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Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 

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FI LED 

Ucitc-d States Court of Appeals 

UNITED STATES COURT OF APPEALS Tenth Circuit 

TENTH CIRCUIT SEP 21 1990 

_________ :&OBERT L. HOECKER 

C!erk 

MERRILL I. HEIM, 

Plaintiff-Appellant, 

Cross-Appellee, 

v. 

EXETER DRILLING COMPANY, 

a Nevada corporation, 

Defendant-Appellee, 

Cross-Appellant. 

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Nos. 89-8097 and 89-8098 

(D.C. No. C88-0324B) 

(District of Wyoming) 

ORDER AND JUDGMENT * 

Before HOLLOWAY, Chief Judge, McWILLIAMS, Circuit Judge, and 

BRATTON, Senior District Judge.** 

This is a personal injury case wherein an injured employee 

sued a corporation which owned the oil drilling rig on which the 

employee was working at the time of the injury. A jury trial 

culminated in a determination by the jury, acting on special 

interrogatories, that the defendant corporation was 35% negligent, 

that its subsidiary corporation, which was not a defendant, was 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

** Honorable Howard C. Bratton, Senior District Judge for the 

District of New Mexico, sitting by designation. 

Appellate Case: 89-8098 Document: 010110053422 Date Filed: 09/21/1990 Page: 1 
also 35% negligent, and that the injured employee himself was 30% 

negligent. The award of the jury was reduced by the percent of 

negligence attributed to the injured employee, and judgment was 

entered in the reduced amount. Both parties appeal. We affirm. 

In his complaint, Merrill I. Heim alleged that he was an 

employee of Exeter Service Company--not Exeter Drilling Company--

and that at the time of his injury he was a crew member on an oil 

drilling rig known as Exeter Rig No. 7 in Wyoming. Heim sued the 

Exeter Drilling Company, a Nevada corporation, alleging that it 

owned Rig No. 7 and retained control over it, and that, being the 

owner, it had a duty to maintain the equipment on the rig in a 

safe operating condition. Heim further alleged that Exeter Drilling Company breached its duty to properly maintain the equipment 

which it owned and that such constituted negligence. Heim then 

went on to allege as follows: 

10. That as a result of the Defendant's 

negligence, the equipment on its drilling rig No. 7 was 

in a state of disrepair =i=na-ct=h=a=t=-=a'--g~u=a=r~d=-c=-=o~v~e=r=i=n=a--=a-~b~e~l~t~ 

was broken in the vicinity of the shale shaker. 

11. On October 15, 1984, in the course of his duties the Plaintiff while collecting a mud sample from 

the shaker table slipped and fell against the belt guard 

which was broken, and the Plaintiff's hand fell upon the 

belt and was carried through the pulleys crushing and 

cutting all four fingers on his left hand (emphasis 

added). 

By answer, Exeter Drilling Company alleged, inter alia, that 

by virtue of the corporate structure of Exeter Drilling Company 

and Exeter Service Company, Heim was "employed by both entities," 

and, accordingly, Heim's sole remedy was the benefit received by 

him from the Wyoming Worker's Compensation Fund and that his claim 

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against Exeter Drilling Company was barred by Wyoming's Worker's 

Compensation Act. 

On June 21, 1989, Exeter Drilling Company filed a motion for 

summary judgment on the ground it was a joint employer of Heim's, 

and that, accordingly, under Wyoming's Worker's Compensation laws, 

it was immune from liability for the injuries sustained by Heim, 

whose sole remedy was the benefit he had received from the Wyoming 

Compensation Fund. On August 7, 1989, the district court denied 

Exeter Drilling Company's motion for summary judgment, holding 

that under Wyoming law Exeter Drilling Company was neither an 

employer nor joint employer of Heim's. By its appeal, Exeter 

Drilling Company seeks a reversal of that order. 

We do not believe that it is necessary to detail the entire 

history of the various Exeter entities. It is sufficient to state 

that on the day of Heim's accident Exeter Drilling Company was a 

parent corporation which functioned through its subsidiary, Exeter 

Service Company. 

employees, but 

Exeter Drilling Company does not itself have any 

it does own all of the oil drilling equipment 

necessary to perform its drilling contracts. Exeter Service 

Company, on the other hand, does not own any drilling equipment 

and its sole purpose is to supply all employees Exeter Drilling 

Company needs for its drilling operations. Both entities are 

completely dependent upon each other and each deals exclusively 

with the other. Exeter Service Company had no funds or assets of 

its own, but maintained a bank account in its own name and would 

draw payroll checks on that account. When the payroll checks were 

presented to the bank for payment, the bank would transfer money 

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Appellate Case: 89-8098 Document: 010110053422 Date Filed: 09/21/1990 Page: 3 
from the Exeter Drilling 

payroll checks as and when 

Company's bank account to cover these 

1 presented. Exeter Service Company 

handles all the paperwork with the Wyoming Worker's Compensation 

office, though Exeter Drilling Company pays all of the premiums 

directly to the fund. 

Wyo. Stat. § 27-14-104(a) (1977) provides, in part, as follows: 

"The rights and remedies provided in this Act 

for an employee and his dependents for 

injuries incurred in extra hazardous employment are in lieu of all other rights and 

remedies against =a=n-y-'e~m~p~l=o~y~e~r......c.m=a=k=1=·n=-g~c.....:o~n~t~r~i=b_u_-

.;;;;t=i=o=n=s=----r=e..;:;ig..::u=i=r::...:e=d=---=b .... y_.....:t=h=1=· s;::;._-=A=c'-=t .... " (emphasis 

added). 

The grant of immunity set forth in the foregoing statute has 

been held to apply to: (1) an employer (2) who pays into the 

worker's compensation fund (3) as required by law. Fiscus v. 

Atlantic Richfield Co., 742 P.2d 198 (Wyo. 1987); Bence v. Pacific 

Power and Light Co., 631 P.2d 13 (Wyo. 1981). Thus, the first 

question to be resolved is whether Exeter Drilling Company was an 

employer, or a joint employer, of Heim's. If it was neither, 

under the cases cited, infra, Exeter Drilling Company is not 

entitled to immunity. 

Even though Heim may have thought he was working for Exeter 

Drilling Company, it is agreed that in fact his employment 

1 The purpose behind the reorganization of the various Exeter 

entities was, according to counsel, to form separate operating 

entities for each geographical area in which it operated, and "to 

have a wholly-owned subsidiary become the employing entity for all 

of the employees who would work for the various operating entities." The reason given for this restructuring was to maintain 

existing pension plan benefits and to simplify benefit programs 

administration and governmental reporting. 

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contract was with Exeter Service Company, a wholly-owned 

subsidiary of Exeter Drilling Company. Exeter Drilling Company 

had no contract of employment with Heim. Exeter Service Company 

did. Accordingly, under Wyoming's constitutional provisions and 

statutes, Exeter Service Company, as opposed to Exeter Drilling 

Company, was immune from liability for Heim's injuries, and Heim's 

right to benefits from the compensation fund was in place of any 

and all rights of action against Exeter Service Company. Wyo. 

Const. art. 10, § 4; Wyo. Stat.§ 27-12-103(a) (1977). 

Exeter Drilling Company argues that under the described 

circumstances, it is, in effect, a "joint employer" of Heim's 

along with Exeter Service Company, and that it, too, is entitled 

to the same immunity afforded Exeter Service Company. In denying 

summary judgment, the district court held that under Wyoming law 

Exeter Drilling Company was not a joint employer of Heim's, and 

therefore was not immune from suit by Heim for the injuries 

sustained as the result of a broken guard on equipment owned by 

Exeter Drilling Company and furnished Exeter Service Company. In 

thus ruling, the district court relied on such Wyoming Supreme 

Court cases as Stratman v. Admiral Beverage Corp., 760 P.2d 974, 

(Wyo. 1988); Fiscus v. Atlantic Richfield Co., 742 P.2d 198 (Wyo. 

1987); and Bence v. Pacific Power and Light Company, 631 P.2d 13 

(Wyo. 1981). We are not inclined to disturb the district court's 

holding that under Wyoming law Exeter Drilling Company was not 

Heim's employer, or joint employer. 

In Stratman, supra, the Wyoming Supreme Court stated that the 

immunity provisions of Wyoming's Worker's Compensation Act should 

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be "narrowly construed" and declined to hold that two related 

corporations were joint employers of a deceased employee and 

refused to extend immunity to both corporations. In that same 

case, the Wyoming Supreme Court recognized that under Wyoming law 

the primary test to determine the existence of an employment 

relationship is the right of control by the alleged employer. In 

the instant case, the district court found that as a matter of 

law, Exeter Drilling Company did not have the right to control 

Heim's actions on the job site. 

In Fiscus, supra, the Wyoming Supreme Court declined to grant 

immunity to the "parent corporation" where the injured party was 

an employee of a "subsidiary corporation." In so doing, the 

Wyoming Supreme Court in Fiscus cited with approval the following 

language from Boggs v. Blue Diamond Coal Company, 590 F.2d 655, 

(6th Cir. 1979): 

"[A] business enterprise has a range of choice 

in controlling its own corporate structure. 

But reciprocal obligations arise as a result 

of the choice it makes. The owners may take 

advantage of the benefits of dividing a business into separate corporate parts, but 

principles of reciprocity require that courts 

also recognize the separate identities of the 

enterprises when sued by an injured employee." 

590 F.2d at 662. 

In Bence, supra, Pacific Power and Light Company entered into 

a contract with Bechtel Power Corporation whereby the latter 

agreed to construct a power plant for Pacific Power and Light near 

Rock Springs, Wyoming. One of Bechtel's employees was seriously 

injured on the job site. Under the terms of the contract, Pacific 

Power and Light agreed, inter alia, to reimburse Bechtel for 

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premiums it paid the Wyoming Worker's Compensation Fund. Under 

Wyoming law, Bechtel was immune from suit by the injured worker. 

However, the Wyoming Supreme Court held that the same immunity did 

not apply to Pacific Power and Light and in so doing, rejected the 

argument that Pacific Power and Light was the real contributor to 

the Wyoming Worker's Compensation Fund. 

By his appeal, Heim contends that the district court erred in 

refusing to allow him to introduce into evidence at trial provisions of Wyoming's OSHA which would have shown that Exeter Drilling Company violated OSHA regulations in failing to repair or 

replace the broken guard covering the belt. On July 14, 1989, 

Exeter Drilling Company filed a motion in limine wherein it sought 

a pretrial order prohibiting Heim from introducing at trial 

certain portions of Wyoming's Occupational Health and Safety Act 

(OSHA). In this regard, it was Exeter Drilling Company's position 

that Wyoming's OSHA applied only to "employers" and pointed out 

that although it believed it was an employer of Heim's, it was 

nonetheless Heim's position that Exeter Drilling Company was not 

his employer. On October 24, 1989, the district court granted 

Exeter Drilling Company's motion in limine. 

The district court held that Wyoming's OSHA applied only to 

employers, and that since Exeter Drilling Company was not Heirn's 

employer it could neither be cited for an OSHA violation nor were 

OSHA regulations admissible as evidence in a negligence action 

against Exeter Drilling Company. Heim asks that we reverse and 

remand for a second trial and instruct the district court that 

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OSHA regulations are admissible evidence against Exeter Drilling 

Company. 

In this general connection, Heim asserts that he did not seek 

to offer into evidence OSHA regulations in order to establish 

negligence, per se, but only as being some evidence tending to 

show common law negligence on the part of Exeter Drilling Company. 

In this regard, it is agreed, however, that Heim was allowed to 

introduce standards promulgated by the American National Standards 

Institute tending to show the same thing as would have been shown 

by the OSHA regulations, i.e., negligence on the part of Exeter 

Drilling Company in failing to replace or repair the broken guard. 

Heim suggests that if he had been allowed to introduce the OSHA 

regulations, the jury might have found Exeter Drilling Company 

guilty of more than 35% negligence. We disagree with this reasoning, and under the described circumstances we think any error in 

this regard is now moot. 

Heim charged Exeter Drilling Company with common law 

negligence. The alleged negligence was based solely on Exeter 

Drilling Company's failure to repair or replace a broken guard 

covering a belt on its rig equipment. The jury found that Exeter 

Drilling Company was negligent in this respect, and that such 

negligence was 35% of the total negligence, which, when combined, 

caused Heim's injuries. The proffered OSHA regulations were for 

the purpose of showing that Exeter Drilling Company was guilty of 

negligence in failing to repair or replace the broken guard covering the belt. The jury has now found that Exeter Drilling Company 

was negligent. The proffered OSHA regulations had no bearing on 

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the issue of whether Heim was guilty of contributory negligence, 

and, if so, how much, and whether Heim's co-employees, i.e., 

employees of Exeter Service Company, were also negligent, and, if 

so, how much. 

Judgment affirmed. 

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Entered for the Court, 

Robert H. Mcwilliams 

Circuit Judge 

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