Phillips v. Western Co. of North America

• Decision Date: 05 February 1992
• Docket Number: No. 90-4704,90-4704
• Citation: 953 F.2d 923
• Parties: , 35 Fed. R. Evid. Serv. 790 Earl K. PHILLIPS and Carrie Phillips, Plaintiffs-Appellants, v. The WESTERN COMPANY OF NORTH AMERICA, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 923

953 F.2d 923

1993 A.M.C. 1815, 35 Fed. R. Evid. Serv. 790

Earl K. PHILLIPS and Carrie Phillips, Plaintiffs-Appellants, v. The WESTERN COMPANY OF NORTH AMERICA, et al., Defendants-Appellees.

No. 90-4704.

United States Court of Appeals Fifth Circuit.

Feb. 5, 1992.

Rehearing Denied March 9, 1992.

Daniel E. Broussard, Jr., Alexandria, La., for plaintiffs-appellants.

Habans & Bologna, Robert N. Habans, Jr., New Orleans, La., for defendants-appellees.

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

Before WISDOM, KING and JOLLY, Circuit Judges.

KING, Circuit Judge:

Plaintiff Earl Phillips reinjured his back while he and a co-employee connected a flow line to the bell nipple on the blow-out preventer (BOP) stack of the TRITON III, a jack-up drilling rig off the coast of Louisiana owned by defendant The Western Company of North America (Western). He asserted an unseaworthiness claim under general maritime law and a negligence claim under the Jones Act, 46 U.S.C.App. § 688, and his wife asserted a claim for loss of consortium under general maritime law. After the close of the plaintiff's case, the district court granted Western's motion for a directed verdict on the unseaworthiness claim, but denied the motion on the Jones Act claim. The jury returned a verdict in favor of Western.

On appeal, Phillips argues that the district court erred (1) in keeping the unseaworthiness claim from the jury, because the evidence was sufficient to raise a jury question about whether Western created an unsafe working environment; (2) in overruling his objection to Western's introduction of evidence concerning the post-accident benefits it paid him; and (3) in refusing to grant his motion for a new trial. We agree with Western that reasonable minds could not differ on the issue of the TRITON III's unseaworthiness, and therefore affirm the directed verdict on the unseaworthiness claim. However, we find that the district court erred in allowing Western to introduce evidence of the post-accident benefits without first determining whether they fell outside the bounds of the collateral source rule. Although we disagree with Phillips's position that he has shown conclusively that the benefits derived from a collateral source, there is substantial uncertainty about the character of the benefits. If they were indeed collateral and subject to exclusion, their inclusion as part of the defendant's case--and the lack of a limiting instruction--raises the possibility that the jury improperly factored the evidence into its determination of liability. Phillips is therefore entitled to a new trial on the Jones Act claim.

I. BACKGROUND

Phillips testified that he had worked in the oilfield since 1973 and had been a driller for Western since 1982. Following an injury he sustained to his lower back while working for a previous employer, he learned that he had spondylolisthesis, a congenital condition involving the absence of a bony connection in the spine. He declined at that time to have fusion surgery to correct the problem, as suggested by his doctor.

On September 21, 1986, he was supervising a crew of four on the TRITON III during a "nippling up" operation. This required the crew to connect a mud flow line to the bell nipple spout on the BOP stack. ¹ The flow line had to be pushed close enough to the nipple that the air bladder coupling between the two could be sealed. Phillips and another employee lifted the flow line, which was partially suspended by chains, and attempted to "stab" it onto the bell nipple. They did not use an air hoist to provide additional support for the flow line because at the time of the operation other workers were running a gyro survey on the main drill floor. ² Because the movement of the sea caused the BOP stack to rock slightly, they were unsuccessful in the first two attempts at stabbing the flow line. Phillips waited for the BOP stack and the bell nipple to stop moving and, on the third try, successfully stabbed the flow line. He testified that he felt a pain in his back on the third attempt to connect the flow line.

Phillips's expert, Kenneth Kaigler, a petroleum engineer with 40 years of experience in the oilfield, testified about the methods used on the TRITON III. On direct examination, Kaigler expressed his opinion that lifting the flow line manually to move it forward onto the bell nipple was an unsafe procedure, and that equipment such as a bell guide ³ attached to the flow line would have eased the connection of the flow line in the event the two pieces of pipe did not line up properly on the first try. He further suggested that the use of padeyes and bolts would aid in lifting the flow line and moving it toward the bell nipple, and indicated that use of a Dresser sleeve, a device developed long before the air bladder, would obviate the need to move the flow line toward the bell nipple. He testified that it would have been unsafe to use an air hoist while a gyro survey was being performed because of the danger of multiple lines running through the rotary in the drill floor.

On cross-examination, Kaigler testified that the air bladder connection in use on the TRITON III is a perfectly acceptable technology, even though it required workers to physically push the flow line toward the bell nipple. He indicated that an air hoist would have made it easier to align the flow line because less effort by the workers would have been necessary to move the flow line toward the nipple. Kaigler further testified that the end of the flow line on the TRITON III was designed like a Dresser sleeve in that it fit over the bell nipple with some clearance. Kaigler indicated that a Dresser sleeve may in fact be less safe than an air bladder coupling because the nature of the drilling mud that passes through the mud flow line leaves the Dresser sleeve susceptible to corrosion, especially under the conditions in the marine environment. On redirect, Kaigler again stated that a Dresser sleeve "is just one of the ways that it could be done. The air bladder, there is nothing wrong with the air bladder, it is okay...." He indicated that the benefit of the Dresser sleeve over the flow line connection design on the TRITON III was the fact that less pipe is moved. He offered the opinion that any reduction or elimination of the need for workers to physically move pipe is a preferable work procedure in the oilfield.

Phillips testified that he had performed the stabbing operation numerous times and saw nothing unsafe about it. He was in charge of the operation, and could have used an air hoist or other equipment he felt was necessary to make the work safer. He did not use the air hoist because that would have involved waiting for completion of the gyro survey, and he testified that he wanted to keep the work on schedule so he could make the company money.

After the accident, Western began paying Phillips long-term disability benefits equal to two-thirds of his salary, as well as medical benefits and maintenance payments. Without objection by Phillips, Western introduced evidence of the medical benefits. Phillips objected, however, to introduction of evidence of the maintenance pay and the long-term disability benefits. Phillips lodged a written objection, arguing that maintenance pay may not be deducted from an award of past lost wages and that the disability benefits were immune from setoff under the collateral source rule. He renewed his objection to the maintenance pay and the disability benefits at trial. In a bench conference, Phillips's attorney reargued the points he had made in his written motion, contending that the disability benefits were fringe benefits and that such evidence may not be placed before the jury because of the possibility of prejudice. The judge overruled the objection, stating that "the income that the man received is in fact income, and that should be reflected so that he doesn't get a double recovery." Although, as the district judge noted, Western presumably introduced the evidence in order to obtain a setoff against any potential Jones Act liability, it never pleaded a right to setoff and did not make its purpose in introducing the evidence apparent to the district judge. Moreover, neither Western nor Phillips placed any evidence before the district judge prior to his ruling on the admissibility of the evidence that bore on the question whether the disability benefits fell within the legal definition of "collateral source income."

The precise source of the payments into the fund did not become clear at trial. Phillips initially expressed a belief that the program was totally funded by Western, but he then stated that he thought it was funded through deductions from his paycheck. Defense counsel, characterizing the payments as replacement of lost wages, referred to them several times in his closing statement while exhorting the jury to deny Phillips a double recovery. The jury returned a verdict in favor of Western on the negligence claim. Phillips filed a motion for a new trial and, in its opposition to the motion, Western appended an affidavit from its Vice President for Human Resources stating that the Western disability plans are non-contributory on the part of the employee. The district court denied the motion for a new trial, and this appeal followed.

II. THE UNSEAWORTHINESS CLAIM

Phillips first argues that the district court erred in directing a verdict on the unseaworthiness claims at the close of his case. We review the decision to grant the motion under the same standard used by the district court, viewing the evidence and drawing all reasonable inferences in favor of the party opposing the motion. Fruge v. Penrod Drilling Co., 918 F.2d 1163, 1166 (5th Cir.1990). The standard for a directed verdict mirrors that for summary judgment. The question for the court, in considering a motion for a directed verdict, is "whether the evidence presents...