State Farm Fire & Cas. Co. v. JPC Group, Inc., 157 A.3d 1 (Pa. Commw. Ct. March 9, 2017)

Contractor retaining control over way it performs work and submits itemized invoices for work is an independent contractor, not an employee, under Pennsylvania Political Subdivision Tort Claims Act and not subject to immunity under Tort Claims Act.

The City of Philadelphia retained JPC Group, Inc. to demolish a property that had sustained fire damage so that the Fire Marshal could investigate the fire’s origin. During the demolition, the building collapsed outward, causing damage to the insured’s property. The plaintiff, the insurance carrier for the property, commenced a subrogation action against JPC, asserting negligence claims. JPC argued that it was immune from liability pursuant to the Pennsylvania Political Subdivision Tort Claims Act, 42 Pa.C.S. § 8541, et seq. The trial court found that JPC was acting as an employee of the City when the accident occurred and was, therefore, immune from liability. On appeal, the Commonwealth Court reversed this ruling, finding, as a matter of law, that JPC acted as an independent contractor, not an employee, on the day of the accident. Specifically, the Commonwealth Court found that the City retained JPC “[b]ecause it possessed ‘the equipment and the manpower and the experience’ to complete the work.” The fact that the Fire Marshal and other City employees oversaw the work for safety issues and provided direction was insufficient to render JPC an employee of the City. Instead, the Commonwealth Court found that JPC retained control over the manner in which it performed the work. Notably, the court noted that “exclusive control” was not necessary for a contractor to be deemed an independent contractor under the Tort Claims Act. The Commonwealth Court further found that JPC’s submittal of itemized bills to the City supported the existence of an “owner-independent contractor relationship,” not an employer-employee relationship. Thus, the case was remanded to the trial court for a new trial. 


Case Law Alerts, 3rd Quarter, July 2017

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