Texas Metal Fabricating Co. v. Northern Gas Products Corp.

• Decision Date: 26 August 1968
• Docket Number: 9674.,No. 9673,9673
• Citation: 404 F.2d 921
• Parties: TEXAS METAL FABRICATING COMPANY, Inc., Appellant, v. NORTHERN GAS PRODUCTS CORPORATION, The Fidelity and Casualty Company of New York, and Robert L. Hendrickson, Appellees. FLUOR CORPORATION, Ltd., Appellant, v. NORTHERN GAS PRODUCTS CORPORATION, The Fidelity and Casualty Company of New York, and Robert L. Hendrickson, Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

404 F.2d 921 (1968)

TEXAS METAL FABRICATING COMPANY, Inc., Appellant, v. NORTHERN GAS PRODUCTS CORPORATION, The Fidelity and Casualty Company of New York, and Robert L. Hendrickson, Appellees.

FLUOR CORPORATION, Ltd., Appellant, v. NORTHERN GAS PRODUCTS CORPORATION, The Fidelity and Casualty Company of New York, and Robert L. Hendrickson, Appellees.

Nos. 9673, 9674.

United States Court of Appeals Tenth Circuit.

August 26, 1968.

Floyd E. Jensen, Wichita, Kan. (Lewin E. Timmerman, of Bell & Timmerman, Wichita, Kan., and Clifford L. Malone, of Adams, Jones, Robinson & Manka, Wichita, Kan., with him on the brief), for appellants.

Harry E. Robbins, Jr., of Gamelson, Hiebsch, Robbins & Tinker, Wichita, Kan., and Arthur C. Hodgson, Lyons, Kan., for appellees.

Before HILL, SETH and HICKEY, Circuit Judges.

SETH, Circuit Judge.

This is a diversity action which was commenced by the individual appellee to recover for personal injuries which he suffered during an explosion which occurred in a hydrocarbon extraction plant in Kansas. The corporate appellees are his employer, Northern Gas Products Corporation, and the employer's compensation carrier, The Fidelity and Casualty Company of New York. The appellees in the trial court recovered judgment against both of the appellants who have now taken this appeal.

The record shows that appellant, Texas Metal Fabricating Company, Inc., built a piece of equipment known as a heat exchanger, which is a metal, cylindrically shaped, enclosed vessel approximately thirty-five feet in length and two feet in diameter. It is designed to provide for a flow of liquids through a large number of small tubes inserted lengthwise through the vessel and also for the circulation of liquids within the outside metal shell which encloses the tubes. In this case propane was circulated through the small inserted tubes and water was circulated and passed between baffles in the area inside the cylinder and surrounding the tubes. The baffles are made of sheet metal which extend across a portion of the interior of the cylinder and through which holes are drilled for the tubes which are inserted through them and which extend throughout the length of the cylinder.

The record shows that the heat exchanger was ordered by the appellant, Fluor Corporation, Ltd., which was engaged in the business of constructing plants for the extraction of liquid hydrocarbons from gases, and in this instance had a contract for the construction of such a plant for Northern Gas Products Corporation. The heat exchanger was constructed in accordance with standard procedures and delivered to Fluor at the rail loading area at Texas Metal's plant in Houston, Texas. The heat exchanger was incorporated in the plant under construction and initially was placed in limited service and eventually in full service. As will hereinafter be further described, the employees of the contractor Fluor when the plant went into operation noticed a rattle in the heat exchanger which they described as a "tube rattle." The engineers of Fluor and the plant owner discussed the problem, agreed on a method which would stop the rattle. The next time the plant was shut down bolts were inserted through the outer casing of the heat exchanger and tightened against the baffles in an attempt to stop what was considered to be a movement of the tubes in the interior. Shortly thereafter the record shows that propane gas escaped from a hole worn in one of the small tubes inside the heat exchanger and became mixed with the water flowing through the outside casing. The gas passed through a portion of the plant to an area where the individual appellee was working, was ignited, and caused the explosion in which he was injured.

The appellants in this appeal urge that the trial court was in error in its failure to grant a motion by Texas Metal Fabricating Company, Inc., a foreign corporation, to quash the service of process which had been made upon it by service on the Kansas Secretary of State, and by service by the United States Marshal in the State of Texas. In view of the disposition which we make of other contentions made by this appellant, it is not necessary to develop the issues relating to the service question. It is sufficient to state that under the facts shown here, there was sufficient contact and involvement by the foreign corporation within the State of Kansas to support the service.

Appellant, Texas Metal Fabricating Company, Inc., also urges that the trial court was in error in failing to sustain its motion to dismiss at the conclusion of plaintiff's evidence and in failing to sustain its motion for directed verdict. The ground asserted by this appellant is that the heat exchanger which it designed and manufactured had been modified without its knowledge or consent after it had been put into operation, and that such change was the proximate cause of the plaintiff's injuries. This appellant thus asserts that it was thereby relieved of liability.

The record shows that the heat exchanger was tested by this appellant when it completed its fabrication of the unit, that it was installed by the contractor Fluor, which is also an appellant herein, and was then tested. The plant in which the exchanger was installed was completed some time in 1961, and this unit was in the system when it was started on a limited basis in that year. The record shows that there was a flow of water through the unit from at least August 1962. The record shows that the plant did not go into complete operation until some time in January 1963.

A witness who was a process engineer and employed by Northern Gas Products, for whom the plant was being constructed, testified that a noise in the heat exchanger was called to his attention in June 1963. This was described as a "rattle in the tubes." The witness went to the unit and listened to the noise and put what he described as a monitor on the exchanger. This monitor was a device which would indicate whether or not there had been any leaking of propane gas into the water flowing through the heat exchanger. There was no leakage indicated by the monitor. Thereafter there began a series of discussions between the contractor Fluor and the representatives of the owner concerning the rattle in the heat exchanger and what should be done about it. Finally a mutual decision was reached that the rattle should be stopped by drilling through the outer casing of the heat exchanger and inserting a bolt which would press against metal baffles in the interior of the exchanger. These baffles had been built into the exchanger for the purpose of diverting the flow of water and apparently also for the purpose of separating the many tubes which were inserted lengthwise through the unit. The baffles were so "pinned" at a time when the plant was out of service. The record shows that this method of stopping the rattle had been used in other plants and on other heat exchangers manufactured by Texas Metal. The plant went back into production on October 7, 1963, and the explosion which is the subject of this litigation occurred on October 17, 1963. The record shows that Texas Metal was not advised or consulted in any way about the rattle in the tubes or about pinning the baffles. The witness for the appellant Texas Metal testified that they heard nothing nor knew nothing about this particular heat exchanger from the time it left the plant until they were sued.

The record shows that the propane gas which caused the explosion escaped through a hole in one of the tubes which ran lengthwise through the heat exchanger. The hole had been worn in the tube at the place of contact of this tube with one of the baffles. The witnesses who testified as to the reason a hole had been worn in the tube attributed the cause to the pinning of the baffles. Other witnesses testified that in their opinion the tube rattle, which was described as being excessive, was caused by the movement of the tubes against the baffles and could have resulted in the wearing of the tubes over a period of time.

The plaintiff asserts that the unit rattled and thus was defective, and that the action taken to modify the unit can be characterized as no more than some concurrent act by the contractor Fluor; consequently he urges that both appellants are responsible, but we cannot agree.

Appellant Texas Metal points out that there are no Kansas cases on the question of the modification of a product following its sale to the user and the result of such modification on the seller's liability. The appellant cites our case of Marker v. Universal Oil Products Co., 250 F.2d 603 (10th Cir.), and Young v. Aeroil Products Co., 248 F.2d 185 (9th Cir.), as holding that the manufacturer may be released from liability in the event of an improper use of the machinery or by reason of a substantial modification of the machinery.

The Marker case concerned a refinery tank which had been constructed for the use of a cold catalyst. The user had commenced using a hot catalyst instead, and an employee was asphyxiated by fumes generated in the unit. This cited case thus involved a use of a unit which was not contemplated by the maker, and also what sort of warning would be required under such circumstances. Our court held that the manufacturer was not liable.

In the Ninth Circuit case of Young v. Aeroil Products Co., supra, an employee was injured by a portable...