Steward v. McDonald

William T. STEWARD and Jeannine G. Steward v.
Jerry Eugene McDONALD and Professional
Services Industries, Inc.

97-137                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
               Opinion delivered December 18, 1997


1.   Landlord & tenant -- duty to repair. -- Under the common-law rule,
     a lessor owes no duty to the lessee to repair the premises;
     however, a lessor can be held liable where he agrees to
     undertake the repairs.

2.   Landlord & tenant -- landlord's liability for physical harm caused to
     tenant and others. -- A landlord is subject to liability for
     physical harm caused to the tenant and others upon the leased
     property with the consent of the tenant or his subtenant by a
     condition of disrepair existing before or arising after the
     tenant has taken possession if: (1) the landlord, as such, has
     contracted by a promise in the lease or otherwise to keep the
     leased property in repair; (2) the disrepair creates an
     unreasonable risk to persons upon the leased property which
     the performance of the landlord's agreement would have
     prevented; and (3) the landlord fails to exercise reasonable
     care to perform his contract.

3.   Landlord & tenant -- no legal obligation to tenant for injuries sustained
     in common areas absent statute or agreement. -- A landlord is under no
     legal obligation to a tenant for injuries sustained in common
     areas, absent a statute or agreement; a party who gratuitously
     undertakes a duty can, however, be liable for negligently
     performing that duty; a duty can also arise, in certain
     circumstances, under the terms of a lease between a landlord
     and tenant.

4.   Statutes -- not taken in derogation of common law unless act shows
     legislative intent. -- Statutes will not be taken in derogation of
     the common law unless the act shows that such was the intent
     of the legislature; the supreme court strictly construes
     statutes that impose duties or liabilities unknown at common
     law in favor of those upon whom the burden is sought to be
     imposed, and nothing will be taken as intended that is not
     clearly expressed.

5.   Landlord & tenant -- no legislative intent to impose greater liability on
     owner of workplace than on employer. -- Reading Ark. Code Ann.  11-
     2-117(b) (Repl. 1996) in conjunction with Ark. Code Ann.  11-
     2-102(1) (Repl. 1996), the supreme court could not ascertain
     a legislative intent to impose greater liability on an owner
     of a place of employment than that imposed on an employer;
     applying the rules of strict construction, the court could not
     say that the legislature plainly intended that the
     responsibility for a safe workplace should be greater on an
     owner of a place of employment than it is on an employer, who
     may be penalized under the statute for having an unsafe
     workplace under its control or custody.

6.   New trial -- when order granting motion may be reversed. -- The
     appellate court will reverse a trial court's order granting a
     motion for a new trial only if there is a manifest abuse of
     discretion; a clearly erroneous interpretation of the law or
     a clearly erroneous application of a law or rule can
     constitute such manifest abuse of discretion.

7.   Landlord & tenant -- no duty under which to impose liability on appellants
     as landlords -- misinterpretation of law constituted abuse of discretion -
     - order granting new trial reversed -- appeal dismissed. -- The supreme
     court held that, without an assumption of responsibility for
     repairs, there was no common-law duty under which it could
     impose liability on appellants, as landlords, to provide a
     safe workplace for the employees of their tenant and that none
     was created by the statute; the court concluded that the trial
     court misinterpreted Ark. Code Ann.  11-2-117 in its order
     granting a new trial, and that this misinterpretation of the
     law constituted a manifest abuse of discretion; the court
     reversed the trial court's order granting a new trial and
     dismissed the appeal.


     Appeal from Crawford Circuit Court; Don Langston, Judge;
reversed and dismissed.
     Warner, Smith & Harris, PLC, by: Joel D. Johnson, for
appellants.
     Eddie H. Walker, Jr., and Stephen M. Sharum, for appellee
Jerry Eugene McDonald.

     Ray Thornton, Justice.
     The issue in this case is whether a landlord owes a duty of
care to his tenant's employees.  Appellants William T. Steward and
Jeannine G. Steward ("Landlords") leased a building to appellee
Professional Services Industries, Inc. (PSI).  PSI employed
appellee Jerry Eugene McDonald, who was injured when a riser broke
while he was carrying boxes weighing approximately 120 pounds up a
flight of stairs in the leased building.  The stairway did not have
a handrail at the time the injury occurred.  After the accident,
McDonald received benefits under the Arkansas Workers' Compensation
Act.
     McDonald filed a complaint against the Landlords, alleging
that they had failed to maintain, repair, and construct the
stairway in violation of our general unsafe-place-to-work statute,
Ark. Code Ann.  11-2-117 (1987), and that the Landlords were
negligent in failing to provide guardrails, toeboards, and
handrails as required by OSHA.  McDonald later amended his
complaint to allege violations of the Arkansas Department of Labor
Basic Safety Manual.  The Landlords then filed a third-party
complaint against PSI, as the tenant, based on the principle of
implied indemnification.  The Landlords and PSI both filed motions
for summary judgment.  The trial court granted summary judgment in
favor of PSI; however, it denied the Landlords' motion, and
McDonald's claim against them proceeded to trial.  The jury
returned a general verdict in favor of the Landlords.  
     McDonald then filed a motion for new trial, on the basis that
the verdict was "clearly contrary to the preponderance of the
evidence or . . . contrary to the law."  Ark. R. Civ. P. 59(a)(6). 
The trial court premised its order granting a new trial on its
interpretation of our general unsafe-place-to-work statute, Ark.
Code Ann.  11-2-117 (Repl. 1996), which states in pertinent part:
     Every employer and every owner of a place of
employment, place of public assembly, or public building,
now or hereafter constructed, shall construct, repair,
and maintain it so as to render it safe.
Ark. Code Ann.  11-2-117(b) (emphasis added).  The trial court
found that the statute applied to the Landlords and created a duty
to provide a safe place to work.  It further found that the jury's
failure to find the Landlords negligent on that basis was clearly
against a preponderance of the evidence.
     In construing the statute, we have determined that the general
assembly did not intend for the phrase "every owner of a place of
employment" to expand or extend a landlord's duty to provide a safe
place to work for his tenant's employees.  We have not previously
had occasion to interpret the meaning of this phrase in the context
of this statute.
     In his complaint, McDonald alleged that this statute imposes
a duty on property owners, who lease a place of employment, to
construct, repair, and maintain the property in a manner that
renders it reasonably safe.  McDonald based this argument solely on
the statutory language.  The trial court's order granting a new
trial indicates that the court likewise found "that the jury
finding that the Defendants were not negligent in failing to
provide a safe place to work as required by A.C.A  11-2-117 is
clearly against the preponderance of the evidence."
     McDonald also argued that the lease agreement, which contained
language stating that the Landlords were responsible for major
repairs and the tenant for minor repairs, could be interpreted to
mean that the Landlords had a contractual duty to repair the
stairs.  This question was submitted to the jury for determination,
and the jury found that the Landlords were not negligent.  However,
the trial court's order granting a new trial was not based on any
assertion of duty imposed under the terms of the lease agreement,
but rather that a duty was imposed by statute and by the safety
regulations.  Therefore, we confine our discussion to the issues on
which the trial court predicated its order in granting a new trial.
     We have followed the common-law rule that a lessor owes no
duty to the lessee to repair the premises.  Majewski v. Cantrell,
293 Ark. 360, 737 S.W.2d 649 (1987).  However, we have elaborated
that a lessor can be held liable where he agrees to undertake the
repairs.  Id.  In Majewski, we followed the majority rule, stating
that:
     A landlord is subject to liability for physical harm
caused to the tenant and others upon the leased property
with the consent of the tenant or his subtenant by a
condition of disrepair existing before or arising after
the tenant has taken possession if: (1) the landlord, as
such, has contracted by a promise in the lease or
otherwise to keep the leased property in repair; (2) the
disrepair creates an unreasonable risk to persons upon
the leased property which the performance of the
landlord's agreement would have prevented; and (3) the
landlord fails to exercise reasonable care to perform his
contract.
Id. at 362-63, 737 S.W.2d  at 651.
     Similarly, in Bartley v. Sweetser, 319 Ark. 117, 890 S.W.2d 250 (1994), we noted that since 1932, we have adhered to the rule
that a landlord is under no legal obligation to a tenant for
injuries sustained in common areas, absent a statute or agreement. 
See also 52 C.J.S. Landlord and Tenant  417 (1968).  A party who
gratuitously undertakes a duty can, however, be liable for
negligently performing that duty.  Keck v. American Employment
Agency, Inc., 279 Ark. 294, 652 S.W.2d 2 (1983); see also Restatement
(Second) of Torts  323 (1965).  We have recognized that a duty can
also arise, in certain circumstances, under the terms of a lease
between a landlord and tenant.  Bartley v. Sweetser, supra.
     It is well settled that statutes will not be taken in
derogation of the common law unless the act shows that such was the
intent of the legislature.  White v. State, 290 Ark. 130, 717 S.W.2d 784 (1986); Gray v. Nations, 1 Ark. (1 Pike) 557 (1839).  We
strictly construe statutes that impose duties or liabilities
unknown at common law in favor of those upon whom the burden is
sought to be imposed, and nothing will be taken as intended that is
not clearly expressed.  Hartford Ins. Group v. Carter, 251 Ark.
680, 473 S.W.2d 918 (1971); see also Norman J. Singer, 3 Sutherland Stat.
Const.  61.01, at 171 (5th ed. 1992).
     McDonald's argument would require us to conclude that the
legislature intended section 11-2-117 to subject all landowners who
lease property to employers of more than five employees to
liability for negligence in failing to provide and maintain a safe
workplace.  If we accept McDonald's interpretation of section 11-2-
117, the resulting rule would clearly be in derogation of the
common-law rule regarding a landlord's duty of care owed to a
tenant.  Therefore, we must strictly construe the statute in an
attempt to give effect to the legislature's intent.
     The legislature enacted almost all of Subchapter 2 of Title 11
through Act 161 of 1937, our Labor Department Act.  1937 Ark. Acts
161 (codified at Ark. Code Ann.  11-2-101 -- 121); Horn v.
Shirley, 246 Ark. 1134, 441 S.W.2d 468 (1969).  The primary
function of the Act is clearly expressed in its title:
AN ACT to Create a Department of Labor; to Create the
Office of Commissioner of Land and to Define the Duties
of the Commissioner as Administrative Head of the
Department of Labor; to Provide for the Arbitration and
Conciliation of Labor Disputes; to Authorize the
Commissioner to Make Investigations and to Collect
Statistics for the Purpose of Enforcing the Labor Laws of
the State of Arkansas; to Empower the Board to Make Rules
Relating to Health and Safety in Places of Employment; to
Provide for the Review of Such Rules; to Provide
Penalties for the Proper Enforcement of this Act and to
Repeal all Laws in Conflict Herewith.
1937 Ark. Acts 161.  We gain further insight into the legislature's
purpose from the Act's Emergency Clause:
     It is found and determined by the General Assembly
that the present laws relating to labor in this State are
not sufficient to meet present conditions; that in order
for this State to coordinate its activities concerning
labor with Federal Agencies on unemployment and security
benefits, it is necessary that a Department of Labor be
created with the powers and duties prescribed by this
Bill; THEREFORE, an emergency is hereby declared to exist
and this Act shall take effect and be in full force and
effect from and after its passage and approval.
1937 Ark. Acts 161,  26.  The portion of the Act that is at issue
here remains essentially unchanged from its form at inception.   9
(b) (codified at Ark. Code Ann.  11-2-117 (b)).
     Clearly, from the foregoing words of the general assembly, we
may deduce that section 11-2-117 had its origin in legislation
creating the Department of Labor with all its incidental powers and
duties, granting the State the authority to enforce the statute
with civil or criminal penalties, and establishing standards to be
used in assessing whether a violation has occurred.  Had the
legislature intended a radical change in the law to extend causes
of action for negligence based on a landlord's duty to his tenant,
the Act would have expressed such an intention in some plain and
unmistakable terms. 
     Instead, the Act speaks of causes of action brought by the
State against employers and owners of places of employment, places
of public assembly, or public buildings.  The Labor Department Act
clearly contemplates bringing a cause of action against an
"employer," which is defined within this subchapter as "includ[ing]
every person, . . . having control or custody of any . . . place of
employment, or of any employee."  Ark. Code Ann.  11-2-102(1)
(emphasis added).  Reading section 11-2-117(b) in conjunction with
section 11-2-102(1), we cannot ascertain a legislative intent to
impose greater liability on an owner of a place of employment than
that imposed on an employer.  Applying the rules of strict
construction, we cannot say that the legislature plainly intended
that the responsibility for a safe workplace is greater on an owner
of a place of employment than it is on an employer, who may be
penalized under the statute for having an unsafe workplace under
its "control or custody."
     We hold that, without an assumption of responsibility for
repairs, there was no common-law duty under which we may impose
liability on the Stewards, as landlords, to provide a safe
workplace for the employees of their tenant and that none was
created by the statute.  We will reverse a trial court's order
granting a motion for a new trial only if there is a manifest abuse
of discretion.  Ray v. Green, 310 Ark. 571, 839 S.W.2d 515 (1992). 
A clearly erroneous interpretation of the law or a clearly
erroneous application of a law or rule can constitute such manifest
abuse of discretion.  Ford Motor Co. v. Nuckolls, 320 Ark. 15, 894 S.W.2d 897 (1995).  We conclude that the trial court misinterpreted
section 11-2-117 in its order granting new trial, and that this
misinterpretation of the law constitutes a manifest abuse of
discretion.  Because of our decision, the remaining issues that
appellant raises on appeal are rendered moot.
     Accordingly, we reverse the trial court's order granting a new
trial and dismiss this appeal.
     Brown, J., concurs.

     Robert L. Brown, Justice, concurring.  I write to concur because
I believe the majority has given an unduly restrictive construction
to Ark. Code Ann.  11-2-117(b) (Repl. 1996).  Section 11-2-117(b)
reads:
          Every employer and every owner of a place of
     employment, place of public assembly, or public building,
     now or hereafter constructed, shall construct, repair,
     and maintain it so as to render it safe.
Id. (emphasis added).  In my judgment, this provision establishes
a statutory duty on the part of the Stewards, who own a building
used as a workplace, to turn the premises over to PSI in a safe
condition.  This duty attaches even though the owners are landlords
because of the clear reference in the statute to "owner."  Here,
the issue of premises safety was submitted to the jury, and the
jury found for the Stewards.  For that reason, I concur in the
result.
     The Supreme Court of West Virginia was faced with a similar
issue in Pack v. Van Meter, 354 S.E.2d 581 (W.Va. 1986).  In that
case, Ms. Pack, who was employed by a dress shop that leased space
in a building owned by the Van Meters, was injured when she fell
down a set of stairs that did not have a handrail, which violated
 21-3-6 of the West Virginia Code.  That code provision mandated
proper and substantial handrails in all mercantile establishments. 
Because the statute was silent on whether this duty was owed by the
Van Meters, the Supreme Court looked to its safe-workplace statute
for guidance:
          W.Va.Code, 21-3-1, is the introductory section in
     the part of our Code relating mainly to the safety and
     welfare of employees in the workplace and contains this
     provision with regard to the owner of certain premises:
     "Every employer and every owner of a place of employment,
     place of public assembly, or a public building, now or
     hereafter constructed, shall so construct, repair and
     maintain the same as to render is reasonably safe."
     (Emphasis added).  This language clearly imposes a duty
     on both the employer and the owner of a place of
     employment, place of public assembly, or a public
     building to maintain such places in a reasonably safe
     condition.
Id. at 585.
     The West Virginia Supreme Court noted that finding a duty on
the part of the Van Meters was necessary; otherwise, the "every
owner" language of the safe-workplace statute would be rendered
meaningless.  Id. at 586.
     The Pack case is instructive because of the factual
similarities to the present case, and also because both the
Arkansas and West Virginia legislatures took action in 1937 to
include the "every owner" language in their respective safe-
workplace statutes.  While I agree that statutes in derogation of
the common law must be strictly construed, it is settled law that
the intent of the General Assembly must be garnered from the plain
meaning of the language used.  Masterson v. Stambuck, 321 Ark. 391,
902 S.W.2d 803 (1995); Hercules, Inc. v. Pledger, 319 Ark. 702, 894 S.W.2d 576 (1995); Pugh v. St. Paul Fire & Marine Ins. Co., 317
Ark. 304, 877 S.W.2d 577 (1994); Worthen Nat'l Bank v. McCuen, 317
Ark. 195, 876 S.W.2d 567 (1994).  Because it is undisputed that the
Stewards were landlords and owners of the building leased by PSI,
and because they had an opportunity to cure the structural defect
prior to surrendering the property, a duty attached under the plain
meaning of  11-2-117(b).
     The question then is whether the trial court was within its
discretion in awarding McDonald a new trial on the ground that the
jury's finding that the Stewards did not violate their statutory
duty was clearly contrary to the preponderance of the evidence. 
See Ark. R. Civ. P. 59(a)(6); Young v. Honeycutt, 324 Ark. 120, 919 S.W.2d 216 (1996).
     In this case, although the stairs did not comply with Rules 21
and 24 of the Arkansas Department of Labor Basic Safety Manual due
to the absence of handrails, these violations are only evidence of
negligence and not negligence per se, see Berkeley Pump Co. v.
Reed-Joseph Land Co., 279 Ark. 384, 653 S.W.2d 128 (1983), reh'g
denied, 279 Ark. 401-A, 653 S.W.2d 128 (1983).  In contrast, it was
plain and obvious to PSI that the stairs had no handrail when PSI
assumed control of the premises, and there was no request by PSI
for the Stewards to provide a handrail for the benefit of PSI's
employees.  The jury could have determined that both PSI and the
Stewards believed the stairs to be in a safe condition.
     I conclude that while a duty exists on the part of the
Stewards to turn the premises over to PSI in a safe condition, the
question of whether the premises were safe was decided in favor of
the Stewards, and the verdict was not clearly contrary to the
preponderance of the evidence.  Accordingly, I would affirm the
jury's decision.