Halepeska v. Callihan Interests, Inc.

• Decision Date: 31 July 1963
• Docket Number: No. A-8698,A-8698
• Parties: Natalie K. HALEPESKA et al., Petitioners, v. CALLIHAN INTERESTS, INC., Respondent.
• Court: Texas Supreme Court

Page 368

371 S.W.2d 368

Natalie K. HALEPESKA et al., Petitioners, v. CALLIHAN INTERESTS, INC., Respondent.

No. A-8698.

Supreme Court of Texas.

July 31, 1963.

Rehearing Denied Oct. 9, 1963.

Childers & Garrett, Abilene, Hill, Brown, Kronzer & Abraham, Houston, for petitioners.

McMahon, Smart, Sprain, Wilson & Camp, Abilene, Leachman, Gardere, Akin & Porter, Dallas, J. M. Lee, Abilene, with McLahon, Smart, Sprain, Wilson & Camp, Abilene, for respondent.

GREENHILL, Justice.

Natalie Halepeska and her children brought this action for the wrongful death of Dennis L. Halepeska, their husband and father, respectively. The defendant is Callihan Interests, Inc., hereafter called Callihan. Halepeska and a Mr. D. F. Morris were killed when a gas well owned by Callihan blew out. Trial was to a jury. Disregarding the answers by the jury to some issues, the trial court entered judgment against Callihan for $85,000. The Court of Civil Appeals at Eastland reversed that judgment and rendered judgment for Callihan. 349 S.W.2d 758. The basis of the Court of Civil Appeals' opinion, upon certain jury findings, was that Callihan had breached no duty toward Halepeska because the danger was open and obvious, and that Halepeska had voluntarily exposed himself to a risk of which in the exercise of ordinary care, he should have known and which he should have appreciated. The jury also found that Halepeska did not have full knowledge of the manner in which the well was equipped and did not appreciate the extent of the danger in opening the valves on the well. The Court of Civil Appeals did not regard these findings as controlling.

The case involves the difficult and sometimes overlapping questions of 'no duty' to invitees, the doctrine of volenti non fit injuria, or voluntary exposure to risk, as well as negligence and contributory negligence.

Because there were no eyewitnesses to the accident and because circumstantial evidence becomes important, a rather full description of the facts is necessary. The transcribed testimony fills three thick volumes, and there are numerous exhibits and pictures. It is difficult to reduce this material to the usually desired brief statement of facts.

The Callihan oil properties had been privately owned. When Mr. Callihan died in 1952, he left them to his widow. She became Mrs. Farnsworth. The business was incorporated as Callihan Interests, Inc., in 1958, with Mrs. Farnsworth owning all, or virtually all, of the stock.

In the statement of the facts which follows, it is important to follow the activities not only of Halepeska but of Morris. Morris was an 'old time' oil man, a jack of all trades. He was named secretary of Callihan, Inc., upon its incorporation, but he continued his same work for the company. Morris was a landman for Callihan with some thirty or forty years' experience in the oil fields. While it was not in Morris's particular department to bleed or blow the well in question, there were no restrictions on his activities. The clear inference is that he could have done so.

Halepeska first went to work as an employee of Callihan (Mrs. Farnsworth) in 1954 as a geologist. He was regarded as a good one. There was a reorganization in 1958 and the business was incorporated. In the charter, Halepeska was named or listed as vice president, though his duties remained the same. The corporation also had another geologist named Vaughn. Following the reorganization, Halepeska and Vaughn severed their official working relations with the corporation though they continued to do a great deal of work for Callihan. Halepeska continued to be a vice president of Callihan, though he received no salary as such. They were no longer carried as employees of Callihan on its books. They kept separate records. They were no longer listed by Callihan for income tax, social security, or insurance purposes. They established what they called an independent geological consulting firm known as 'Halepeska and Vaughn.' There was evidence that they had a separate office, with their names on the door, a separate telephone listing, and separate secretarial service. While they were paid a substantial retainer by Callihan, they held themselves out as independent geologists, a fact recognized from the stand by Mrs. Farnsworth. Halepeska and Vaughn had purchased from Callihan the cars and furniture they had been using. Payments thereon were deducted monthly from their retainer. At the time of Halepeska's death, he and Vaughn shared their profits on a 50-50 basis. In short, there is evidence to support the jury's findings that Halepeska had become an independent geologist and was a business invitee upon Callihan's property at the time of the fatal occurrence in question. Commercial Standard Ins. Co. v. Davis, 134 Tex. 487, 137 S.W.2d 1 (1940).

Callihan owned mainly oil properties. It had only three or four gas wells. The particular well here involved was on the Smith lease in Callahan County. The well was drilled for Callihan in 1955 by Worth Thomason of Brownwood. Halepeska was then an employed geologist of Callihan. He had been present during the drilling and at the completion of the well. It was perforated at approximately 3570 feet in the Duffer Lime. It was hoped that the well would be an oil well and that sand fracting would make it so. But it did not, and the well was regarded as a gas well. As Halepeska knew, it had a bottomhole pressure of 1280 pounds per square inch. It was never completed as a gas well. Halepeska had made the drill stem test. He had wanted to 'set pipe' at that time, but this was not done. No tubing was placed in the hole, and only surface casing was set. It was shut in as a gas well in 1955; and no further efforts were made to cause it to produce until 1958.

In November of 1958, Callihan re-entered the well. While Mr. Fuller was superintendent, Mr. Howell was in charge under Fuller. Mr. Nicholson made a dead-weight test, Fuller supervised the perforation, and Howell acidized the well. Halepeska was not present at these operations.

On December 9, 1958, O. J. Russell of Riley Maxwell Company, an oil field servicing company, was employed by Callihan to work on the well. The well had a 4-inch pipe within the surface casing. It had a 4-inch master gate valve on it. Accompanied by Callihan employees Nicholson and Morris (who was killed later with Halepeska), Russell went to the gas well. Above the 4-inch valve, there was placed a 2-inch choke which had a maximum opening of 3/4 inch. The 4-inch valve was first opened. Then the 2-inch choke was opened 1/4 inch so as to let the gas escape, and later opened to 1/2 inch. At the time Russell 'blew' the well, it was not equipped with the 2-inch valve, the 'L' joint, or flow line, as it was equipped when Halepeska and Morris were killed. The gas was produced through the choke, which was considered to be a safety factor. The gas was allowed to escape directly from the vertical well structure through the choke. The well was thus tested without incident for approximately eight hours.

Russell said that the equipment on the well was (then) good, and no changes were necessary. He found that the well was making a little fresh water, and he felt that the 'open flow would go considerably higher if the water was gotten out of the formation.' He told the Callihan people that the well would make a higher test if they got the water out of it, but he did not advise them how to get the water out.

Morris was present when Russell 'blew' the well. Halepeska was not present. Nicholson testified that Morris observed Russell opening the choke. While Morris did not stay for all of the test, Russell did tell Morris that the well should be 'blowed' so as to get rid of the water. Russell testified that to get rid of the water, it was necessary to blow a well hard enough to raise the fluid; that to get the water out, you have to blow it pretty hard.

L. R. Fuller, production superintendent for Callihan, testified that on December 15 (before the fatal accident on the 17th) Morris had said the well ought to be flowed (or blown), a view shared by Halepeska. Both Morris and Halepeska had expressed unusual interest in the well and believed it to be a productive one.

Clark Howell, field superintendent for Callihan directly under Fuller, testified that Fuller told him to go to the well on December 15 and fix it up so it could be flowed. Howell testified that Morris told him how it should be fixed: it should have a pipe leading to the slush pits to take care of the oil and water which would be produced. Howell also testified that on the morning of December 15 he had a conversation with Halepeska as to how the well was to be equipped. He said Halepeska told him to 'fix it up to the pit, where we could flow it without any danger to the farm property . . . or any cars that might be passing by.'

On the morning of Monday, December 15, 1958, Howell went with Emmett Price, a Callihan pumper, to the well to equip it for the blowing. He and Price took off the 2-inch choke which had been used by Russell to blow the well on December 9. In its place they put some other equipment including a 2-inch valve, an 'L' joint sticking out horizontally to the side of the well in a southerly direction, and 2 joints of pipe 20 feet long and 2 inches in diameter. The 40 feet of pipe led in an easterly direction from the 'L' joint just off the well to a slush pit to the east and a little bit south of the well. Near the end of the 40 feet of pipe (called the 'flow pipe') there was a single set of stakes to hold the flow pipe down. The testimony as to the distance the pipe extended beyond the stakes varied from 18 inches to 4 feet. The stakes consisted of two odd pieces of pipe (a 1 1/2 steel pipe and 3/4 rod), driven into the ground and crossed above the flow pipe. The two pieces were secured by a rope. Thus braced by the single set of stakes, the flow pipe led from the well to the slush pit at ground level....