Jallah v. Diverscape
Filed 10/13/06 Jallah v. Diverscape CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
MARY ROSE JALLAH et al.,
Plaintiff and Appellant,
Defendant and Respondent.
APPEAL from the Superior Court of San Bernardino County. John P. Wade, Judge. Affirmed.
Law Offices of Nicholas R. Allis and Nicholas R. Allis for Plaintiffs and Appellants.
Arias Aaen and Christopher D. Lockwood for Defendant and Respondent.
The Jallahs (hereafter sometimes plaintiffs) appeal from a summary judgment in favor of Diverscape, Inc. (hereafter Diverscape) in a personal injury action. The issue raised on appeal is whether the 1996 Motor Carriers of Property Permit Act (Veh. Code § 34600 et seq., hereafter the MCPPA) imposes a nondelegable duty of care on Diverscape, as a motor carrier of property, making it liable for the negligent acts of an independent contractor it hired to transport materials to a job site. We conclude that Diverscape was a private carrier as defined by the MCPPA, and that the MCPPA does not impose a nondelegable duty of care on private carriers. Therefore, we will affirm the judgment.
factual and procedural History
Diverscape, a landscaping contractor, owned a fleet of trucks that it used to deliver supplies to its job sites. At the time of the accident, Diverscape had a contract with the California Department of Transportation (Caltrans) to deliver and spread mulch for landscaping purposes along Route 60. Diverscape occasionally hired Norman Abbott, who is the sole proprietor of a licensed independent trucking company, N.L. Abbott Trucking (hereafter Abbott), to transport mulch from its suppliers to its job sites. After Abbot delivered the mulch to a job site, Diverscape’s employees would spread the mulch, using Diverscape’s equipment.
While Abbott’s semi-truck was en route to one of Diverscape’s job sites, it crashed into the Jallahs’ vehicle, rendering one occupant of the vehicle a quadriplegic. The truck was driven by one of Abbott’s employees. The Jallahs reached a settlement with Abbott, but the litigation continued against Diverscape. After discovery, Diverscape moved for summary judgment, arguing that, as a matter of law, it could not be held vicariously liable for the negligence of an independent contractor. The Jallahs opposed the motion for summary judgment, arguing that Diverscape had a nondelegable duty of care, and was therefore liable for the negligence of an independent contractor. In its reply to the Jallahs’ opposition, Diverscape relied on Hill Brothers Chemical Co. v. Superior Court (2004) 123 Cal.App.4th 1001 (Hill Brothers) to assert that because Diverscape was a private carrier within the meaning of the MCPPA, it was not vicariously liable for Abbott’s negligence.
The trial court granted the motion for summary judgment. The trial court adopted the rationale of Hill Brothers, which held that under the MCPPA, a for-hire carrier has a nondelegable duty while a private carrier does not. (Hill Brothers, supra, 123 Cal.App.4th at p. 1003.) The court found that Diverscape was a private carrier. Judgment was entered for Diverscape, and the Jallahs appealed.
A PRIVATE MOTOR CARRIER IS NOT VICARIOUSLY LIABLE FOR THE NEGLIGENCE OF AN INDEPENDENT CONTRACTOR
Standard of Review
The issues on appeal involve the interpretation and application of the MCPPA to undisputed facts, thus presenting questions of pure law: “We review an order denying a motion for summary judgment de novo. [Citation.] Summary judgment is properly granted when the papers show there is no triable issue of material fact, and the moving party is entitled to judgment as a matter of law. [Citation.] Issues of law, including statutory construction and the application of that construction to a set of undisputed facts, are subject to this court’s independent review. [Citation.]” (Hill Brothers, supra, 123 Cal.App.4th at p. 1005.)
Issues Framed by the Pleadings
We first address Diverscape’s contention that in opposing the motion for summary judgment, the Jallahs relied on a theory which was not alleged in the complaint, i.e., that as a motor carrier for hire, Diverscape had a nondelegable duty of care and is therefore vicariously liable for the negligence of its independent contractor. It argues that because the theory was not pled, it is neither a proper basis for denying summary judgment nor properly before this court.
Diverscape is correct that the pleadings set the boundaries of the issues to be resolved on a motion for summary judgment. (Oakland Raiders v. National Football League (2005) 131 Cal.App.4th 621, 648.) A plaintiff wishing to rely upon unpleaded theories to defeat summary judgment must move to amend the complaint before the hearing. (Ibid.) Thus, if the theory that the Jallahs relied on to oppose the summary judgment motion was not “within the reasonable purview of the allegations of the complaint” (Chevron U.S.A., Inc. v. Superior Court (1992) 4 Cal.App.4th 544, 548), it would not be a basis upon which the trial court could have denied the motion for summary judgment, or upon which we could reverse the summary judgment.
The complaint does not expressly allege the nondelegable duty theory. However, as Diverscape acknowledged in its summary judgment motion, it was aware that as to it, the complaint was based on the theory that it was vicariously liable for the negligence of Abbott and its employee. Its summary judgment motion argued exclusively that it was not vicariously liable as a matter of law for the negligence of an independent contractor. The nondelegable duty theory on which the plaintiffs rely is a type of vicarious liability. (Hill Brothers, supra, 123 Cal.App.4th at p. 1008.) Thus, the theory is “within the reasonable purview” of the allegations of the complaint (Chevron U.S.A., Inc. v. Superior Court, supra, 4 Cal.App.4th at p. 548) as the complaint was understood by Diverscape.
Diverscape claims that it was prejudiced by plaintiffs’ failure to allege the theory explicitly in the complaint. It claims that it did not address the nondelegable duty theory in the summary judgment motion because it was not aware that plaintiffs intended to rely on it, and that in the limited time available to it to reply to the plaintiffs’ opposition to the motion, it was unable to file “the type of brief and evidence which would have been filed if this theory had been alleged in the complaint.” This contention is demonstrably false. Plaintiffs’ response to Diverscape’s first set of special interrogatories lays out in detail the legal and factual basis for its theory of vicarious liability based upon a nondelegable duty. The responses to the first set of special interrogatories were served on Diverscape on November 7, 2003. Diverscape filed its motion for summary judgment on or about June 1, 2004. Thus, Diverscape was well aware of the factual basis for the plaintiffs’ claim and had ample time to amass whatever evidence it might have needed to support its summary judgment motion.
Diverscape Was Operating As a Private Carrier at the Time of the Accident
The Jallahs contend that under the MCPPA, all operators of commercial trucks have a nondelegable duty of care to the public traveling the roads and are therefore liable for the negligence of independent contractors. Diverscape contends that under the MCPPA, only for-hire carriers have a nondelegable duty, and that it is a private carrier within the meaning of the MCPPA. Because we conclude that only for-hire carriers have a nondelegable duty under the MCPPA, we must first determine whether Diverscape was a for-hire carrier or a private carrier at the time of the accident. We make that determination as a matter of law, based on the undisputed facts. (See Bailey v. Filco, Inc. (1996) 48 Cal.App.4th 1552, 1558.)
Section 34601 of the MCPPA provides that “any person who operates any commercial motor vehicle” is classified as a “motor carrier of property.” Motor carriers of property are divided into two categories: “for-hire motor carrier of property” and “private carrier.” “‘[F]or-hire motor carrier of property’ means a motor carrier of property as defined in subdivision (a) who transports property for compensation.” (§ 34601, subd. (b).) “‘[P]rivate carrier’ means a motor carrier of property, who transports only his or her own property, including, but not limited to, the delivery of goods sold by that carrier.” (§ 34601, subd. (d).)
Although the MCPPA does not more explicitly define ‘private carrier,’ the legislative history discussed in Hill Brothers, supra, 123 Cal.App.4th 1001, indicates that the distinguishing feature between for-hire and private carriers is that for-hire carriers are compensated solely for the transportation of goods belonging to others, i.e., that the transportation of goods is their business, while private carriers transport goods for purposes incidental to their business. (Id. at pp. 1006-1007, 1010.) Hill Brothers, a chemical company, used its trucks only to deliver its own products to its customers, and its transportation of goods was therefore incidental to its business. (Hill Brothers, supra, 123 Cal.App.4th at p. 1004.) The situation here is different, but analogous: Diverscape transports only materials which it needs to perform landscaping services, and its transportation of goods is therefore incidental to the performance of the services it contracts to provide. (We discuss the evidence in support of this conclusion below.) Diverscape is thus a private carrier of goods within the meaning of the MCPPA.
The Jallahs contend that Diverscape was a for-hire carrier because at the time of the accident it was “fulfilling a contractual duty to transport goods (mulch) which Caltrans already owned by virtue of the bid acceptance and guarantee of periodic payments by Caltrans.” This mischaracterizes the terms of the contract. Under “Type of Work,” the contract states, “Contractor [Diverscape] shall apply a 4-inch layer of mulch along state right-of-way highway Route 60 . . . .” Under “Scope of Work,” the contract states “Contractor agrees to provide to the Department of Transportation . . . all labor, tools, materials, fuel, equipment, personal safety gear, and incidentals required for mulch application along state right-of-way highway Route
60 . . . . These items will be all inclusive and be bid and paid as a total dollar per cube [sic] yard in place.” (Italics added.) Thus, Diverscape was paid for performing landscaping services, and transportation of the mulch from the supplier to the job site was merely incidental to that service. Moreover, Caltrans did not “own” the mulch by virtue of agreeing to make payments under the contract. Rather, the contract called for Diverscape to provide “all materials,” i.e., the mulch. Diverscape included the cost of the material in its calculations in determining the price to bid on the contract. It never billed Caltrans for the mulch. There is simply no basis for concluding that Caltrans “owned” the mulch.
The Jallahs next argue that Diverscape is a for-hire carrier because it sometimes picks up and transports mulch for other companies. However, the evidence plaintiffs rely on does not support their contention. Diverscape was occasionally hired as a subcontractor to apply mulch using its specialized equipment. In connection with such contracts, Diverscape would sometimes pick up the mulch from the supplier. However, Diverscape charged the prime contractor according to the number of cubic yards of mulch that it applied to the site. There is no evidence that Diverscape ever contracted merely to transport mulch or other goods for compensation.
Finally, the Jallahs contend that Diverscape was a for-hire carrier because several months after the accident, Diverscape obtained a permit to operate as a for-hire motor carrier. We do not see the relevance of this fact. At the time of the accident, Diverscape had neither a permit to operate as a private carrier nor a permit to operate as a for-hire carrier. Its decision to obtain a for-hire permit after the fact has no bearing on its status or activities at the time of the accident. Moreover, even if Diverscape had had a permit to operate as a for-hire carrier at the time of the incident, that would not be dispositive, because, for the reasons stated above, it was not acting in that capacity with respect to the job for which it hired Abbott. (See Hill Brothers, supra, 123 Cal.App.4th at p. 1010.)
The MCPPA Does Not Impose a Nondelegable Duty of Care on Private Carriers
The Jallahs contend that the MCPPA changed the long-standing distinction between private and for-hire carriers and imposes a nondelegable duty on all motor carriers of goods. They contend that Hill Brothers, supra, 123 Cal.App.4th 1001, is incorrect in concluding that the MCPPA continues to exempt private carriers.
The primary goal of statutory construction is to ascertain the Legislature’s intent, in order to effectuate the statute’s purpose. (Reidy v. City and County of San Francisco (2004) 123 Cal.App.4th 580, 591.) The Legislature is presumed not to change existing law unless it does so expressly. (Id. at pp. 591-592.) The legislative history of a statute is properly considered in interpreting the statute, and the legislative reports are evidence of the legislative intent. (Watson Land Co. v. Shell Oil Co. (2005) 130 Cal.App.4th 69, 77; People v. Cruz (1996) 13 Cal.4th 764, 774, fn. 5.)
“The premise of real parties’ argument is that because the MCPPA classifies all carriers as motor carriers of property, and because ‘private carriers’ are subject to regulatory and permit requirements under the MCPPA, it is clear that the Legislature intended that all carriers be treated alike with respect to their responsibilities to the public. But nothing in the language of the MCPPA or its legislative history supports this conclusion. “Prior to the passage of the MCPPA in 1996, the PUC regulated trucking companies under the Public Utilities Act (PUA). Subject to certain exceptions, the PUA defined ‘highway carrier’ to mean a person or corporation ‘engaged in transportation of property for compensation or hire as a business over any public highway in this state by means of a motor vehicle.’ [Citation.] Three types of operating authority were established under the PUA for such ‘for hire’ highway carriers. “(1) The highway common carrier was defined as a public utility engaged in the transportation of property on the highways and was regulated as a public utility. The highway common carrier dedicated its facilities to the public and ordinarily operated between fixed termini or over regular routes. It was required to have a certificate of public convenience and necessity from the PUC. (Former Pub. Util. Code, §§ 213, 215, 3513.)
“(2) The radial highway common carrier engaged in the transportation of property on the highways but was not regulated as a public utility. The principal difference between a highway common carrier and a radial highway common carrier was that the latter did not operate between fixed termini or over regular routes, and it established its own rates until rates were fixed by the PUC. A radial highway common carrier was not required to have a certificate of public convenience and necessity, but was required to have a permit. (Former Pub. Util. Code, § 3516.) “(3) The highway contract carrier engaged in the transportation of property on the highways for selected shippers under a contract, but did not dedicate its facilities to the public. The highway contract carrier was required to have a permit, but not a certificate of public convenience and necessity. Until fixed by the PUC, it established its own rates. (Former Pub. Util. Code, § 3517.) “Highway common carriers were licensed and regulated under division 1 of the PUA which was entitled ‘Regulation of Public Utilities.’ (Former Pub. Util. Code, § 1061.) Radial highway common carriers and highway contract carriers were licensed and regulated under division 2 which was entitled ‘Regulation of Related Businesses by the Public Utilities Commission.’ (Former Pub. Util Code, §§ 3516, 3517, 3541.) Persons or corporations transporting their own property were specifically excluded from the definition of a ‘highway carrier,’ and the term ‘private carrier’ was separately defined as a ‘not-for-hire’ motor carrier. (Former Pub. Util. Code, §§ 400l, subd. (a), 5353, subd. (c).)
“As can be seen, prior to the passage of the MCPPA, persons or corporations transporting their own property were specifically excluded from the definition of a ‘highway carrier,’ and the term ‘private carrier’ was separately defined as a ‘not-for-hire’ motor carrier. Under the MCPPA, ‘for hire’ and ‘private’ carriers continue to be separately defined. In an analysis of the MCPPA as Assembly Bill No. 1683, private carriers were described as ‘registered with but non regulated by the PUC, who operate truck fleets incidental to their main business.’ (Gov. Affairs Consulting, analysis of Assem. Bill No. 1683 (1995-1996 Reg. Sess.) June 26, 1995.) “In ‘clean up’ legislation passed in 1997, the Legislature expressed concern that the difference between ‘for-hire’ and ‘private’ carriers should be more explicitly stated. The Assembly Committee on Transportation reported that one of the purposes of the bill was to ‘[c]larify the definitions of “motor carrier of property” and “private carrier”, the latter being a carrier who does not transport goods or property for compensation.’ (Assem. Com. on Transportation, Rep. on Assem. Bill No. 1518 (1997-1998 Reg. Sess.) as amended July 2, 1997.)
“In 2000, the definition of ‘private carrier’ was further clarified. In a Senate Committee Report, the MCPPA was described as providing for ‘the regulation of certain for-hire motor carriers of property,’ and the Legislature’s intent was stated to be to ‘delete the obsolete statutory references and definitions relating to specified motor carriers in the Act.’ (Sen. Com. on Transportation, Rep. on Sen. Bill No. 1404 (1999-2000 Reg. Sess.) as amended Aug. 24, 2000.) The report went on to state: ‘Currently, a “private carrier” is defined by what the carrier does not do, rather than what is done. This bill seeks to define private carriers in positive language, and to clarify that delivery of merchandise is private carriage (or private property), if the merchandise was sold to the receiver by the motor carrier.’ (Ibid.) “The statutory language of the MCPPA, together with the legislative materials, evidence legislative intent to maintain a distinction between private carriers and for-hire carriers. Legislative history does not support real parties’ assertion that simply because private carriers are subject to regulatory and permit requirements, they should be subject to the nondelegable duty rule. . . .
“While not disputing that Hill Brothers is a ‘private carrier’ under the MCPPA, real parties contend that because Hill Brothers is regulated under the MCPPA, it cannot delegate its duties to independent contractors so as to be shielded from liability for their negligence. “The general rule is that one is not liable for the negligent acts of an independent contractor one hires. (Fonseca v. County of Orange (1972) 28 Cal.App.3d 361, 364 [104 Cal.Rptr. 566].) But exceptions to this rule have been well developed in California. Relying on section 428 of the Restatement of Torts,[] the Supreme Court ruled in Taylor v. Oakland Scavenger Co. (1941) 17 Cal.2d 594, 604 [110 P.2d 1044], that if ‘an individual or corporation undertakes to carry on an activity involving possible danger to the public under a license or franchise granted by public authority subject to certain obligations or liabilities imposed by the public authority, these liabilities may not be evaded by delegating performance to an independent contractor. The original contractor remains subject to liability for harm caused by the negligence of the independent contractor employed to do the work.‘
“This rule of nondelegable duty was applied to a highway common carrier in Eli v. Murphy (1952) 39 Cal.2d 598 [248 P.2d 756]. The Supreme Court ruled that ‘under both the common law and certain regulations of the [PUC], . . . a highway common carrier, could not delegate its duties to an independent contractor so as to escape liability for [its] negligent performance.’ [Citation.] The court explained: ‘a highway common carrier, is engaged in a “business attended with very considerable risk” [citations], and the Legislature has subjected it and similar carriers to the full regulatory power of the [PUC] to protect the safety of the general public. [Citations.] The effectiveness of safety regulations is necessarily impaired if a carrier conducts its business by engaging independent contractors over whom it exercises no control. If by the same device it could escape liability for the negligent conduct of its contractors, not only would the incentive for careful supervision of its business be reduced, but members of the public who are injured would be deprived of the financial responsibility of those who had been granted the privilege of conducting their business over the public highways. Accordingly, both to protect the public from financially irresponsible contractors, and to strengthen safety regulations, it is necessary to treat the carrier’s duties as nondelegable. [Citations.]
. . . The Legislature has . . . classified highway common carriers . . . apart from others, and by so doing has indicated special concern with the safety of their
operations. . . . . . . . . . Highway common carriers may not, therefore, insulate themselves from liability for negligence occurring in the conduct of their business by engaging independent contractors to transport freight for them.’ (Eli v. Murphy, supra, 39 Cal.2d at pp. 599-601.)
“The court in Eli noted the distinction between a carrier licensed as a public utility and one that operated under a permit: ‘”It is our conclusion that any trucking company, upon becoming a public utility under the Public Utility Act, should be expected to exhibit a high degree of performance in the field of safety and should expect to be required to observe rigid safety rules and regulations.” (General Order No. 99, 51 Cal. P.U.C. 66, 68-69.)’ (Eli v. Murphy, supra, 39 Cal.2d at p. 601.) “A nondelegable duty was found to exist even when a PUC-licensed highway common carrier hires another PUC-licensed highway common carrier as an independent contractor to subhaul freight. (Gamboa v. Conti Trucking, Inc. (1993) 19 Cal.App.4th 663, 666-668 [23 Cal.Rptr.2d 564].) Thus, in Serna v. Pettey Leach Trucking, Inc. [(2003)] 110 Cal.App.4th 1475, an interstate carrier, licensed by the Surface Transportation Board (formerly the Interstate Commerce Commission), was found to have such a nondelegable duty to the public and was therefore found to have vicarious liability for the negligent acts of an interstate carrier it hired as an independent contractor to transport a load it had been hired to haul. “But the courts have not applied the rule of nondelegability to every highway carrier. For example, in Gaskill v. Calaveras Cement Co. (1951) 102 Cal.App.2d 120 [226 P.2d 633], the Court of Appeal did not extend the Taylor rule to a contract carrier who was operating under a permit rather than a franchise. The Gaskill court further distinguished the circumstances from those in Taylor and under section 428 of the Restatement of Torts, finding that the activity of hauling a trailer and semitrailer by tractor did not involve any unreasonable risk of harm to others: ‘The operation of any motor vehicle may be said to involve some risk to others but the use of [this independent contractor’s] equipment involved no more risk than that of any other.’ (Gaskill, at p. 126.) [Brackets in original.] “In Gilbert v. Rogers (1953) 117 Cal.App.2d 712 [256 P.2d 574], the issue before the court was whether a radial highway common carrier should be vicariously liable for the negligence of a common carrier to whom it had sublet a portion of a hauling contract. The court reasoned that Eli should be applicable to a radial common carrier because the rigs used by them and by contract carriers to haul freight were comparable to those used by highway common carriers, and all classes of carriers were licensed to transport freight on the public highways by the PUC. (Id. at pp. 714-715.) But the court nevertheless found that it was bound by the distinction set forth in Eli, and held that the radial highway common carrier had ‘successfully insulated itself through the medium of an independent contractor’ because both the carrier and the subhauler operated pursuant to permits, not franchises. (Id. at pp. 716-717.) “In any event, all of the cases in which a nondelegable duty has been imposed on a carrier have involved a ‘for-hire’ carrier rather than a private carrier such as Hill Brothers. Hill Brothers argues that there is a critical difference between those who use the public highways as a business and those who use the highways only to transport their own products incidental to their business, and that the latter constitutes private carriage as a matter of right which is not subject to the same level of regulation as that of for-hire carriage. We agree. . . . “Real parties contend that the fact that both private and for-hire carriers are regulated entities supports imposition of equal responsibilities on both. But it is clear that a greater standard of responsibility has been imposed upon those who hold themselves out to the public as being engaged in the business of transporting goods for compensation on the public highways. (See Eli v. Murphy, supra, 39 Cal.2d 598, 600-601; Civ. Code, § 2168 et seq.) Hill Brothers was neither licensed as a for-hire carrier, nor acting as a for-hire carrier when it hired an independent contractor to carry goods for the operation of its own chemical manufacturing business. Indeed, Hill Brothers was a consumer of the services of a for-hire carrier just as any other private member of the public might be. “Extension of the nondelegable duty rule to a member of the shipping public simply because the shipper is a private carrier and owns commercial vehicles it uses in its own business makes no sense at all. Such a rule would impose vicarious liability on the part of a shipper for the negligence of an independent contractor for matters over which it exercises no control. We do not believe that imposing such a duty is necessary to address the other concerns expressed by the court in Eli. It would certainly increase the cost of doing business in California, particularly the cost of insurance, and would effectively spread risk to a party without consideration of fault and without a sound policy basis. “We therefore hold that a private carrier is not vicariously liable for the negligent acts of its independent contractor.” (Hill Brothers, supra, 123 Cal.App.4th at pp. 1006-1011.)
The Jallahs contend that the reasoning of Serna v. Leach Pettey Trucking, Inc., supra, 110 Cal.App.4th 1475 (Serna) is superior to that of Hill Brothers and should be applied here. Serna holds that any carrier which undertakes an activity which can be lawfully carried out only under a public franchise or authority and which involves danger to the public is subject to the nondelegable duty rule. (Serna, at p. 1486.) However, the carrier in that case was a for-hire carrier, and the cases the court relied on all involved carriers which would be defined as for-hire carriers under the MCPPA. Moreover, it applies federal law, applicable to carriers operating in interstate commerce. (Serna, at pp. 1477-1479.) A case is not authority for a proposition it does not decide. (Santisas v. Goodin (1998) 17 Cal.4th 599, 620.) Because Serna does not discuss the applicability of the nondelegable duty rule under the MCPPA to private carriers, it is not authority on that issue. And, as the court in Hill Brothers pointed out, Serna involves a carrier operating under a franchise or license. Motor carriers of property as defined in the MCPPA operate under a permit. Existing California case law distinguishes between carriers operating under a franchise and those operating under a permit. (Hill Brothers, supra, 123 Cal.App.4th at pp. 1009-1010.) There is no indication in the legislative history or the statutory language that the Legislature intended to abolish that distinction.
The judgment is affirmed. Diverscape is to recover its costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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 Plaintiffs contend that there is a triable issue of fact whether Diverscape was a private or for-hire carrier. However, they merely argue that certain undisputed facts, which we discuss below, mean that Diverscape is a for-hire carrier rather than a private carrier. Thus, they are actually arguing that Diverscape was a for-hire carrier as a matter of law. (Bailey v. Filco, Inc., supra, 48 Cal.App.4th at p. 1558.)
 “Section 428 of the Restatement of Torts provided: ‘An individual or a corporation carrying on an activity which can be lawfully carried on only under a franchise granted by public authority and which involves an unreasonable risk of harm to others, is subject to liability for physical harm caused to such others by the negligence of a contractor employed to do work in carrying on the activity.’ There was no change in language in section 428 in Restatement Second of Torts.”