Pearson v. McPhillips

Pearson v. McPhillips, 2016 MT 257 (Oct. 11, 2016) (Shea, J.; Cotter, J., dissenting) (4-1, aff’d)

Issue: (1) Whether the district court erred in finding McPhillips and Raulston were not joint venturers, and (2) whether the district court erred in finding that the use of a cutting torch is not an inherently dangerous activity.

Short Answer: (1) No, and (2) no.


Facts: James Raulston started a scrap metal business in 2012, which involved him collecting scrap metal from landowners in Toole County and selling it. In February 2012, Raulston approached Scott O’Brien, McPhillips’ son-in-law who helps McPhillips manage her property, and asked if he could remove scrap metal from McPhillips’ property and sell it. O’Brien gave Raulston permission on the condition that Raulston give O’Brien 35% of the proceeds. O

Brien gave Raulston a map of the property with highlighted areas where Raulston could collect scrap metal, and wrote the terms of the agreement on it.

In March 2012, Raulston was using a cutting torch to cut scrap metal on McPhillips’ property when a spark from the torch started a grass fire that Raulston could not contain. The fire burned several structures and equipment on Pearson’s property.

Pearson sued Raulston and McPhillips, alleging Raulston acted as McPhillips’ agent when he started the fire. 

Procedural Posture & Holding: McPhillips moved for summary judgment, arguing Pearson could not establish vicarious liability. The district court granted the motion, and Pearson appeals. The Supreme Court affirms.

Reasoning: (1) While profit sharing may be persuasive evidence of a joint venture, it does not conclusively establish one. McPhillips did not have an equal voice in Raulston’s work. He had his own equipment, and he controlled the days, hours, and methods of his work. Pearson failed to present evidence that McPhillips and Raulston intended to enter into a joint venture.

(2) A person who hires an independent contractor is not liable for the contractor’s torts unless the contractor was engaged in an inherently dangerous activity. An activity is not inherently dangerous if simple safety precautions can be taken.

Justice Cotter’s Dissent: Justice Cotter would conclude that the parties created a joint venture as a matter of law. “The fact that McPhillips entrusted performance of the removal of the scrap to Raulston instead of dictating how the removal should be accomplished does not signify the lack of an equal voice in the performance of the enterprise; it simply establishes that — through O’Brien — she left the details to Raulston.” ¶ 22.