Everette v. Alyeska Pipeline Service Co., s. 4067

• Decision Date: 18 July 1980
• Docket Number: 4068 and 4134,Nos. 4067,s. 4067
• Citation: 614 P.2d 1341
• Parties: Kelley Key EVERETTE, Appellant, v. ALYESKA PIPELINE SERVICE CO. and Bechtel, Inc., Appellees. ALYESKA PIPELINE SERVICE CO. and Bechtel, Inc., Cross-Appellants, v. Kelley Key EVERETTE, Cross-Appellee. Alvin L. LANTZ and Odellia Lantz, Appellants, v. ALYESKA PIPELINE SERVICE CO., Appellees.
• Court: Alaska Supreme Court

Page 1341

614 P.2d 1341

Kelley Key EVERETTE, Appellant, v. ALYESKA PIPELINE SERVICE CO. and Bechtel, Inc., Appellees.

ALYESKA PIPELINE SERVICE CO. and Bechtel, Inc., Cross-Appellants, v. Kelley Key EVERETTE, Cross-Appellee.

Alvin L. LANTZ and Odellia Lantz, Appellants, v. ALYESKA PIPELINE SERVICE CO., Appellees.

Nos. 4067, 4068 and 4134.

Supreme Court of Alaska.

July 18, 1980.

Theodore R. Dunn, Dunn, Baily & Mason, Anchorage, James A. Parrish, Parrish Law Office, Fairbanks, for appellant/cross-appellee Everette.

Robert L. Eastaugh, Delaney, Wiles, Moore, Hayes & Reitman, Inc., Anchorage, for appellees/cross-appellants Alyeska Pipeline Service Co. and Bechtel, Inc.

James A. Parrish, Parrish Law Office, Fairbanks, for appellants Lantz.

Doris R. Ehrens, Hughes, Thorsness, Gantz, Powell & Brundin, Fairbanks, for appellee Alyeska Pipeline Service Co.

Before RABINOWITZ, C. J., CONNOR, BOOCHEVER, BURKE, JJ. and DIMOND, Senior Justice.

OPINION

BURKE, Justice.

These cases involve workers who were injured during the course of their employment during the construction of the trans-Alaska pipeline. The workers have sued Alyeska Pipeline Service Co. to recover for their injuries. ¹ Alyeska was the agent for the oil companies which own the permit authorizing construction of the pipeline. Alyeska, however, did not engage in any construction activity. Instead, it contracted with numerous "execution contractors" to do the actual work. These execution contractors were the direct employers of the injured workers. The contracts between Alyeska and the execution contractors provided that Alyeska would obtain workers' compensation coverage for the in-state employees of the different contractors. With one exception ² this blanket policy has compensated the injured workers.

The cases each raise the same issue: whether the exclusive liability provision provided in the Workmen's Compensation Act, AS 23.30.055, shields Alyeska from common law tort liability for the injuries of the employees of the execution contractors. We hold that it does not. Because we find Alyeska subject to common law liability, a second issue, raised on appeal only in case no. 4067, must be resolved: what is the extent of Alyeska's common law liability. We hold that Alyeska's liability at common law depends upon factual issues which must be determined by a jury on remand. Because of the similarity of the issues, we have treated these cases in a single opinion.

I. Facts

A. Everette v. Alyeska Pipeline Service Co. & Bechtel Inc., Nos. 4067 & 4068

Appellant, Kelley Key Everette, was employed by Price-Potashnick-Codell-Oman (PPCO), a joint venture, one of the execution contractors on the pipeline project. The events leading to Everette's injuries began when fellow PPCO workers were re-beveling a pipe joint. As the re-beveling machine was lowered into place, the machine hit the end of the pipe dislodging it from its skids. The pipe slipped downhill and struck a second pipe, dislodging it as well. Everette was injured when one of the pipejoints pinned him against the pipe upon which he was working.

Everette sued Alyeska Pipeline Co. and Bechtel, Inc., asserting that they were negligent and that their negligence proximately caused his injury. He claimed that Alyeska was under a duty to provide a safe place for plaintiff to work; that Alyeska retained control of safety with respect to pipe installation and was negligent in the exercise of that control; that Alyeska was on notice of the danger of pipe sections "breaking loose from stacks and blocking" and causing serious injury or death; and that Alyeska was negligent in failing to provide proper safety instruction, safety orders, and supervision to prevent injuries such as those received by Everette.

Everette complained that Bechtel was employed by Alyeska "to insure that adequate quality control and safety standards were followed by Alyeska's contractors;" that it was under a duty to Everette to adopt and insure proper safety procedures for securing and blocking sections of pipe; that on the day of the accident it had employees at the accident site who saw or should have seen the improper blocking of pipe sections on the hill, and who knew or should have known of the purported dangerous propensity of such sections to slip; and that Bechtel was negligent in failing to "insure" through its employees, procedures and directives that pipe sections in potentially dangerous situations would be adequately blocked and secured.

Alyeska and Bechtel denied these allegations in their answers and moved for summary judgment. They asserted, first, that the PPCO joint venture was an independent contractor and that they could not be held liable for the injury Everette received in the course of his employment with the joint venture and, second, that the Workmen's Compensation Act provided the exclusive remedy for Everette's injuries.

On March 28, 1978, the superior court granted summary judgment in favor of Alyeska and Bechtel on the first of these grounds. It found that, because Everette was an employee of an independent contractor, Alyeska and Bechtel owed him no duty of care. The court further found that Alyeska did not assume sufficient control over the stringing of the pipe and related safety procedures to justify a finding of liability. Everette has appealed the superior court's ruling in case no. 4067. The superior court, however, rejected the argument that the Workmen's Compensation Act provided the exclusive remedy for the injuries, and denied summary judgment on that ground. Alyeska and Bechtel have appealed the denial of their motion for summary judgment in case no. 4068 as a protective measure, in the event that the court's ruling that there was no duty of care is reversed.

B. Lantz v. Alyeska Pipeline Service Co., No. 4134

Appellant Alvin L. Lantz was employed by Arctic Constructors, another one of the execution contractors. On April 5, 1976, and for three days thereafter, he had reported to a physician's assistant, who was employed by Alyeska to provide medical care for pipeline workers, to complain of severe abdominal pain that he was experiencing. Lantz alleges that the physician's assistant failed to refer him to a proper medical facility and as a result he has suffered a ruptured appendix, severe abdominal infection, and a large incisional hernia. Alvin and Odellia Lantz brought a lawsuit against Alyeska alleging that the physician's assistant was negligent and that Alyeska was vicariously liable for the negligent acts of its employee. Alyeska moved for summary judgment on the ground that the action was barred by the exclusive remedy provision in the Workmen's Compensation Act. The superior court ruled that Alyeska was immune from tort liability by reason of the Act and granted the motion.

II. Whether the Exclusive Remedy Provision Provided in the Workmen's Compensation Act, AS 23.30.055 Entitles Alyeska to Immunity From Common Law Liability

To support its claim for immunity, Alyeska initially contends that it is entitled to rely on the exclusive remedy provision provided in Alaska's Workmen's Compensation Act, AS 23.30.055, ³ since under the act it may incur some liability to secure compensation. Alyeska's liability under the Act, if any would result from application of the so-called "contractor-under" clause. This clause is set forth in AS 23.30.045(a) which provides as follows:

An employer is liable for and shall secure the payment to his employees of the compensation payable under §§ 50, 95, 145, and 180-215 of this chapter. If the employer is a subcontractor, the contractor is liable for and shall secure the payment of the compensation to employees of the subcontractor unless the subcontractor secures the payment. (Emphasis added.)

The exclusive liability provision in the Workmen's Compensation Act states in part: "The liability of an employer prescribed in § 45 of this chapter is exclusive and in place of all other liability of the employer and any fellow employee to the employee . . . ." AS 23.30.055. ⁴ Alyeska maintains that, because it may be liable to secure compensation under section 45, it is in effect the employer of the injured workers and is therefore entitled to immunity under section 55.

We are unable to agree with Alyeska's contention. In order for the "contractor-under" clause to have any application in the case at bar, we must necessarily find that Alyeska was a contractor who employed various subcontractors to perform the actual construction of the pipeline. We do not believe that the requisite contractor-subcontractor relationship was established between Alyeska and the various execution contractors.

Alyeska was the agent for the oil companies which owned the permit authorizing construction of the pipeline; Alyeska did not engage in any construction activities itself. Instead, Alyeska entered into contractual agreements with other contractors to engage in the actual construction of the pipeline. These execution contractors entered into an agreement with Alyeska which stated that the contractor "is, and shall be deemed to be, an independent contractor and not the agent or employee of OWNERS or ALYESKA."

Our finding here is supported by our recent decision in Hammond v. Bechtel Inc. and Alyeska Pipeline Service Co., 606 P.2d 1269 (Alaska 1980). The facts in Hammond are very similar to those in the instant case. Hammond was injured while employed by General-Alaska-Stewart, a contractor engaged in construction work on the Trans-Alaska Pipeline. As with the contracts in the case at bar, General-Alaska's contract provided that General-Alaska "is, and shall be deemed to be, an independent contractor and not the agent or employee of OWNERS or ALYESKA." Holding that, as a matter of law, Bechtel and Alyeska could be held vicariously liable for the actions of General-Alaska, we found that Bechtel and Alyeska "maintained an 'independent contractor' relationship with...