Houk v. Arrow Drilling Co.

• Decision Date: 06 April 1968
• Docket Number: No. 44992,44992
• Citation: 201 Kan. 81,439 P.2d 146
• Parties: William J. HOUK, Jr., Plaintiff and Appellee, v. ARROW DRILLING COMPANY, Defendant and Appellant.
• Court: Kansas Supreme Court

Page 146

439 P.2d 146

201 Kan. 81

William J. HOUK, Jr., Plaintiff and Appellee, v. ARROW DRILLING COMPANY, Defendant and Appellant.

No. 44992.

Supreme Court of Kansas.

April 6, 1968.

Syllabus by the Court

1. Where the plaintiff commences a common-law action against a 'person other than the employer' pursuant to K.S.A 44-504, to recover damages for personal injuries sustained as a result of the negligence of such third person, more than one year, but less than two years, after the injury occurred, and alleges the action is brought for himself in concert with his employer and its insurance carrier, as their interest may appear, the action is not barred, following Klein v. Wells, 194 Kan. 528, 400 P.2d 1002.

2. The fundamental premise upon which liability is predicated in the Workmen's Compensation Act under K.S.A. 44-503(a), is the existence of a contract between two employers.

3. Where a general contract or employs two separate independent contractors to perform specialized services on the same premises and the employees of each contractor cooperate in carrying on the work their employers were hired to do, the employees of neither contractor being subject to the control of the other and do not engage in doing work the other was employed to perform, an employee of one contractor injured by the negligence of the other is not a 'statutory employee' within the contemplation of K.S.A. 44-503(a), and is authorized to maintain an action to recover damages against the negligent third party under K.S.A. 44-504.

4. The liability of an employer under K.S.A. 44-501 to provide compensation and medical aid to an employee injured in the course of his employment supersedes the employer's common-law liability for negligence. However, the Workmen's Compensation Act does not attempt in any way to determine the rights of the employee with respect to the legal liability of some 'person other than the employer' to pay damages, but permits the employee to pursue his common-law right of action for negligence caused by such other person. (K.S.A. 44-504.)

5. Where an action is brought by an injured employee against a negligent third party pursuant to 44-504, compensation proceedings have no place in the trial of such an action and the extent the employer may participate therein is to intervene to protect and enforce his monetary lien for compensation and medical aid provided the employee to the date of recovery.

6. It is no defense in a negligent third party action that the injured workman has received workmen's compensation benefits from his employer for the same injury, nor is it a defense that the employer's negligence may have proximately contributed to the injury. Likewise, the doctrine of assumption of risk is no defense.

7. Where an employer and his employee are both under the Workmen's Compensation Act and the employer provides the injured employee compensation benefits thereunder pursuant to 44-501, Section 44-504 expressly gives the employer a lien on the first proceeds recovered by the injured workman from a negligent third party which lien is not abrogated by the employer's negligence which may have approximately contributed to the injury.

8. The record in a negligent third party action commenced pursuant to K.S.A. 44-504, is examined and it is held: The district court erred in submitting a special question to the jury whether the plaintiff's injuries were proximately caused by the negligence of his employer, and in concluding the jury's finding in the affirmative terminated the employer's right of subrogation to any monetary interest in the litigation, and the court further erred in reducing the total amount of damages awarded the plaintiff by the amount of the employer's monetary lien.

Keith M. Wilcox, Liberal, argued the cause, and Richard Hickey and E. W. Hack, Liberal, were with him on the brief for appellant Arrow Drilling Co.

Harold K. Greenleaf, Jr., Liberal, argued the cause, and Eugene L. Smith, Chas. Vance, H. Hobble, Jr., Rex A. Neubauer, Chester A. Nordling and Gene H. Sharp, Liberal, were with him on the brief for plaintiff-appellee, and cross-appellant.

Gene H. Sharp, Liberal, argued the cause, and Chas. Vance, H. Hobble, Jr., Rex A. Neubauer, Chester A. Nordling and Kerry McKueen, Liberal, were with him on the brief for cross-appellant Jake's Casing Crews, Inc.

FATZER, Justice.

William J. Houk, Jr., brought this negligent third party action against the Arrow Drilling Company, Inc., pursuant to K.S.A. 44-504, and the district court entered judgment in his favor in the sum of $21,100.27, upon the jury's answers to special questions.

The defendant has appealed from the judgment entered, and from summary judgment discharging Jake's Casing Crews, Inc., the plaintiff's employer, as a party defendant. The plaintiff Houk has cross-appealed from the entry of judgment in sum of $21,100.27, notwithstanding the jury's special finding the sustained total damages in the sum of $25,850.00. Jake's Casing Crews, Inc., has also cross-appealed from the finding and judgment that its statutory right of subrogation for compensation and medical aid provided the plaintiff was terminated by the special finding of the jury.

The parties are hereafter referred to as follows: William J. Houk, Jr., as the plaintiff; the Arrow Drilling Company, Inc., as Arrow; Jake's Casing Crews, Inc., as Jake's Crew, and Petroleum Exploration, Inc., of Texas, as Petroleum.

On September 4, 1963, the plaintiff sustained personal injuries in an industrial accident while employed by Jake's Crew on an oil and gas drilling location in Beaver County, Oklahoma, owned by Petroleum, of Amarillo, Texas. Petroleum contracted with Arrow to drill the Beaver County test well, and employed Jake's Crew to perform its specialized service to run casing in the well.

The plaintiff was provided workmen's compensation and medical aid by Jake's Crew and its insurance carrier in the sum of $9,449.46, and he commenced this action on July 25, 1965, more than one year, but less than two years, after the date of the injury.

The amended petition alleged that the plaintiff was employed by Jake's Crew, an independent contractor, on Arrow's drilling rig at the Beaver County test well, and as a result of Arrow's negligence he was injured and sustained permanent disability. The negligent acts of Arrow which were alleged need not be set out, and the amended petition also alleged the action was brought 'in concert with his employer of that date, Jake's Casing Crews, Inc. and its insurance carrier for the benefit of the parties as their interest may appear in accordance with K.S.A. 44-504.' The amended petition was signed by counsel for the plaintiff and Jake's Crew.

Arrow answered the plaintiff's amended petition and filed a counterclaim requesting that Jake's Crew be made a party defendant to respond to the amended petition and to Arrow's counterclaim against it. Arrow's answer generally denied the allegations of the amended petition. It specifically denied that Jake's Crew was an independent contractor, and alleged that Jake's Crew was a subcontractor to Arrow in executing the work which was a part of Arrow's trade or business and which Arrow had contracted to perform. It further alleged that plaintiff's sole remedy against Arrow was provided under the Kansas Workmen's Compensation Act, specifically K.S.A. 44-503. The answer further alleged specific acts of contributory negligence on the part of the plaintiff.

In its counterclaim for interpleader, Arrow alleged that if the plaintiff was injured by a stand of falling pipe, the pipe was being moved by a pick-up cable which was not owned by it but was equipment owned and controlled exclusively by the plaintiff's employer and the subcontractor of Arrow, namely, Jake's Crew, and that Arrow was without knowledge of the previous condition of the pick-up cable; that if Arrow was liable for the plaintiff's injuries, it was entitled to be indemnified by Jake's Crew in the amount awarded to the plaintiff for damages, and the presence of Jake's Crew in the action was required for the granting of complete relief. The prayer was that Jake's Crew be made a party defendant to respond to plaintiff's amended petition and to Arrow's counterclaim against it, and that Arrow be given judgment against Jake's Crew in the event an award of damages was made in favor of the plaintiff; that the plaintiff take nothing in his claim for damages and that his amended petition be dismissed with prejudice.

On April 8, 1966, the district court sustained Jake's Crew's motion for summary judgment against Arrow upon the grounds that the plaintiff had recovered workmen's compensation benefits from Jake's Crew for the injuries he sustained in the accident and that the provisions of K.S.A. 44-501 prevent any other recovery being made against Jake's Crew because of said accident.

On April 19, 1966, the cause was tried to a jury which returned answers to special questions submitted by the district court. Those pertinent read:

'1. Do you find by a preponderance of the evidence that Plaintiff Houk's injuries were proximately caused by:

'a. The sole negligence of the defendant Arrow Drilling Company.

'ANSWER: No.

'b. The sole negligence of Jake's Casing Crew.

'ANSWER: No.

'c. The combined negligence of the Defendant Arrow Drilling Co. and Jake's Casing crew.

'ANSWER: Yes.

'd. The combined negligence of the Plaintiff Houk, Jake's Casing Crew and the defendant Arrow Drilling Company.

'ANSWER: No.'

In answer to special question No. 2, the jury found the plaintiff sustained a total of $25,850.00 for various items of damages.

Thereafter, on May 6, 1966, the district court held that the monetary interest of Jake's Crew in the litigation totaled $4,749.73 (pursuant to agreement between the plaintiff and Jake's Crew's insurance carrier); that the jury's answer to special question No. 1c found Jake's Crew guilty of negligence, which finding terminated...