Opinion
CIVIL ACTION NO. 99-3476 SECTION "L"
July 9, 2001
ORDER AND REASONS
Four motions are pending before the Court in the above-captioned case: (1) defendant Mississippi River Equipment Co.'s ("Mississippi River") motion for summary judgment as to Plaintiffs' claims and Gulf/Inland Contractors, Inc.'s ("Gulf") crossclaims; (2) Amoco Production Co.'s ("Amoco") cross-motion for summary judgment as to Plaintiffs' claims; (3) Plaintiffs' cross-motion for summary judgment on their claims against Amoco; and (4) Amoco's motion for summary judgment as to its third-party claims against Gulf.
After a review of the pleadings and the applicable law, the Court makes the following rulings: Mississippi River's motion for summary judgment is DENIED; Amoco's cross-motion for summary judgement as to Plaintiffs' claims is GRANTED as to any claims seeking to hold Amoco liable under the ultrahazardous activity doctrine, and Plaintiffs' cross-motion is DENIED as to any claims seeking to hold Amoco liable under that doctrine. The Court will withhold ruling on Amoco's motion for summary judgment as to its third-party claims. Amoco and Gulf are hereby ORDERED to submit supplemental briefing on which law applies to the contract between Amoco and Gulf within three days.
I. BACKGROUND
Plaintiff Scotty Flynn was employed by Gulf as a construction worker. Gulf and Amoco had entered into a contract for Gulf to perform certain work at Amoco's facility. On October 28, 1998, Flynn was working as a member of the pile driving team on an island in Plaquemines Parish. The pile driver was attached to a crane allegedly located on a spud barge. Gulfs employees operated the pile driver from the barge. During the pile driving operation, a piece of the pile driving equipment, the striker plate, disengaged and struck Flynn, who was acting within the course and scope of his employment. At the time of the accident Flynn was allegedly standing on a walkway that ran over the land. Flynn asserts that the accident resulted in serious injury. He is seeking damages for the injuries, and past and future medical expenses. His wife, Billy Rose Flynn, is seeking damages for loss of consortium.
Plaintiffs filed suit against Amoco and Mississippi River, the entity that owned, maintained and rented the pile driving equipment to Gulf. Amoco filed a third-party complaint against Gulf. Amoco claims that under the Master Services Agreement between these two parties, Gulf is required to defend and indemnify Amoco for Plaintiffs' claims. Gulf filed a cross-claim against Mississippi River asserting that the pile driver had a defect. Intervenor American Zurich, Gulfs worker's compensation insurer, is seeking reimbursement of worker's compensation payments made to Flynn from any settlement or judgment with the Defendants.
II. ANALYSIS
Summary judgment will be granted only if the pleadings, depositions, answers to interrogatories, and admissions, together with affidavits show that there is no genuine issues as to any material fact and that the plaintiff is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56. If the party moving for summary judgment demonstrates the absence of a genuine issue of material fact "the nonmoving must go beyond the pleadings and designate specific facts showing that there is a genuine issue for trial." Willis v. Roche Biomedical Laboratories, Inc., 61 F.3d 313, 315 (5th Cir. 1995). "[A] dispute about a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. To oppose a motion for summary judgment, the non-movant cannot rest on mere allegations or denials, but must set forth specific facts showing that there is a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 321-322(1986).
The burden of demonstrating the existence of a genuine issue is not met by "metaphysical doubt" or "unsubstantiated assertions." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (quoting Matsuchita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586(1986)). The Court must "resolve factual controversies in favor of the nonmoving party, but only when there is an actual controversy, that is, when both parties have submitted evidence of contrary facts." Id. The Court does not, "in the absence of proof, assume that the nonmoving party, no genuine issue exists for trial." See Matsushita, 475 U.S. at 588. Finally, "the mere existence of some factual dispute will not defeat a motion for summary judgment; Rule 56 requires that the fact dispute be genuine and material." Willis, 61 F.3d at 315. If the evidence leads to only one reasonable conclusion, summary judgment is proper. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250(1986).
A. Mississippi River's Motion For Summary Judgment
Mississippi River moves this Court for judgment as to the claims of the Plaintiffs and as to the cross-claim filed by Gulf or, alternatively, to hold Gulf liable for its defense and indemnity pursuant to the Equipment Rental Agreement between Gulf and Mississippi River. Mississippi River argues that Plaintiffs have not provided sufficient evidence to show that the pile driving equipment, specifically the striker plate, was defective. According to Mississippi River, after Flynn was injured, Gulf continued to use the same pile driving equipment without any modifications and completed the pile driving operation without modifying its procedures, except to inspect the striker plate after driving each pile. Moreover, the same equipment was used in subsequent pile driving operations without any modifications.
The Court notes that while Plaintiffs' evidence of defect is weak, it is sufficient to survive summary judgment. A piece of the equipment did become dislodged and fall, injuring the Plaintiff. The Court finds that the facts surrounding the accident create questions of material fact that renders this issue inappropriate for summary judgment. Therefore, Mississippi River's motion for summary judgment as to Plaintiffs' claims is DENIED.
In the alternative, Mississippi River asks the Court to find that Gulf is liable to defend and indemnify Mississippi River pursuant to the Equipment Rental Agreement between the parties. Moreover, Mississippi River alleges that Gulf breached its contractual agreement because it did not provide insurance coverage and, therefore, Gulf stands in the shoes as insurer of Mississippi River. Gulf responds by challenging the validity of the rental agreement. Gulf argues that the person who signed the agreement did not have the knowledge, sophistication and/or authorization to bind the company. The Court finds that this issue is pregnant with facts in dispute by both parties and, therefore, the motion for summary judgment is DENIED. B. Plaintiffs' Cross-Motion for Summary Judgment as Their Claims Against Amoco and Amoco's Cross-Motion for Summary Judgment as to Plaintiffs' Claims.
Because it finds that genuine issues of material exist challenging the validity of the agreement, the Court does not address Gulf's argument on the sufficiency of the agreement to trigger indemnification at this time.
Plaintiffs move this Court to hold Amoco liable for the activities of Gulf. The parties agree, and the summary judgment evidence indicates, that Gulf was acting as an independent contractor with regard to Amoco at the time of the accident. Plaintiffs argue that pile driving is an ultrahazardous activity that imposes liability on Amoco for Gulfs actions, regardless of whether Gulf is an independent contractor. Amoco filed a crossmotion arguing that there are no facts in this case sufficient to hold Amoco liable for the acts of its independent contractor.
Generally, a principal is not liable for the offense of its independent contractor committed in the course of performing its contractual duties. See Cooper v. Offshore Express, Inc., 717 F. Supp. 1180, 1186 (W.D.La. 1989). There are, however, two exceptions to this rule: (1) a principal can be held liable for damages caused by the acts of its independent contractors if its work is ultrahazardous, and (2) a principal can be held liable if the principal reserves the right to supervise or control the work. See, e.g., Ainsworth v. Shell Offshore, Inc., 829 F.2d 548 (5th Cir. 1987).
The first question is whether Flynn's injury was caused by an ultrahazardous activity. Whether an activity is ultrahazardous is a question of law. Id. at 550.
With regard to the tort aspect of this case the applicable substantive law is either the law of Louisiana or the General Maritime Law ("GML"). A determinative factor in this selection is the status of the barge on which the crane rested. If it qualifies as a vessel, the GML may apply, if, on the other hand, it is a mere staging area or work site, then the law of Louisiana would apply. At this point the facts on this issue are in dispute or have not yet crystalized so as to permit a final resolution. Nevertheless, for purposes of determining whether the Plaintiff's injury was caused by an ultrahazardous activity it is not necessary to determine which law is applicable. The result is the same under both the GML and Louisiana law. As Louisiana courts have had more occasion to consider the nature of ultrahazardous activities, the issue will be analyzed under Louisiana law.
Louisiana places in the ultrahazardous category activities that can cause damage even when conducted with the greatest of care. The operation of a pile driver even with extreme care will result in land vibrations. This is inherent in the activity.
Many Louisiana cases have treated pile driving as an ultrahazardous activity resulting in absolute liability when it causes property damages. In Perkins v. F.I.E. Corp., the Fifth Circuit stated that "the activity of driving piles, for which absolute liability has been imposed, is one that is likely to cause damage even when there is no substandard conduct on anyone's part." 762 F.2d 1250, 1262 (5th Cir. 1985).
In the property damage cases, it is the activity itself not any substandard conduct that causes the damage. In the present case, however, it was not the activity but something else such as substandard conduct or some mishap or defect that caused the incident. The same equipment was used after the incident in question and nothing happened. Thus, it was not inherent in the activity itself for a piece of the equipment to become dislodged. If the pile driving operation was conducted with the greatest prudence and with proper equipment, a piece of the equipment would not have flown off and caused injury.
Because the pile driving activity itself did not cause the Plaintiff's injury, the ultrahazardous doctrine is not applicable in this case. While this distinction is somewhat subtle, the Court finds it consistent with the limited application of the ultrahazardous doctrine in Louisiana. See, e.g., Perkins, 762 F.2d at 1250 (holding that marketing of handguns is not ultrahazardous activity); Ainsworth, 829 F.2d at 548 (stating that drilling operations on an offshore drilling platform were not ultrahazardous); Kent v. Gulf States Util. Co., 418 So.2d 493 (La. 1982) (finding that transmission of electric power is not an ultrahazardous activity).
In Hebert v. NME Hospital, 1992 WL 10333 (E.D. La. 1992), Judge Livaudais found that pile driving is "unquestionably" an ultrahazardous activity and that liability for personal injury caused by a section of a concrete pile falling from the pile driving equipment could be governed by the ultrahazardous doctrine. When taken out of context some of the Court's statements in Hebert seem to support the Plaintiffs' view. But upon closer scrutiny, the case is not supportive. In the first place, it does not appear that the issue (i.e. whether a personal injury caused by the pile driving equipment is included in the ultrahazardous doctrine) was even raised by the parties in Hebert. See 1992 WL 10333. Moreover, the Court excused the defendant from liability on other grounds and found that the defendant hospital was not "engaged directly" in the pile driving activity. Id. at *5
The next issue is whether Amoco reserved the right to supervise or control the work to such an extent that it could be liable for the acts of its contractor. See Ainsworth, 829 F.2d at 548. The degree of control retained by the principal "depends in great measure upon whether and to what degree the right to control the work has been contractually reserved by the principal. The supervision and control which is actually exercised by the principal is less significant." See id. at 550-51 (quoting Hemphill v. State Farm Ins. Co., 472 So.2d 320 (La.App. 3d Cir. 1985). The retention of supervision by the principal must be "to the extent that the contractor is not entirely free to do the work in his own way." Wallace v. Oceaneering Int'l, 727 F.2d 427 (5th Cir. 1984).
The Well and Lease Service Master Contract (the "Contract") between Gulf and Amoco did not reserve control for Amoco. See Contract, Ex. A to Amoco's Motion for Sum. J. Para. 3 of the Contract provides:
AMOCO hereby expressly forgoes and disclaims any contractual or other right to direct or control [Gulf] or its employees and agents for any work or services performed pursuant to this contract and is interested only in the results to be obtained
However, Plaintiffs argue that an Amoco employee did retain actual control over the work. The summary judgment evidence indicates that Amoco employees instructed the Gulf crew as to the location and depths of the piles and held a safety meeting every morning with Gulf employees. Plaintiffs assert that whether Amoco had operational control and the extent of its control are questions of fact that are not appropriate for summary judgment. The Court agrees with the Plaintiffs. The facts asserted by the Plaintiffs create genuine issues that must be resolved at the trial of this matter. Therefore, Amoco's Motion for Summary Judgment is GRANTED as to Plaintiff's claims under the ultrahazardous doctrine and DENIED as to Plaintiff's other claims of liability. Plaintiffs' Cross-Motion for Summary Judgment on the ultrahazardous liability issue is DENIED. Plaintiff's remaining claims against Amoco are factually pregnant and, therefore, not appropriate for summary judgment.
C. Amoco's Motion for Summary Judgment on its Third-Party Claims Against Gulf
Amoco moves this Court to declare that the GML applies to the Master Service Agreement between Amoco and Gulf. Gulf argues that state law and not maritime law is applicable. Neither party has briefed the Court on whether the choice of law provision, i.e. the choice between Texas or general maritime law, in the Master Service Agreement should be enforced, and whether the Louisiana Oilfield Indemnity Act, La. Rev. Stat. Ann. § 9:2780, applies to the Agreement. See, e.g., Roberts v. Energy Development Corp., 235 F.3d 935 (5th Cir. 2000); Verdin v. ENSCO Offshore Co., 104 F. Supp.2d 682 (W.D.La. 2000). Therefore, it is ORDERED that within three days, the parties shall submit supplemental briefing on whether Louisiana's conflicts of law recognizes the validity of the choice of law provision in the Master Service Agreement and whether the Louisiana Oilfield Indemnity applies to the Agreement.
III. CONCLUSION
For the foregoing reasons, Mississippi River's motion for summary judgment is DENIED. Amoco's motion for summary judgment on the Plaintiffs' claims is GRANTED as to claims seeking to hold Amoco liable under the ultrahazardous activity doctrine, and Plaintiffs' cross-motion is DENIED as to any claims seeking to hold Amoco liable under that doctrine. Amoco and Gulf are ORDERED to submit supplemental briefing on the choice of law issue within three days.