 (App. Div. 1999). In Hill, for example, the plaintiff purchased furniture from Grant's that was nicked and scratched when delivered. Grant's assured the plaintiff they would send someone to fix it. Id. at 560. The defendant Newman, who represented he was from Grant's, appeared at plaintiff's home to repair the defects. Ibid. He sprayed "bad smelling stuff" on the furniture and left. Shortly thereafter, when plaintiff answered the phone in the room with the recently-sprayed furniture, there was an explosion resulting in serious injury to plaintiff. Id. at 560-61. We found "that plaintiff relied upon the manifestation of authority in Newman, thereby constituting an invitation to deal with him . . . consistent with the apparent authority." Id. at 562.

Similarly, in Marek v. Prof'l Health Servs., Inc., 179 N.J. Super. 433 (App. Div.), certif. granted, 88 N.J. 470, appeal dismissed, 93 N.J. 232 (1981), we found that a patient who presented for a chest x-ray at a health care provider had a reasonable expectation that the party providing the x-ray was the health care provider, absent any clear indication it was an independent contractor. We held there that "the duty to provide competent and adequate medical care [is] nondelegable." Id. at 442.

Plaintiff maintains that Robinson's was cloaked with the apparent authority of CNS because CNS did not seek approval from the DRPA to sub-contract the maintenance services to Robinson's, and Valerie Bradford, the DRPA's director, testified in her deposition that she believed Horace Robinson was a "crew chief" for CNS. Plaintiff further maintains that because CNS, rather than Robinson's, communicated with the DRPA and maintained a supervisory role, Robinson's was clothed in the mantel of CNS's apparent authority.

Bradford's testimony is the key to this issue. In her deposition, she testified that she dealt exclusively with CNS. "[O]n occasion, we had some performance issues, problems with CNS and . . . we would on occasion do a walk through . . . just to point out areas that we thought were deficient. . . ." She indicated that this was the first time the DRPA "outsourced" maintenance services and she wanted to be certain that the maintenance services were performed properly. Although she dealt with Horace Robinson as the "crew chief," she assumed he was a CNS employee because she was unaware that CNS had contracted the maintenance services to Robinson's until this lawsuit began.

Defendant responds that this case is distinguishable from Marek and Hill. It maintains that Horace Robinson never represented to Bradford or anyone at the DRPA that he was a CNS employee or had authority from CNS to act as its agent. That is not the issue, however. A determination of apparent authority is based upon the conduct of the principal and the agent and the reasonable reliance by the user of the services.

[T]he plaintiff must establish, (1) that the appearance of authority has been created by the conduct of the alleged principal and it cannot be established "alone and solely by proof of [conduct by] the supposed agent," (2) that a third party has relied on the agent's apparent authority to act for a principal, and (3) that the reliance was reasonable under the circumstances.

[Mercer, supra, 324 N.J. Super. at 318.]

Bradford testified that she was not aware that CNS had sub-contracted its work until plaintiff filed this lawsuit. CNS's failure to fulfill its contractual obligation to inform the DRPA that its duties were sub-contracted to Robinson's is the reason Bradford held the entirely reasonable, albeit misinformed, belief that Horace Robinson was an employee of CNS. She thought she was dealing exclusively with CNS. Under the circumstances presented, it is apparent that Bradford relied upon Robinson's manifestation of CNS's authority.

The question, then, is whether plaintiff similarly relied on Robinson's apparent authority to act for CNS. Plaintiff was a beneficiary of the maintenance contract. Since plaintiff did not act in a supervisory capacity and had no responsibility for maintenance services or the outsourcing thereof, he necessarily relied upon the DRPA in its contracting for the maintenance services and thereby stands in the shoes of his employer with respect to the apparent authority of Robinson's. Cf. Nieves v. Bruno Sherman Corp., 86 N.J. 361, 372 (1981).

Accordingly, we reverse the grant of summary judgment and remand for further proceedings in accordance with this opinion.

 
Reversed and remanded.

Plaintiff Carmen Conti was the injured party and when we refer to plaintiff in the singular throughout this opinion, we are referring to Carmen. Evelyn Conti's claim is per quod. We were advised by counsel at oral argument that Carmen Conti has passed away since this appeal was filed.

(continued)

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A-6176-03T5

March 1, 2006