Justiss Oil Co., Inc. v. Kerr-McGee Refining Corp., KERR-M

• Decision Date: 28 February 1996
• Docket Number: KERR-M,No. 94-41310,94-41310
• Citation: 75 F.3d 1057
• Parties: JUSTISS OIL COMPANY, INC., Plaintiff/Cross-Defendant/Appellant, v.cGEE REFINING CORPORATION, Defendant/Counter-Claimant/Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1057

75 F.3d 1057

JUSTISS OIL COMPANY, INC., Plaintiff/Cross-Defendant/Appellant, v. KERR-McGEE REFINING CORPORATION, Defendant/Counter-Claimant/Appellee.

No. 94-41310.

United States Court of Appeals, Fifth Circuit.

Feb. 28, 1996.

Donald R. Wilson, Gaharan & Wilson, Jena, LA, Joseph Wilson, Thompson and Knight, Dallas, TX, for Justiss Oil Co., Inc., plaintiff-counter defendant-appellant.

Robert A. Vosbein, New Orleans, LA, Eugene Gregg Barrios, Adams & Reese, New Orleans, LA, Deborah B. Rouen, New Orleans, LA, for Kerr-McGee Refining Corp., defendant-counter claimant-appellee.

Appeals from the United States District Court for the Western District of Louisiana.

Before JOLLY, DUHE and DENNIS, Circuit Judges.

DUHE, Circuit Judge:

Kerr-McGee Refining Corporation ("Kerr-McGee") owns and operates an oil refinery in Cotton Valley, Louisiana. In early 1990, the aluminum floating roof of a crude oil storage tank ("Tank 29") at the Cotton Valley refinery collapsed. ¹ Kerr-McGee contacted Baker Tank Company, a division of Justiss Oil Company, Inc. ("Justiss"), and solicited a bid for the manufacture and installation of a new floating roof. In response, Ken Moose, Baker Tank Company's Construction Manager, telephoned Gerald Collins, the Kerr-McGee Plant Manager. During this conversation, Collins requested that Moose submit a separate proposal for dismantling and removing the collapsed roof from inside the tank. Moose agreed to submit this bid, and asked to view the job site.

After meeting with Collins, the two men went to Tank 29 and were joined by Herschel Jones, Kerr-McGee's Maintenance Foreman. Moose climbed to the top man way and looked inside the tank to evaluate its condition and the floating roof. Kerr-McGee had removed most of Tank 29's contents and was continuing to wash and to vacuum the inside of the tank. Moose was satisfied that Baker Tank Company could remove the roof, and upon Collins' indication that they had the job, agreed to deploy a crew to the refinery. Over the three days that followed Moose's visit, Kerr-McGee continued to wash Tank 29 and utilized high-pressure steam to free it of hydrocarbon vapors.

Subsequently, Justiss and Kerr-McGee contracted for the removal of the floating roof. ² Under the contract, Justiss was obligated to provide all labor, supervision, materials, tools, equipment, and services needed to complete the job. Further, Justiss warranted that the work would be performed in a good, safe, workmanlike manner in conformity with the highest industry standards. ³ Kerr-McGee was obligated to first "clean[ ] and gas free[ ]" the tank, and to test the concentration of hydrocarbon vapors in the tank's atmosphere each morning before the Justiss crew entered. ⁴ Although Kerr-McGee was only required to test the tank once every morning, Justiss could request additional testing at any time. ⁵

The Justiss crew arrived at the refinery on Tuesday, March 6, 1990, and reported to the Kerr-McGee offices. While there, Darwin Parker, Manager of Operations and Safety at the refinery, gave the crew foreman, Thomas McKelvey, safety pamphlets that he and his crew were to read and to sign prior to commencing work. After all the signed pamphlets were collected, ⁶ Parker took the Justiss crew to Tank 29. Another Kerr-McGee employee sniffed the tank, obtained an L.E.L. reading of less than 10%, and issued a hot work permit authorizing the crew to go to work.

The Justiss crew worked for three and a half to four days without incident. Each morning before the Justiss crew entered Tank 29, a Kerr-McGee employee sniffed the tank, obtained an L.E.L. reading of less than 10%, and gave McKelvey a hot work permit. McKelvey signed each hot work permit verifying that all necessary precautions had been taken and that work could begin.

On the fourth day of work, Sunday, March 11, 1990, Kerr-McGee issued a hot work permit to McKelvey around seven o'clock in the morning that was effective until five o'clock that evening, provided conditions inside the tank did not change. McKelvey's crew consisted of three laborers, Steve Vega, Chris Doyle, and Ricky Martin. After working all morning, the crew broke for lunch, returned about an hour later, reentered the tank, and commenced working again. Shortly thereafter, a Kerr-McGee employee charged with the responsibility of refueling the air compressor that powered the ventilation fan bolted to the side man way of Tank 29 asked McKelvey if the crew would take their afternoon break early so he could refuel the compressor and go home. McKelvey agreed and the crew took a fifteen to twenty minute break. When they returned, Vega, Doyle, and Martin went back into Tank 29 via the top man way while McKelvey went to his truck some seventy to one hundred feet away to retrieve a can of gasoline. Before McKelvey returned, while Vega, Doyle, and Martin were inside, Tank 29 exploded. All three men inside the tank were killed. ⁷

After settling the claims of the deceased workers' families, Justiss sued Kerr-McGee on theories of tort and contract to recover its losses. Kerr-McGee counterclaimed asserting breach of contract by Justiss, and seeking damages for the destruction of its property. A nine day bench trial was held. At the conclusion of the trial, District Judge Donald E. Walter found that the source of fuel for the explosion and flash fire was vapors emitted from gasoline brought into Tank 29 by the Justiss crew. Accordingly, he held Kerr-McGee free from fault. Further, he ruled in favor of Kerr-McGee on its counterclaim. Justiss appealed, asserting five errors. ⁸

I. Error One

Justiss argues the district court erred by applying Occam's razor as controlling legal principle in deciding which evidence of the events leading to the explosion and flash fire in Tank 29 to credit. More precisely, Justiss argues that the district court, in relying on this premise, applied an incorrect legal standard in making its factual findings. ⁹ Justiss contends that we should discard the district court's factual findings and conduct de novo review of the trial record in accordance with applicable law to ascertain the true cause of these deaths.

In his oral findings, Judge Walter stated:

The testimony has suggested numerous theories as to how the tank exploded. Clearly Tank 29 was not gas free at the time of the explosion. The explanations of why the tank was not gas free range from the very simple to indeed the hyper-complex. I have used Occam's razor which is as valid juridically as it is scientifically. Basically Holcomb's [sic] razor is that the simplest of competing theories should be preferred over more complex or subtle ones.

28 R. at 71-72. ¹⁰ Though Justiss interprets this statement to indicate that Judge Walter's fact-finding was confined by Occam's razor, this interpretation is misguided. Judge Walter's oral reasons make clear that his findings were not merely an exercise of this 14th Century maxim, but were based upon his evaluation and weighing of all evidence presented. In finding that Justiss' crew was the source of the fuel, he stated:

This finding is obviously dependent on which McElvey [sic] story I believe. That told to the E.M.S. workers or that expressed to OSHA representatives and indeed in this court.

The E.M.S. workers had no reason to lie. The story makes sense. And frankly accepting the rescue workers['] [sic] or E.M.S. workers['] [sic] version of what McElvey's [sic] admission was explains all....

... Under any of [Justiss' several scenarios suggesting how Kerr-McGee's conduct caused the fire], hydrocarbons could have reached dangerous levels but [Kerr-McGee's] version is more persuasive.

28 R. at 73. While the reference to Occam's razor may be unfortunate for its potential to create post-judgment controversy, Judge Walter's reference to the maxim is not inappropriate, because in fact he did not abdicate his duty as fact-finder. Judge Walter evaluated the evidence before him, weighed it according to his determinations of credibility and trustworthiness, and drew reasonable inferences and conclusions supported by his findings. Thus, insofar as Justiss attacks the district court's findings as made by the application of an allegedly improper legal standard, we reject this contention and affirm Judge Walter's actions.

II. Errors Two, Three, and Four

Justiss' assertions two, three, and four are grounded in a single argument that the district court erred in finding Justiss employees introduced into Tank 29 the source of fuel for the explosion and flash fire. For example, in disputing the district court's ruling on Kerr-McGee's counterclaims, Justiss states:

In the "Memorandum Ruling" issued on October 26, 1994, the Trial Court found that the actions of Justiss/Baker Tank Company were "grossly negligent". In his oral ruling the Trial Court described the crew as "reckless". Such rulings can only be predicated on the finding that the Justiss crew brought gasoline into the tank, virtually insuring their own demise.

Such a finding and the Trial Court's favorable ruling on the Kerr-McGee Counterclaim are totally and completely unsupported by the evidence. A complete review of the record will show that such a finding is "clearly erroneous" and not the "truth and right of the case." ...

* * *

... The Kerr-McGee Counterclaim succeeds (or fails) on the Trial Court's finding that the Justiss crew introduced gasoline into the tank.

Original Brief of Justiss Oil Company, Inc., at 23, 25 (citations omitted). Likewise, Justiss' argument regarding the district court's failure to apply strict liability to Kerr-McGee's conduct is summarized as follows:

The District Court considered opposing Motions For Summary Judgment, regarding the application of Louisiana's doctrine of strict liability to the fire in Tank 29. Upon determining that the source of fuel for the fire was flammable liquids brought into the tank by Justiss employees, the Court never reached the issue. Justiss...