Nash v. Damson Oil Corp.

• Decision Date: 06 November 1985
• Docket Number: No. 55067,55067
• Parties: Gary Allen NASH v. DAMSON OIL CORPORATION.
• Court: Mississippi Supreme Court

Page 1095

480 So.2d 1095

Gary Allen NASH v. DAMSON OIL CORPORATION.

No. 55067.

Supreme Court of Mississippi.

Nov. 6, 1985.

Rehearing Denied Jan. 15, 1986.

Stanford Young, David Slaughter, Waynesboro, for appellant.

Thomas W. Tyner, Joseph W. Hurston, H. Alex Brinkley, Aultman, Tyner, McNeese, Weathers & Gunn, Hattiesburg, for appellee.

Before ROY NOBLE LEE, P.J., and ROBERTSON and ANDERSON, JJ.

ROBERTSON, Justice, for the Court:

This case arises out of the efforts of an operating lessee under an oil and gas lease to fit itself within the suit we tailored in Doubleday v. Boyd Construction Company, 418 So.2d 823 (Miss.1982) and thus avoid common law tort liability to an injured worker employed by a service and repair contractor. Keeping the necessary bodily contortions disguised, the lessee convinced the trial court of the fit and obtained summary judgment in its favor. As tailors of the Doubleday suit, we recognize that it was made for another occupying a different station in life. We reverse and remand.

II.

A.

Damson Oil Corporation, a Delaware corporation, is qualified to do and is doing business in the State of Mississippi. At all pertinent times Damson was the lessee of the producing unit in the Sabine No. 4-A oil well located in the northeast quarter of the southeast quarter of Section 21 and the northwest quarter of the southwest quarter of Section 22, Township 7 North, Range 7 West, Wayne County, Mississippi.

On March 16, 1978, Damson Oil entered into a Master Service Contract with Trigger Contractors, Inc., an independent contractor doing business in Wayne County, Mississippi. The contract called for Trigger's performance of "certain work with respect to oil or gas wells, as well as any other services" which Damson Oil might require from time to time or until the contract be cancelled. Of relevance to the case at bar, the contract provided:

MASTER SERVICE CONTRACT

* * *

III.

It is expressly understood and agreed that all work to be performed by Contractor [Trigger] for Company [Damson Oil] shall be and is an independent contractor, Company being interested in the results obtained; Company shall have no direction or control of the Contractor or its employees and agents except in the results to be obtained. The work contemplated herein shall meet the approval of Company, and be subject to the general right of inspection for Company to secure the satisfactory completion thereof. The actual performance and superintendence of all work hereunder shall be by Contractor, but company or its representatives shall have unlimited access to the operations to determine whether such work is being performed by contractor in accordance with all the provisions of this Contract and the work order, or other written contracts if any. Contractor shall be entirely responsible for its own acts and the acts of its employees and agents while engaged in the work to be performed for Company, and in no instance shall Contractor or its employees or agents act as the agent or employee of Company.

* * *

XI.

At any and all times during the term of this Agreement, Contractor agrees to carry insurance of the types and in the minimum amounts as provided for in Articles 1 through 7 of the Certificate of Insurance, [including workers' compensation insurance], a copy of which is attached hereto and made a part hereof. Contractor shall, upon request, furnish Company with certified copies of all policies. Prior to commencement of work hereunder, Contractor shall furnish Company with certificates showing its current insurance coverage and shall update them as required to keep them current so long as this Agreement is in effect.

XII.

All such policies shall be carried in a company or companies acceptable to Company, and shall be maintained in full force and effect during the term of this Agreement, and shall not be cancelled, altered or amended without ten (10) days prior written notice having been furnished to Company. All insurance policies of Contractor, whether specifically mentioned above or not, shall be endorsed to waive subrogation against Company, and against all parties endorsed to waive subrogation against Company, and against all parties for whom Company may be working with the exception of state statutory workmen's compensation insurance, but including all insurance carried by Contractor protecting against loss of, or damage to, its property and equipment employed in the performance of any work order issued hereunder.

XIII.

Company shall be named as an additional insured under all policies in force and effect pursuant to the listings and requirements of the Certificates of Insurance attached hereto.

XIV.

In order to eliminate controversies between Contractor, and Subcontractors and Company and its joint owners, if any, and their respective insurers, Contractor agrees to indemnify and hold harmless Company and any or all "Partners" of Company who wholly or partially bear the cost of operations hereunder,.... [Emphasis added]

Having reference to Paragraph XI above, one of the types of coverage provided for in Articles 1 through 7 of the certificate of insurance was workers' compensation insurance. Pursuant thereto, Trigger had procured from the Travelers Insurance Company, Policy No. UB-976E700-79 to afford workers' compensation insurance coverage to its employees. This policy was in effect prior to and subsequent to the date of the accident in question.

On or about March 3, 1980, pursuant to the provisions of the Master Service Contract, Trigger was installing a flow line and hook up to Sabine No. 4-A oil well. The installation of this flow line involves the placing of a check valve along the line to prevent the back flow of oil and/or water into the well. Gary Allen Nash, Plaintiff below and Appellant here, alleges that W.L. Trigg, an employee of Damson Oil instructed Wayne Cooley on how to install the check valve. These instructions, we are told, resulted in the valve being placed backwards. Trigg then advised Nash to tighten a stuffing box seal on the pumping unit where the valve had been installed. As Nash was tightening the stuffing box, the valve blew out and hit him in the right eye causing severe injury.

B.

Gary Allen Nash has been afforded compensation by his employer Trigger Contractors, Inc., and its carrier, Travelers Insurance Company. Thirty-three months later however, on December 20, 1982, Nash commenced this action by filing his complaint in the Circuit Court of Wayne County, Mississippi. Nash named Damson Oil Corporation, Appellee here, as sole Defendant below and asserted that Damson was "any other party" within the compensation act, Miss.Code Ann. Sec. 71-3-71 (1972) against whom his common law action for personal injuries was preserved. Nash charged negligence, as described above. Damson, of course, responded with a denial and the assertion of various defenses.

On April 20, 1983, Damson filed a motion to dismiss or, in the alternative, for summary judgment. See Rule 12(b)(6) and 56, Miss.R.Civ.P. As grounds therefor, Damson asserted that it was an employer within the meaning and contemplation of the Mississippi Workers' Compensation Act as construed in Doubleday v. Boyd Construction Co., 418 So.2d 823 (Miss.1982), and that Nash's exclusive remedy was compensation, Miss.Code Ann. Sec. 71-3-9 (1972), payment of which Trigger had already secured. Being of the opinion that Doubleday governed and that the state of the record was such that the motion should be treated as one for summary judgment, the Circuit Court on July 13, 1983, entered judgment summarily in favor of Damson Oil Corporation and against Gary Allen Nash finally dismissing the complaint. From that judgment, Nash appeals.

III.

This appeal presents a question of statutory construction. If Damson Oil Corporation is a "contractor" who is an "employer" within the Mississippi Workers' Compensation Act, Miss.Code Ann. Secs. 71-3-7 and -9 (1972), Damson wins. On the other hand, if Damson is not a "contractor" and thus not a statutory employer, Nash is entitled to proceed further in the trial court. We approach this question realizing that we do not write on a clean slate.

Damson's case is predicated upon the exclusiveness of liability section of the Act, Miss.Code Ann. Sec. 71-3-9 (1972) which reads:

The liability of an employer to pay compensation shall be exclusive and in place of all other liability of such employer to the employee....

Nash, however, was not directly employed by Damson. Nash drew his paycheck from Trigger Construction, Inc. Trigger has provided compensation insurance and secured payment of benefits to Nash as required by the Act. Damson attempts to piggyback itself onto Trigger's status as an employer via Doubleday and particularly the following language from the Act, Miss.Code Ann. Sec. 71-3-7 (Supp.1984):

In the case of an employer who is a subcontractor, the contractor shall be liable for and shall secure the payment of such compensation to employees of the subcontractor, unless the subcontractor has secured such payment. [Emphasis supplied]

Construing this language, Doubleday held that, when a highway construction project general contractor who subcontracted out a portion of the construction project and required the subcontractor to secure compensation benefits to its employees, the contractor became a statutory employer entitled to the protection of the exclusiveness of liability provisions of Section 71-3-9. In Doubleday the general contractor, Boyd Construction Co., had no ownership interest in the premises. Moreover, the contractor in Doubleday occupied the position persons of common understanding would label general contractor or prime contractor. Thus, Boyd was the kind of "contractor" contemplated by Section 71-3-7. The case at bar turns not on whether Damson required Trigger to secure compensation for Nash but whether Damson was the kind of "contractor" contemplated by the statute.

The...