Case Title: Natural Gas Processing Co. v. Hull

Citation: 

Docket Number: 94-31

State: wyoming

Court: Wyoming Supreme Court

Date: 1994-12-12T00:00:00Z

Document:
Natural Gas Processing Co. v. Hull1994 WY 142886 P.2d 1181Case Number: 94-31Decided: 12/12/1994Supreme Court of Wyoming
NATURAL GAS PROCESSING 
CO., a Wyoming corporation,

Appellant 
(Defendant),

v.

Michael A. 
HULL,

Appellee 
(Plaintiff).

 

Appeal from District 
Court, Carbon County, Larry L. Lehman, J.

 

Thomas A. 
Nicholas of Hirst & Applegate, Cheyenne, for 
appellant.

David B. Hooper, 
Hooper Law Offices, Riverton, for appellee.

 

Before 
GOLDEN, C.J., THOMAS, TAYLOR, JJ., and KALOKATHIS, and VOIGT, District 
Judges.

KALOKATHIS, District 
Judge.

 

[¶1]      This appeal 
follows a jury verdict finding Natural Gas Processing Company (NGP) ninety 
percent negligent in an oilfield accident that severely injured Michael Hull. 
The district court entered judgment based on the jury's verdict for $1,455,444, 
plus costs and interest. NGP contends four errors occurred mandating 
reversal.

[¶2]      We 
affirm.

I. 
ISSUES

[¶3]      NGP alleges four 
errors:

1. Whether the trial 
court's failure to answer a jury question in open court is plain error, 
mandating reversal;

2. Whether the jury's 
verdict and judgment are contrary to Wyoming law relating to an owner's 
liability to employees of an independent contractor; 

3. Whether, even if NGP 
breached duties it owed to Plaintiff, that breach was the proximate cause of 
Plaintiff's damages;

4. Whether the trial 
court erred in instructing the jury that violation of a statute [OSHA 
regulation] was evidence of negligence, when no evidence existed that NGP was 
responsible to enforce the regulations.

II. 
FACTS

[¶4]      Michael Hull 
began working for Teton Well Service (TWS) in 1984. In June, 1992, NGP hired TWS 
to assist in reworking an oil well, called the "Union Pacific Number One," in 
the Hatfield Dome Oilfield ten miles south of Rawlins. The well was going to be 
"fracked."1 TWS was to pull the tubing out of 
the well, remove the bridge plug, test the tubing, place a packer in the well 
and acidize2 it in preparation for the "frac" 
job. After the "frac" job was completed by another contractor, TWS was to trip 
back into the well to circulate (remove) the sand that accumulates on top of the 
bridge plug as a result of the "frac" job.

[¶5]      June 9, 1992, was 
the TWS crew's first day on site. From June 9 until June 11, TWS prepared the 
well for the "frac" job. On June 11, Black Warrior, another contractor, came to 
the site to perforate the well.3 On Friday, June 12, BJ Services, 
yet another contractor, brought 500 gallons of acid to the lease to acidize the 
well. June 13 and 14 fell on a weekend; the crews did not work on those days. 
The well was "fracked" by BJ Services on June 15. TWS began circulating sand off 
the bridge plug on June 16. The next day (June 17), the TWS crew was still 
circulating sand.

[¶6]      Mike Hull was on 
deck using power tongs to connect the joints of tubing already in the well with 
the chicksan and kelly hose, which had been raised over thirty feet in the air. 
OSHA regulations require that safety cables be used to fasten the kelly hose and 
the standpipe end to the derrick and at the swivel end to the swivel housing. 
However, on this occasion, the safety chains were not in use. As Hull turned the 
tubing on the floor, the chicksan overhead bound up and did not turn. As the 
tubing on the floor turned, the swage unscrewed and the swage, chicksan (which 
alone weighed approximately fifty pounds) and kelly hose fell, striking Hull in 
the back of the hard hat and driving him onto the rig floor. Mike Hull sustained 
many injuries, including a traumatic brain injury, linear skull fracture, 
fractured clavicle, and fractures of both lower left leg bones in the ankle 
area. His injuries required immediate brain surgery, performed in Casper after 
being airlifted from the Rawlins hospital.

[¶7]      Hull filed suit 
against NGP (and Amoco Production Company, which was subsequently dismissed by 
stipulation), alleging that NGP was negligent and had exercised direct control 
over the work-over rig hired to do clean up work on a well where NGP was the 
operator. Hull alleged, among other things, that NGP breached various duties of 
care it owed Hull as an employee on the work-over rig and Hull was injured as a 
result. Issues presented to the jury included NGP's direct liability for its own 
acts, as well as vicarious liability for its conduct in directing TWS employees' 
actions.

[¶8]      After a jury 
trial, a verdict was rendered against NGP, finding it responsible for ninety 
percent of the fault. The remainder of the fault was split between Hull (four 
percent), John Nodolf (the driller) (five percent), and Jack Wiggins (the 
derrick hand) (one percent). Damages were fixed at 
$1,617,160.

[¶9]      NGP filed a 
motion for judgment notwithstanding the verdict, to alter or amend the judgment, 
or for a new trial, which was denied. NGP appeals both the judgment and the 
trial court's order denying its post-trial motions.

III. 
DISCUSSION

A. An owner's 
liability to employees of an independent contractor

[¶10]   This court has previously adopted 
the general proposition set forth in RESTATEMENT (SECOND) OF TORTS § 409 (1965), 
stating that "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." Hill v. Pacific Power & Light Co., 765 P.2d 1348, 1349 
(Wyo. 1988). See also, Stephenson v. Pacific Power & Light Co., 779 P.2d 1169, 1176 (Wyo. 1989); Jones v. Chevron U.S.A., Inc., 718 P.2d 890, 
898 (Wyo. 1986); Noonan v. Texaco, Inc., 713 P.2d 160, 164-67 (Wyo. 
1986); 41 AM.JUR.2D Independent Contractors § 24 
(1968).

[¶11]   This Court has previously held that 
the owner of the workplace who employs an independent contractor 
and

retains the right to 
direct the manner of an independent contractor's performance or assumes 
affirmative duties with respect to safety owes a duty of reasonable care to an 
employee of the independent contractor even if the employee is injured doing the 
very work the [independent] contractor was hired to 
perform.

Jones, 718 P.2d  at 896 
(citations omitted). See also Cockburn v. Terra Resources, Inc., 794 P.2d 1334, 1342 (Wyo. 1990); Stephenson, 779 P.2d  at 1177; Hill, 765 P.2d  at 1349; Brewster v. Salveson Construction, 765 P.2d 1350 (Wyo. 
1988); Stockwell v. Parker Drilling Co., 733 P.2d 1029, 1033 (Wyo. 1987). 
However,

the owner "must retain 
more than the general right to order the contractors to stop work, to inspect 
the progress of the work, to make recommendations thereon, or to prescribe 
alterations or deviations in the work" [Stockwell, 733 P.2d  at 1033] in order to 
impose liability under that rule. The product of our precedent is that an 
employer of an independent contractor, although potentially responsible for 
injuries to employees of the contractor, must assume a controlling and pervasive 
role in the work being done in order to generate any duty of care sufficient to 
establish vicarious liability for the negligence of the independent 
contractor.

Cockburn, 794 P.2d  at 1342 
(citations omitted). See also, Johnston v. Conoco, Inc., 758 P.2d 566 
(Wyo. 1988).

[¶12]   Our first area of inquiry would 
ordinarily be to the written contract between NGP and TWS. Although the contract 
is not conclusive evidence of the status of the relationship between parties, it 
is a strong indication of the association intended. See Noonan, 713 P.2d  
at 165. In this case, however, no written contract exists. Duane Winkler 
testified that NGP does not normally enter into written agreements with workover 
companies, and did not enter into a written contract with TWS. We, therefore, 
must look to the record to determine whether NGP controlled, or had a right to 
control, TWS' performance sufficient to establish a duty to TWS' (an independent 
contractor's) employees.

The employer may exercise 
a limited control over the work without rendering the contractor a mere servant 
or employee, as a relation of master and servant or employer and employee is not 
inferable from a reservation of powers which do not deprive the contractor of 
his right to do the work according to his own initiative, so long as he does it 
in accordance with the contract. The control of the work reserved in the 
employer which affects a master-servant relationship is control of the means and 
manner of performance of the work, as well as of the result; an independent 
contractor relationship exists where the person doing the work is subject to the 
will of the employer only as to the result, but not as to the means or manner of 
accomplishment. . . . A requirement that the work be performed according to 
standards and specifications imposed by the owner is not sufficient to establish 
the degree of control necessary to make a presumably independent contractor the 
agent of the owner, but the retention of the right not only to insure 
conformity with specifications, but also the retention or exercise of the right 
to direct the manner in or means by which the work shall be performed, will 
destroy the independent status of the contractor.

41 AM.JUR.2D 
Independent Contractors § 8 (1968) (emphasis added); and see Noonan, 
713 P.2d  at 164-66. In examining the record, we find the following indicia of 
the extent of NGP's control over TWS:

1. NGP, through its 
agent, Duane Winkler, controlled the equipment to be used to complete the TWS' 
crew's tasks. Testimony showed that John Nodolf, TWS' rig operator on this job, 
asked Winkler for a tubing swivel.4 Winkler replied that they would not 
need one, could get by with the chicksan, and NGP would not provide the tubing 
swivel. Nodolf told Winkler that he did not like to use chicksans because 
"sometimes they bind up"; he thought he mentioned to Winkler that the use of a 
chicksan to circulate sand in this instance would not be safe. The decision to 
use the chicksan stood.5

The TWS' crew, left to 
their own manner of performance, would have used a tubing swivel to complete 
this task. NGP, through Winkler, mandated that the TWS' crew could not have the 
tubing swivel they felt was proper for the job they were hired to perform on the 
Natural Gas Processing location.

2. NGP instructed the 
TWS' crew in the manner of completion of their performance. When the TWS crew 
first attempted to make the connection between the chicksan and the pipe to be 
used in circulation, they tried to attach the chicksan to the tube by hoisting a 
worker up into the air to the top of the joint to make the connection. Winkler 
directed the crew to make the connections on the floor of the rig instead 
because they were taking too much time.

The TWS' crew took 
specific directions from Winkler regarding the performance of their jobs. Mike 
Hull remembered that Winkler told him to start scooping off the sand that was 
circulating out of the well.

3. NGP controlled the 
pace of the TWS' crew's performance. Each member of TWS' crew testified that 
Winkler had driven them to work faster. See, e.g., (John Nodolf: "[H]e 
was wanting us to go fast. . . . He was . . . always there kind of riding you, 
or trying to get you to go a little faster"); (Jack Wiggins, the derrick hand: 
"I'd jog over there [from the pump back to the deck] or walk or run. . . . 
Mainly jog, because we were always at a high rate of speed. . . . [E]ver since I 
started working for him, it's been go, go, go"); (Mike Hull, the floor hand: 
"There's been some days you never even shut down for lunch or nothing. You just 
worked through and worked through. Some days might be shorter days, and some 
days you might be out there for fourteen, eighteen hours a day. If they wanted 
to get something done, you just stayed there and did 
it.").

[¶13]   Had NGP merely retained the right 
to supervise or inspect TWS' work as it progressed to determine whether the work 
was completed according to plan, TWS would have retained its independent 
contractor status and NGP would not be liable for TWS' negligence. When the 
employer of the independent contractor directs the manner of the independent 
contractor's performance, as NGP did here, the independent contractor is no 
longer free to manage its own operation and direct his own employees. At this 
point, the independent contractor's employer has abandoned the protection of the 
"independent contractor" rule, and owes the independent contractor's employees a 
duty of reasonable care.

[¶14]   Winkler's actions at the work site 
went beyond making general suggestions or recommendations; he told the rig hands 
what to do, how and when to do it, and what equipment they were to use. In 
undertaking to control the work site operations, Winkler abandoned (for NGP) the 
protection of the "independent contractor" rule.

B. The 
proximate cause of Mike Hull's damages

[¶15]   Proximate cause is the notion that 
"the accident or injury must be the natural and probable consequence of the act 
of negligence." Bettencourt v. Pride Well Service, Inc., 735 P.2d 722, 
726 (Wyo. 1987) (quoting McClellan v. Tottenhoff, 666 P.2d 408, 414 (Wyo. 
1983)). Normally, proximate cause is a question of fact unless the evidence is 
such that reasonable minds could not disagree. Buckley v. Bell, 703 P.2d 1089, 1092 (Wyo. 1985); Caterpillar Tractor Co. v. Donahue, 674 P.2d 1276, 1283 (Wyo. 1983).

[¶16]   Legal causation has been defined as 
that conduct which is a substantial factor in bringing about the plaintiff's 
injuries. Buckley, 703 P.2d  at 1091.

[I]f the conduct is "that 
cause which in natural and continuous sequence, unbroken by a sufficient 
intervening cause produces the injury, without which the result would not have 
occurred," it must be identified as a substantial factor in bringing about the 
harm. If, however, it created only a condition or occasion for the harm to occur 
then it would be regarded as a remote, not a proximate, cause, and would not be 
a substantial factor in bringing about the harm.

Buckley, 703 P.2d  at 1092 
(quoting Lemos v. Madden, 28 Wyo. 1, 10, 200 P. 791, 793 (1921)). See 
also, Bettencourt, 735 P.2d  at 726.

[¶17]   Appellant argues that the sole 
proximate cause of Mike Hull's injuries was the TWS' crew's failure to attach 
the safety chains. We disagree, because the record supports findings of 
concurrent causes.

[¶18]   "Concurrent negligence" involves 
acts of negligence of two or more people that, although not working in concert, 
combine to produce a single injury. Green v. Sellers, 413 P.2d 522, 528 
(Okla. 1966). More than one proximate cause can exist for an accident or injury. 
Each concurrent cause that contributes directly to the accident or injury is a 
"proximate cause." "`[W]here injury results from two separate and distinct acts 
of negligence by different persons operating and concurring simultaneously and 
concurrently, both are the proximate cause and recovery may be had against 
either or both of the responsible persons.'" Hester v. Coliseum Motor 
Co., 41 Wyo. 345, 353, 285 P. 781 (1930) (quoting DeWees v. Kuntz, 
280 P. 552 (Cal.App. 1929)). See also, Frazier v. Pokorny, 349 P.2d 324 
(Wyo. 1960); Phelps v. Woodward Constr. Co., 66 Wyo. 33, 204 P.2d 179 
(1948).

[¶19]   Mike Hull's injuries were caused by 
a string of events, which culminated in the June 17 accident. Both the hurried 
atmosphere at the worksite and the failure to attach the safety chains to the 
chicksan and kelly hose were contributing factors:

1. The hurried atmosphere 
- Appellee's expert, Jerry Warren, stated that he did not feel the crew should 
have been pressured. He felt that the crew was "rushed so much that they didn't 
have time to stop and think what they were doing." John Nodolf said, "[M]aybe if 
we weren't working . . . in a rush to try to get everything done, we might have 
thought about putting the safety cable on." Jack Wiggins, the derrick hand, 
testified that, based upon his observations and his years of experience in the 
oil field, "being rushed" was the cause of Mike Hull's 
injury.

2. The failure to attach 
the safety chains - Duane Winkler, NGP's on-site representative, admitted 
knowing that, as a safety precaution, the kelly hose and chicksan should be tied 
off. He failed, however, to instruct the crew to attach the safety chains on the 
date of the accident. Testimony in the record shows that this was not the first 
time Winkler had failed to see that the safety chains were attached. Likewise, 
the TWS crew knew that the safety chains should have been attached to the 
chicksan and kelly hose and failed to attach them as required by OSHA 
regulations.

[¶20]   The jury was instructed on 
comparative fault and was asked to determine the percentage of fault 
attributable to each of the parties involved in the accident. After its 
deliberations, the jury found four different individuals/entities negligent with 
regard to the June 17 accident: NGP (Appellant), Mike Hull (Appellee), John 
Nodolf (the driller/rig operator), and Jack Wiggins (the derrick hand). The jury 
recognized that more than one proximate cause existed and so noted in its 
verdict. Evidence adduced at trial supports the jury's finding that concurrent 
causes existed for Hull's injuries.

C. Jury 
instruction regarding violation of an OSHA regulation as evidence of 
negligence

[¶21]   Appellant does not dispute that 
violation of a regulation is evidence of negligence. Further, Appellant argues 
that no evidence existed which showed that NGP was the entity required to comply 
with the regulations at issue.

[¶22]   Among the jury instructions was the 
following:

Violation of a statute is 
evidence of negligence. If you determine that a party violated a statute on the 
occasion in question and that the violation was a [proximate] [direct] cause of 
the occurrence, then you may consider that fact together with all the other 
facts and circumstances in evidence in determining whether or not the party was 
negligent at the time of the occurrence.

[¶23]   The OSHA regulation in question 
reads as follows:

No person shall cause the 
servicing work to commence until the contractor or subcontractor, as 
appropriate, has declared his equipment and employees are safely prepared to 
proceed.

Rules and 
Regulations for Oil and Gas Well Servicing, State of Wyoming 
Occupational Health and Safety Department, Chapter II, Section 1(f) 
(1990).

[¶24]   We find no error in this 
instruction.

[¶25]   The regulation is self-explanatory; 
it applies to any person who causes the oil and gas well servicing work 
to commence. The issue is not whether NGP was obligated to enforce this 
regulation, rather, the issue is whether NGP violated its obligation by causing 
servicing work to commence.

[¶26]   Substantial evidence was adduced 
which showed that either TWS or NGP (as well as their employees), or both, 
commenced the servicing work before the contractor or subcontractor had declared 
that the equipment was safely prepared to proceed. Sufficient evidence existed 
on the record to allow this instruction to be submitted to the jury. The jury 
was properly instructed.

D. The trial 
court's failure to answer a jury question in open 
court

[¶27]   Appellant urges that this court's 
prior decision, Rissler & McMurry v. Snodgrass, 854 P.2d 69 (Wyo. 
1993), makes failure of the trial court to answer questions from the jury in 
open court plain error "mandat[ing] a new trial."

[¶28]   The scope of Rissler must be 
defined by the facts of that case. Rissler involved an eminent domain 
action. During jury deliberations, the jury in Rissler sent a note to the 
trial court. Neither the jury's note to the court nor the trial court's response 
were made of record. Jurymen's affidavits made after the fact stated that the 
jury's note requested an instruction on whether they could fix their own value 
(damages) or were bound to accept a value fixed by a witness. The jury's verdict 
was returned in the amount of $182,034 for 5.45 acres of land taken for a mine 
haul road across pasture land. The Rissler opinion found plain error had 
been committed in the trial court's failure (1) to return the jury to open court 
for instruction [WYO. STAT. § 1-11-209 (1988)], and (2) to make the jury 
instruction part of the record [WYO. STAT. § 1-11-205(a)(vii) (1988)]. Although 
not fully developed in the opinion, Rissler involved prejudice to the 
appellant as a result of that error, and therefore, the case was remanded for a 
new trial.

[¶29]   The facts here are substantially 
different from Rissler. The question from the jury, as well as the trial 
court's answer, appear of record. Counsel for both parties discussed the answer 
to the jury's question with the court, and together formulated an answer to 
which both counsel consented. NGP has failed to show any prejudice by the trial 
court's failure to answer the jury question in open court. WYO.R.APP.P. 9.04. We 
have searched this record and find no error that, to leave uncorrected, "would 
cause a miscarriage of justice or result in damage to the integrity, reputation, 
and fairness of the judicial process" [Abdullah v. Gunter, 242 Neb. 854, 
497 N.W.2d 12, 15 (1993)]; neither are we convinced that the claimed error 
"possessed a clear capacity to bring about an unjust result." Gluckauf v. 
Pine Lake Beach Club, Inc., 78 N.J. Super. 8, 187 A.2d 357, 366 
(1963).

[¶30]   We do not interpret Rissler 
as obviating the need for the harmless error doctrine. Since NGP was not 
prejudiced, any potential error is harmless.

IV. 
CONCLUSION

[¶31]   Evidence adduced at trial showed 
NGP retained the right to direct the manner of TWS' performance, and therefore, 
owed a duty of reasonable care to TWS' employees. Concurrent causes existed for 
Mike Hull's injuries; the jury was instructed on comparative negligence and 
allocated the fault. The jury was properly instructed regarding violations of 
statutes as evidence of negligence. Rissler does not obviate the need for 
the harmless error doctrine. As NGP was not prejudiced, any potential error is 
harmless.

[¶32]   Affirmed.

Footnotes

1 
"Fractured."

Fracturing 
is a method of increasing the flow of oil or gas into a well. Production of 
individual wells often decreases because the underground formation is not 
sufficiently permeable to allow the oil to move freely toward the well. When 
this happens nature may be given a big boost by fracturing the formation around 
the well.

Fracturing 
forces open underground channels so oil can flow to the well more easily. A 
specially treated fluid is pumped into the producing well under high pressure, 
fissuring the reservoir rock. When the pressure is released and the fluid flows 
back into the well, so-called propping agents in the fluid remain behind to keep 
the fissures open and permit the oil to flow toward the well more easily. These 
propping agents may be sand, metal, chemically compounded pellets or even walnut 
shells.

Mobil Oil Corp., The Language of Oil: Understanding Oil Talk . . . A 
Ready Reference to Over 100 Frequently Used Oil Industry Expressions 33 
(1974).

2

Acidizing 
involves the treatment of limestone or carbonate formations whereby acids are 
applied under pressure to increase production. This is accomplished when acid 
enters natural crevices or crevices caused by hydraulic pressure, or when it 
invades the natural permeability system of the formation. Hydrochloric acid is 
the most commonly used acidizing fluid, though other acids such as 
hydrochloric-hydrofluoric, acetic or formic, or sufamic acids might also be 
used. The two basic types of acidizing are "matrix acidizing" and "fracture 
acidizing" . . . .

In fracture 
acidizing acid is injected into the formation at pressures greater than 
fracturing pressure. The primary purpose of fracture acidizing is to achieve 
productivity levels greater than those afforded by the natural reservoir. It is 
also used in some instances to by-pass damaged areas within the well 
bore.

Philip F. Lynch, A Primer in Drilling & Production Equipment, 
Vol. 3: Downhole Operations 74 (1981).

3

Perforating 
involves the piercing of the casing wall to provide access to petroleum flow 
into the well bore or to provide holes through which fluids may be pumped into 
the annulus space between the casing and the formation wall. A perforating gun 
is lowered into the well bore to fire "bullets" or "jet charges" through the 
casing wall.

LYNCH, supra, at 66.

4 
Uncontroverted testimony showed that it would have been NGPs' responsibility to 
provide a tubing swivel for use at the worksite.

5 Although 
NGP, through Winkler, directed the TWS' crew to use a chicksan to circulate sand 
off the top of the bridge plug, it was unaware that an OSHA regulation existed 
requiring the chicksan and kelly hose to be tied off. The chicksan and kelly 
hose were not tied off at the time of the accident. Winkler also testified that, 
as a safety operation, he knew the chicksan and kelly hose should have been tied 
off. After the accident, Winkler admitted having in mind, at the hospital, that 
the chicksan and kelly hose connection, which Winkler directed them to make up 
on the floor, had not been chained off.