Merit Energy Co. v. Horr
| Decision Date | 06 January 2016 |
| Docket Number | No. S–15–0141.,S–15–0141. |
| Citation | 366 P.3d 489 |
| Parties | MERIT ENERGY COMPANY, LLC, Appellant (Defendant), v. Blake HORR, Appellee (Plaintiff). |
| Court | Wyoming Supreme Court |
Representing Appellant: Timothy W. Miller, Attorney at Law, Casper, Wyoming; Weston W. Reeves, Park Street Law Office, Casper, Wyoming. Argument by Mr. Miller.
Representing Appellee: G. Bryan Ulmer, III, and Grant H. Lawson, The Spence Law Firm, LLC, Jackson, Wyoming. Argument by Mr. Ulmer.
Before BURKE, C.J., and HILL, DAVIS, FOX, and KAUTZ, JJ.
[¶ 1] Merit Energy Company, LLC, needed to clean out its oil and gas wells that had become clogged with debris over time. It hired an independent contractor, Basic Energy Services, Inc., to do the job. Unfortunately, Basic employee Blake Horr was seriously injured when a stripping rubber launched out of a wellhead due to a buildup of pressure. Horr sued Merit based on several exceptions to the general rule that the employer of an independent contractor is not liable for physical harm caused to another by an act or omission of the contractor or his servants. A jury returned a verdict finding Merit substantially at fault and that its fault had caused Horr well over two million dollars in damages. The district court entered judgment on the jury verdict.
[¶ 2] Merit contends that the district court misapplied Wyoming law both in its instructions to the jury and in denying Merit's motion for judgment as a matter of law. A solicitous review of our law and the record proves otherwise. Accordingly, we affirm.
[¶ 3] 1. In resolving whether Merit owed a duty to Horr, did the district court err when it instructed the jury to determine if Merit retained control over any part of the work that caused injury to Horr?
2. Did the district court abuse its discretion by refusing to give the jury Merit's proposed instruction detailing Basic's duty of care to Horr, and opting instead to provide a more general duty of care instruction?
3. Was the evidence such that reasonable persons could only reach one conclusion as to the verdict, which would have required the district court to grant Merit's motion for judgment as a matter of law?
[¶ 4] Merit owns and operates oil and gas wells in the Lost Soldier Unit near Bairoil, Wyoming. These are high pressure wells because Merit injects CO2 into the reservoirs in order to force oil to its producing wells. Over time, the bottoms of the wells accumulate sand and other debris that limits production. When this occurs, the wells need to be cleaned out to restore optimal flow.
[¶ 5] Merit hired an independent contractor, Basic, to clean out a few of these wells. The field was managed by Merit's operations manager, John Brooks, who supervised Merit's field foreman, otherwise known as the company man. The company man was in charge of cleanout operations in the field, and he provided direction to Basic's rig manager. During the relevant time period, two different Merit company men were in charge. Mike Self held that position when Basic started working in this field. Steve Kalberer took over in January 2011, roughly three months before the incident with Horr.
[¶ 6] The equipment used to clean out the well at issue in the instant case included a stripper head for well control, which was located just above the blowout preventer (BOP). The stripper head encased a rubber that fit tightly around the tubing or drill pipe Basic inserted and removed as part of cleanup operations. The rubber was held in place by bolts into the head's metal top. The diagram below illustrates the general setup of the stripper head and associated equipment.
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[¶ 7] Many months before the incident involving Horr, Merit had provided a "Washington" stripper head, along with the BOP, for the Basic crew to use when servicing Merit's wells. Significantly, the Washington head had a release valve that could be used to relieve pressure trapped between it and the blowout preventer. Without such a valve, the well would need to be "killed" to control the pressure.1
[¶ 8] At some point prior to the accident, Merit's company man, Self, decided that Merit would no longer pay for the Washington head and told Basic's supervisor, Willard Sanders, that Basic needed to provide a different stripper head. Basic obtained a "Hercules" stripper head, which did not have a release valve. Basic presented the Hercules head to Self for approval, and he approved it even though it did not have a release valve. A Hercules head was used on the well the day Horr was injured.
[¶ 9] On April 11, 2011, Horr was part of a Basic crew performing cleanout operations on one of the wells. Sanders was Basic's supervisor on the job, Adam Eddy was the workover rig operator, and Horr was the floorhand. During the job, tubing (drill pipe) became stuck in the rubber seal in the wellhead as the crew was pulling the pipe out of the well. The crew stopped work, closed the BOP, and Sanders sought out Kalberer to see how Merit wanted to proceed.
[¶ 10] Kalberer came to the well site and had Sanders come over to his truck to discuss the problem. Without personally inspecting the equipment or checking the well pressure, Kalberer directed the Basic crew to replace the stripping rubber. Accordingly, Horr began removing bolts that held the rubber in place. As he did so, pressure trapped between the BOP and the Hercules head blew the stripping rubber out of the wellhead and struck Horr while rocketing thirty feet up the drill pipe. Horr suffered serious injuries to his left hand and arm.
[¶ 11] Horr sued Merit based upon several exceptions to the general rule that the employer of an independent contractor is not liable for physical harm caused to another by an act or omission of the contractor or his servants. The matter made its way to a jury trial, during which Merit unsuccessfully moved for judgment as a matter of law at the close of all the evidence.2 After eight days of hearing evidence and argument, the jury sided with Horr and returned a verdict finding Merit 45% at fault for its own negligence. The district court entered judgment in Horr's favor for $2,335,923.90 against Merit based upon the fault of all parties.3 Merit renewed its motion for judgment as a matter of law after the verdict was rendered, and the motion was again denied.
[¶ 12] Merit timely perfected this appeal.
[¶ 13] Over the years, this Court has had several occasions to address the law concerning liability of an owner of a worksite who employs an independent contractor when an employee of that contractor is injured. A close look at our law is necessary in order to resolve Merit's first contention that the district court erred in instructing the jury.
[¶ 14] Years ago, this Court adopted Restatement (Second) of Torts § 409 (1965, database updated 2015), which provides that "the employer of an independent contractor is not liable for physical harm caused to another by an act or omission of the contractor or his servants." See Jones v. Chevron U.S.A., Inc., 718 P.2d 890, 894 n. 1 (Wyo.1986) ; see also Hittel v. WOTCO, Inc., 996 P.2d 673, 676 (Wyo.2000). This general rule exists for good reason. An employer of an independent contractor generally does not have control over the manner in which the work is done by the independent contractor, so the independent contractor, rather than the employer, is the proper party upon whom to impose the obligation to prevent the risk of harm and to bear responsibility if it fails to do so and injury results. See Restatement (Second) of Torts § 409 cmt. b; see also Jones, 718 P.2d at 895.
[¶ 15] However, we have recognized two exceptions to this rule. See Jones, 718 P.2d at 893–94. One exception is found in Restatement (Second) of Torts § 414, which deals with the direct liability of an employer in connection with the work to be done. Id. In order to recover in such a direct negligence action, the plaintiff must show a legal duty owed by the defendant to the plaintiff, a breach of that duty, causation, and damages. Section 414 states:
One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care.
Restatement (Second) of Torts § 414.
[¶ 16] It is important to remember that this exception deals with direct negligence of the employer based upon a legal duty created because of the control it retains over the independent contractor's work. See id.; see also Hill v. Pac. Power & Light Co., 765 P.2d 1348, 1349 (Wyo.1988). The operative words of this Restatement section are "control of any part of the work." The comments to this section provide helpful guidance as to the level of control required, and thus we quote the bulk of them despite their length:
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