1 1 DATE OF PRESENTATION CRANE OPERATIONS IN CONSTRUCTION: REGULATIONS, STANDARDS, AND LIABILITY...

1111DATE OF PRESENTATIONDATE OF PRESENTATION

CRANE OPERATIONS IN CRANE OPERATIONS IN CONSTRUCTION: REGULATIONS, CONSTRUCTION: REGULATIONS,

STANDARDS, AND LIABILITYSTANDARDS, AND LIABILITY

Presented by:Presented by:David A. JohnsonDavid A. Johnson

SmithAmundsen LLCSmithAmundsen LLC

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David JohnsonDavid Johnson

David is a partner in SmithAmundsen’s Chicago office. For over twenty years, he has focused his practice on construction law issues, representing commercial and residential owners, developers, architects, construction managers, general contractors, and specialty subcontractors. David has extensive experience in defending property damage, personal injury, and construction defect claims in mediation, arbitration and litigation. He has prosecuted and defended mechanics lien claims.

David focuses a segment of his practice on crane accidents involving personal injury, property damage, and product liability. He has extensive training in crane and rigging safety and inspection and is a CIC Certified Rigging/Signalperson. He has presented webinars and seminars on OSHA’s new crane regulations and the ASME B.30.5-2007 mobile crane standards with respect to compliance and responsibilities.

David is admitted to practice in the State of Illinois, and the United States District Courts for the Northern District of Illinois, the Eastern District of Wisconsin, and the Eastern District of New York. He is a member of the Federal Trial Bar.

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Facts

Crane accidents:

-are relatively more serious than other construction equipment accidents.

-are the most costly in terms of insurance claims and lawsuits.

-result in more construction fatalities than any other single cause.

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Construction Fatalities

One out of every five construction deaths is

crane-related!

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Causes of Mobile Crane Fatalities

RiggingRigging15%15%

ElectrocutionElectrocution44%44%

Miscellaneous 3%Miscellaneous 3%

Struck by Crane 3%Struck by Crane 3%

Wire Rope Failure 3%Wire Rope Failure 3%

Dismantling Boom 5%Dismantling Boom 5%

Overload 7%Overload 7%

OperatorOperatorError 7%Error 7%

Load Handling Load Handling 14%14%

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Main Causes ofMobile Crane Accidents

Support FailureSupport Failure31.5%31.5%

Operator ErrorOperator Error33.1%33.1%

Failure to UseFailure to UseOutriggersOutriggers

22.6%22.6%

Machinery &Machinery &Structural FailureStructural Failure

11.2%11.2%

High WindHigh Wind1.6%1.6%

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Codes and

Standards

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What is a code?

A code is a standard that has been adopted by one or more governmental bodies and has the force of law.

OSHA is a standard adopted by the United States Department of Labor.

OSHA 1926.1400 is a standard that pertains to cranes in construction and became effective November 8, 2010.

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What is a standard?

Standards are written by experts in the field and represent the most current thinking or custom and practice in an industry.

Standards are voluntary and do not have the force of law unless adopted by a governmental body.

ASME B30.5-2007 is a standard that pertains to mobile cranes, and was promulgated by the American Society of Mechanical Engineers.

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RESPONSIBILITIES UNDER OSHA 1926.1400 AND ASME B30.5-2007

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Looking Back…

In 1970 the Occupational Safety and Health Act (OSHA) was promulgated by the federal government requiring employers to provide a safe workplace. In construction it is titled CFR 1926 Construction Industry Standards.

At that time, the government found it effective and timely to incorporate into the regulations certain industry developed consensus standards.

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Looking Back…

One of the many standards adopted by reference in CFR 1926 was the ASME B30.5 1968 standard for Crawler, Locomotive, and Truck Cranes.

By incorporating ASME B30.5-1968 into CFR 1926, it became law and could be enforced and cited by compliance officials.

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Looking Back…The first B30 committee was organized on November 4, 1924.

Due to changing technology, and the interests of labor and industry in safety, the B30.5 sub-committee was formed in January of 1962.

On May 14, 1968, the first B30.5 standard was published.

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Looking Back…

B30.5-1968, Chapter 5-3 Operation, Section 5-3.1.3(d) provided:

“The operator shall be responsible for those operations under his direct control. Whenever there is any doubt as to safety, the operator shall have the authority to stop and refuse to handle loads until safety has been assured.”

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Looking Back…

In 1989, Section 5-3.1.3(d) of B30.5 was changed to read:

“Each operator shall be held responsible for those operations under the operator’s direct control. When there is any doubt as to safety, the operator shall consult with the supervisor before handling the loads.”

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Looking Back…

Beginning in the early 80s, experts in the crane industry, began assigning responsibilities for crane operations on construction sites.

The impetus for this was an increase in the number of crane accidents, the perceived need for better trained operators, and changes in technology.

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Donald E. Dickie: Mobile Crane Manual

In 1982, Donald E. Dickie wrote the Mobile Crane Manual. Dickie worked for the influential Construction Safety Association of Ontario that was instrumental in the development of training programs for of crane operators. Crane experts retained in litigation still rely on Dickie for his opinions on responsibilities. Reprinted from Mobile Crane Manual by permission of Infrastructure Health and Safety Association, Ontario, Canada.

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Dickie: Responsibilities in General

Because of the complexity of most crane operations and because they can differ so much from one job to the next, no single set of guidelines can ever cover all the parameters involved but the following listing can be applied to most situations.

The really important thing to remember is that it is crucial that all responsibilities be spelled out to everyone involved in the operation before it begins.

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Dickie: Controlling and Directing Entities

Partial List of Responsibilities of Controlling or Directing Entities for Pre-Lift Site Preparations:

The company controlling or directing the crane operation must, through their project engineer, superintendent or foreman, provide a well prepared working area for the crane.

They must ensure that:

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Dickie: Controlling and Directing Entities

-Operating locations are far enough away from shoring, excavations, trenches, buried utilities, foundations, etc. to eliminate risk of collapse.-Whenever possible, operating locations are graded, level and compacted.-Operating locations are chosen so that the minimum clearances from power lines are maintained. If not, the power lines must be either shut down or relocated by the utility so that contact cannot be made. -Competent signalmen are available on site to assist in each lift.-Rigging crews are competent and know the weight of all lifts to be made.

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Dickie: Crane Owner’s Responsibilities

Partial List of Crane Owner’s Responsibilities:

The crane owner (including all management and supervisory personnel employed by the owner) is responsible for the identification and assignment of specific responsibilities to the operating crews including:

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Dickie: Crane Owner’s Responsibilities

Ensuring that the operator is competent.

Ensuring that all personnel involved in maintaining, repairing, transporting, preparing, assembling and operating the equipment are competent.

Ensuring that a thorough crane maintenance and inspection program is established and maintained.

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Dickie: Crane Operator’s Responsibilities

Partial List of Crane Operator’s Responsibilities:

The operator is generally responsible for the safety of the crane operation as soon as the load is lifted clear of the ground. Because of this responsibility, whenever there is a reasonable cause to believe that the lift might be dangerous or unsafe, the operator must refuse to lift until the concern has been reported to the supervisor, any hazards rectified, and safe conditions assured.

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Dickie: Crane Operator’s Responsibilities

The crane operator is also generally responsible for:

Being familiar with the information contained in the crane's operating manual.

Being familiar with the crane's load chart.

Being aware of any site conditions that could affect the crane operation, e.g., power lines.

Knowing basic load rigging procedures.

Maintaining communication with signalpersons.

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Dickie: Site Supervision’s Responsibilities

Partial List of Site Supervision’s Responsibilities:

The site supervision (foreman, rigger foreman or lead hand of the trade group involved) has overall responsibility for the lift, and therefore must plan all phases of the operation. This includes all factors of site preparation.

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Dickie: Site Supervision’s Responsibilities:

Ensuring that the load is properly rigged.

Ensuring that the signalpersons are competent and capable of directing the crane and load.

Designating signalpersons and identifying them to the operator.

Ensuring that all required safety precautions are taken when the lift is in the vicinity of power lines.

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Dickie: Site Supervision’s Responsibilities

Site supervision is also generally responsible for:

Overall responsibility for the lift and all phases of the operation.

Supervising all work involving the crane.

Supervising the rigging crew.

Ensuring that the rigging crew is experienced and competent.

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Howard I. Shapiro: Cranes and Derricks

In 1991, Howard I. Shapiro wrote Cranes and Derricks.

Reprinted from Cranes and Derricks, by permission of Lawrence K. Shapiro. All rights reserved.

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Shapiro: Responsibilities in General

There may be a number of independent parties taking part in one lifting operation.

Parties will vary depending on the nature and complexity of the operations.

No single set of guidelines can cover all situations.

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The parties that may be involved in lifting operations are:

Project Management—the party controlling the overall operations which may include activities other than lifting work; the project owner is included.

Lift Director—the person directing the lifts and the personnel involved in the lifts.

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Crane Owner/Supplier—the party furnishing the crane, who may not have involvement in the use of the equipment at the site.

Site Supervision—the party supervising the people at the site which may include people not involved with the lifting work; this party may also be the lift director.

Crane Operator—the person at the controls of the crane.

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Shapiro: Project Management”s Responsibilities

Partial List of Project Management’s Responsibilities:

Arrange for site conditions necessary for proper lifting operations, in conjunction with Site Supervision.

Cooperate with Site Supervision in measures concerning electrical hazards when there are power lines present on the site.

Advise Site Supervision of the presence of underground utilities and sub-surface construction.

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Shapiro: Crane Owner’s/Supplier’s Responsibilities

Partial List of Crane Owner’s/Supplier’s Responsibilities:

Furnish a crane or derrick in proper condition and properly maintained.

Furnish a crane to satisfy the capacity requirements given by Site Supervision.

Have maintenance and repair records available in needed.

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Shapiro: Crane Owner’s/Supplier’s Responsibilities

Furnish a crane complete with applicable load charts, operator's manual, etc.

Furnish competent personnel to assist in assembly and disassembly.

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Shapiro: Site Supervision’s Responsibilities:

Partial List of Site Supervision’s Responsibilities:

Visit the site to obtain first hand knowledge of conditions; particularly note power lines, obstructions, and limitations on access and operating areas.

Brief the Lift Director on selection of the lifting equipment, and potential hazards and their remedies, particularly for operations in the vicinity of power lines and the lifting of personnel.

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Shapiro: Site Supervision’s Responsibilities

Check with Project Management for the existence of underground utilities and sub-surface construction.

Monitor the Lift Director concerning training and competence of personnel and for adherence to safety laws, rules, and standards.

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Shapiro: Site Supervision’s Responsibilities

Verify that the crane operating area is suitable with respect to levelness, surface condition (compaction), proximity to slopes, power lines, underground utilities, sub-surface construction, and obstructions to crane operation.

For operations in the vicinity of power lines, verify that all concerned parties are instructed in OSHA and ASME/ANSI B30.5 requirements for operational safety.

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Shapiro: Lift Director’s Responsibilities

Partial List of Lift Director’s Responsibilities:

Locate and identify site hazards such as electric power lines and piping (above and below ground) together with Site Supervision.

Review operations with the crane operator and lift crew; discuss limitations of the equipment, potential hazards and measures that are to be taken to minimize risk.

Verify that the riggers are experienced in slinging loads and in selecting suitable slings and fittings, when appropriate.

When operations will be in the vicinity of power lines, see to it that all concerned parties are instructed in OSHA and ASME/ ANSI B30.5 requirements for operational safety.

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Shapiro: Lift Director’s Responsibilities

Establish proper communications between the operator, crew and signal person, such as the use of hand signals, radios, etc.

If needed, assign competent signal person(s), experienced in crane operations and in hand signals, and verifying that they are positioned where most effective.

Check that proper slings, fittings, and lift accessories are at hand and that they are in acceptable condition.

Supervise the installation of the rigging on the load and hook.

Verify that the crane is level and blocked, if appropriate, and positioned in the proper location.

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Shapiro: Crane Operator’s Responsibilities


Understand the crane’s operating manual.

Know how to use crane’s load chart, and verify that the crane has sufficient net capacity for the lift.

Be aware of any site condition that could affect the crane operation, e.g., the presence of power lines.

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Shapiro: Crane Operator’s Responsibilities

Inspect the crane or derrick and perform routine maintenance regularly.

Review the planned operation and requirements with the Lift Director.

Check the load chart to verify that the crane has sufficient net capacity for the lift.

Understand basic load rigging procedures.

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ASCE: CRANE SAFETY ON CONSTRUCTION SITES

In 1998, the American Society of Civil Engineers wrote Report No. 93 on Crane Safety on Construction Sites. The impetus for the report resulted from the collapse of a tower crane in San Francisco on November 28, 1989. Five people were killed and twenty-two insured in that accident. Reprinted from Crane Safety on Construction Sites by permission of ASCE. All rights reserved.

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ZONES OF RESPONSIBILITY

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The Present-ASME B30.5-2007

In May of 2007 ASME published the first B30 volume that defined responsibilities and delineated the roles of parties engaged in the crane industry. It was a culmination of work with a tedious process that that took about 10 years to complete.ASME B30.5 was revised in 2007, issued on March 7,2008, and became effective March 7, 2009.

Reprinted from ASME B30.5-2007, by permission of The American Society of Mechanical Engineers. All rights reserved.

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Chapter 5.3-Responsibilities in General

5-3.1.3 Responsibilities:

While the organizational structure ofvarious projects may differ, thefollowing roles are described here forpurposes of delineatingresponsibilities. All responsibilitieslisted below shall be assigned in thework site organization. (A single individual may perform one or more ofthese roles)

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Chapter 5-3-Responsibilities in General

CRANE OWNER: Has custodial control of a crane by virtue of lease or ownership.

CRANE USER: Arranges the crane’s presence on a worksite and controls its use there.

SITE SUPERVISOR: Exercises supervisory control over the work site on which a crane is being used and over the work which is being performed on that site.

LIFT DIRECTOR: Directly oversees the work being performed by a crane and the associated rigging crew.

CRANE OPERATOR: Directly controls the crane’s functions.

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Chapter 5.3-Crane Owner’s Responsibilities

Partial List of Crane Owner’s Responsibilities:

Providing a crane and all necessary components, specified by the manufacturer, that meets the Crane User's requested configuration and capacity.

Providing all applicable load/capacity chart(s) and diagrams.

Providing additional technical information pertaining to the crane, necessary for crane operation, when requested by the Crane User.

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Chapter 5.3-Crane Owner’s Responsibilities

Providing field assembly, disassembly, operation, maintenance information, warning decals and placards installed as prescribed by the crane manufacturer.

Establishing an inspection, testing, and maintenance program.

Using personnel that meet the requirements for a designated person for the purposes of maintenance, repair, transport, assembly and disassembly.

Using personnel that meet the requirements for a qualified or designated person for inspections.

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Chapter 5.3-Crane User’s Responsibilities

Partial List of Crane User's Responsibilities:

Using supervisors for crane activities that meet the requirements for a qualified person.

Ensuring that the crane is in proper operating condition prior to initial use at the worksite.

Verify that the crane has the necessary lifting capacity.

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Chapter 5.3-Crane User’s Responsibilities

Using crane operators that are qualified to perform the tasks that will be required with the crane which they are assigned to operate.

Using personnel that meet the requirements for a qualified or designated person.

Using personnel that meet the requirements for a designated person for the purposes of maintenance, repair, transport, assembly and disassembly.

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Chapter 5.3-Site Supervisor’s Responsibilities

Partial List of Site Supervisor's Responsibilities:

Ensuring that a qualified person is designated as the Lift Director.

Ensuring that crane operations are coordinated with other job site activities that will be affected by or will affect lift operations:

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Coordination includes but is not limited to:

Access roads for the crane and associated equipment.

Sufficient room to assemble and disassemble the crane.

An operating area that is suitable for the crane with respect to levelness, surface conditions, support capability, proximity to power lines, excavations, slopes, underground utilities, subsurface construction and obstructions to crane operation.

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Ensuring that work involving the assembly and disassembly of a crane is supervised by a qualified person.

Ensuring that crane operators meet ASME requirements.

Ensuring that conditions which may adversely affect crane operations are addressed. Such conditions include but are not limited to:

• Poor soil conditions• Wind velocity or gusting winds• Heavy rain• Fog• Extreme Cold• Artificial lighting

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Allowing crane operation near electric power lines only when the ASME requirements have been met.

Ensuring that work performed by the rigging crew is supervised by a qualified person.

Ensuring that crane maintenance is performed by a designated person.

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Chapter 5.3-Lift Director’s Responsibilities

Partial List of Lift Director's Responsibilities:

Being present at the jobsite during lifting operations.

Stopping crane operations if alerted to an unsafe condition affecting those operations.

Ensuring that the preparation of the area needed to support crane operations has been completed before crane operations commence.

Know limitations of protective measures against electrical hazards.

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Ensuring that personnel involved in crane operations understand their responsibilities, assigned duties and the associated hazards.

Addressing safety concerns raised by the operator or other personnel and being responsible if he decides to overrule those concerns and directs crane operations to continue. In all cases, the manufacturer's criteria for safe operation and the requirements of this volume shall be adhered to.

Appointing the signal person(s) and conveying that information to the crane operator.

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Ensuring that signal person appointed meets the requirements of Section 5-3.3.

Allowing crane operations near electric power lines only when the ASME requirements, and any additional requirements determined by the Site Supervisor have been met.

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Informing the crane operator of the weight of loads to be lifted, as well as the lifting, moving and placing locations for these loads and obtain the operator's verification that this weight does not exceed the crane's rated capacity.

Ensuring that a crane's load rigging is performed by designated personnel.

Ensuring that the load is properly rigged and balanced before it is lifted more than a few inches.

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Chapter 5.3-Crane Operator’s Responsibilities


The operator shall be responsible for the following listed items. The operator shall not be responsible for hazards or conditions that are not under his direct control and that adversely affect the lift operations.

Whenever the operator has doubt as to the safety of crane operations, the operator shall stop the crane's functions in a controlled manner. Lift operations shall resume only after safety concerns have been addressed or the continuation of crane operations is directed by the Lift Director.

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Reviewing the requirements for the crane with the Lift Director before operations.

Knowing what types of site conditions could adversely affect the operation of the crane and consulting with the Lift Director concerning the possible presence of these conditions.

Understanding The information contained in the crane manufacturer's operating manual.

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Using the crane’s load/capacity chart(s) and diagrams and applying all notes and warnings related to the charts.

Refusing to operate the crane in "Prohibited Zone" of power lines.

Performing a daily inspection.

Not engaging in any practice that will divert his attention while actually operating the crane controls.

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Calculating or determining the net lifting capacity and verifying that the crane has sufficient net capacity for the proposed lift.

Knowing the standard and special signals and responding to such signals from the appointed signal person.

The operator shall obey a stop signal at all times, no matter who gives it.

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The Present-OSHA 1926.1400

The Occupational Safety and Health Act (OSHA) of 1970 created a regulation for Cranes in 29 CFR 1926.550 adopting industry consensus standards like ASME B30.5 1968.

In July of 2003, 23 members of the industry were selected and met 11 times until July of 2004 titled CDAC.

October 2006 ACCSH recommended that OSHA use the document CDAC created as a basis for the proposed rule.

OSHA issues a proposed rule in October 2008.

In August 2010, OSHA publishes the Final Rule, which became effective on November 8, 2010.

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Selected Topics in OSHA 1926.1400

1926.1400 Scope 1926.1402 Ground Conditions 1926.1403-1406 Assembly/Disassembly 1926.1407-1411 Power Line Safety 1926.1412 Inspections 1926.1413-1414 Wire Rope 1926.1415 Safety Devices 1926.1416 Operational Aids 1926.1418 Authority To Stop Work 1926.1427 Operator Qualification and Certification 1926.1428 Signalperson Qualifications

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Responsibilities in General under OSHA 1926.1400

Note: The discussion of responsibilities under OSHA 1926.1400 relies in great part on the informative and insightful article written by Deborah I. Hollander, a shareholder of Sheak & Korzun, P.C., Pennington, New Jersey, entitled “New OSHA Safety Rules for Crane and Derrick Operations” appearing in The Construction Lawyer (Winter 2011), reprinted by permission of the author. All rights reserved.

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Responsibilities in General under OSHA 1926.1400

OSHA creates responsibilities for four

categories of entities that are directly regulated under the1926.1400., which OSHA claims it may hold responsible for violations: o Employerso Controlling Entitieso Users of Equipmento Utility Company Owners/Operators

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OSHA 1926.1400-Employers’ Responsibilities

Responsibilities of Employers:

Under the new regulation, OSHA uses the term employer primarily to include:

-employers whose employees deal directly with cranes, and

-employers whose employees work in the vicinity of cranes.

These employers are subject to all provisions of the rules.

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OSHA 1926.1400-Controlling Entities’ Responsibilities

Responsibilities of Controlling Entities:

OSHA 1926.1402 assigns controlling entities specific responsibilities for ensuring that ground conditions necessary for cranes on construction sites are safe.

OSHA defines a controlling entity as “an employer that is a prime contractor, general contractor, construction manager or any other legal entity which has the overall responsibility for the construction of the project.”

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OSHA requires the "controlling entity" to (1) ensure that ground preparations necessary to ensure the ground is firm, drained, and graded are sufficient, and

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(2) inform the user of the equipment and the operator of the location of hazards beneath the equipment setup area (such as voids, tanks, utilities), if those hazards are identified in documents (such as site drawings, as-built drawings, and soil analyses) that are in the possession of the controlling entity (whether at the site or off-site) or the hazards are, otherwise, known to that controlling entity.

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OSHA 1926.1400-User of Equipment’s Responsibilities

OSHA uses the phrase "User of the equipment" to refer to the employer that is using or directing the use of the crane equipment to perform a task.

The user of equipment is the one whom the "controlling entity" must notify of hazards in the ground conditions beneath the crane operation and setup areas."

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OSHA 1926.1400-User of Equipment’s Responsibilities

When crane operations must come close to electrical lines, "the equipment user and utility owner/operator (or registered professional engineer) meet with the equipment operator and the other workers who will be in the area of the equipment or load to review the procedures that will be implemented to prevent breaching the minimum approach distance... and prevent electrocution."

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OSHA 1926.1400-Crane Employer’s and Utility Company’s/Operator’s Responsibilities

In order to determine and carry out safety procedures around power lines, OSHA requires employers (presumably employers whose employees deal directly with cranes) to ask the utility owner/ operator for the voltage information, and the utility owner/operator of the line is required to provide the voltage information within two working days of the request.

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Legal Implications of Extension of Responsibilities for Crane Safety on Construction Sites under OSHA 1926.1400 and ASME B30.5-2007

The OSHA regulations and ASME standards are likely to have major impacts on civil liability.

The OSHA statute explicitly states that it neither expands nor limits common law, worker compensation, or other statutory law on employer-employee relations or liability.

Most jurisdictions recognize that violations of OSHA regulations or ASME standards are evidence that can be used to establish a claim of negligence.

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Legal Implications of Extension of Responsibilities for Crane Safety on Construction Sites under OSHA 1926.1400 and ASME B30.5-2007

Examples of potential exposures for violations of OSHA:

o Uncertified-Crane Operatorso Unqualified Lift Directorso Untrained and Untested-Signalpersonso Unqualified Riggerso Unqualified Assembly/Disassembly Directorso Incompetent Inspectorso Prohibited Zone Encroachment around Power Lineso Unsafe Ground Conditions

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Assigning Responsibilities for OSHA Regulations and ASME Standards

Apportionment of responsibilities varies with the complexity of the job.

Major projects with extensive crane and rigging work.

Minor projects with incidental crane use.

Roles combined in practice and under ASME on smaller projects result in a greater burden on the crane operator.

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Lists furnished in ASME B30.5-2007 cover responsibilities for all parties potentially involved in lifting operations.

Lists need to be calibrated to the scale of the operation and adjusted for organizational differences.

Responsibilities should be discussed, incorporated in contract language and crane rental agreements, and become part of discussions about crane hire.

All responsibilities listed must be assigned to an appropriate party in the work site organization.

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For projects not yet under contract, the allocation of responsibilities under OSHA and ASME should be considered.

All entities whose operations may require cranes should try to have their contracts identify a "controlling entity" for the crane safety regulations.

This should prevent OSHA from trying to allot "controlling entity" responsibility to several different employers, and will reduce the possibility that the "controlling entity" responsibilities will fall through the cracks.

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Crane Accident—Case Study

The Accident The Complaint The Counterclaims The Contracts Crane Lessee’s Motion for Summary

Judgment The Court’s Ruling on Crane Lessee’s

Motion The Experts’ Opinions

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Crane Owner’s Complaint

Count I-Breach of Contract v. Crane Lessee Count II-Quantum Meruit v. Crane Lessee Count III-Negligence v. Crane Lessee Count IV-Negligence v. General Contractor

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Crane Owner’s Complaint

Damages sought ($350,000 plus attorney’s fees):

Rental amount of the crane and crane operator.

All damage to the crane.

Lost crane rental income while crane being repaired.

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General Contractor’s Counterclaim

Count I-Contribution v. Crane Owner No claim v. crane lessee because

general contractor covered as an additional insured under crane lessee’s GL policy

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Crane Lessee’s Counterclaim v. Crane Owner

Count I-Breach of Contract

Count II-Failure to Indemnify and

Procure Insurance

Count III-Negligence

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Crane Lessee’s Contract with Crane Owner

No delegation of responsibility for inspection and investigation of ground conditions to crane owner in either the subcontract agreement between the crane lessee and crane owner or in the pass through obligations to the crane owner in the contract between the general contractor and the subcontractor.

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Crane Owner’s Crane Rental Agreement with Crane Lessee

Terms and Conditions of Contract provided:

CONDITIONS-GROUND/POWER LINES/RIGGING – The lessee hereby agrees that it will assume all responsibility for the ground or soil conditions in the area where the crane is to be stored, parked or operated. The lessee shall perform or have performed all necessary inspections or testing to determine the nature of the ground or soil and its ability to support the crane while in operation or otherwise. If the ground or soil condition is such that it cannot support the crane, the lessee shall take all necessary measures to insure that these conditions are remedied prior to the crane being placed on that ground or soil.

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Crane Lessee’s Motion for Summary Judgment

Argument:

Crane owner’s claim for breach of contract fails because the claim is based on an invalid contract.o Not supported by consideration.o Not a modification of lessee-crane owner

contract because no consideration to support modification.

Quantum Meruit fails because of the existence of an express contract.

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Crane Lessee’s Motion for Summary Judgment

Negligence claim fails because:

Contract does not establish the duties that the crane owner alleges that lessee assumed.

Negligence claim is barred by the economic loss doctrine.

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Court’s Ruling on Motion for Summary Judgment

Crane Rental Agreement is a valid contract, because it is supported by consideration

If no consideration, crane rental agreement, is a modification of the original lessee-crane owner contract and no additional consideration is necessary.

Economic loss doctrine does not apply because calamitous event and damage to other property.

Quantum meruit claim is dismissed, because of existence of express contract.

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Whose negligence is implicated under OSHA 1926.1400?

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OSHA 1026.1402-Controlling Entity

OSHA 1926.1402 defines “controlling entity” as employer that is a general contractor. That would make the general contractor in this case responsible for ground conditions.

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Whose negligence is implicated under

ASME B30.5-2007?

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ASME B30.5-2007-Chapter 5-3- Supervisor’s/Lift Director’s Responsibilities

Site Supervisor and/or the Lift Director is responsible for ensuring that the area for the crane is adequately prepared. This preparation includes, but is not limited to, the following:

o An operating area that is suitable for the crane with respect to levelness, surface conditions, support capability, proximity to power lines, excavations, slopes, underground utilities, subsurface construction and obstructions to crane operation

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ASME B30.5-2007-Chapter 5-3- Lift Director’s Responsibilities

Ensuring that the preparation of the area needed to support crane operations has been completed before crane operations commence.

These provisions would make the general contractor and crane lessee, as Lift Director, responsible for ground conditions.

Don’t forget Dickie, Shapiro, and ASCE.

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Crane Owner’s Expert’s Opinions

The general contractor and subcontractor failed to comply with industry customs, practices, and standards.

o Over the last nearly 30 years, industry publications have consistently placed the responsibility for the determination and verification of underground conditions on the general contractor and the subcontractor who ordered the crane.

o The American Society of Mechanical Engineers has been publishing these industry standards since 1982.

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The 1982, 2004, and 2007 versions of the ASME B30.5 publications specifically state that decisions concerning ground support are part of the analysis required by the general contractor and subcontractor who ordered the crane.

Moreover, it provides that the general contractor and subcontractor who ordered the crane to ensure that the area for the crane operation is adequately prepared, including providing an "operating area that is suitable for the crane with respect to levelness, surface conditions, support capability, proximity to power lines, excavations, slopes, underground utilities, subsurface construction and obstructions to crane operation."

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In 2010, OSHA published certain regulations and practices related to the determination of ground conditions for crane operations. 29 CFR 1926.1402.

OSHA 1926.1402 is consistent with the standards and practices in the crane rental and construction industries since at least the early 1970's when I began operating cranes. In other words, the OSHA regulations memorialize the practices, customs and standards recognized in the crane and construction industries for at least the last 39 years.

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Based upon the documents, depositions and photographs reviewed and gathered related to this project, it is absolutely clear that neither the general contractor nor the subcontractor did anything to ensure that the ground conditions at the project would support the crane operation they intended to perform in order to complete the construction project.

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General Contractor’s and Crane Lessee’s Experts’ Opinions

Essentially both experts relied on custom and practice in the industry to make the crane owner responsible for ground conditions, and ignored OSHA-2010 and ASME-2007, which thinking on the responsibility for ground conditions was expressed prior to the time of the accident according to the history of OSHA (C-DAC) (2004), ASME (1997), and the opinions expressed by the industry experts beginning in 1982.

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STRATEGIES FOR DEFENDING

NEGLIGENCE CLAIMS AGAINST CRANES

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Crane Rental Agreement-Delegation Responsibilities

Crane Owner-Delegate responsibility for ground conditions to crane lessee as discussed above.

Crane Owner-Delegate responsibility for qualified riggers and signalpersons to crane lessee.

Delegation of other responsibilities in construction documents, e.g., designation of the controlling entity.

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Crane Rental Agreement-Additional Insured Coverage

In the Crane Accident Case Study, the Crane Rental Agreement required the lessee to name crane owner as an additional insured under the lessee’s general liability policy.

Crane owner tendered its defense of the counterclaim filed by the lessee to the lessee’s general liability carrier.

After a year-and- a-half, the lessee’s insurer accepted the tender and agreed to defend the crane owner, and pay all defense costs incurred from the date of tender.

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Crane Rental Agreement-Loaned Servant Doctrine

It is expressly agreed by and between the parties hereto that the equipment and all persons operating, repairing, or maintaining the equipment are under the exclusive jurisdiction, supervision and control of lessee. It shall be the duty of Lessee to give specific instructions and directions to all persons operating, repairing, and maintaining the leased equipment. Lessee specifically agrees that the lessor has absolutely no control over any person operating or assisting in operating, repairing, or maintaining the leased equipment. Lessor may provide an operator with the equipment. Lessee may reject this operator; however, if operator is not rejected, the operator is under the lessee’s exclusive direction and control and is lessee’s agent, servant, and employee.

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Crane Rental Agreement-Loaned Servant Doctrine

The lease payments made by the lessee shall include the operator’s wages, even though the operator’s wages may be disbursed by the lessor. This lease is upon the agreement of the parties that the lessor has no right to replace or substitute personnel except at the direction of and with the approval of lessee and that the lessee shall have the right to control, including the right of termination, and shall be deemed to have exercised that right as to all details or operation of the leased equipment and personnel the lessee selects to operate the leased equipment.

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Crane Rental Agreement-Partial Indemnity

Lessee agrees to partially indemnify and save lessor, its employees and agents harmless from claims for death or injury to persons, including lessor's employees, of loss, damage or injury to property, including the equipment, arising in any manner out of lessee's operation. Lessee's duty to partially indemnify thereunder shall include costs or expenses arising out of claims specified herein, including all court and/or arbitration costs, filing fees, attorneys' fees and costs of settlement. Lessee shall not be required to indemnify lessor for lessor's own negligence. However, the partial indemnification obligation under the above paragraph shall not be limited in any way by any limitation on the amount or type of damage, compensation, or benefits payable by or for the lessee under worker's compensation acts, disability benefit acts, or other employee benefit acts.

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YOUR QUESTIONS?YOUR QUESTIONS?

If you do not have the opportunity to have your question addressed during the Seminar, you may contact the presenter directly:

David A. JohnsonSmithAmundsen LLC [email protected] 312-894-3336

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