### PUBLISH

UNITED STATES COURT OF APPEALS Filed 8/1/96TENTH CIRCUIT

CONOCO INCORPORATED, Third-Party Plaintiff, and CONOCO PIPELINE CO., Third-Party Plaintiff-Appellant/ Cross-Appellee,

v. ONEOK, INC., doing business as Oklahoma Natural Gas Company,Third-Party DefendantAppellee/Cross-Appellant.

________________________ ASSOCIATION OF OIL PIPE LINES, Amicus Curiae. Nos. 95-6095 95-6118

Appeal from the United States District Court for the Western District of Oklahoma (D.C. No. CIV-93-1060-L)
Gary W. Davis, of Crowe & Dunlevy, Oklahoma City, O klahoma (L. Mark Walker and Fred R. Gipson of Crowe & Dunlevy, Oklahoma City, Oklahoma; and Mark-2-

R. Zehleer, Conoco Inc., Houston, Texas, with him o n the briefs), for Third- Party Plaintiff-Appellant/Cross-Appellee. Peter L. Wheeler (D. Lynn Babb and Susan A. Doke, w ith him on the briefs) of Pierce Couch Hendrickson Baysinger & Green, Oklahom a City, Oklahoma, for Third-Party Defendant-Appellee/Cross-Appellant.

Before SEYMOUR , Chief Judge, PORFILIO and TACHA , Circuit Judges.

SEYMOUR , Chief Judge.1 After discovery, the Moores dropped their claims against Conoco, Inc.

and proceeded solely against Conoco Pipe Line Co. -3- Mr. Don E. Moore and Ms. Connie J. Moore brought th is action alleging their property was polluted by Conoco, Inc. and Con oco Pipe Line Co. 1 The Moores alleged that Conoco owned and operated a pip eline which broke and spilled gasoline and fuel oil into nearby soil and ground water. Conoco brought a third-party action against ONEOK, Inc., d/b/a Oklah oma Natural Gas Company (ONG), alleging that the leak was caused by the ins tallation of an ONG pipeline on top of the Conoco pipeline, and seeking damages for the Moore claim and for state-ordered remediation costs. Conoco settled wi th the Moores, leaving only the dispute between Conoco and ONG to be decided by the jury. The jury returned a verdict in favor of Conoco with regard to the Moore settlement, establishing the proportion of ONG’s liability at fifty percent, and in favor of ONG on Conoco’s unjust enrichment claim for the remediation costs. Both parties appeal. We affirm in part and reverse in part.

I. In 1962, Conoco completed the installation of a pip eline which runs north and south through Del City, Oklahoma, and started utilizing the pipeline to carry gasoline and fuel oil. In 1964, ONG hired P&A Cons truction Co. to install a2 State waters and other properties were polluted a s a result of the leak. -4- pipeline running east and west through Del City, wh ich ONG then used to carry natural gas. In 1976, Conoco’s pipeline ruptured, releasing gasoline and fuel oil in the nearby area. The ONG pipeline was resting o n top of the Conoco pipeline and had caused a dent at the location of the ruptur e. Conoco conducted a cleanup of the leak site and repaired the pipeline without seeking reimbursement from
ONG. Mr. Richard Keen, whose property was in the vicinity of the 1976 leak, discovered gasoline in his underground water well i n 1991. The State of Oklahoma investigated and concluded that the source of the gasoline was the 1976 leak. The State ordered Conoco to remediate t he leak. 2 The State approved Conoco’s cleanup plan and remediation has been ongo ing since 1991. The Moores, whose property is adjacent to the Keen property, filed this action in 1993 alleging that the 1976 leak also pol luted their soil and underground water. After Conoco settled with the Moores, ONG s tipulated that the settlement and the state-ordered cleanup costs were reasonable . At the close of Conoco’s evidence, and again prior to the jury instruction c onference, ONG moved for a directed verdict determining as a matter of law that P&A was an independent contractor for whose negligent acts ONG would not b e liable. The district court declined to direct a verdict, holding that fact iss ues existed regarding P&A’s-5-

independence. During the jury instruction conference, Conoco requ ested that the jury be instructed it could find ONG liable to Conoco underboth a contribution and an unjust enrichment theory with respect to the cleanup costs and the Moore settlement costs. The district court determined in stead that the cleanup claim would be submitted solely under an unjust enrichment theory and the Moore claim would be submitted solely under a contribution theo ry. The jury found that Conoco and ONG were each negligent on an equal basi s, and that Conoco was entitled to contribution for fifty percent of the a mount it paid in settlement to the Moores. The jury found in favor of ONG on Conoco’s unjust enrichment claim for the state remediation costs. On appeal, ONG contends the district court erred indenying its motion for directed verdict on P&A’s status as an independent contractor. Conoco contends the district court erred in denying its request to submit the state-ordered remediation costs to the jury under a theory of con tribution, and asserts we should order contribution as a matter of law in accordance with the jury’s determination that each party was fifty percent responsible for t he pipeline leak.

II. We first address ONG’s claim that it was entitled t o a directed verdict on-6-

P&A’s status as an independent contractor, which if successful would entitle ONG to judgment as a matter of law. In a diversitycase, we apply the federal standard and review de novo the district court’s de nial of a motion for directed verdict. J.I. Case Credit Corp. v. Crites , 851 F.2d 309, 311 (10th Cir. 1988). A directed verdict is appropriate “‘only if the proof is all one way or so overwhelmingly preponderant in favor of the movant as to permit no other rational conclusion.’” Id. (quoting McKinney v. Gannett Co., Inc. , 817 F.2d 659, 663 (10th Cir. 1987)). If “the evidence is suffici ent to create an issue for the jury,” a motion for directed verdict is inappropriate. Id. Under Oklahoma law, independent contractor status d epends upon whether the alleged employer had the right to contr ol, or purported or attempted to control, the manner of doing the job b y the alleged servant . . . . If he did have that right or exerc ised it regardless of his right to exercise it, then the relationship is thatof master and servant. . . . [W]here the facts bearing on such i ssue are either disputed or conflicting inferences may be reasonabl y drawn from the known facts, it would be error to withhold the issu e from the determination of the jury. Holland v. Dolese Co. , 643 P.2d 317, 319-20 (Okla. 1982). Moreover, “al though under a written contract the question whether the r elation of employer and independent contractor ordinarily is a question of law for the court, a contract which purports to create such relationship will notprotect the employer when it may be inferred from facts and circumstances reveal ed by evidence that, despite provisions of contract, the real relation was that of master and servant.”3 Two ONG employees were involved in the pipeline i nstallation, a chief

inspector and a welding inspector. -7- McReynolds v. Oklahoma Turnpike Auth. , 291 P.2d 341, 345 (Okla. 1955); see Mistletoe Express Service v. Culp , 353 P.2d 9, 12 (1959) (listing elements to be considered in determining whether relationship was that of servant or independent contractor). In the present case, conflicting inferences regardi ng ONG’s relationship with P&A may reasonably be drawn from their contrac t. The memorandum contract stated that P&A was an independent contrac tor and that ONG reserved no right to control the manner and method of performan ce. In addition, the general specifications incorporated into the contract state d that P&A was solely responsible for determining the depth of other pipe lines. On the other hand, the proposal, which was also incorporated into the contract, stated that while pipelines were required to be at least forty-eight inches below ground level, greater depths to pass under existing pipelines cou ld be required by ONG 3 and would be considered part of the pipeline installati on. The general specifications also stated that ONG reserved the right to make cha nges in location of the pipelines if necessitated by right-of-way difficult ies or unforseen obstructions, and that P&A could not make any changes in the location without the approval of ONG. The general specifications further stated, am ong other things, that where4 The contract contains numerous other examples of ON G’s control over the

details of the pipeline installation. For example, the thinning of primer was prohibited except under the direct supervision of O NG. Aplee. App. at 33. -8- ONG deemed it necessary, excavations were required around valves and other protruding fittings; that the method of crossing ri vers, creeks, and drainage channels was to be determined by ONG; and that addi tional expenses incurred in the lowering of the pipe as a result of direction f rom ONG would be paid by
ONG. 4 Based on the foregoing, the terms of the contractare susceptible to the inference that ONG had the right to control the man ner or method of installation, notwithstanding its characterization of P&A as an i ndependent contractor. Conflicting inferences may also be drawn from testi mony at trial. Mr. Jimmy Luster, a retired ONG welding inspector, test ified that he was present during the installation of the pipeline and that he did not direct the employees of P&A, nor instruct them on the method of installatio n. Mr. Luster also testified, however, that ONG had authority under the contract to ensure that the pipeline was installed in the way ONG would have installed i t. Mr. J.T. Hyatt, also a retired ONG inspector, testified that ONG inspector s did not in general have direct responsibility over individual contractors o r employees. Mr. Hyatt also testified, however, that under the contract in this case ONG controlled the depths at which new pipeline should pass under existing pi peline and also directed pipeline lowering.5 To the extent that ONG contends the evidence was insufficient to support

the jury’s verdict, we disagree.

6 “The right of contribution exists only in favor o f a tort-feasor who has paid more than their pro rata share . . . .” Okla. Stat. tit. 12, § 832 (B).

-9- Ample evidence existed from which a jury could reas onably infer that P&A was not an independent contractor. Both the contra ct and testimony at trial support the inference that ONG had the right to con trol, or purported or attempted to control, the manner or method of installing the pipeline. Consequently, the district court did not err in denying ONG’s motion for a directed verdict on this issue. 5

III. We now address whether the jury should have been in structed under a contribution theory on Conoco’s claim for state-ord ered remediation costs. In a diversity case, we apply the substantive law of the forum state and review the district court’s determinations of state law de nov o. Farmers Alliance Mut. Ins. Co. v. Salazar , 77 F.3d 1291, 1294 (10th Cir. 1996). Under Oklah oma statutory law, “[w]hen two or more persons become jointly or severally liable in tort for the same injury to person or property . . . there is a right of contribution among them even though judgment has not been recovered againstall or any of them . . . .” Okla. Stat. tit. 12, § 832 (A) (1988). 6A tortfeasor may seek contribution for payment of a joint liability where the payment is cash, its equivalent, or anything el se accepted in satisfaction for injury to person or property. See Power v. Sullivan , 852 P.2d 790, 792 (Okla. Ct. App. 1993). -10- Conoco committed a tort and the State of Oklahoma s uffered an injury when the gasoline and fuel oil from the 1976 leak p olluted state waters. See Okla. Stat. tit. 27A, § 2-6-105 (1996) (“It shall b e unlawful for any person to cause pollution of any waters of the state . . . . Any such action is hereby declared to be a public nuisance.”). The parties s tipulated that the State ordered Conoco to remediate the 1976 leak site. ONG conten ds, however, that the expenses incurred by Conoco to remediate the leak w ere Conoco’s own damages and therefore form the basis of an independent clai m rather than a contribution claim. We disagree. The costs Conoco incurred in complying with the State’s order were the direct result of a tort committed ag ainst state waters, and Conoco presented evidence at trial that ONG was jointly orseverally liable for the leak that caused the pollution. We therefore hold that the jury should have been instructed under a contribution theory on the state -ordered remediation costs. The question remains whether the jury verdict and s tipulations support an order of contribution as a matter of law. The jury found that ONG and Conoco were joint tortfeasors in polluting the Moores’ pro perty and found them each fifty percent liable. The only evidence before the jury establishing causation was the-11-

1976 leak. ONG and Conoco stipulated that the prop ortion of liability established by the jury would apply to liability incurred for t he cleanup. Aplt. App. at 316- 17. ONG and Conoco further stipulated that the cur rent costs of the cleanup were reasonable and that the future costs of the cleanup would be subject to the proportion of liability established by the jury. I d. at 317. There is thus no fact issue left for trial. Accordingly, we hold that ON G is fifty percent liable for the past and future costs incurred in the 1976 leak cle anup. We AFFIRM the denial of ONG’s motion for directed v erdict. We REVERSE the district court’s refusal to send Conoco ’s contribution claim against ONG to the jury, and we hold that on this record Co noco is entitled to contribution with respect to stipulated current and future cleanup costs in accordance with the percentages of fault establishe d by the jury. We REMAND the case to the district court to enter judgment in favor of Conoco consistent with this opinion.