A Texas appeals court last month rejected Stewart & Stevenson LLC, an oilfield equipment manufacturer, which had contended that a jury should have been allowed to consider Apache Corp.’s contribution to a Louisiana oil rig collapse that resulted in an $11 million judgment in favor of an injured worker. The First District Court of Appeals said that Stewart & Stevenson had not shown Apache exercised enough control over independent contractor Key Energy Services Inc.’s operation of the rig prior to the accident at issue to be considered a “responsible third party” for liability purposes. The appeals court said in its opinion:
[To] be liable for exercising actual control, a premises owner or general contractor must have had the right to control the means, methods or details of the independent contractor’s work to the extent that the independent contractor was not entirely free to do the work its own way. The control must relate to the injury that the negligence causes.
Brady Foret, an employee of Key Energy, who was 23 at the time of the incident, fell more than 80 feet from the rig, which had been slowly sinking in Louisiana swamplands in the days leading up to the collapse. Although Apache owned the well that was being developed at the site, under Louisiana law it could not be held responsible for the accident. Foret had sued Stewart & Stevenson in Houston on the theory that the company performed shoddy work on the rig’s support mast, which failed during the accident. Key Energy, which had been providing well completion services at the site, was also named in Foret’s suit.
Stewart & Stevenson argued that even though Apache couldn’t be named as a defendant in the suit, a jury ought to nonetheless be able to consider the extent of Apache’s alleged role in the accident when apportioning liability. According to Stewart & Stevenson, Apache was aware of deteriorating conditions at the well site before the accident but refused to shut down operations to adjust the teetering oil rig because of the expected cost of repairs.
Stewart & Stevenson claimed that Apache knew that Key Energy employees were attempting a risky maneuver to redistribute weight on the rig by adjusting guy wires in an effort to stabilize the mast when the collapse occurred. But the trial court refused to grant Stewart & Stevenson’s requested jury instruction, and the jury found that the company was largely responsible for the accident, leaving it responsible for the entire $10.7 million jury verdict. The appeals court upheld the lower court’s decision, saying that Apache’s ability to start or stop work and receive progress reports from subcontractors was not enough to prove it controlled the specific negligent activity that caused the accident. The court, in its opinion, said:
Here, although several witnesses testified that it was improper to adjust the guy wires to correct a rig misalignment, there is no evidence in the record that Apache… directed or controlled Key Energy’s use of the guy wires.
The appeals court also noted that problems with the rig’s sinking foundation were obvious to Key Energy, which was included in the trial court’s charge as a potentially responsible third party. In that regard, the appeals court said:
[A]n independent contractor is generally expected ‘to take into account any open and obvious premises defects in deciding how the work should be done, what equipment to use in doing it, and whether its workers need any warning.’
The case is Stewart & Stevenson LLC v. Foret, which is in the First District Court of Appeals for the State of Texas.
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