Tipton v. Clower

• Decision Date: 13 October 1960
• Docket Number: No. 6562,6562
• Parties: Martha J. TIPTON, Administratrix of the Estate of Elbert A. Tipton, Deceased; Dorothy T. Carran, Administratrix of the Estate of Joe Lewis Green, Deceased; and J. S. Jeffreys, Plaintiffs- A Royal Indemnity Company, Intervening Plaintiff-Appellee, v. J. C. CLOWER, d/b/a Clower Drilling Company, Defendant-Appellant.
• Court: New Mexico Supreme Court

Page 46

356 P.2d 46

67 N.M. 388

Martha J. TIPTON, Administratrix of the Estate of Elbert A Tipton, Deceased; Dorothy T. Carran Administratrix of the Estate of Joe Lewis Green, Deceased; and J S. Jeffreys Plaintiffs- A Royal Indemnity Company, Intervening Plaintiff-Appellee, v. J. C. CLOWER, d/b/a Clower Drilling Company, Defendant-Appellant.

No. 6562.

Supreme Court of New Mexico.

Oct. 13, 1960.

Ray C. Cowan, Hobbs, Seth, Montgomery, Federici & Andrews, Santa Fe, for appellant.

William J. Heck, Hobbs, for appellees Tipton and Carran.

Mack Easley, Hobbs, Smith, Johns & Neuffer, Oklahoma City, Okl., for appellee Jeffreys.

Atwood & Malone, Roswell, for appellee Royal Indemnity Co.

CARMODY, Justice.

Appeal from jury verdicts and judgments in favor of the plaintiffs in three consolidated cases.

The questions involved on appeal relate to the relative responsibilities and liabilities to third persons of a contract oil well driller and the owner at the time when the actual drilling had been substantially completed but the well was not made entirely ready for production.

This is the foundation case out of which Royal Indemnity Co. v. Southern Cal. Petroleum Corp., 1960, 67 N.M. 137, 353 P.2d 358, also arose. However, except for the fact that Royal Indemnity Company is a party to both cases, there is no similarity from a factual or legal issue standpoint.

The case may seem complicated because in the court below there were a great many parties involved. In the interest of clarity, we will designate the parties and other persons or corporations interested in the following manner. The defendant and appellant, J. C. Clower, d/b/a Clower Drilling Company, as 'Clower'; the three plaintiffs and the intervening plaintiff, Royal Indemnity Company, all having identical interests, will be designated as 'plaintiffs'; in addition, Southern California Petroleum Corporation, one of the defendants below and the well owner, will be called 'Southern California'; and B. J. Service Company, an oil well cementing contractor and a third party defendant below, as 'B. J. Company.' It should be noted, however, that Southern California and B. J. Company are not parties to this appeal.

The pertinent facts are that immediately prior to August 17, 1957, Clower was drilling an oil well for Southern California, under a contract consisting of the following letter signed by representatives of both parties:

'This is an agreement to drill your Federal Bobb C No. I well in Sec. 13 T. 20 S R 33 E, Lea County, N. Mex.

'I will furnish cable tool rig complete, fuel, water, pit and cellar, also approximately 75 feet of 13 3/8 surface pipe, 600 feet of 10 3/4 pipe and 950 feet of 8 5/8 pipe to dry the hole above the salt section. I will run and pull this pipe at my expense, it is not to be cemented.

'I will drill this well through the Yates pay zone or to 3375 feet.

'You agree to furnish road and location spread, 5 1/2 pipe for the oil string, also cement and Halliburton services.

'Drilling to be at $4.00 per foot, day work at $220.00 per 24 hour day.'

Clower drilled until August 16th, when ordered by Southern California's geologist to stop drilling because the hole was deep enough. Clower then had the 5 1/2 inch oil string, furnished by Southern California, installed, and thereafter pulled the casing. The next step in the work was to cement the pipe in place, and to do this Southern California employed the B. J. Company. Inasmuch as there was going to be some additional work for Clower to do after the cementing process was completed and the cement dried, Clower's employees and equipment stood by to do what might be necessary, this principally consisting of the raising of the pipe off the bottom of the hole so that the cement would circulate. In addition, at the time of the cementing process, the drilling rig and other equipment of Clower was being used, including lights used in night operations and necessary motors. B. J. Company commenced the cementing process shortly after midnight on August 17th, and after a portion of the work had been done, a fire broke out which instantly enveloped the area in flames, burning three of B. J. Company's employees, two to death and one seriously. The actual cause of the fire was undetermined, but apparently it resulted in some manner from the cement's forcing oil and gas upwards on the outside of the pipe so that when it reached the surface, for one reason or another, it ignited. Suits were brought by the plaintiffs, for the two deaths and for the injuries to the third employee, against Southern California and Clower. Immediately prior to the trial, Southern California took a joint tort-feasor's release from each of the plaintiffs, and thereafter trial was had, with Clower as the only remaining defendant. Substantial damages were recovered, the jury having determined that the fire was caused by the joint negligence of the employees of Southern California and employees of Clower. Such other facts as may be necessary for the decision will be discussed subsequently, but, in the main, the above brief summarization is believed sufficient to properly understand the case.

Clower's initial contention on appeal is that, under the testimony, the trial court erred in failing to direct the verdict in favor of Clower and in denying Clower's motion for judgment notwithstanding the verdict. In this connection, Clower claims that the evidence, when considered as a whole, makes it clear that the negligence, if any, and the proximate cause of the accident was not that of Clower, but was that of either Southern California or B. J. Company. This is on the basis that when Clower was told to stop drilling by Southern California and Southern California then employed B. J. Company to do the cementing work, that thereby the drilling contract was partially accepted and that, at least during the period of the cementing operation, Southern California resumed complete control. Clower urges that the action of Southern California in going ahead with the work as they did was an intervening cause as a matter of law, which relieved Clower from liability.

It is urged that Southern California having resumed control over the property, that at least during the period of the cementing operations Clower's employees became the servants or special employees of Southern California, or, in any event, that the owner having knowledge of the existing conditions, that the contractor (Clower) is not liable to third persons employed by the owner when he is merely performing work under the directions of the owner.

From a careful examination of the extremely lengthy and involved record, there is certainly evidence which would warrant the giving of Clower's contention serious consideration. However, to the contrary, it must be said that the plaintiffs offered proof by which the jury, under proper instructions, would have been justified in finding that Clower's negligence, if any, either contributed to or was the proximate cause of the injuries to the plaintiffs. We do not deem it necessary to detail the testimony as to this claimed error. Suffice it to say that there is a definite conflict in the evidence. We are fully cognizant of the general rule as to the non-liability of an independent contractor after the acceptance of the work by the owner, and we are familiar also with the exceptions to this rule and the so-called 'modern view.' 13 A.L.R.2d 195; 58 A.L.R.2d 869; Wood v. Sloan, 1915, 20 N.M. 127, 148 P. 507, L.R.A.1915E, 766; Prosser, Torts, 2d ed., Sec. 85. However, it should be noted that no two cases are identical, and the instant case must be determined on the basis of the proof, not on the adoption or rejection of legal theories.

Nevertheless, as a general guide for the trial court, it should be said that an independent contractor may be found to be liable to third parties who may have been foreseeably endangered by the contractor's negligence, even after acceptance of the work. The above must be limited to the extent that the contractor should not be liable if he merely carefully carried out the plans, specifications and directions given him, at least where the plans are not so obviously dangerous that no reasonable man would follow them and further be limited to the extent that if the owner discovers the danger, or it is obvious to him, his responsibility supersedes that of the contractor. See Prosser, supra, at 519, and Russell v. Arthur Whitcomb, Inc., 1956, 100 N.H. 171, 121 A.2d 781. It should be remembered that the application of the rule may be affected when consideration is given to the status of the third person, i. e., whether invitee, licensee, or some other type of relationship. Further reference to an instruction on the status of the plaintiffs will be made in the closing paragraphs of this opinion.

Although there is a great deal of evidence to the contrary, there is testimony in the record which would warrant the case's going to the jury for their determination as to whether there had been a completion or acceptance of the work, whether Southern California had complete supervision and authority during the cementing process, and whether Southern California, as owner, knew or could have discovered upon reasonable inspection the dangerous condition, if such existed. Compare Standard Ins. Co. v. McKee, 1947, 146 Tex. 183, 205 S.W.2d 362; and Gulf Oil Corporation v. Wright, 5 Cir., 1956, 236 F.2d 46.

It should be noted that the drilling contract fixed the status of the parties without regard to what may have been the customs and practices in the community, insofar as the contract covered these particular items. Therefore, testimony as to custom and practice cannot be used to vary the express terms and conditions provided in the contract. Gooch v. Coleman, 1916, 22 N.M. 45, 159 P. 945; and Romero v. Romero, 1924, 29 N.M. 667, 226 P. 652. However, where the contract is silent, as this one, with regard to standby services...