Case Title: JAMES E. CORNELIUS V. POWDER RIVER ENERGY CORPORATION, INC., a Wyoming corporation, acting through their agents, officers, employees and representatives

Citation: 

Docket Number: 06-186

State: wyoming

Court: Wyoming Supreme Court

Date: 2007-02-21T00:00:00Z

Document:
JAMES E. CORNELIUS V. POWDER RIVER ENERGY CORPORATION, INC., a Wyoming corporation, acting through their agents, officers, employees and representatives2007 WY 30152 P.3d 387Case Number: 06-186Decided: 02/21/2007
OCTOBER TERM, A.D. 2006

 
 
JAMES E. 
CORNELIUS,

 
 
Appellant

(Plaintiff),

 
 
v.

 
 
POWDER RIVER ENERGY CORPORATION, INC., aWyoming corporation, acting through their 
agents, officers, employees and representatives,

 
 
Appellee

(Defendant).

 
 
Appeal 
from the DistrictCourtofCampbellCounty

 
 

Representing 
Appellant:

C. John 
Cotton of Cotton Law Offices, Gillette, Wyoming; and Kenneth E. Barker of Barker 
Reynolds Law Firm, LLC, Belle Fourche, South Dakota.  Argument by Messrs. Cotton and 
Barker.

 
 

Representing 
Appellee:

Bruce A. 
Salzburg of Freudenthal, Salzburg & Bonds, P.C., Cheyenne, Wyoming.

 
 
Before 
VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, 
JJ.

 
 

VOIGT, 
Chief Justice.

 
 
[¶1]      Cornelius sued 
his employer (Baldwin) and the company for which Baldwin did contract work (PRECorp) for injuries Cornelius 
suffered when he contacted a live electrical line.  The district court granted summary 
judgment to PRECorp on two grounds:  
first, as the employer of an independent contractor, PRECorp was not 
vicariously liable for injuries to that contractor's employee; and second,  PRECorp was not independently 
negligent.  We 
affirm.

 
 
ISSUES

 
 
[¶2]     1.   Whether the district court erred in 
failing to determine whether the contract between Baldwin and PRECorp was 
written or oral?

 
 
           
2.   Whether the district 
court erred in applying the wrong standard to determine whether Baldwin was an independent 
contractor?

 
 
           
3.   Whether genuine 
issues of material fact exist as to whether Baldwin was an independent 
contractor?

 
 
           
4.   Whether genuine 
issues of material fact exist as to PRECorp's liability for its own 
negligence?

 
 
FACTS

 
 
[¶3]      PRECorp is a 
rural electric cooperative serving the northeastern part of Wyoming.  PRECorp was formed in 1997 by the merger 
of Tri-County Electric Association, Inc., and Sheridan-Johnson Rural 
Electrification Association.  Baldwin, d/b/a Live Line Maintenance, 
provides construction and maintenance services to rural electric cooperatives in 
South Dakota, Nebraska, and Wyoming.

 
 
[¶4]      In 1990, 
Tri-County decided that its workload was such that it could no longer perform 
systematic inspections or routine line maintenance.  Beginning the following year, Tri-County 
(and later PRECorp) entered into a series of contracts with Baldwin, whereunder 
Baldwin provided a variety of services, 
including routine inspection and maintenance of power poles and live electrical 
lines.  Baldwin's crews inspected power poles, tightening 
hardware, replacing broken insulators and lightning arrestors, and retying loose 
conductors where necessary.

 
 
[¶5]      Baldwin's bids under the contracts were for work to be 
done on energized lines.  The prices 
charged were set out in attachments to a series of contracts signed by the 
parties.  The documents, themselves, 
were standard forms originally provided by the United States Department of 
Agriculture Rural Electrification Administrationlater known as the Rural 
Utilities Servicesand were designated as RUS Form 792, "Distribution Line 
Extension Construction Contract (Labor Only)."

 
 
[¶6]      Cornelius began 
working for Baldwin as a lineman in 1996.  He had done similar routine maintenance 
work for eleven or twelve years in Montana.  From 1996 through 1999, Cornelius 
performed maintenance work on various rural electric cooperatives' power lines 
in Nebraska and South 
Dakota.  Beginning in late 1999, he began working 
on PRECorp's power lines, doing the same type of work.  Baldwin 
provided Cornelius a bucket truck, a pneumatic wrench, and insulated gloves and 
liners.  Cornelius provided his own 
hand tools.

 
 
[¶7]      During the last 
year or two of the period in which Baldwin's crews did work for PRECorp, Baldwin 
began to experience health problems and he stopped personally supervising his 
field crews.  Subsequently, PRECorp 
began to notice deficiencies in the work done by those crews, some of which 
deficiencies raised safety questions, including crew training, the wearing of 
hard hats and safety glasses, and whether protective gear and bucket trucks had 
been tested.  As a result of these 
concerns, PRECorp scheduled a meeting with Baldwin for February 21, 2002.  At that meeting, Baldwin was given 30 days in which to correct the noted 
deficiencies and to provide to PRECorp written evidence that his equipment had 
been properly tested.  When that 
evidence was not produced, Baldwin's contract 
was terminated.

 
 
[¶8]      Unfortunately, 
Cornelius was injured during the hiatus between the meeting and Baldwin's contract termination.  On March 11, 2002, Cornelius was in the 
bucket of his truck tightening hardware on a PRECorp power pole with three 
energized lines.  He had just 
removed his insulated gloves to tighten the hardware on the neutral connector 
when his head apparently contacted one of the live lines.  The electric current entered his body 
near his left ear, followed pathways down both arms to the bucket, and then to 
the ground through the boom of the truck or through an uninsulated pneumatic 
hose.  Cornelius sustained serious 
injuries.

 
 
STANDARD 
OF REVIEW

 
 
[¶9]      Summary judgments 
are governed by W.R.C.P. 56, with particular attention paid to the following 
language from subsection (c) thereof:

 
 
The 
judgment sought shall be rendered forthwith if the pleadings, depositions, 
answers to interrogatories, and admissions on file, together with the 
affidavits, if any, show that there is no genuine issue as to any material fact 
and that the moving party is entitled to a judgment as a matter of 
law.

 
 
[¶10]   When summary judgment has been 
granted below,

 
 
[t]his 
Court reviews a grant of summary judgment de novo without giving any deference 
to the district court's determinations.  
In reviewing a district court's grant of summary judgment, this Court has 
before it the same materials as the district court and it employs the same 
standards as used by the district court.  
We examine the record from the vantage point most favorable to the party 
who opposed the motion, and we give that party the benefit of all favorable 
inferences that may fairly be drawn from the record.

 
 

HABCO v. 
L&B Oilfield Serv., 2006 
WY 91, ¶ 7, 138 P.3d 1162, 1164 (Wyo. 2006).  The movant has the initial burden of 
establishing a prima facie case by 
admissible evidence.  If that is 
done, the burden then shifts to the opposing party to present specific facts 
showing that there remain genuine issues of material fact.  Markstein v. Countryside I, L.L.C., 2003 
WY 122, ¶ 11, 77 P.3d 389, 393 (Wyo. 2003).  A summary judgment granted in a 
negligence action is subject to more exacting scrutiny upon appeal because 
negligence actions "by their nature are factually dependent[.]"  Foote v. Simek, 2006 WY 96, ¶ 9, 139 P.3d 455, 458 (Wyo. 2006) (quoting Franks 
v. Indep. Prod. Co., 2004 WY 97, ¶ 9, 96 P.3d 484, 489 (Wyo. 2004)).

 
 
DISCUSSION

 
 
Whether 
the district court erred in failing to determine whether the contract 
between Baldwin and PRECorp was written or 
oral?

 
 
[¶11]   In its decision letter, the 
district court included the following footnote:  "Plaintiff and PRECorp dispute whether a 
written contract or an oral contract actually controlled the work of [Baldwin], but this dispute is not material to the court's 
decision."  On its face, this 
footnote does make it appear that the district court never made a decision as to 
what contract created the relationship between the parties.  When the decision letter is read in its 
entirety, however, it is clear that the district court found that the parties 
had entered into written contracts.  
For instance, in considering whether PRECorp asserted a controlling and 
pervasive role over Baldwin's operations, the 
district court declared that "[t]he written contract between [Baldwin] and 
PRECorp contains a provision stating that the contractor ([Baldwin]) will 
perform work in compliance with all applicable safety 
laws."

 
 
[¶12]   A review of the record makes the 
opposite conclusionthat the parties operated under an oral contractan 
evidentiary absurdity.  Throughout 
the entire duration of their working relationship, PRECorp and Baldwin annually 
signed a form contract, to which was attached Baldwin's then-current fee schedule, called a "price 
list," for the work to be done.  The 
fact that the parties used a form document that was not wholly suited to its 
purposes does not negate the fact that it was the parties' contract.1  The district court's facts and 
conclusions were based upon this contract, and we find no error in that 
regard.

 
 
Whether 
the district court erred in applying the wrong standard to determine 
whether Baldwin was an independent 
contractor?

 
 
[¶13]   The answer to this question is 
dependent upon the answer to the first question because the gist of Cornelius's 
argument here is that the district court looked to cases where there was an 
express written contract between the parties, rather than to cases where there 
was no express contract between the parties.  We concluded above that the district 
court correctly had found that the parties operated under a series of annual 
written contracts.  With that in 
mind, we now also conclude that the district court applied the appropriate rules 
of law in determining that Baldwin was an 
independent contractor.  Rather than 
paraphrasing the district court's decision letter, we will set forth the 
relevant portion at length, inasmuch as it correctly states the law to be 
applied:

 
 
            
In Franks v. Independent 
Production Company, the Wyoming Supreme Court defined an independent 
contractor as "one who, exercising an independent employment, contracts to do a 
piece of work according to his own methods and without being subject to the 
control of his employer except as to the result of the work."  2004 WY 97, ¶ 10, 96 P.3d 484 (Wyo. 
2004) (citing Combined Ins. Co. of 
America v. Sinclair, 584 P.2d 1034, 1043 (Wyo. 1978) (quoting Lichty v. Model Homes, 66 Wyo. 347, 211 P.2d 958, 967 (Wyo. 1949)).  In order to determine whether a given 
contractor is functioning as an independent contractor or a servant, the Court 
has observed "[t]he overriding consideration in distinguishing between 
master-servant relationships and employer-independent contractor relationships 
is the employer's right to control the means and manner of the work."  Diamond B. Servs. v. Rohde, 2005 WY 130, 
¶ 28, 120 P.3d 1031, 1041 (Wyo. 2005).  
The Court added:  "[w]hen an 
express contract exists between the parties, it is important evidence in 
defining the relationship, although it is not conclusive of the issue." 
Id. (citing Coates v. Anderson, 2004 WY 11, ¶ 14, 84 P.3d 953, 957 (Wyo. 2004); Noonan v. 
Texaco, Inc., 713 P.2d 160, 164 (Wyo. 1986)).

 
 
            
As the 
Franks Court 
noted, "[g]enerally, 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."  Franks, ¶ 10 (citing Hittel v. WOTCO, Inc., 996 P.2d 673, 676 
(Wyo. 2000) (citing Restatement (Second) of Torts ¶ 409 (1965); Hill v. Pacific Power & Light Co., 
765 P.2d 1348, 1349 (Wyo. 1988)).  Further, the Court has adopted the 
general rule that an employer of an independent contractor "is not obligated to 
protect the employees of an independent contractor from hazards which are 
incidental to, or part of, the very work the contractor was hired to 
perform."  Jones v. Chevron U.S.A., 718 P.2d 890, 
894 (Wyo. 
1986) (citations omitted).

 
 
            
The Franks court recognized 
that "[t]wo limited exceptions to non-liability have been recognized in our 
previous decisions:  (1) workplace 
owner/employer (owner) exercises controlling and pervasive role over the 
independent contractor's work; or (2) owner assumes affirmative safety 
duties."  Franks, ¶ 10 (citing Hittel, 996 P.2d  at 676; Jones v. Chevron, 718 P.2d at 896).  The United States Court of Appeals for 
the Tenth Circuit applied those exceptions and Wyoming law in the recent case of 
Hjelle v. Mid-State Consultants, 
Inc., 394 F.3d 873 (10th Cir. 2005).  
In Hjelle, the Court held that 
the owner in that case (acting through its agent) did not exercise a 
"controlling or pervasive role" over the independent contractor's work, even 
though "(1) [owner's agent] instructed Plaintiff where to dig and where to place 
the pipe and other items, but did not instruct Plaintiff on how to operate the 
backhoe; (2) he indicated that the work was completed according to 
specifications and the trench could be filled; (3) he instructed Plaintiff to 
mark the pipe in the bottom of the trench with scare tape; and (4) he 
instructed [independent contractor] employees . . . where to place the remote, 
pipe and other items . . . and approved their work, but he did not direct the 
specific manner in which those results should be obtained.'"  Id. at 879.  The Court in that case concluded that 
the instructions given by the owner's agent were "incidental to and consistent 
with his role of ensuring that the final product of [independent contractor's] 
work complied with contract requirements."  
Id.

 
 

            
Finally, 
the Wyoming Supreme Court has held that electricity is an ultrahazardous 
instrumentality, and that businesses working with ultrahazardous 
instrumentalities owe a greater duty of care than the basic 
reasonable-under-all-the-circumstances standard.  Wyrulec Co. v. Schutt, 866 P.2d 756, 761 
(Wyo. 
1993).  In situations where an 
ultrahazardous instrumentality as electricity is in use, the Court has further 
acknowledged that "the duty of the electric company to maintain safe premises is 
nondelegable."  Ruhs v. Pacific Power & Light, 671 F.2d 1268 (10th Cir. 1982).

 
 
[¶14]   When this law is applied to the 
facts of this case, it is clear that Baldwin 
was an independent contractor and that summary judgment in favor of PRECorp was 
appropriate on that issue.  Certain 
overriding facts are not contradicted.  
Baldwin contracted with PRECorp to do 
piecework at specified fees.  In 
general, it can be said that PRECorp hired Baldwin to obtain a particular 
resultBaldwin would inspect power poles and 
tighten loose hardware.  Baldwin provided the men, equipment, and supervision.  PRECorp did not retain anything 
approaching a "controlling or pervasive role" in the work.  PRECorp's role was (1) to specify where 
the work was to be done; and (2) to pay for the work that was 
done.

 
 
[¶15]   There is no suggestion in the 
record either that PRECorp provided unsafe premises, or that PRECorp took over 
affirmative safety duties.  
PRECorp's "premises" basically were the power poles.  Cornelius has not asserted that such 
poles were in any way defective or unsafe, or that they contributed to his 
injuries.  PRECorp did require 
Baldwin to perform the work in compliance with 
applicable safety laws, but that does not lead to the conclusion that PRECorp 
was in charge of safety measures.  
Indeed, it implies the contrary.  
PRECorp did meet with Baldwin just prior to his termination in an effort 
to get him to comply with safety regulations, but that is not an indication that 
ensuring the safety of Baldwin's employees was 
PRECorp's duty under the contracts.  
Rather, PRECorp's duty was to provide safe premises, which it 
did.

 
 
[¶16]   The fundamental flaw with 
Cornelius's argument is that it directly contravenes the basic premise that an 
employer of an independent contractor is not liable for injuries suffered by 
that independent contractor's employee.  
Stated succinctly, Cornelius argues that PRECorp should be liable for his 
injuries because PRECorp did not fulfill its duty to make sure that Baldwin provided equipment that was properly tested.  The problem, of course, is that that is 
the legal duty that PRECorp specifically did not have under independent 
contractor law.

 
 
[¶17]   In addition to the principles of 
law set forth in the district court's decision letter and quoted hereinabove, we 
would add the following.  In 
particular,

 
 
"The 
owner may retain a broad general power of supervision and control as to the 
results of the work so as to insure satisfactory performance of the independent 
contractincluding the right to inspect, the right to stop the work, the right 
to make suggestions or recommendations as to details of the work, the right to 
prescribe alterations or deviations in the workwithout changing the 
relationship from that of owner and independent contractor or the duties arising 
from that relationship."

 
 

Franks 
v. Indep. Prod. Co., 2004 
WY 97, ¶ 10, 96 P.3d 484, 490 (Wyo. 2004) (quoting Noonan v. Texaco, Inc., 713 P.2d 160, 
165 (Wyo. 
1986)).  That very principle was 
exemplified by the meeting PRECorp arranged with Baldwin to address deficiencies in his performance.  Furthermore, the standard form contract 
being used by the partiesRUS Form 792has been found not to give an owner 
acting thereunder such a right to control the details of the work as to make it 
liable for injuries to an independent contractor's employee.  Victoria Elec. Coop. v. Williams, 100 S.W.3d 323, 329 (Tex.App. 2002).  
And finally, a bald assertion such as Baldwin's deposition statement that PRECorp "had an 
absolute right to do whatever they want with [their property]," does not create 
a genuine issue of material fact in the face of contract language directly to 
the contrary.  Cockburn v. Terra Res., Inc., 794 P.2d 1334, 1340-41 (Wyo. 1990).

 
 
Whether 
genuine issues of material fact exist as to whether Baldwin was an independent 
contractor?

 
 
[¶18]   This issue largely has been 
answered in the negative in the discussion of the second issue.  Having reviewed the entire record, and 
in particular having read all the depositions in the file, we are convinced that 
there is not a genuine issue of material fact as to whether Baldwin was an independent contractor.  Attorney's questions, including leading 
questions in a deposition, are not evidence.  Cornelius's counsel tried valiantly 
throughout Howard Baldwin's deposition to get him to say that PRECorp could 
control Baldwin's work.  Despite some responses such as the one 
mentioned above suggesting PRECorp had the "right to do anything they wanted," 
Baldwin's essential testimony was that PRECorp 
"never told us how to do it.  They 
expected us to know how to do it."  
The gist of the relationship between Baldwin and PRECorp was described in 
this exchange between counsel and Baldwin:

 
 
Q.   Okay.  I take it that the written document that 
you had regarding the maintenance work was just a list of  

 
 
A.   Price maybe, 
yeah.

 
 
Q.   And I also understand it, there 
wasn't any description on that list of exactly how PRECorp wanted this work 
done; is that fair?

 
 
A.   No, but you have  you have  you 
have industry standard.

 
 
Q.   Okay.

 
 
A.   Kind of an unwritten rule, you 
know.  We 
have industry standards, and you agree to do this work for them, it's just 
generally understood that it's going to be up to those industry 
standards.

 
 
(Emphasis 
added.)  We believe this succinctly 
describes the contractual relationship between PRECorp and Baldwin.  Baldwin 
gave PRECorp a price list or fee schedule for particular maintenance tasks, 
agreeing to perform those tasks to industry standards.  PRECorp retained the right to object if 
the work did not meet those standards, and to require Baldwin to correct any deficiencies.  This relationship was the epitome of an 
independent contractor relationship.

 
 
Whether 
genuine issues of material fact exist as to PRECorp's liability for its own 
negligence?

 
 
[¶19]   Cornelius alleges that, in addition 
to being vicariously liable for Baldwin's 
negligence, PRECorp is also directly liable for its own negligence.  Cornelius's argument may be summarized as 
follows:

 
 
1.    The owner's duty to an 
employee of a contractor working on the premises is the duty to exercise 
reasonable care under all the circumstances to protect that employee from 
foreseeable dangers.  Franks, 2004 WY 97, ¶ 16, 96 P.3d  at 
492.

 
 
2.    Ultrahazardous activities 
create a non-delegable duty on the part of the owner to maintain a safe 
workplace.  Id.

 
 
3.    Any duty voluntarily assumed 
by PRECorp must be performed with reasonable care, even if no duty otherwise 
existed.  Valance v. VI-Doug., Inc., 2002 WY 113, 
¶ 15, 50 P.3d 697, 703 (Wyo. 2002).

 
 
4.    PRECorp trained its own 
crews, and inspected its own equipment, but did not do the same for Baldwin's 
crews and equipment, even though it retained control over Baldwin's work.

 
 
5.    PRECorp was negligent in not 
shutting Baldwin's work down immediately upon learning of Baldwin's deficiencies, rather than merely calling the 
meeting of February 21, 2002.

 
 
[¶20]   The district court's decision 
letter paid more detailed attention to the allegation of vicarious liability 
than it did to the allegation of direct liability.  Nevertheless, it did identify the above 
legal principles before reaching the following conclusion:

 
 
            
The court acknowledges that working with electricity is an ultrahazardous 
endeavor.  Therefore, PRECorp owes a 
greater duty of care than simply what would be reasonable under all the 
circumstances, the oft-cited basic standard of care for premises liability in 
Wyoming.  Here, however, there was nothing 
inherently faulty with the PRECorp power line.  Instead, it was a deficiency (or 
multiple deficiencies) in the equipment provided to [Cornelius] by [Baldwin] and/or failure on the part of [Cornelius] himself 
that led to [Cornelius's] injuries.

 
 
[¶21]   PRECorp had no affirmative duty 
toward Cornelius that it breached.  
There is no allegation that PRECorp's "premises" were unsafe.  PRECorp did not control the method and 
manner of work performed by Baldwin, and 
PRECorp did not voluntarily assume any safety duties.  Cornelius's injuries were caused by his 
own lack of care, and/or by Baldwin's failure 
to provide safe equipment.

 
 
CONCLUSION

 
 
[¶22]   
There are no genuine issues of material fact to contradict the 
conclusion that PRECorp was not vicariously liable for the acts of its 
independent contractor, Baldwin, and that PRECorp violated no separate legal 
duty owed by it to Cornelius.

 
 
[¶23]   Affirmed.

FOOTNOTES

 
 

1RUS Form 
792 appears to have been designed as a contract for use in the construction of 
power distribution line extensions.