Constructing Louisiana (LAGC) Summer 2002 – Russel W. Wray
Job site theft and vandalism has become a major cost to contractors. When that in turn causes harm to third parties, the contractor is the “deep pocket.” Insurance is not a cure-all. Even before 9-11, insurance to cover all risk of loss for theft and vandalism was prohibitably expensive, and since 9-11, some contractors have experienced more than a tenfold increase in some types of coverages, while also reducing the amount of coverage by over half. To avoid being a deep pocket and an easy target, a contractor must minimize exposure to loss, and to do so he must stay current on the law.
This article will address recent trends in the law as it applies to contractor liability to third parties harmed by theft or vandalism at the job site.
In Trahan v. Asphalt Associates, Inc., the contractor was held not to be responsible for criminal acts of unnamed third parties who had moved barricades and warning signs resulting in an automobile accident on the job site. The court said: “There is generally no duty to protect others from the criminal activities of third persons. This duty only arises under limited circumstances, when the criminal act in question was reasonably foreseeable.”
The court’s ruling in Trahan that the contractor had no duty is not a precedent governing all cases. Reasonable foreseeability is a balancing test determined by the facts and circumstances of each occurrence. The contractor having control of the job site owes a duty similar to the owner of a business having control of the premises. The Louisiana Supreme Court in Posecai v. Wal-Mart Stores, Inc. established a balancing test for determining foreseeability in such a case:
The foreseeability of the crime risk on the defendant’s property and the gravity of the risk determine the existence and the extent of the defendant’s duty. The greater the foreseeability and gravity of harm, the greater the duty of care that will be imposed on the business. A very high degree of foreseeability is required to give rise to a duty to post security guards, but a lower degree of foreseeability may support a duty to implement lesser security measures such as using surveillance cameras, installing improved lighting and fencing, or trimming shrubbery. The plaintiff has the burden to establishing the duty the defendant owed under the circumstances.
In Trahan, there was “no evidence presented that the contractor was aware of any previous incident on a project where persons caused a accident by removing all signs and barricades.” Nor was there evidence that the signs and barricades placed by Asphalt Associates though removed, were inadequate. But, what if the contractor had known of other such incidents at this site or at nearby sites, or what if the job site was in a high crime neighborhood?
In Posecai, evidence of previous crimes on or near the premises was a significant factor in the decision. In that case, the plaintiff was the victim of a armed robbery in a Sam’s store parking lot in Kenner. There were only three such offenses over a six and a half year period prior to this occurrence. One involving a delivery man after store hours, a mugging in the parking lot three years before this occurrence and the last when an employee was attacked by her own husband. As a practical matter, there was only one occurrence that was truly similar, and that was over three years prior to the date of this incident. Also, Sam’s is only open during daylight hours.
The Court also considered at length the neighborhood in which the store was located. The area was considered a high crime area, but because of only one mugging of a customer in the parking lot, and also considering the number of people using the parking lot over that period of time, the Court found that the foreseeability and gravity of the harm remained slight. Thus the Court found that Sam’s had no duty to provide security patrols, nor some lessor security measure in that case.
The balance on a job site when a contractor is a defendant may be weighed in a wholly different manner. The risk of an accident because warning devices are removed or damaged is significant. Should the contractor, because of one incident, take greater security measures to prevent warning signs and barricades from being moved by vandals? Maybe so. One prior incident of that character on a job site may be more significant than the prior incident in Posecai.
Should a contractor undertake a study of crime in the area of their job site as part of their routine site investigation to balance for themselves the risk and gravity of harm versus the economic burden? A job site in a high crime area may require at least some form of security at night to guard against tampering with the warning devices, machinery or materials.
If a contractor does provide a security guard, what additional duties to the public against other types of criminal activity taking place at the job site are assumed? In Posecai, the fact that Sam’s had a security guard stationed inside the store placed no higher burden on them to do so in the parking lot. Once the contractor hires a night watchman on the job site, he undertakes a duty and he must carry out the duty in a reasonably careful fashion. Thereby, he will likely have assumed a duty to protect others even if he was not obligated to do so in the first place.
Construction equipment left at the job site can be the cause of significant liability or loss. When dangerous construction equipment is targeted by vandals, injuries sometimes result not only to third parties but the vandals themselves. In balancing the risk versus the economic burdens, the court may take into account current methods of protecting construction equipment from unauthorized use to find a duty exists to employ such methods. Under current technology, contractors can obtain keyless starting units; satellite tracking systems such as Tracsat communicators that keep track of construction equipment; or other systems to disable the entire electrical system and prevent the use of the equipment even if would-be thieves have the key. The cheaper these devices, the lower the burden, and the less risk that must be balanced against it to find that a duty exists.
There is no one answer to these issues at the present time. The law in this area is evolving and will take shape over the next several years. Courts will be influenced by social and economic public policy considerations in doing so. The construction industry must remain informed and vigilant to protect their interests.
Russel W. Wray is a partner in the firm of Wray & Pierce, L.L.P., in Baton Rouge, Louisiana. Questions or comments can be directed to Mr. Wray at firstname.lastname@example.org.