Brister v. Gulf Cent. Pipeline Co., Civ. A. No. 82-1069 to 82-1089

• Citation: 684 F. Supp. 1373
• Decision Date: 28 April 1988
• Docket Number: 82-1380,82-1437 and 82-1485.,Civ. A. No. 82-1069 to 82-1089
• Parties: Larry BRISTER, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. Bobby BRISTER, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. Linda Gayle PESNELL v. GULF CENTRAL PIPELINE COMPANY, et al. SUCCESSION OF J.O. GRIFFIN v. GULF CENTRAL PIPELINE COMPANY, et al. Edroe T. PESNELL, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. Claude L. PESNELL, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. Mike GRIFFIN, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. (Two Cases) Raymond CALDWELL, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. (Two Cases) Hollis L. SPILLERS, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. Vicki Janell GRIFFIN v. GULF CENTRAL PIPELINE COMPANY, et al. Harold L. PESNELL v. GULF CENTRAL PIPELINE COMPANY, et al. Jack FARMER, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. Edroe T. PESNELL, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. Randy BRISTER, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. Pam FARMER, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. O.R. GRIFFIN, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. W.J. PESNELL, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. Vannie M. GRIFFIN v. GULF CENTRAL PIPELINE COMPANY, et al. T.S. PESNELL, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. Mary W. SMITH v. GULF CENTRAL PIPELINE COMPANY, et al. C.J. UNDERWOOD, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. Raymond S. CALDWELL, Jr. v. GULF CENTRAL PIPELINE COMPANY, et al.
• Court: U.S. District Court — Western District of Louisiana

684 F. Supp. 1373

Larry BRISTER, et al. v. GULF CENTRAL PIPELINE COMPANY, et al.

Bobby BRISTER, et al. v. GULF CENTRAL PIPELINE COMPANY, et al.

Linda Gayle PESNELL v. GULF CENTRAL PIPELINE COMPANY, et al.

SUCCESSION OF J.O. GRIFFIN v. GULF CENTRAL PIPELINE COMPANY, et al.

Edroe T. PESNELL, et al. v. GULF CENTRAL PIPELINE COMPANY, et al.

Claude L. PESNELL, et al. v. GULF CENTRAL PIPELINE COMPANY, et al.

Mike GRIFFIN, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. (Two Cases)

Raymond CALDWELL, et al. v. GULF CENTRAL PIPELINE COMPANY, et al. (Two Cases)

Hollis L. SPILLERS, et al. v. GULF CENTRAL PIPELINE COMPANY, et al.

Vicki Janell GRIFFIN v. GULF CENTRAL PIPELINE COMPANY, et al.

Harold L. PESNELL v. GULF CENTRAL PIPELINE COMPANY, et al.

Jack FARMER, et al. v. GULF CENTRAL PIPELINE COMPANY, et al.

Edroe T. PESNELL, et al. v. GULF CENTRAL PIPELINE COMPANY, et al.

Randy BRISTER, et al. v. GULF CENTRAL PIPELINE COMPANY, et al.

Pam FARMER, et al. v. GULF CENTRAL PIPELINE COMPANY, et al.

O.R. GRIFFIN, et al. v. GULF CENTRAL PIPELINE COMPANY, et al.

W.J. PESNELL, et al. v. GULF CENTRAL PIPELINE COMPANY, et al.

Vannie M. GRIFFIN v. GULF CENTRAL PIPELINE COMPANY, et al.

T.S. PESNELL, et al. v. GULF CENTRAL PIPELINE COMPANY, et al.

Mary W. SMITH v. GULF CENTRAL PIPELINE COMPANY, et al.

C.J. UNDERWOOD, et al. v. GULF CENTRAL PIPELINE COMPANY, et al.

Raymond S. CALDWELL, Jr. v. GULF CENTRAL PIPELINE COMPANY, et al.

Civ. A. Nos. 82-1069 to 82-1089, 82-1380, 82-1437 and 82-1485.

United States District Court, W.D. Louisiana, Monroe Division.

April 28, 1988.

COPYRIGHT MATERIAL OMITTED

Robert E. Shadoin, Ruston, La., Charles D. Jones, Benjamin Jones, David E. Verlander, III, William G. Kelly, Jr., Monroe, La., for plaintiffs.

Joseph L. Hargrove, Jr., A.L. Wedgeworth, III, Scott C. Sinclair, Gordon E. Rountree, Dale G. Cox, Billy J. Guin, Jr., Shreveport, La., J. Bachman Lee, Monroe, La., John R. Smith, Center, Tex., for defendants.

OPINION

NAUMAN S. SCOTT, District Judge.

This consolidated action arises out of an accident involving the rupture of a liquid ammonia pipeline located in a rural part of Jackson Parish near Cartwright, Louisiana. The accident occurred on May 27, 1981 when an employee of Shelby County Construction Services, Inc. ("Shelby County") struck and punctured the pipeline while operating a bulldozer. A large amount of anhydrous ammonia was vaporized, escaped into the atmosphere and settled over the surrounding area. Thereafter, residents and landowners from the area instituted 24 separate lawsuits in state court to recover damages for personal injuries and property losses allegedly caused by the ammonia. Named as defendants were: Gulf Central Pipeline Company ("Gulf Central"), the owner and operator of the ammonia pipeline; Mitchell Energy Corporation ("Mitchell Energy"), the owner of the oil, gas and mineral rights for the land where the accident occurred; Shelby County, the independent contractor hired by Mitchell Energy to clear the land and prepare it for use as an oil well site; and "any liability insurers which insured these companies." Plaintiffs' Original Petition for Damages. The three defendants removed the 24 suits to this Court and we ordered their consolidation for purposes of trial pursuant to Rule 42(a) of the Federal Rules of Civil Procedure. Each of the defendants has denied responsibility for the accident and has asserted a cross-claim against the other two for indemnity or contribution. Additionally, each of the three defendants has filed a cross-claim¹ against Reliance Insurance Co. ("Reliance"), the liability insurer of Shelby County. In its cross-claims, Gulf Central is not only seeking indemnity or contribution, but is also seeking damages for its costs to repair the pipeline and for its loss of ammonia product. Likewise, Mitchell Energy is also seeking in its cross-claims to recover $109,565.65 it has already paid in settlement to 47 nonparty residents and landowners. Gulf Central has also filed a third-party complaint against Crown-Zellerbach Corporation ("Crown-Zellerbach"), the owner of the land where the accident occurred.

Following a trial limited to the issue of insurance coverage, we held that at the time of the accident Reliance provided liability coverage to Shelby County with limits of $500,000 for bodily injury, $100,000 for property damage, and $1,000,000 in umbrella coverage. Brister v. Gulf Central Pipeline Co., 618 F.Supp. 104 (W.D.La. 1985), affirmed, 788 F.2d 1564 (5th Cir. 1986). We also ordered the bifurcation of the remainder of this action and set the trial of the liability issues for May 18, 1987 and the trial of the damage issues for a later date. We now address the liability issues, specifically: (1) whether any or all of the original defendants, i.e., Gulf Central, Mitchell Energy, and/or Shelby County, are liable to plaintiffs for damages caused by the ammonia gas; (2) whether Gulf Central, Mitchell Energy, Shelby County and/or Reliance are entitled to recover on their cross-claims; and (3) whether Gulf Central is entitled to recover on its third-party claim against Crown-Zellerbach.

FINDINGS OF FACT

1. Plaintiffs are residents and/or landowners near Cartwright, Louisiana and are citizens of Louisiana.

2. Defendants Gulf Central, Mitchell Energy, Crown-Zellerbach, Shelby County and Reliance are foreign corporations which have their principal places of business in states other than Louisiana.

3. At all times pertinent to this action Crown-Zellerbach was owner of the land where the pipeline rupture occurred; Gulf Central was owner of a right-of-way across Crown Zellerbach's land and was owner and operator of the ammonia pipeline; Mitchell Energy owned the lessee's interest in an oil, gas and mineral lease covering the same land; Shelby County was an independent contractor hired by Mitchell Energy to clear the land and prepare it for use as an oil well site; and Reliance was Shelby County's liability insurer.

4. Gulf Central uses its pipeline to transport anhydrous ammonia from chemical plants in Louisiana to storage facilities in the midwest. (Exhibit M-16, Gulf Central System Map). The segment of pipeline that runs through Jackson Parish is 10 inches in diameter. The right-of-way across Crown-Zellerbach's land is 30 feet wide—15 feet on either side of the pipe. (Exhibit R-24, Right-of-way Easement; Dep. Tr. of William M. Kyger at 8).

5. In April, 1981 Mitchell Energy requested that Marvin T. Kent and Associates conduct a land survey of the subject oil well site which was located in the north-east corner of Section 16, Township 17 North, Range 1 West, Jackson Parish, Louisiana. During the survey, the surveyor observed that the well location was 195 feet from the ammonia pipeline right-of-way. (Dep. Tr. of Marvin Thomas Kent at 32). After the survey was made, Marvin Kent prepared a plat showing the well location and gave this plat to Mitchell Energy. (Exhibit R-19, Kent # 2). The plat incorrectly indicates that Gulf Central's pipeline runs southeast of the well location; the pipeline actually runs southwest of the well.

6. On or about May 19, 1987 Mitchell Energy received a title opinion which was prepared by attorney Joseph L. Hargrove, Jr. (Exhibit R-13, Title Opinion of May 14, 1981). In Comment 13 of the title opinion Hargrove pointed out the existence of a pipeline right-of-way instrument granted to Gulf Central affecting the subject land. Hargrove further stated: "We, of course, recommend and require that you conduct all of your operations on the land under examination with due regard for the rights accorded the grantee under these instruments." (Exhibit R-13 at 7; see also Uncontested Facts No. K, Pretrial Stipulations filed May 4, 1987).

7. In early May, 1981 Mitchell Energy invited Shelby County to submit a bid proposal to excavate and clear land at the well site. Before preparing its bid, Shelby County's president, Joe Pouyer, met with a Mitchell Energy representative at the well site and inspected the surrounding land. During the meeting there was no specific discussion regarding the close proximity of Gulf Central's ammonia pipeline, however, Pouyer did observe two markers or signs indicating the presence of an underground pipeline. (1st Dep.Tr. of Joseph E. Pouyer at 28-29, 41-43; 2nd Dep.Tr. of Joseph E. Pouyer at 56-57). The signs were positioned on opposite sides of a gravel road that was adjacent to and north of the well site. Pouyer aligned the two sign posts and concluded that the path of the pipeline would not cross the well site area. (Pouyer # 1, supra at 43-44; Pouyer # 2, supra at 57-58). Mitchell Energy subsequently awarded the job to Shelby County as low bidder. The parties did not execute a written agreement. (Pouyer # 1, supra at 27-28).

8. The topography of the land at the well site directly affected Shelby County's work. Crown-Zellerbach had clear-cut and harvested the timber on the land south of the gravel road in the vicinity of the well location in either 1975 or 1976. (Dep.Tr. of Gary W. Franklin at 15-16). Crown-Zellerbach used a helicopter to reseed the area with pine seedlings in 1977. Id. In May, 1981 this land was completely covered with grass, weeds, brush and young pine trees; the vegetation was between four and ten feet in height. (Dep.Tr. of Joe Parks at 32; Dep.Tr. of Levi Morgan Harris at 33-34; Franklin, supra at 14-17; Dep.Tr. of Bobby Brister at 10; Dep.Tr. of Frank Dykstra at 10, 12; Kent, supra, at 27; see also Exhibits R-11, R-12, R-16). In contrast, the land north of the gravel road was covered with tall pine trees except for a clearly defined strip of land running north-south, which was Gulf Central's right-of-way. (Harris, supra at 35; Exhibit R-11; Exhibit G-8). Also, utility high lines were located north of the site adjacent to the gravel road. (Parks, supra at 19-22; Harris, supra at 31). The land elevation west of the well location abruptly decreased near either a creek bed or bottom...