Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-87-01102/USCOURTS-ca10-87-01102-0/pdf.json

Parties Involved:
LeRoy Black
Appellant
Mabelle R. Black
Appellant
Cabot Petroleum Corporation
Appellee
Mary Black Dowell
Appellant
Nora Black Dowell
Appellant

Document Text:

PUBLISH 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

MABELLE R. BLACK, widow and 

surviving spouse and personal 

representative of the Estate 

of Glen L. Black, deceased, 

and next friend of LeROY BLACK, 

a minor, and on behalf of 

MARY BLACK DOWELL and NORA BLACK 

DOWELL, surviving adult children 

of Glen L. Black, deceased, 

Plaintiffs-Appellants, 

FILED 

United Stat.es Court of Appeals 'rf!nth Circuit 

JUN 121989 

ROBERT L. HOECKER 

Clerk 

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No. 87-1102 

CABOT PETROLEUM CORPORATION, 

a Delaware corporation, 

Defendant-Appellee. 

Appeal from the United States District Court 

for the Western District of Oklahoma 

(D.C. No. CIV-86-0018-R) 

Gordon H. Rowe III, Oklahoma City, Oklahoma (Gordon H. Rowe, Jr., 

Monte Vista, Colorado and Bruce w. Pitzer of John w. Norman, 

Incorporated and Associates, Oklahoma City, Oklahoma, with him on 

the brief), for Plaintiffs-Appellants. 

Michael c. Felty (William G. Smith with him on the brief), of 

Fenton, Fenton 1 Smith, Reneau & Moon, Oklahoma City, Oklahoma, for 

Defendant-Appellee. 

Before TACHA, BARRETT, and EBEL, Circuit Judges. 

EBEL, Circuit Judge. 

Appellate Case: 87-1102 Document: 01019784891 Date Filed: 06/12/1989 Page: 1 
This diversity case concerns the application of Colorado's 

workers' compensation statute. The principal issue is whether a 

general contractor whose subcontractor carries adequate workers' 

compensation insurance is immune from suit by the subcontractor's 

injured employee. 

The facts necessary for resolving this appeal are not in 

dispute. Plaintiffs are the spouse and children of Glen L. Black 

("Black"), a welder killed in an oil field accident. Defendant 

Cabot Petroleum Corporation ("Cabot") is an oil drilling company 

that was responsible for plugging and capping the oil well 

involved in the accident. 

Pursuant to a farm out agreement, Cabot undertook to 

determine whether a previously-drilled oil well in Colorado could 

be made productive. Cabot concluded that the well should be 

abandoned. Colorado regulations required Cabot to plug and cap 

the well before abandoning it. The capping process includes 

cutting off the well head and welding a steel plate over the 

well's opening. Cabot hired an independent contractor, Cleo Keith 

Welding Service ("Cleo Keith"), to cap the well. Black was a 

self-employed welder who often worked for Cleo Keith on a 

subcontract basis. Cleo Keith hired Black to perform the work 

necessary for the capping. While Black was cutting off the well 

head at the site, it fell on him and killed him. 

At the time of the accident, Cleo Keith had a workers' 

compensation insurance policy in effect with the Colorado State 

Insurance Fund. Cabot also had a workers' compensation insurance 

policy in effect at that time. 

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Appellate Case: 87-1102 Document: 01019784891 Date Filed: 06/12/1989 Page: 2 
Plaintiffs sued Cabot under a products liability theory and 

. for negligence. Cabot moved for sununar.y · . .judgment, asserting that 

plaintiffs' claims were barred by the Colorado Workmen's 

Compensation Act (the "Act''). Colo. Rev. Stat •. §§ 8-40-101 to 

8-54-127. The district court granted Cabot's motion, holding that 

Colorado law applied to the suit and that the Act constituted 

plaintiffs' exclusive remedy. 

On appeal, plaintiffs contend that Oklahoma law rather than 

Colorado law applies to the suit. Plaintiffs further argue that 

. 

even if Colorado law does apply, the Act does not bar their claims 

because (1) Cabot was not a statutory employer of Black; (2) Cabot 

was not inunune from suit under Colo. Rev. Stat. § 8-48-102 as an 

owner of real property or improvements; and (3) Cabot had not 

complied fully with the Act's notice and filing requirements. 

I. CHOICE OF LAW 

At the outset, we agree that Colorado law applies to this 

case. The undisputed facts show that the underlying accident 

occurred in Colorado. At the time of the accident, both Black and 

his wife were residents of Colorado, although they had recently 

moved there from Oklahoma. Black and his wife had obtained 

Colorado drivers licenses, had opened bank accounts in Colorado, 

and had registered several of their vehicles in Colorado. Cleo 

Keith, the contractor who hired Black, likewise was located in 

Colorado. Cabot, although chartered in Delaware and headquartered 

in Texas, was registered to do business in Colorado and was 

working on the Colorado well involved in the accident. 

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Appellate Case: 87-1102 Document: 01019784891 Date Filed: 06/12/1989 Page: 3 
A federal district court sitting in a diversity case must 

apply the choice of law rules of .the state where it sits, which in 

this instance is Oklahoma. Vandeventer v. Four Corners Electric 

Co., 663 F.2d 1016, 1017 (10th Cir. 1981). We conclude that under 

Oklahoma's "most significant relationship" choice of law rule, the 

law of Colorado applies here. See,~' Brickner v. Gooden, 525 

P.2d 632, 637 (Okla. 1974) (considering place where injury 

occurred, place of conduct causing injury, domicile and place of 

business of parties, and place where relationship of parties 

occurred). 

II. APPLICATION OF WORKERS' COMPENSATION STATUTE 

Although conceding that Cabot had its own workers' 

compensation insurance policy in effect at the time of the 

accident, plaintiffs assert that Cabot should not be immune from 

suit. Plaintiffs argue that Cabot did not meet the various 

requirements for being a statutory employer under Colorado law and 

that, even if Cabot was a statutory employer and was properly 

insured, it lost its immunity by failing to follow the Act's 

notice and filing requirements. 1 

In response, Cabot maintains, among other things, that 

regardless of the effect of its own insurance policy or its 

compliance with the Act's requirements, Section 8-48-101(2) of the 

Act immunizes Cabot from suit because Black's direct employer, 

1 A statutory employer is a person or entity that, although not 

necessarily the direct employer of an injured worker, is 

responsible under the Act for paying compensation benefits to the 

worker. See,~' Colo. Rev. Stat. § 8-48-101(1). 

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Appellate Case: 87-1102 Document: 01019784891 Date Filed: 06/12/1989 Page: 4 
Cleo Keith, carried workers' compensation insurance at all 

relevant times. Colo. Rev. Stat. § 8-48-101(2). That section 

provides that general contractors (such as Cabot) are immune from 

suit for injuries to employees of their subcontractors (such as 

Cleo Keith) so long as the subcontractors maintain workers' 

compensation insurance. 2 

Cabot argues, inter alia, that we need not address the effec~ 

of Cabot's own insurance because Section 8-48-101(2) and a 

Colorado Supreme Court decision interpreting it, Buzard v. Super 

Walls, Inc., 681 P.2d 520 (Colo. 1984), are controlling here. We 

agree. 

The Colorado Supreme Court in Buzard held that under Section 

8-48-101(2), an injured employee of an adequately-insured 

subcontractor cannot recover from the general contractor or from 

other "upstream'' employers. In that case, defendant Super Walls 

2 Colo. Rev. Stat. § 8-48-101 provides, in pertinent part: 

(1) Any person, company, or corporation ••. 

contracting out any part or all of the work thereof to 

any ••. subcontractor .•. shall be construed to be 

an employer as defined in articles 40 to 54 of this . title and shall be liable as provided in said articles 

to pay compensation for injury or death resulting 

therefrom to said ••• subcontractors and their 

employees or employees' dependents .••• 

(2) If said •.• subcontractor is himself an employer 

in the doing of such work and, before commencing such 

work, insures and keeps insured his liability for 

compensation as provided in articles 40 to 54 of this 

title, neither said ... subcontractor, its employees, 

or its insurer shall have any right of contribution or 

action of any kind ..• against the person, company, or 

corporation .•• contracting out any part or all of the 

work thereof .... 

Emphasis added. 

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Appellate Case: 87-1102 Document: 01019784891 Date Filed: 06/12/1989 Page: 5 
was the general contractor on a construction project. Super Walls 

subcontracted part of the work to Hawkins Construction Co., which 

in turn subcontracted part of it to plaintiff Buzard. Buzard was 

injured when a roof that he was working on collapsed. All three 

parties, the general contractor (Super Wills), the subcontractor 

(Hawkins Construction), and the "sub-subcontractor" (Buzard 

himself), carried workers' compensation insurance. Buzard sued 

Super Walls, claiming that, as a "sub-subcontractor," he should be 

allowed to reach upstream and impose tort liability on the general 

contractor, Super Walls. 

The Colorado Supreme Court rejected Buzard's claim. The 

court found that the "legislature ••• intended that workers' 

compensation be the remedy for all contractors 'downstream' from 

the one contracting.out work, regardless of how many intermediate 

contractors there might be." 681 P.2d at 522. The court held 

that under the Act, if a downstream subcontractor obtains workers' 

compensation insurance, then all upstream subcontractors and 

general contractors are immune from suit: 

Under section 8-48-101(2) if (Buzard] has obtained 

insurance he cannot reach "upstream" to Hawkins 

Construction or Super Walls to establish tort iiability; 

they are immune from suit as any insured employer would 

be. See section 8-43-104, C.R.S.1973 (1983 Supp.). 

Statutory immunity goes hand in· hand with statutory 

liability. Krueger v. Merriman Electric, 29 Colo. App. 

492, 488 P.2d 228 (1971); Frohlick Crane Service, Inc. 

v. Mack, 182 Colo. 34, 510 P.2d 891 (1973). The 

requirement that Buzard, acting as an employer, obtain 

insurance in order for Super Walls to be immune from 

suit guarantees that there will be immunity only when 

full workers' compensation benefits are obtainable. It 

also encourages those contracting out work to require 

that contractors and subcontractors obtain workers' 

compensation insurance, as occurred in the present case. 

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Appellate Case: 87-1102 Document: 01019784891 Date Filed: 06/12/1989 Page: 6 
681 P.2d at 523. 

The court in Buzard concluded that because Buzard (and, for 

that matter, Hawkins Construction) had obtained workers' 

compensation insurance, "Super Walls is immune from tort liability 

to Buzard." Id. See also,~' Edwards v. Price, 191 Colo. 46, 

· 550 P.2d 856, 859 (1976) (survivors of deceased employ~e of 

subcontractor that carried workers' compensation insurance could 

not sue general contractor: "[T]he survivors received their 

workmen's compensation benefits from Jelco, Inc. [the 

subcontractor], and as noted above, the statute provides that 

under those circumstances the survivors cannot maintain a 

negligence action against sec [the general contractor] or any of 

its principals"), appeal dismissed, 429 U.S. 1056 (1977). 

Here, Cabot was an oil drilling company that, as part of its 

normal operations, "contract[ed] out .•• part or all of [its] 

work" to subcontractors, such as Cleo Keith. Colo. Rev. Stat. 

§ 8-48-101(2). Colorado regulations specifically required Cabot 

to plug and cap oil wells before abandoning them. 2 Code Colo. 

Regs. 404-1 §§ 301, 305, 332. Thus, the plugging and capping of 

wells was inherently a "part of [Cabot's] regular business 

operation," and Cabot had no choice but to do the task itself or 

to hire someone else to do it. Pioneer Construction Co. v. Davis, 

152 Colo. 121, 381 P.2d 22, 24 (1963). See Finlay v. Storage 

Technology Corp., 764 P.2d 62, 67 (Colo. 1988) (computer equipment 

company contracted out part of its work for workers' compensation 

purposes when it hired janitorial service firm); Melody Homes, 

Inc. v. Lay, 610 P.2d 1081, 1087 (Colo. App. 1980) (builder 

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Appellate Case: 87-1102 Document: 01019784891 Date Filed: 06/12/1989 Page: 7 
contracted out part of its work for workers' compensation purposes 

when it hired security firm to patrol construction site). 

Because it is undisputed that Cleo Kei t·h had workers' 

compensation insurance at the time of the accident, pla:intiffs 

must look exclusively to Cleo Keith for workers' compensation 

·benefits. 3 Plaintiffs can have no "action of any kind" against 

the general contractor, Cabot. Colo. Rev. Stat. § 8-48-101(2). 

The judgment of the district court is AFFIRMED. 

3 Although Cleo Keith did not give notice of Black's accident and 

death to the Colorado Division of Labor within the time required 

by Colo. Rev. Stat. § 8-52-105, that requirement is not 

jurisdictional. The Division did receive notice of the accident 

from Cabot. The parties have submitted supplemental authority to 

this Court showing that plaintiffs eventually brought a workers' 

compensation claim before the Division against Cleo Keith, Cabot, 

and their respective insurance carriers. In a now-final decision, 

the Division held that because Cleo Keith's insurance carrier had 

stipulated to its coverage of Black, plaintiffs could not look to 

Cabot for compensation benefits: "[I]nasmuch as Cleo F. Keith had 

insured and kept insured his workmen's compensation insurance in 

the State of Colorado and .•• the State Compensation Insurance 

fund has admitted and stipulated that Glen L. Black was an 

employee of Cleo F. Keith, ••• Cabot Petroleum Corporation and 

their insurer ••• have no responsibility herein and should be 

dismissed as parties to this action." (Order, w.c. No. 3-835-481, 

April 13, 1987, as modified February 1, 1988.) 

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Appellate Case: 87-1102 Document: 01019784891 Date Filed: 06/12/1989 Page: 8