Natural Gas Processing Co. v. Hull, 94-31

• Decision Date: 12 December 1994
• Docket Number: No. 94-31,94-31
• Citation: 886 P.2d 1181
• Parties: 1995 O.S.H.D. (CCH) P 30,668 NATURAL GAS PROCESSING CO., a Wyoming corporation, Appellant (Defendant), v. Michael A. HULL, Appellee (Plaintiff).
• Court: Wyoming Supreme Court

Page 1181

886 P.2d 1181

1995 O.S.H.D. (CCH) P 30,668

NATURAL GAS PROCESSING CO., a Wyoming corporation, Appellant (Defendant), v. Michael A. HULL, Appellee (Plaintiff).

No. 94-31.

Supreme Court of Wyoming.

Dec. 12, 1994.

Thomas A. Nicholas of Hirst & Applegate, Cheyenne, for appellant.

David B. Hooper, Hooper Law Offices, Riverton, for appellee.

Before GOLDEN, C.J., THOMAS, TAYLOR, JJ., and KALOKATHIS, and VOIGT, District Judges.

KALOKATHIS, District Judge.

This appeal follows a jury verdict finding Natural Gas Processing Company (NGP) ninety percent negligent in an oilfield accident that severely injured Michael Hull. The district court entered judgment based on the jury's verdict for $1,455,444, plus costs and interest. NGP contends four errors occurred mandating reversal.

We affirm.

I. ISSUES

NGP alleges four errors:

1. Whether the trial court's failure to answer a jury question in open court is plain error, mandating reversal;

2. Whether the jury's verdict and judgment are contrary to Wyoming law relating to an owner's liability to employees of an independent contractor 3. Whether, even if NGP breached duties it owed to Plaintiff, that breach was the proximate cause of Plaintiff's damages;

4. Whether the trial court erred in instructing the jury that violation of a statute [OSHA regulation] was evidence of negligence, when no evidence existed that NGP was responsible to enforce the regulations.

II. FACTS

Michael Hull began working for Teton Well Service (TWS) in 1984. In June, 1992, NGP hired TWS to assist in reworking an oil well, called the "Union Pacific Number One," in the Hatfield Dome Oilfield ten miles south of Rawlins. The well was going to be "fracked." ¹ TWS was to pull the tubing out of the well, remove the bridge plug, test the tubing, place a packer in the well and acidize ² it in preparation for the "frac" job. After the "frac" job was completed by another contractor, TWS was to trip back into the well to circulate (remove) the sand that accumulates on top of the bridge plug as a result of the "frac" job.

June 9, 1992, was the TWS crew's first day on site. From June 9 until June 11, TWS prepared the well for the "frac" job. On June 11, Black Warrior, another contractor, came to the site to perforate the well. ³ On Friday, June 12, BJ Services, yet another contractor, brought 500 gallons of acid to the lease to acidize the well. June 13 and 14 fell on a weekend; the crews did not work on those days. The well was "fracked" by BJ Services on June 15. TWS began circulating sand off the bridge plug on June 16. The next day (June 17), the TWS crew was still circulating sand.

Mike Hull was on deck using power tongs to connect the joints of tubing already in the well with the chicksan and kelly hose, which had been raised over thirty feet in the air. OSHA regulations require that safety cables be used to fasten the kelly hose and the standpipe end to the derrick and at the swivel end to the swivel housing. However, on this occasion, the safety chains were not in use. As Hull turned the tubing on the floor, the chicksan overhead bound up and did not turn. As the tubing on the floor turned, the swage unscrewed and the swage, chicksan (which alone weighed approximately fifty pounds) and kelly hose fell, striking Hull in the back of the hard hat and driving him onto the rig floor. Mike Hull sustained many injuries, including a traumatic brain injury, linear skull fracture, fractured clavicle, and fractures of both lower left leg bones in the ankle area. His injuries required immediate brain surgery, performed in Casper after being airlifted from the Rawlins hospital.

Hull filed suit against NGP (and Amoco Production Company, which was subsequently dismissed by stipulation), alleging that NGP was negligent and had exercised direct control over the work-over rig hired to do clean up work on a well where NGP was the operator. Hull alleged, among other things, that NGP breached various duties of care it owed Hull as an employee on the work-over rig and Hull was injured as a result. Issues presented to the jury included NGP's direct liability for its own acts, as well as vicarious liability for its conduct in directing TWS employees' actions.

After a jury trial, a verdict was rendered against NGP, finding it responsible for ninety percent of the fault. The remainder of the fault was split between Hull (four percent), John Nodolf (the driller) (five percent), and Jack Wiggins (the derrick hand) (one percent). Damages were fixed at $1,617,160.

NGP filed a motion for judgment notwithstanding the verdict, to alter or amend the judgment, or for a new trial, which was denied. NGP appeals both the judgment and the trial court's order denying its post-trial motions.

III. DISCUSSION

A. An owner's liability to employees of an independent contractor

This court has previously adopted the general proposition set forth in RESTATEMENT (SECOND) OF TORTS § 409 (1965), stating 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." Hill v. Pacific Power & Light Co., 765 P.2d 1348, 1349 (Wyo.1988). See also, Stephenson v. Pacific Power & Light Co., 779 P.2d 1169, 1176 (Wyo.1989); Jones v. Chevron U.S.A., Inc., 718 P.2d 890, 898 (Wyo.1986); Noonan v. Texaco, Inc., 713 P.2d 160, 164-67 (Wyo.1986); 41 AM.JUR.2D Independent Contractors § 24 (1968).

This Court has previously held that the owner of the workplace who employs an independent contractor and

retains the right to direct the manner of an independent contractor's performance or assumes affirmative duties with respect to safety owes a duty of reasonable care to an employee of the independent contractor even if the employee is injured doing the very work the [independent] contractor was hired to perform.

Jones, 718 P.2d at 896 (citations omitted). See also Cockburn v. Terra Resources, Inc., 794 P.2d 1334, 1342 (Wyo.1990); Stephenson, 779 P.2d at 1177; Hill, 765 P.2d at 1349; Brewster v. Salveson Construction, 765 P.2d 1350 (Wyo.1988); Stockwell v. Parker Drilling Co., 733 P.2d 1029, 1033 (Wyo.1987). However,

the owner "must retain more than the general right to order the contractors to stop work, to inspect the progress of the work, to make recommendations thereon, or to prescribe alterations or deviations in the work" [Stockwell, 733 P.2d at 1033] in order to impose liability under that rule. The product of our precedent is that an employer of an independent contractor, although potentially responsible for injuries to employees of the contractor, must assume a controlling and pervasive role in the work being done in order to generate any duty of care sufficient to establish vicarious liability for the negligence of the independent contractor.

Cockburn, 794 P.2d at 1342 (citations omitted). See also, Johnston v. Conoco, Inc., 758 P.2d 566 (Wyo.1988).

Our first area of inquiry would ordinarily be to the written contract between NGP and TWS. Although the contract is not conclusive evidence of the status of the relationship between parties, it is a strong indication of the association intended. See Noonan, 713 P.2d at 165. In this case, however, no written contract exists. Duane Winkler testified that NGP does not normally enter into written agreements with workover companies, and did not enter into a written contract with TWS. We, therefore, must look to the record to determine whether NGP controlled or had a right to control, TWS' performance sufficient to establish a duty to TWS' (an independent contractor's) employees.

The employer may exercise a limited control over the work without rendering the contractor a mere servant or employee, as a relation of master and servant or employer and employee is not inferable from a reservation of powers which do not deprive the contractor of his right to do the work according to his own initiative, so long as he does it in accordance with the contract. The control of the work reserved in the employer which affects a master-servant relationship is control of the means and manner of performance of the work, as well as of the result; an independent contractor relationship exists where the person doing the work is subject to the will of the employer only as to the result, but not as to the means or manner of accomplishment.... A requirement that the work be performed according to standards and specifications imposed by the owner is not sufficient to establish the degree of control necessary to make a presumably independent contractor the agent of the owner, but the retention of the right not only to insure conformity with specifications, but also the retention or exercise of the right to direct the manner in or means by which the work shall be performed, will destroy the independent status of the contractor.

41 AM.JUR.2D Independent Contractors § 8 (1968) (emphasis added); and see Noonan, 713 P.2d at 164-66. In examining the record, we find the following indicia of the extent of NGP's control over TWS:

1. NGP, through its agent, Duane Winkler, controlled the equipment to be used to complete the TWS' crew's tasks. Testimony showed that John Nodolf, TWS' rig operator on this job, asked Winkler for a tubing swivel. ⁴ Winkler replied that they would not need one, could get by with the chicksan, and NGP would not provide the tubing swivel. Nodolf told Winkler that he did not like to use chicksans because "sometimes they bind up"; he thought he mentioned to Winkler that the use of a chicksan to circulate sand in this instance would not be safe. The decision to use the chicksan stood. ⁵

The TWS' crew, left to their own manner of performance, would have used a tubing swivel to complete this task. NGP, through Winkler, mandated that the TWS' crew could not have the tubing swivel they felt was proper for the job they were hired to perform on the Natural Gas Processing location.

2. NGP instructed the TWS' crew in the manner...