Index Drilling Co. v. Williams

• Citation: 242 Miss. 775,8 A.L.R.3d 323,137 So.2d 525
• Decision Date: 05 February 1962
• Docket Number: No. 42142,42142
• Parties: , 8 A.L.R.3d 323 INDEX DRILLING COMPANY, Inc. v. Charles Oree WILLIAMS, Jr.
• Court: United States State Supreme Court of Mississippi

Page 525

137 So.2d 525

242 Miss. 775, 8 A.L.R.3d 323

INDEX DRILLING COMPANY, Inc. v. Charles Oree WILLIAMS, Jr.

No. 42142.

Supreme Court of Mississippi.

Feb. 5, 1962.

Beard, Pack & Ratcliff, Laurel, for appellant.

F. B. Collins, Paul G. Swartzfager, Laurel, for appellee.

ETHRIDGE, Justice.

Appellee, Charles Oree Williams, Jr., filed this suit in the Circuit Court, Second District of Jones County, Mississippi, against appellant, Index Drilling Co., Inc., for personal injuries. He recovered a verdict and judgment for $63,500. The principal questions involved are (1) interpretation of the third-party tort-feasor provisions of the Mississippi Workmen's Compensation Act, where the employee, after receiving compensation benefits, brings a third-party action against a corporation wholly owned by those owning his employer-corporation; (2) whether the lent-servant doctrine applies; and (3) the validity of the verdict, as to whether it was a quotient verdict, and grossly excessive.

I.

The jury was warranted in finding for the plaintiff on the issue of liability. Williams was 18 years old on September 8, 1956, the date of the accident. At the time of trial he was 23 and unmarried. He was employed by Production Service, Inc. (called Production). Production was one of five corporations wholly owned by C. F. and L. H. Martin. Until April 1956, they had operated as a co-partnership engaged in servicing, trucking and drilling operations in oil fields. At that time the partners organized five separate corporations, including Production, and transferred their interests to these five corporations: Production Service, Inc., Dapsco, Inc., Index Drilling Co., Inc., the defendant (called Index), Marmiss Supply Co., Inc., and C. F. Martin, Inc. The partners were the sole officers, directors and stockholders. Plaintiff was employed by Production. He was on its payroll and thus was paid by it.

On the day of the accident, Williams had worked for Production on a home in the City of Laurel until about 3 p. m., when he went to the office of Dapsco, Inc., at the air base in Laurel, where the main offices and field offices of the five corporations are located. Kervin Hall, of the Dapsco office, instructed him to help unload a truck and put some drill pipes and pipe racks on another one. Williams went to the truck, which had a sign on its door, 'Index Drilling Co., Inc.' The truck driver was Thaddeus Anderson, an employee of Index. The trailer contained drill pipes about 30 feet in length, and large pipe racks made in a triangular shape and weighing about 1,000 pounds each. James Knight, an employee of Production, was present on the float or trailer which was being unloaded. Harry (Rudolph) Walters said he was employed by Dapsco, Inc., as field superintendent for the entire operation. The pipe racks were to be picked up with a crane or winch mounted upon the truck driven by Anderson, an employee of Index.

According to plaintiff's testimony, Knight hooked the chain around two recks, and the hoist on Anderson's truck, under his control, lifted them and set them on a concrete floor. One rack was sitting on its base and the other was leaning against it. Anderson told Williams to unhook the hoist line from the racks, and Williams did that. Anderson then started the crane and winch line, picking it up. This 'jarred against that rack and knocked it over.' The pipe rack fell on plaintiff's foot, resulting in the injuries for which he sought damages.

Williams said that he never worked for or agreed to work for Index. Index never paid him for any work. When he returned to the air base, he reported to Hall, employed by Dapsco, Inc., because that was the custom. When he reached the truck, Harry Walters, head foreman for Production, was present along with Knight and Anderson. Walters told him to stay on the ground, and to unhook the line from the racks. Anderson was on the truck operating the crane. Anderson picked up two racks together, laid them down one, then picked them up, and set them down again. Anderson then told him to go ahead and unhook the line from the racks. Plaintiff said he did what Hall instructed him to do. When Index's truck driver, Anderson, told him to unhook the line, he did. When the crane picked the racks off the float, Walters left going toward the office, and was not present when plaintiff was hurt.

James Knight said he was working under Walters' direction, but that Anderson told him to hook the racks together, and instructed Williams to unhook the lines, which Williams did. Anderson was looking through the back window of the truck and could see what was going on. After the driver told plaintiff to unhook the line, but before he could move out of the way, the rack fell on his foot. Knight denied he had given Anderson the signal to move on.

On the other hand, Anderson said that after he had set down the racks, Williams, who was 'swamping' for him, unhooked the line and gave him the signal to pull away. He admitted that Walters was not present when plaintiff unhooked the racks; that when he did this, it was either on his own or Anderson's direction. He was looking out the back window of the truck. He knew that, when he lowered two racks at once, one of them would be at an angle. He said that Williams was in the right place to unhook the lines, but denied telling him to unhook them.

Walters was on a truck about 100 feet away checking drill collars on pipes, when he looked over and saw the racks in their positions, which he knew 'were dangerous and would fall', so he called to Williams to move out of the way, but about that time they fell. He did not know whether Anderson gave plaintiff orders to unhook the line or plaintiff told Anderson to move the truck.

From this summary of the evidence, the following were manifestly questions for the jury: Whether the employee of Index, its truck driver, Anderson, negligently and carelessly started the crane in operation before plaintiff could get out of the way, and as a proximate result of such negligence, Anderson caused the rack to fall on plaintiff's foot; whether it was negligent to unload two of the racks at one time, and, if so, whether plaintiff's injuries were a proximate result of such negligence; and finally, the issue of Williams asserted contributory negligence.

II.

After Williams was injured, he received under the Workmen's Compensation Act temporary total disability benefits for 39 weeks, an award of 65 4/7 weeks for permanent partial disability, for 50 per cent loss of use of the left foot, and hospital and medical expenses. In August 1959, he filed with the Workmen's Compensation Commission, under Sec. 9(i) of the Act, a petition for authority to make a compromise lump sum settlement with his employer, designated as Martin's Connection Works and Welding Shop, being one and the same as Dapsco, Inc. The petition averred that a 'steel plate' had fallen on his left foot, which resulted in 'amputation of the big toe and the second toe of that foot, and that he received other personal injuries;' that claimant had reached maximum recovery, and a settlement had been agreed upon, by which, in addition to benefits already paid, claimant would receive $2,300 plus $355.10 medical expenses; and that claimant desired to settle and compromise all of his claims under the act.

On September 1, 1959, the Commission entered an order finding that the proposed settlement was fair, reasonable, and to claimant's best interest, and approving it. On September 5, 1959, Williams executed a release to 'Martin's Connection Works and Welding Shop (Dapsco, Inc.)' and Maryland Casualty Company, the compensation insurance carrier, pursuant to this 9(i) settlement.

The instant action was filed in April 1960, under the authority of the third-party-action provision of the Miss. Workmen's Compensation Act. Miss.Laws 1948, Ch. 354, Sec. 30; Miss.Code 1942, Rec., Sec. 6998-36. Section 30 provides that the acceptance of compensation benefits shall not affect the employee's right to sue any other party at law for such injury or death, but, if the employer or insurer join in such action, they are entitled to be reimbursed for compensation benefits paid by them from the net proceeds of the suit.

In short, under Sec. 30 acceptance of compensation benefits from an employer does not affect the employee's right 'to sue any other party at law for such injury or death'. The immunity from all liability except compensation benefits applies only to the employer and insurer. Tort liability remains as to 'any other party'. Section 5 of the Act (Code Sec. 6998-05) states that the liability 'of an employer to pay compensation shall be exclusive'. The limitation of liability and immunity from tort liability applies only to an employer.

Nevertheless, appellant contends that it is immune from this suit at common law, because it is not a third party within Sec. 30. It is argued that each of the five corporations simply constituted a department or division of the over-all enterprise. The Martins owned and operated all of them; contracts were taken only in the name of Dapsco, Inc., and all invoicing was done in its name. Plaintiff was assigned by Hall, an employee of Dapsco, Inc., to help unload the truck. Hence it is said there was such an identity of ownership, operation, purposes and activities that each of the five Martin corporations was the alter ego of the other, jointly engaged in mutual activities; that the legal fiction of corporate entities should be disregarded under these circumstances. The several Martin corporations constituted but a single employing entity. Defendant raised this issue by incorporating in its answer certain special defenses, which were struck by the circuit court on motion of plaintiff. We find no error in that action.

Section 30 of the Workmen's Compensation Act preserve a compensation claimant's right of action against 'any other party at law', except the employer or...