Dobransky v. EQT Production Company

• Decision Date: 11 April 2022
• Docket Number: 900 WDA 2019
• Citation: 273 A.3d 1133
• Parties: Eric DOBRANSKY, Appellant v. EQT PRODUCTION COMPANY and Halliburton Energy Services, Inc.
• Court: Pennsylvania Superior Court

273 A.3d 1133

Eric DOBRANSKY, Appellant

v.EQT PRODUCTION COMPANY and Halliburton Energy Services, Inc.

No. 900 WDA 2019

Superior Court of Pennsylvania.

Argued August 24, 2021

Filed: April 11, 2022

Vincent A. Coppola, Pittsburgh, for appellant.

David R. Fine, Harrisburg, for appellees.

BEFORE: PANELLA, P.J., BENDER, P.J.E., BOWES, J., LAZARUS, J., OLSON, J., DUBOW, J., KUNSELMAN, J., MURRAY, J., and McCAFFERY, J.

OPINION BY BENDER, P.J.E.:

Appellant, Eric Dobransky, appeals from the trial court's May 22, 2019 order granting summary judgment in favor of Appellees, EQT Production Company ("EQT") and Halliburton Energy Services, Inc. ("HESI") (referred to herein collectively as "Appellees"). After careful review, we vacate the trial court's order and remand. In addition, we deny Appellees’ application to strike and preclude argument.

The matter before us concerns whether HESI — and by extension, EQT — qualify as statutory employers under the Workers’ Compensation Act ("WCA" or "the Act")¹ and, as such, enjoy immunity from tort liability for injuries suffered by Mr. Dobransky. By way of background, under the WCA, employers must pay workers’ compensation benefits, regardless of negligence, to employees who sustain injuries in the course of their employment. See 77 P.S. § 431. In exchange for receiving these benefits without having to prove negligence, employees may not sue their employers in tort for injuries they incurred in the course of their employment. See 77 P.S. § 481(a). In other words, with respect to work-related injuries, the employers have immunity from tort liability.

Pertinent to the issues before us, pursuant to Section 302(a) of the WCA, codified at 77 P.S. § 461, certain contractors who meet a specialized definition take on secondary liability for the payment of workers’ compensation benefits to the injured employees of their subcontractors. See 77 P.S. § 461 ; see also Six L's Packing Co. v. W.C.A.B. (Williamson) , 615 Pa. 615, 44 A.3d 1148, 1157 (2012). Thus, in the event the subcontractor-employers cannot or will not pay workers’ compensation benefits to their subcontractor-employees, these contractors assume workers’ compensation liability. 77 P.S. § 461. As such, despite not being the actual employers of the subcontractor-employees, these contractors are considered "statutory employers" of the subcontractor-employees due to their treatment under the WCA. See Patton v. Worthington Associates, Inc. , 625 Pa. 1, 89 A.3d 643, 645 (2014). Like the treatment of actual employers under the WCA, in return for assuming secondary liability for the payment of workers’ compensation benefits, statutory employers enjoy immunity in tort for injuries the subcontractor-employees receive during the course of their employment. See 77 P.S. § 481(a) ; Doman v. Atlas America, Inc. , 150 A.3d 103 (Pa. Super. 2016). The contractors enjoy this immunity "by virtue of statutory-employer status alone, such that it is accorded even where the statutory employer has not been required to make any actual benefit payment." See Patton , 89 A.3d at 645 (citing Fonner v. Shandon, Inc. , 555 Pa. 370, 724 A.2d 903, 907 (1999) ) (footnote omitted).

Facts

With that background in mind, we now turn to the facts before us. This case arises out of injuries sustained by Mr. Dobransky from his exposure to barite at Scott's Run, a natural-gas well site leased and operated by EQT, on June 19, 2012.^{2 ,3} In order to drill and produce natural gas at Scott's Run, EQT subcontracted with numerous companies, including HESI. See Maddox's Dep. at 12-13. Pursuant to a master services agreement ("MSA"), EQT contracted with HESI to perform various services for it related to both drilling and hydraulic fracturing. See Appellees’ Motion for Summary Judgment, 7/2/18, at Exhibit B ("MSA"); Appellees’ Brief at 5-6; Mr. Dobransky's Substituted Brief at 7. Notably, at the Scott's Run site, HESI provided EQT with mud services. Maddox's Dep. at 16-17. Bradley Maddox, EQT's director of drilling, described the mud services provided by HESI as follows:

[Mr. Dobransky's counsel:] [W]hat does providing mud services mean?

[Mr. Maddox:] So to drill a horizontal well, we have to have mud in the hole to keep the hole open and stable, and carry cutting out of the hole. And [HESI's] function in that role is to provide [EQT] a mud that will provide ... those qualities to be able to drill the well successfully and get casing in the ground.

***

[Mr. Dobransky's counsel:] And when you say mud, can you define mud for me?

[Mr. Maddox:] It is a water-based, semi[-]saturated, polymer-based fluid, that has a variety of products in it to give it the properties we need to drill the well.

[Mr. Dobransky's counsel:] Are you able to tell me what's in it?

[Mr. Maddox:] Barite is one of them. Xanthan gum is another one. Salt is another product. We have a polymer. ... There could be other products in there ... a pH pack ten, I think is another product in there. There's a lot of products in the mud that give it the consistency that we need, keep the pH in check and the other properties.

[Mr. Dobransky's counsel:] Why is barite necessary?

[Mr. Maddox:] It's a weighting material.

[Mr. Dobransky's counsel:] Meaning it has weight?

[Mr. Maddox:] Yes.

[Mr. Dobransky's counsel:] Why is that necessary?

[Mr. Maddox:] We need weight.... [W]hen drilling a horizontal well, the overburden of the formation that we are drilling, if we didn't have a fluid in there that had ... hydrostatic weight to push back against that formation, the hole would not remain open to get our drill bit through it and our casing in the ground.

Maddox's Dep. at 17, 18-19; see also id. at 7.

In providing EQT with mud services, HESI was responsible for gathering the necessary raw materials to create the drilling mud, maintaining and inspecting the tanks that held the barite, and keeping track of inventory. Id. at 27; Mr. Dobransky's Substituted Brief at 15 ("[HESI] did not purchase the ‘mud’ from a third[-]party supplier, but instead collected the necessary raw materials to have the mud blended and stored at the EQT well site."); Appellees’ Brief at 22 (noting that HESI required that barite be delivered in order to make the drilling mud).

In order to have the barite used in the drilling mud delivered to the Scott's Run well site, HESI executed a transportation agreement with Northwest Concrete Products, Inc., d/b/a Northwest Logistics ("Northwest"), under which Northwest agreed to "transport the goods or materials tendered to it by [HESI] or any supplier of [HESI] to and from the origin and/or destination points (and stop off points in between) as designated by [HESI]...." Appellees’ Motion for Summary Judgment at Exhibit C ("Transportation Agreement") at ¶ 1; see also Mr. Dobransky's Substituted Brief at 15; Appellees’ Supplemental Brief at 16-17. Northwest also unloaded the goods and materials it transported. See Appellees’ Brief at 6; Appellees’ Supplemental Brief at 9, 16-17; Mr. Dobransky's Substituted Brief at 10.

Northwest employed Mr. Dobransky as a truck driver. TCO at 2. On the day in question, Mr. Dobransky was delivering barite to the Scott's Run site. When unloading the barite into HESI's storage tank, the cap blew off, releasing barite onto Mr. Dobransky's face and onto his person. Id. at 2-3. Mr. Dobransky claims that, among other deficiencies, the tank was missing a ball valve and pressure gauge. Id. at 3. As a result of his exposure to the barite, Mr. Dobransky alleges that he sustained severe and serious injuries, including losing nearly half of his lung capacity. See, e.g. , First Amended Complaint, 5/2/14, at ¶ 12.

Procedural History

Mr. Dobransky subsequently filed a negligence action against Appellees. On July 2, 2018, Appellees filed a motion for summary judgment, arguing that they were Mr. Dobransky's statutory employers under Section 302(a) of the WCA, and, therefore, immune from tort liability. Section 302(a) provides:

A contractor who subcontracts all or any part of a contract and his insurer shall be liable for the payment of compensation to the employes of the subcontractor unless the subcontractor primarily liable for the payment of such compensation has secured its payment as provided for in this act. Any contractor or his insurer who shall become liable hereunder for such compensation may recover the amount thereof paid and any necessary expenses from the subcontractor primarily liable therefor.

For purposes of this subsection, a person who contracts with another (1) to have work performed consisting of (i) the removal, excavation or drilling of soil, rock or minerals, or (ii) the cutting or removal of timber from lands, or (2) to have work performed of a kind which is a regular or recurrent part of the business, occupation, profession or trade of such person shall be deemed a contractor, and such other person a subcontractor. This subsection shall not apply, however, to an owner or lessee of land principally used for agriculture who is not a covered employer under this act and who contracts for the removal of timber from such land.

77 P.S. § 461 ("Section 302(a)").

In their motion for summary judgment, Appellees — relying on 77 P.S. § 461(1)(i) ("Section 302(a)(1)(i)") and Doman , supra — argued that HESI contracted with Mr. Dobransky's employer, Northwest, to transport and unload a product at the well site used in the "removal, excavation or drilling" for natural gas, and that consequently, HESI is Mr. Dobransky's statutory employer and immune from tort liability. See Appellees’ Motion for Summary Judgment at ¶¶ 39, 44. In addition, HESI asserted that, because EQT is in vertical contractual privity with Northwest and HESI, EQT is also Mr. Dobransky's statutory employer such that it, too, is immune from suit. Id. at ¶¶ 45-51; see also Emery v. Leavesly McCollum , 725 A.2d 807, 811-12 (Pa. Super. 1999) (en banc ) (determining that a general contractor could qualify as the statutory employer of a sub-subcontractor's...