Morrison Law Journal


The Morrison Law Journal March 2021 Volume XVI, Edition 3 A Defeat for Commercial Landlords in Personal Injury Actions: Court of Appeal Refuses to Extend Privette Doctrine to Operator of Swap Meet By: Edward F. Morrison, Jr., Esq. Larry A. Schwartz, Esq.
As many are aware, in Privette v. Superior Court (1993) 5 Cal.4ᵗʰ 869, the California Supreme Court adopted a principle of non-liability holding that a person who hires an independent contractor to do dangerous work is not liable when an employee of the independent contractor suffers a work-related injury. Stated differently, the Courts have held that, "[g]enerally, when employees of independent contractors are injured in the workplace, they cannot sue the party that hired the contractor to do the work." See, SeaBright Insurance Co. v. US Airways, Inc. (2011) 52 Cal.4ᵗʰ 590. The rule of non- liability was adopted essentially for two reasons. First, workers compensation insurance usually provides exclusive remedy for employees who are injured on the job. Second, by hiring an independent contractor, the theory is the hirer implicitly delegates to the contractor any tort law duty owed to the contractor's employees. One issue that has arisen is whether the Privette Doctrine applies in a commercial landlord situation. In the case of Laico v. Chevron USA, Inc. (2004) 123 Cal.App.4ᵗʰ 649, a Court of Appeal ruled that an employee of an industrial contractor failed to show any basis for finding the property owner liable for his injuries. In a case involving significant damages, this issue came up in the matter of Zuniga v. Che ry Avenue Auction, Inc. (2021) WL972881 ("Zuniga case"). The Zuniga case involved the operation of an outdoor swap meet in Fresno. Cherry Avenue Auction, Inc. had operated that outdoor swap meet on the same site in Fresno for over 40 years. W.D. & M.S. Mitchell Family Limited Partnership owned the land on which the swap meet operated. Kinsman Enterprises, LLC managed that property (those entities are herein referred to as the “Cherry Avenue parties”). A couple, plaintiff Araceli Zuniga and her husband Jose Flores, rented two vendor spaces at the Fresno swap meet. When they were setting up their booth in their spaces, a 28 foot metal pole holding their advertising banner touched an overhead owerline. Both were electrocuted. Mr. Flores died and Ms. Zuniga was severely injured. Ms. Zuniga filed suit against the Cherry Avenue parties. The jury found the Cherry Avenue parties were 77.5% at fault and that Plaintiff's damages totaled $12,250,000. On appeal, the Cherry Avenue parties contended they had no duty of care to the Plaintiff because the danger presented by the overhead powerline was open and obvious and the Privette Doctrine should be extended to protect them from liability. The Cherry Avenue parties appealed. 1 As to the Privette Doctrine, the Court of Appeal acknowledged the holding in Laico v. Chevron USA, Inc., but specifically ruled that the Supreme Court's adoption of the principal of non-liability would not apply with respect to the swap meet. The Court explained that the Court in Laico was not actually applying the Privette Doctrine to conclude that a landlord owed no duty to the Plaintiff. The Court went on to hold that it would not be appropriate to extend the Privette Doctrine to landlord/tenant relationships because doing so would overturn established rules involving premises liability that governed a land possessor's duty to third parties. The Zuniga decision is in tension with the holding in Laico v. Chevron USA, Inc. and it remains to be seen if the California Supreme Court will weigh in on the issue. Nonetheless, the Zuniga decision will have important impacts insofar as commercial landlord disputes involving personal injury accidents. About the Authors: Edward F. Morrison, Jr. is the founding partner and Larry A. Schwartz is Of Counsel to The Morrison Law Group, a professional corporation. Their biographies can be viewed at morrisonlawgroup.com. Publication Note: The Morrison Law Group wishes to disseminate this publication to all clients and colleagues of the Firm who wish to receive it. Should any recipient desire to be removed from the distribution list, or wishes to have a colleague added, please contact Jim Van Dusen at The Morrison Law Group at 213 356-5504. Disclaimer Note: The legal article presented above is intended to provide general information which may be of interest or use to clients and colleagues of The Morrison Law Group and should not be construed as legal advice on any matter. 2

As many are aware, in Privette v. Superior Court (1993) 5 Cal.4ᵗʰ 869, the California
Supreme Court adopted a principle of non-liability holding that a person who hires an independent
contractor to do dangerous work is not liable when an employee of the independent contractor
suffers a work-related injury. Stated differently, the Courts have held that, "[g]enerally, when
employees of independent contractors are injured in the workplace, they cannot sue the
party that hired the contractor to do the work." See, SeaBright Insurance Co. v. US
Airways, Inc. (2011) 52 Cal.4ᵗʰ 590. The rule of non- liability was adopted essentially
for two reasons. First, workers compensation insurance usually provides exclusive remedy for
employees who are injured on the job. Second, by hiring an independent contractor, the theory
is the hirer implicitly delegates to the contractor any tort law duty owed to the
contractor's employees.

One issue that has arisen is whether the Privette Doctrine applies in a commercial landlord
situation. In the case of Laico v. Chevron USA, Inc. (2004) 123 Cal.App.4ᵗʰ 649, a Court of Appeal
ruled that an employee of an industrial contractor failed to show any
basis for finding the property owner liable for his injuries.

In a case involving significant damages, this issue came up in the matter of Zuniga
v. Che ry Avenue Auction, Inc. (2021) WL972881 ("Zuniga case"). The Zuniga case involved
the operation of an outdoor swap meet in Fresno. Cherry Avenue Auction, Inc. had operated that
outdoor swap meet on the same site in Fresno for over 40 years. W.D. & M.S. Mitchell Family
Limited Partnership owned the land on which the swap meet operated. Kinsman Enterprises,
LLC managed that property (those entities are herein referred to as the “Cherry Avenue
parties”). A couple, plaintiff Araceli Zuniga and her husband Jose Flores, rented two vendor
spaces at the Fresno swap meet. When they were setting up their booth in their spaces, a 28 foot
metal pole holding their advertising banner touched an overhead owerline. Both were electrocuted.
Mr. Flores died and Ms. Zuniga
was severely injured.

Ms. Zuniga filed suit against the Cherry Avenue parties. The jury found the Cherry
Avenue parties were 77.5% at fault and that Plaintiff's damages totaled $12,250,000. On appeal,
the Cherry Avenue parties contended they had no duty of care to the Plaintiff because
the danger presented by the overhead powerline was open and obvious and the Privette Doctrine
should be extended to protect them from liability.

The Cherry Avenue parties appealed.

As to the Privette Doctrine, the Court of Appeal acknowledged the holding in Laico v. Chevron
USA, Inc., but specifically ruled that the Supreme Court's adoption of the principal of
non-liability would not apply with respect to the swap meet. The Court explained that
the Court in Laico was not actually applying the Privette Doctrine to conclude that a
landlord owed no duty to the Plaintiff. The Court went on to hold that it would not be appropriate
to extend the Privette Doctrine to landlord/tenant relationships because doing so would
overturn established rules involving premises liability that governed a land possessor's duty
to third parties.

The Zuniga decision is in tension with the holding in Laico v. Chevron USA, Inc. and it remains
to be seen if the California Supreme Court will weigh in on the issue. Nonetheless,
the Zuniga decision will have important impacts insofar as commercial landlord disputes involving personal injury accidents.

About the Authors: Edward F. Morrison, Jr. is the founding partner and Larry A. Schwartz is Of
Counsel to The Morrison Law Group, a professional corporation. Their biographies can be viewed at
morrisonlawgroup.com.

Publication Note: The Morrison Law Group wishes to disseminate this publication to all clients and
colleagues of the Firm who wish to receive it. Should any recipient desire to be removed from the
distribution list, or wishes to have a colleague added, please contact Jim Van Dusen at The
Morrison Law Group at 213 356-5504.

Disclaimer Note: The legal article presented above is intended to provide general
information which may be of interest or use to clients and colleagues of The Morrison Law
Group and should not be construed as legal advice on any matter.

The Morrison Law Journal March 2021 Volume XVI, Edition 3 A Defeat for Commercial Landlords in Personal Injury Actions: Court of Appeal Refuses to Extend Privette Doctrine to Operator of Swap Meet By: Edward F. Morrison, Jr., Esq. Larry A. Schwartz, Esq.

The Morrison Law Journal
March 2021
Volume XVI, Edition 3

A Defeat for Commercial Landlords in Personal Injury Actions: Court of Appeal Refuses
to Extend Privette Doctrine to Operator of Swap Meet

By: Edward F. Morrison, Jr., Esq.
Larry A. Schwartz, Esq.