Franks v. Independent Production Co., Inc.

Citations: 2004 WY 97; 96 P.3d 484; 2004 Wyo. LEXIS 125; 2004 WL 1878344Docket: 02-269

Court: Wyoming Supreme Court; August 24, 2004; Wyoming; State Supreme Court

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Judith L. Franks, as the personal representative of her deceased husband Wayne Franks' estate, appeals a summary judgment in a wrongful death case against Independent Production Company, Inc. (IPC), R. J Production, and Jack Andregg. The appeal arises from the trial court's finding that the defendants owed no duty of care to Wayne Franks, who died after being crushed by well casing at a coal bed methane well site operated by IPC. 

Franks contests the summary judgment on several grounds: whether the defendants had a duty of reasonable care to Wayne; whether IPC and its agents had non-delegable duties due to the nature of their operations; and if the defendants owed a duty because they controlled the activity leading to his death or because Wayne was considered an "other" under the Restatement (Second) of Torts. 

The appellees argue that the independent contractor rule protects them from liability for harm caused by contractors and question whether stepchildren can recover under Wyoming's Wrongful Death Act. The facts detail that IPC operated the well site and contracted R. J Production to oversee operations, while A-1 Drilling was responsible for drilling. Wayne was delivering well casing when he was fatally injured after a mishap involving a backhoe during the unloading process. The court ultimately affirms the summary judgment in favor of the appellees.

Wayne, who had no biological children but had stepchildren from two marriages, was involved in a lawsuit with parties including IPC, R. J Production, and others. The trial court granted a motion for partial summary judgment, dismissing claims brought on behalf of Wayne's stepchildren based on Wyo. Stat. Ann. 2-4-101(c), which prohibits wrongful death actions by stepchildren. Summary judgment was also granted to other defendants, IPC, R. J, and Jack Andregg. Franks, the plaintiff, later settled with A-1 and Justin Browning, reserving the issue of whether Browning was a loaned employee of IPC. 

Franks argued the trial court misapplied the Noonan precedent regarding liability of employers of independent contractors, claiming IPC retained the obligation for unloading well casing despite delegating the task to its agent, Jack Andregg. He contended that Browning was a borrowed servant and that IPC had a non-delegable duty due to regulatory obligations and the hazardous nature of the work. Franks asserted that even under independent contractor liability principles, IPC and its agents owed Wayne a duty of care due to their control over the worksite and Wayne's classification as an 'other' under tort law.

IPC, R. J, and Andregg maintained that summary judgment was appropriate as there was no duty owed to Wayne. The legal standard for summary judgment in negligence cases requires establishing duty, breach, causation, and damages. Summary judgment is scrutinized more closely in negligence cases due to their factual nature. The appellate review of summary judgment is de novo, focusing on the nonmovant's perspective and ensuring no material facts are in dispute. The court ultimately upheld the summary judgment, concluding that no duty of care existed for the Appellees.

An independent contractor is defined as one who operates independently, performing work according to their own methods without the employer's control, except regarding the work's outcome. Employers of independent contractors typically bear no liability for harm caused by the contractor's actions, with two exceptions: 1) if the employer exerts significant control over the contractor's work, or 2) if the employer undertakes specific safety duties. 

In this case, Franks argues that Jack Andregg, acting as IPC's agent, exerted daily control over the work site and the workers involved in the accident. However, the evidence indicates that A-1 and R. J were the independent contractors, while Andregg and Browning were their employees. The determination of whether a party is an employee or independent contractor hinges on the employer's control over work details. Although Andregg was associated with IPC, the record does not demonstrate that he exceeded the permissible scope of control that would impose liability on IPC or himself.

Franks also claims that a tort duty was created through IPC's drilling contract with A-1, which included unloading well casing. IPC argues that the contract did not obligate it to unload casing, viewing related provisions as guidelines for invoicing rather than a separate obligation. The contract explicitly identifies A-1 as an independent contractor responsible for drilling and casing, with no provisions clearly assigning casing unloading to IPC. The contract outlines a pricing structure for various services and equipment, without stating that unloading responsibilities were allocated to any specific party.

The provision in Exhibit A permits invoicing for the use of a backhoe in various activities, including unloading and handling casing, digging multiple drilling pits, backfilling completed pits, and any operator-requested tasks excluding the first drilling pit. The language indicates that IPC is not responsible for unloading well casing. Franks argues that IPC's agent, Jack Andregg, conducted safety meetings and assumed safety duties, thus creating a duty of care to Wayne. However, it is determined that Andregg did not direct the unloading tasks and there is no factual dispute regarding his status as an independent contractor or any assumed safety duties. As Andregg served as a site supervisor, no duty of care arose.

Franks also claims a tort duty exists under the Uniform Commercial Code (UCC), asserting that IPC, as the buyer of the well casing, had an obligation to ensure suitable unloading facilities. Yet, no authority supports that IPC retained responsibility for unloading under the UCC's provisions. The unloading was performed by Justin Browning of A-1 Drilling and Wayne Franks from Cole’s, with IPC paying a rate per hour as part of the drilling services. This confirms the independent contractor relationship, absolving IPC of a duty of care to Wayne.

Furthermore, Franks posits that IPC owes a duty of care based on Wayne being a business invitee on IPC's leased premises. She cites the case of Ruhs v. Pacific Power, Light, where a duty was established due to the owner's negligence creating an unsafe condition for an independent contractor’s employee. However, in that case, the court found negligence on the part of the owner for failing to de-energize power lines, which is not comparable to the circumstances here. Thus, IPC's liability under the employer-independent contractor principle remains intact.

PP&L was found to owe a duty of care to Ruhs as an invitee, with the Tenth Circuit allowing the case to proceed to trial due to potential jury findings of PP&L’s negligence causing Ruhs' injuries. Franks argues that the principles from the Ruhs case apply here, while IPC asserts that a direct negligence claim against the employer of an independent contractor is not permissible when an employee injures another independent contractor’s employee. The duty of reasonable care, except for trespassers, is imposed on landowners for all entrants. In Wyoming, drilling oil and gas wells is deemed an ultrahazardous activity, which heightens an owner's duty of care to invitees, including independent contractors’ employees, necessitating reasonable precautions against foreseeable dangers. The application of the Ruhs and Pan American cases is limited to ultrahazardous activities, according to Hittel. Franks cites Hull v. Chevron to argue that ultrahazardous activities impose a non-delegable duty on owners to ensure workplace safety. In Hull, an employee of Chase Drilling, John C. Hull, was injured while unloading drill collars, leading him to sue both Chase and Chevron for negligence, citing Chevron’s nondelegable duty and several safety violations. The jury trial included testimonies from various experts, with Chevron defending itself by emphasizing Chase's independent contractor status and alleging negligence on Chase’s part and the plaintiff's contributory negligence.

Chase, as a third-party defendant, shifted its position from claiming to be an independent contractor to arguing that Chevron’s employee, Mr. Bobby Haynes, directed the drilling operations. The jury found that Chevron and Chase had a principal/agent relationship, distinguishing this case from Hull, where A-1 was acknowledged as an independent contractor. Franks could not establish the necessary principal/agent relationship for a non-delegable duty claim, given the contractual agreement between IPC and A-1. 

Franks raised the "borrowed servant" theory, asserting that Justin Browning, who was allegedly borrowed by IPC’s agent, Jack Andregg, should render all Appellees liable for his negligence. Appellees argued that Franks was improperly introducing this issue on appeal, but she referenced the Restatement (Second) of Agency regarding borrowed servants in her opposition to summary judgment. They also claimed judicial estoppel barred her from asserting this due to her prior settlement with A-1, which identified Browning as its employee. Franks countered that the settlement agreement allowed her to reserve the question of Browning's employment status.

The court determined that it need not resolve the propriety of the parties' arguments since Appellees did not exercise control over Browning during the unloading process, ruling as a matter of law that he was not a borrowed servant. The "borrowed servant" doctrine indicates that if one employer lends an employee to another and the second employer exerts control, the second employer is liable for the employee's actions. The determining factors for liability include who controls the employee and whose business the employee is advancing at the time of the incident. Franks argued that IPC’s responsibility for unloading and Andregg’s control over Browning supported her claim. However, the evidence did not support this assertion, and it was concluded that Browning remained A-1's employee. Additionally, Franks alleged that regulations applicable to IPC as a well operator imposed a duty of care on them.

An applicable statute or regulation may establish a duty of care in employer/independent contractor relationships but cannot extend beyond common law parameters. Without evidence of pervasive control or an assumption of safety duties, no duty of care exists under the regulations. In this case, Franks argues that Wayne, as the delivery person for a supplier, was an innocent third-party invitee at the well site. She cites Restatement (Second) of Torts provisions (413, 416, 427) that outline a duty of care by employers to 'others' under specific conditions. However, these sections require a finding of peculiar unreasonable risks of physical harm, which are absent here. The term 'others' does not include employees of the independent contractor and refers instead to the general public. Franks claims that the hazardous task of unloading casing constituted a peculiar risk, asserting that IPC owed Wayne a duty of care despite no contractual or fiduciary relationship between IPC and Cole's. Wayne was providing a specific service for Cole's at the well site and was not a bystander, thus not qualifying as an 'other' under the Restatement. The Restatement reiterates that an owner cannot delegate the duty to protect others from inherently dangerous activities on their land, a principle often upheld when bystanders are injured, but typically not when the injured party is an employee of the contractor. This distinction is justified since bystanders may rely on the owner for compensation whereas employees are covered under worker's compensation, mitigating the owner's liability. Wayne’s connection to the work precludes him from being considered an 'other' in this context. Additionally, the court in Butler v. Halstead addressed wrongful death claims, indicating that the statute does not specify stepchildren as beneficiaries.

Franks' request to expand the class to include stepchildren is deemed unnecessary to address at this stage, as the current ruling will not be subject to reversal or remand for trial. The order for summary judgment is upheld. The distribution of an intestate estate follows a specific hierarchy: firstly, to surviving children and their descendants; if none exist, then to the deceased individual's parents, siblings, and their descendants; and if there are no direct relatives, the estate passes to grandparents, aunts, uncles, and their descendants, with shares divided equally among those taking. Relevant case law includes Hittel v. WOTCO, Inc., Krier v. Safeway Stores 46, Inc., Hill v. Pacific Power & Light Co., and Jones v. Chevron U.S.A. Inc.