Berry v. Holston Well Service, Inc.

• Decision Date: 20 May 1986
• Docket Number: No. 86-C-0091,86-C-0091
• Citation: 488 So.2d 934
• Parties: Lynn D. BERRY v. HOLSTON WELL SERVICE, INC., et al. 488 So.2d 934
• Court: Louisiana Supreme Court

Page 934

488 So.2d 934

Lynn D. BERRY v. HOLSTON WELL SERVICE, INC., et al.

No. 86-C-0091.

488 So.2d 934

Supreme Court of Louisiana.

May 20, 1986.

Rehearing Denied June 19, 1986.

Glenn W. Alexander, Jones, Jones & Alexander, Cameron, for plaintiff-applicant.

Thomas L. Raggio, Raggio, Cappel, Chozen & Berniard, Lake Charles, Kirk A. Bergeron, Stockwell, Sievert, Viccellio, Clements & Shaddock, Lake Charles, for respondent.

FACTS

BLANCHE, Justice.

On June 23, 1977, the date of the alleged accident, Berry was employed as a hoistman for CRC Western Wireline Services, Inc. (hereinafter "CRC"). His petition alleges that he received serious injuries to his back and legs during workover operations on a lease well owned and operated by Sohio Natural Resources Company, formerly Sohio Petroleum Company (hereinafter "Sohio"). Sohio had contracted with Holston Well Service, Inc. (hereinafter "Holston") to furnish the necessary rig, equipment and personnel for the drilling portion of the workover. While engaging in the operations it became evident that there would be a need to perforate the well at a certain depth. Sohio then contracted with CRC (plaintiff's immediate employer) to perform the necessary perforating work. CRC pursuant to the contract was to provide the necessary labor, tools, equipment and material. CRC sent a three-man wireline crew composed of Harvey M. Twiner, Johnny Landry and Berry to the well location. Berry was injured while in the course and scope of his employment with CRC.

Berry timely filed his tort suit alleging that the injuries he sustained were caused by the negligence of Holston and/or Sohio. The acts of negligence complained of consisted of improperly and unsafely stacking a large quantity of pipe in close proximity to the working area thus not allowing a reasonable amount of space for the CRC crew to perform its work. All of the defendants filed motions for summary judgment. Of import to this case is the motion filed by Sohio. In its motion, Sohio claims that it was plaintiff's statutory employer under La.R.S. 23:1061; ¹ and therefore, Berry's exclusive remedy against it is for compensation. La.R.S. 23:1032. ²

In support of its motion Sohio attached several depositions as well as supporting affidavits. From the attachments it is clear that CRC is a specialized support company performing wireline services which are undisputedly necessary for the operation of Sohio's trade, business or occupation (i.e. discovering, extracting and producing minerals from the ground). By the very nature of CRC's business, the wireline service that it performs requires a degree of skill, training, experience and equipment not generally found outside the field. In fact it is so specialized that it supports a host of independent wireline companies. Basically the process involves the attachment of certain special tools to an electrically charged cable and then lowering those tools down into the hole to perform the necessary tasks. Because of the nature of the work, Sohio has no employees of its own which do this type of work. Sohio has always contracted out this type of work to those entities with the skill and equipment to handle the job properly. In addition, most, if not all, oil companies with operations similar to Sohio contract out this work.

In its original appearance before our brothers of the Third Circuit Court of Appeal, that court affirmed the trial court's granting of Sohio's motion for summary judgment finding that Berry was Sohio's statutory employee. Berry v. Holston Well Service, Inc., 467 So.2d 90 (La.App. 3d Cir.1985). In their opinion, the cases of Lewis v. Exxon Corp., 441 So.2d 192 (La.1983) and Benson v. Seagraves, 436 So.2d 525 (La.1983) were distinguished on the ground that those cases involved "new construction" and on that factual basis were not controlling. We granted writs intially in this case and rendered an order transferring the case back to the court of appeal for reconsideration in light of our decision in Rowe v. Northwestern National Ins. Co., 471 So.2d 226 (La.1985). Berry v. Holston Well Service, Inc., 474 So.2d 1296 (La.1985).

In a second opinion, the court of appeal reaffirmed their earlier decision. Berry v. Holston Well Service, Inc., 479 So.2d 944 (La.App. 3d Cir.1985). The court likewise distinguished our decision in Rowe on the ground that Rowe involved routine maintenance activities in a plant, whereas here the wireline work was part of the complex, integrated, interdependent and interrelated operations required for the safe and efficient discovery, recovery and production of minerals. In essence the Third Circuit has created what might be called an "oilfield exception " to the principles of statutory employment. We again granted writs on application of the plaintiff to determine if, based on the facts of this case, Sohio is plaintiff's statutory employer. 481 So.2d 1341 (La.1986).

For the following reasons we reverse the judgments of the lower courts granting Sohio's motion for summary judgment. We hold that under the facts of this case and the principles announced herein Sohio was not Berry's statutory employer. Sohio and its insurer are therefore amenable to tort suit, and the case will be remanded to the trial court for further proceedings in accordance with law.

STATUTORY EMPLOYMENT DOCTRINE ³

Pursuant to section 1061, employees of contractors are under certain circumstances considered to be the employees of the owner or principal. Lewis, supra. As originally enacted the purpose behind this fiction of the law was to prevent principals from evading their compensation responsibilities by interposing a "straw man" between them and those "employees" who are doing the whole or a part of their trade, business or occupation. Rowe, supra (Lemmon, J. concurring); Lewis, supra; 1C A. Larson, The Law of Workmen's Compensation, Sec. 49.00 (1982); 13 W. Malone & H. Johnson, La.Civil Law Treatise--Worker's Compensation, Sec. 121 (1980). Although its purpose was self-evident, beginning with the case of Thibodaux v. Sun Oil Co., 218 La. 453, 49 So.2d 852 (1950), this Court developed the doctrine of tort immunity for principals (i.e. statutory employers) vis-a-vis their contractor's employees (i.e. statutory employees).

This jurisprudential doctrine was later codified in 1976 when the legislature amended certain sections of the Act. See 1976 La.Acts, No. 147, Sec. 1; Rowe, supra (Lemmon, J. concurring). Since the time of Thibodaux and through the present, most of the cases involving a claim by the injured employee against the principal were cases sounding in tort, and in most instances the employee had already received compensation from his immediate employer. Malone & Johnson, supra, Sec. 126. In this context, courts have struggled to determine what is or is not a statutory employment relationship. The primary reason advanced for the difficulty was the fact that section 1061 was "being interpreted in a context for which it was never intended" (i.e. How should the question of a principal's tort liability or immunity therefrom vis-a-vis an employee of a contractor be resolved?). Id. "The section [1061] makes no indication that this subject was intended to be resolved by its provisions, and until the jurisprudence established the principal's tort immunity, no one would have concluded that it should be so used." Id.

Initially, the courts of this state, including this Court, had determined that a contractor was performing a part of the principal's trade, business or occupation, and thus falling under the statute, when the contract work was an integral and/or essential part (or other synonyms) of the trade, business or occupation of the principal. See for example Barnes v. Sun Oil Co., 362 So.2d 761 (La.1978); Thibodaux, supra; Melancon v. Tassin Amphibious Equip. Corp., 427 So.2d 932 (La.App. 4th Cir.), writ denied 433 So.2d 166 (La.1983); Klohn v. Louisiana Power & Light Co., 394 So.2d 636 (La.App. 1st Cir.1980), writ denied 399 So.2d 612 (La.1981); Stelly v. Waggoner Estates, 355 So.2d 12 (La.App. 1st Cir.1977), writ denied 356 So.2d 1011 (La.1978); Vizena v. Travelers Ins. Co., 238 So.2d 238 (La.App. 3d Cir.), writ denied 256 La. 885, 239 So.2d 542 (1970); Shird v. Maricle, 156 So.2d 476 (La.App. 3d Cir.1963); Mau v. Industrial Steel Products Co., Inc., 119 So.2d 654 (La.App. 2d Cir.1960); Stansbury v. Magnolia Petroleum Co., 91 So.2d 917 (La.App. 1st Cir.1957). This almost limitless standard yielded inconsistent and often illogical results since almost everything could be said to be integrally related to the principal's trade, business or occupation. See Slocum v. Lamartiniere, 369 So.2d 201 (La.App. 3d Cir.), writ denied 372 So.2d 569 (La.1979) (New construction of a building was found to be within the trade, business or occupation of a grocery.); Foster v. Western Electric Co., Inc., 258 So.2d 153 (La.App. 2d Cir.1972) (Operating a cafeteria on the premises of a large industrial plant fell under the statute.).

Beginning with the case of Benson and followed by the cases of Lewis and Rowe, it is obvious that this Court has shifted its interpretive analysis regarding the statutory employer defense from one which favored a liberal application of the doctrine to one which is more restrictive. Rowe, supra (Lemmon, J. concurring). In so doing we have abandoned the "integral relation" test for a test that we feel is more in line with the purpose of sections 1032 and 1061. See Boudreaux v. Exxon Co., U.S.A., 441 So.2d 79 (La.App. 3d Cir.1983), writ granted and case remanded 445 So.2d 429 (La.1984), on remand 451 So.2d 85 (La.App. 3d Cir.), writ denied 458 So.2d 119 (La.1984). The reason for the change was that the former test was being interpreted too expansively, see Malone & Johnson, supra, Sec. 126, thus transforming a doctrine which was originally designed to provide secondary protection to an injured employee into one which grants immunity to principals...