Filed 2/6/20 Reuter v. Oakwood Construction & Restoration Services, Inc. CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

JEFFREY DEAN REUTER,

Plaintiff and Appellant,

v.

OAKWOOD CONSTRUCTION AND RESTORATION SERVICES, INC.,

Defendant and Appellant.

G055569

(Super. Ct. No. 30-2014-00754557)

O P I N I O N

Appeals from an order of the Superior Court of Orange County, Theodore R. Howard, Judge. Affirmed.

Goldsman Law Offices, Evan A. Blair, Arik Shafir and Gene J. Goldsman for Plaintiff and Appellant.

Parker Ibrahim & Berg, Andrew S. Hollins, Tamara M. Heathcote, Mariel Gerlt-Ferraro and Heather P. Karl; Ropers, Majeski, Kohn & Bentley and Kathleen M.K. Carter for Defendant and Appellant.

 

I. INTRODUCTION

This personal injury case turns on whether a subcontractor hired by a general contractor is the agent of the independent contractor for purposes of respondeat superior liability. Agency is a question of fact. The trial judge granted a new trial because he concluded he hadn’t correctly instructed the jury as to all the factors it should have considered bearing on the determination of agency.

The trial court’s decision to conduct a do-over was correct. The jury wasn’t given all the factors bearing on agency. Regardless of whether the judge’s new trial grant is evaluated under a de novo standard of review or an abuse of discretion standard, the grant of a new trial was correct. We affirm.

II. BACKGROUND

During a strong windstorm on February 28, 2014, several eucalyptus trees fell over on the back unit of a Tustin duplex owned (but not lived in) by Laurie and Jeffrey Reuter. Laurie Reuter called her homeowners’ insurer Allstate, who directed her to Oakwood Construction for emergency repairs.

Like other emergency service providers, Oakwood would subcontract work out during times of heavy rains and wind. In fact, it had already done so prior to Allstate’s referral to the Reuters. In late January, about a month before the February 28 storm, Oakwood had entered into two written subcontractor agreements with IGT Construction, a roofer. One of the agreement was entitled an “independent sub-contractor agreement” (the subcontract agreement). The other was a “Subcontract Indemnity Agreement” (the indemnity agreement).

The subcontract agreement referred to IGT as an “independent contractor” multiple times. It said:

(1) There was to be no employer/employee relationship between the two companies. (2) IGT had the “right to adopt its own means and methods in accomplishing the agreed-to results.” (3) IGT was to furnish its own tools, supplies, equipment and materials, and would obtain any necessary licenses and permits. (4) IGT would take care of all taxes. (5) IGT would maintain its own insurance. And (6) IGT would not be entitled to any of the benefits afforded Oakwood’s full-time employees, such as pension or health plans.

On the other hand, Oakwood set down a number of “rules” IGT was to follow: (1) It had to provide daily progress reports to Oakwood’s “Super.” (2) It had to complete all work “as per scope.” (3) There were to be no missed start or finish times “according to homeowner.” (4) IGT was not to do cleanup work in the homeowner’s yard. (5) IGT had to perform up to industry standards “the first time.” (6) There was to be no parking on any driveways. (7) IGT personnel were not to smoke on the job. And (8), IGT personnel had to wear either Oakwood shirts on the job site at all times or white t-shirts.

The indemnity agreement required IGT to carry its own general liability and workers’ compensation insurance, and to indemnify and hold Oakwood harmless from all lawsuits and all legal proceedings. And it expressly stated that IGT was not Oakwood’s agent: “By signing this Agreement, Subcontractor warrants that he is fully experienced, properly licensed, and insured to perform the type of work that he is performing as an independent contractor for Oakwood, and that he is an independent contractor and not an agent or employee of the Oakwood.”

On March 1, 2014, an estimator working for Oakwood called Bogdan Lucescu, owner of IGT, and gave IGT an “assignment” to “do a board up cover-up.” March 1 was a Saturday, and while IGT workers normally didn’t work Saturdays, Lucescu told the estimator “we can go out and do it.” Lucescu told his people to “put on the Oakwood shirts” and go out to the “Reuter project.”

Beyond doing a “board up” and “cover-up,” the Oakwood estimator gave IGT almost no instructions as to how to proceed. He didn’t tell Lucescu to put on a temporary roof, or to use a tarp on any temporary roof, or how to attach the roof to the main house. It was Lucescu himself who decided to put on a temporary roof. He thought it was the “safest and the best way” to cope with the damage. He also decided against using only a tarp; it would just accumulate water with the next rain and cave in. Lucescu would, however, put a tarp on the temporary roof his people built.

Lucescu didn’t ask anyone at Oakwood for a go-ahead to begin work. He just got his crew together and did it. He had been “charged from Oakwood” to “protect the structure and [its] contents.”

Laurie and Jeffrey Reuter were not told the IGT workers were not from Oakwood, but no one claiming ownership of the property came on the property that Saturday while IGT people were working on it. And that was not surprising since the Reuters did not live on the property.

The emergency repair job took about 9 to 10 hours and was finished that day. During the job, Lucescu would periodically report back to Oakwood’s estimator on his crew’s progress, including sending some photographs. At the time, Laurie and Jeffrey Reuter didn’t have a written contract with anybody to do the job. However, the following Monday, March 3, Laurie Reuter signed a contract with Oakwood Construction for “[a]ll emergency repairs, including, but not limited to, roof tarps, water extraction/mitigation, board ups etc.”

IGT billed Oakwood, and Oakwood billed Allstate for a larger amount. The difference was Oakwood’s profit on the job.

Jeffrey Reuter was himself a general contractor, specializing in high-end houses, with experience in roof repair. On April 4, he took several associates out to the property with the goal of taking off the temporary roof structure and ascertaining the “actual damage to the roof.” He hoped to ascertain how much fellow contractors were likely to bid on the job. He further hoped his inspection would help get the roof repaired “as close to the budget” he thought Allstate was going to give the Reuters.

The Reuters still didn’t know it was IGT, not Oakwood, that had done the job. While on the roof in the process of removing the tarp, Jeffrey Reuter stepped on a piece of board installed by IGT. The board went down and collapsed. Reuter stumbled and fell off the “very edge” of roof, hitting the ground. His injuries, particularly to his left heel, were extensive.

Jeffrey Reuter sued Oakwood for his injuries. Oakwood cross-complained against IGT for indemnity. As the first trial date approached, among the points Oakwood made in its trial brief was that IGT was an independent contractor, therefore Oakwood, as the “hirer” of an independent contractor, was not liable for IGT’s negligence. A second trial brief, filed about a week before the actual trial began on May 1, 2017, amplified the point. It asserted a “hirer” is “generally not liable for the acts of an independent contractor” with the exception of when the hirer has the independent contractor do work that is inherently dangerous – a legal concept known as the peculiar risk doctrine. The brief cited Privette v. Superior Court (1993) 5 Cal.4th 689 (Privette) for the idea that Oakwood, qua hirer, could not be held liable because it had not “exercise[d] retained control” over IGT.

Two related jury instruction issues surfaced at trial bearing on Oakwood’s independent contractor defense. The first involved a jury instruction proposed by Oakwood relating to how the jury was to go about determining whether Oakwood was the hirer of IGT as an independent contractor in the first place. Oakwood proposed a special instruction (special instruction number 9) that emphasized right to control: “The most significant factor in determining the existence of an employer-independent contractor relationship is the right to control the manner and the means by which the work is to be performed.” That instruction was refused.

The other bore on Reuter’s claim that IGT had been Oakwood’s agent in regard to the emergency roof repairs, and thus liable for IGT’s negligence as a matter of respondeat superior. Oakwood’s defense was the converse: IGT was not its agent for purposes of respondeat superior, therefore only IGT was responsible for any negligence in the emergency roof repair. Accordingly, Oakwood asked the trial judge to give a standard jury instruction (BAJI No. 13.20) which (1) tells the jury that in the case before it the categories of agent and independent contractor are mutually exclusive, and (2) tells the jury the question of agency is the product of a variety of factors, and then tells the jury what those factors are. BAJI No. 13.20, however, was refused.

Instead, the judge gave special instruction number 1, which emphasized rights of control and supervision, and devalued as “not determinative” any written agreement “purporting to establish an independent contractor relationship.”

The jury found (1) IGT’s negligence was a substantial factor in causing Jeffrey Reuter’s harm, and (2) IGT was indeed Oakwood’s agent. That was the liability phase of the trial. Later, in the damages phase, it determined Oakwood’s share of the comparative fault was 20 percent, and IGT’s 30 percent. Reuter’s total damages were $400,000; the ensuing judgment made Oakwood and IGT jointly and severally liable for $200,000 of it.

Oakwood filed a motion for new trial, complete with points and authorities as well as a list of the grounds for a new trial as enumerated in section 657 of the Code of Civil Procedure. Oakwood also filed a motion for judgment notwithstanding the verdict (JNOV).

Both motions advanced the same thought: The evidence presented at trial required a finding that IGT was not Oakwood’s agent. IGT was instead an “independent contractor.” By contrast, Jeffrey Reuter’s opposition stressed that Oakwood had “retained substantial control” over the project, yet left IGT in the lurch by not providing IGT with any plans, specifications or instructions for the job. Jeffrey Reuter also stressed that the main contract documents between Oakwood and IGT meant Oakwood “controlled the initial scope of work, payment, commencement and completion time, and cleanup” as well providing that Oakwood would be an additional insured on IGT’s policy.

There was a tentative ruling on the motions, and it was not favorable to Oakwood. The tentative said that BAJI No. 13.20 was written to make the categories of independent contractor and agent mutually exclusive, and that is just not the case.

Then came oral argument on the motion. Counsel for Oakwood reiterated his theory that agency and independent contractor status are mutually exclusive and mentioned the Privette and Toland cases several times. Counsel for Reuter reemphasized Oakwood’s right to control IGT, including “clothing worn by IGT’s workers, whether they could smoke, where they could park, and so forth.” Reuter’s counsel also pointed out that “agency is the heart and soul of the finding of liability on the part of Oakwood,” and “a principal is liable for the negligent acts of its agent[.]” The court said it would “take another look” and took the matter under submission.

The formal minute order granted Oakwood’s new trial motion. In granting the motion, the judge noted two major points: First, there was no evidence that Oakwood itself had done anything wrong. It was never on the job site. It performed no inspection. And even if it had inspected the site, there was no evidence that any such inspection would have prevented Reuter’s fall. More importantly, there was no evidence of negligent hiring, instruction or supervision.

Second, the evidence of agency “was relatively not strong.” IGT used its own employees and controlled the work. Oakwood did not supervise it. The fact IGT workers wore Oakwood t-shirts was evidence in favor of agency, but not dispositive because the practice is “not uncommon.” As the judge summed up his decision, “In other words, the evidence was sufficiently close here that the Court is persuaded the cumulative effect of the instructional deficiencies for the jury, was to create a prejudice sufficient to warrant a new trial.”

III. DISCUSSION

Since orders and judgments of the superior court come to the Court of Appeal with a presumption of correctness, it is the job of the aggrieved party on appeal to show error. Error, in turn, is shown by the arguments presented in the various headings and subheadings found in the appellant’s opening brief. (Conservatorship of Hume (2006) 139 Cal.App.4th 393, 395, fn. 2; Heavenly Valley v. El Dorado County Bd. of Equalization (2000) 84 Cal.App.4th 1323, 1345, fn. 17.)

In the heading presented in his opening brief, Reuter enumerates a set of nine challenges to the trial court’s order. Having studied these nine challenges, we think they are best grouped into four categories, which we now paraphrase. The first three categories are procedural – basically arguing that something Oakwood’s counsel did or didn’t do forfeited the possibility of a new trial: (1) Oakwood’s new trial motion was based on issues which hadn’t been raised at the trial. (2) Oakwood waived the right to seek better jury instructions than the ones given. (3) Oakwood’s new trial motion did not comply with the statutory requirements for a new trial. The fourth category then goes to the merits, and may be encapsulated simply: (4) Given the evidence at trial, IGT necessarily was Oakwood’s agent such that Oakwood must, as a matter of law, be held responsible for IGT’s negligence.

A. The New Issue Challenge

Reuter’s lead argument is predicated on the idea that Oakwood’s new trial motion was based on theories of nonliability set forth in Privette, supra, 5 Cal.4th 689 and Toland, supra, 18 Cal.4th 253, pertaining to workers’ compensation law. Reuter argues that the “relevance” of the Privette/Toland body of law – which his brief calls “deep, wide, and murky” – did not come up until oral argument on the new trial motion. The “Privette” body of law, he says, was not raised in the new trial motion. Thus, he asserts, it was unfair, indeed violative of due process, to grant the new trial motion based on that body of law.

We cannot agree. Reuter’s argument relies on a misreading of the trial court’s reason for granting a new trial. Basically, Reuter confuses two things: (1) the starting point of the Privette and Toland opinions – which is the common law principle that the hirer of an independent contractor is not responsible for that contractor’s negligence – with (2) the actual holding of those cases – which is that the existence of workers’ compensation benefits to injured employees of an independent contractor means the hirer of an independent contract is not responsible for the contractor’s negligence even when the work involves a “peculiar risk.” As counsel for Oakwood may have mentioned them at oral argument on the new trial motion (and in papers filed prior to trial), the Privette and Toland case were mere lawyer’s shorthand for the basic common law principle that the hirer of an independent contractor is not responsible for that contractor’s negligence, even when the hirer is itself an independent contractor.

It is important to keep in mind the reason the trial court granted the new trial motion. The trial court did so because the hirer of an independent contractor is not responsible for that contractor’s negligence, a point made by many cases, not just Privette and Toland. There was no wading into the murky waters of workers’ compensation exclusivity. Thus it was irrelevant that neither case appears in the points and authorities in the new trial motion. There was no need to specifically mention them. What Privette and Toland had to say about the nonliability of the hirers of independent contracts had been said elsewhere. In short, there was no surprise at all in the legal basis on which the trial court granted the new trial motion.

B. Waiver

Reuter’s second argument is that Oakwood never alleged a “Privette/Toland” affirmative defense in its answer, so it was estopped as a matter of law from making a claim of error based on that defense in its new trial motion. To be sure, the answer is perfunctory. Basically it simply asserted Oakwood was not liable to Reuter. However, Reuter’s argument fails because an affirmative defense is only required for “new matter” outside of the complaint. (Jetty v. Craco (1954) 123 Cal.App.2d 876, 880.) Agency was not new matter. It was, as recognized by Reuter’s own counsel, the “heart and soul” of Reuter’s theory of Oakwood’s liability. There was no need to assert a negative of Reuter’s agency theory in an affirmative defense; that job had already been done by Oakwood’s denial of all of Reuter’s claims.

 

C. Compliance with Statutory Requirements

Oakwood filed its new trial motion the day after the notice of entry of judgment was filed. In the metaphor of a monopoly game, Oakwood went directly to Go, without first filing a “notice of intention to move for a new trial” as envisaged in section 659. Reuter now argues that by omitting the formal notice of intention to move for new trial, Oakwood precluded the trial court from granting a new trial.

We disagree for three reasons. First, Reuter waived the issue for purposes of this appeal by not raising it at the trial level. “It is axiomatic that a party may not complain on appeal of rulings to which it acquiesced in the lower court. [Citation.] . . . It is unfair to the trial judge and the adverse party to attempt to take advantage of an alleged error or omission on appeal when the error or omission could have been, but was not, brought to the attention of the trial court in the first instance. [Citation.].” (Porterville Citizens for Responsible Hillside Development v. City of Porterville (2007) 157 Cal.App.4th 885, 912.)

Second, to accept Reuter’s argument would be to elevate form over substance. (See Civ. Code, § 3528.) The purpose of a notice of intention to move for new trial is to give the adverse party a reasonable opportunity to oppose the motion on its merits. (Nichols v. Hast (1965) 62 Cal.2d 598, 600.) Oakwood’s new trial motion certainly did that, by listing the categories in section 657 which justify the new trial. Reuter certainly got notice of the hearing date, sent out by the clerk just a few days after Oakwood’s filing. He had no problem opposing the motion on its merits.

And third, we perceive no jurisdictional bar to the trial court’s grant of the new trial motion from the absence of notice of intent to move for new trial, as distinct from new trial motion itself. To be sure, bad timing can nullify the court’s power to grant a new trial motion because “[a] trial court has no jurisdiction to rule on a premature new trial motion, so any trial court proceedings or orders on such a premature motion likewise are void and of no effect.” (Ochoa v. Dorado (2014) 228 Cal.App.4th 120, 132.) Likewise a new trial motion filed too late can nullify the trial court’s power. (Douglas v. Janis (1974) 43 Cal.App.3d 931, 936 [notice of intention to move for new trial was not timely because filed after 15 days after notice of entry of judgment].)

But neither of those is this case. Subdivision (b) of section 659 says a notice of intent to move for a new trial is the equivalent of a new trial motion: “That notice of intention to move for a new trial shall be deemed to be a motion for a new trial on all the grounds stated in the notice.” There is no good reason not to conclude the obvious converse: A new trial motion which functions perfectly as a notice of intent to move for new trial should not be deemed to be a notice of intent to move for new trial for purposes of the statutory deadlines.

Deemed to be what it functionally was – a combined notice of intent to move for new trial and new trial motion proper – the new trial motion was neither too early or too late. It was, in fact, perfectly timely, being filed both after the notice of entry of judgment (so not premature) and well within the 15-day period within which to file a notice of intention to move for new trial (so not late). Accordingly we conclude the trial had jurisdiction to grant the new trial motion.

D. Agency As Law, Or Fact

The main event in this appeal is Reuter’s argument, said in a variety of ways, that the evidence will admit of no other result than Oakwood being liable for IGT’s negligence. The argument necessarily rests on the proposition that IGT was Oakwood’s agent as a matter of law.

We must reject that argument right off the bat. The existence of an agency relationship is usually a question of fact, and only becomes a matter of law “when the facts can be viewed in only one way.” (Markow v. Rosner (2016) 3 Cal.App.5th 1027, 1039, citing Metropolitan Life Ins. Co. v. State Bd. of Equalization (1982) 32 Cal.3d 649, 658.) Here, the facts bearing on whether IGT was Oakwood’s agent are so mixed that we cannot say that they can “be viewed in only one way.” Indeed, we perceive the trial judge’s observation that the evidence of agency was “relatively not strong” to be spot on.

We count these facts having some significant throw-weight against a finding of agency: (1) The subcontract agreement plainly said there was to be no employer/employee relationship between Oakwood and IGT and the indemnity agreement went it one better by expressly saying IGT warranted it was not Oakwood’s agent. (2) IGT had control over its choice of means and methods in the roof repair. (3) Oakwood gave IGT no specific instructions in regard to the job, just overall general commission to effectuate repairs. (4) IGT furnished its own workers, tools, supplies, and was in charge of obtaining any required permits. (4) IGT had to carry its own liability insurance.

On the other hand, we count these facts as fairly weighty in favor of a finding of agency: (1) IGT had to give Oakwood daily progress reports, which was performed by Lucescu sending photos to Oakwood’s estimator. (2) IGT workers had to wear Oakwood shirts or white t-shirts. (3) Allstate referred the Reuters to Oakwood, ostensibly as an approved emergency contractor.

We should mention here that a number of the facts in the case do not to us seem to carry much weight one way or the other. Of course IGT had to pay its own taxes, and of course its employees would not be entitled to Oakwood employee benefits. Neither goes a long way to negate agency. On the other hand, several of the work rules imposed by Oakwood on IGT seem only common sense for any contractor work anyway: No matter whether IGT was an agent or solely an independent contractor it would probably have not been allowed to park in a customer’s driveway or allow its workers to smoke on the job or perform below industry standards.

In light of our rejection of Reuter’s argument that he had to win on the agency issue, the only remaining question involves our review of the trial court’s decision to grant a new trial. We conclude it was correct, whether evaluated on a de novo basis, or an abuse of discretion basis.

The record is clear that Oakwood asked for a now outdated jury instruction to be given – BAJI 13.20 – and the trial judge refused it. The problem with BAJI 13.20 – as recognized by the trial judge himself in his tentative ruling on the new trial motion – is that it is glaringly incorrect in saying independent contractor status and agent status are mutually exclusive. They aren’t. As stated in Jackson v. AEG Live, LLC (2015) 233 Cal.App.4th 1156, 1184: “One who contracts to act on behalf of another and subject to the other’s control, except with respect to his physical conduct, is both an agent and an independent contractor.” (Citing Rest.2d Agency (1958) § 14N, p. 80, italics added.) There is no reason a person cannot hire an independent contractor to be his or her agent. People do it all the time when they go to sell their homes.

However, even though BAJI 13.20 might be outdated in that one respect, it does contain a nice encapsulation of the various factors for a trier of fact to consider in determining agency. And there are a lot of them.

The court, however, only gave one, special instruction on agency crafted by Reuter’s counsel, and that instruction was deficient in apprising the jury of all the factors bearing on agency. It specified only one factor (the legal right of control) instead of such things, as found in BAJI 13.20, as the custom in the location, who supplies the tools, the length of time of the job, and the parties own belief.

The trial court could thus reasonably conclude there was an error of law in not giving the jury enough factors to decide the factual question of agency. (§ 657, subd. (7).)

We stress, of course, that since agency is a question of fact, we think there is enough substantial evidence in the case to sustain a finding of agency, hence the trial court was also correct in denying Oakwood’s JNOV motion. However, there is also enough in the case to sustain a finding of no agency. In a new trial motion the judge acts as the 13th juror and can weigh the evidence differently from the jury. (Fountain Valley Chateau Blanc Homeowner’s Assn. v. Department of Veterans Affairs (1998) 67 Cal.App.4th 743, 751.) This trial judge had the right to give more weight to Oakwood’s lack of a right to control the means and methods of IGT’s work than the jury. The trial court decision to have a “do-over” was eminently reasonable.

 

IV. DISPOSITION

The order granting a new trial is affirmed. Because we affirm the new trial motion, there is no need to address Oakwood’s protective cross-appeal. Oakwood is to recover its costs on appeal.

BEDSWORTH, ACTING P. J.

WE CONCUR:

ARONSON, J.

DUNNING, J.*

*Retired judge of the Orange County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.