Free Motion for Summary Judgment - District Court of Colorado - Colorado

Case 1:03-cv-02420-RPM

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 03-cv- 2420- RPM- OES

SHARI McCARLEY REX ALLEN McCARLEY , and JUDY ARBGAST for and on behalf of JESSICA McCARLEY , a minor, individually and as heirs of REX McCARLEY , deceased

Plaintiffs

AEC OIL & GAS (USA), INC. , d/b/a BALLARD PETROLEUM HOLDINGS , LLC KEY ENERGY SERVICES , INC. , and WEATHERFORD HOLDING u.S. , INC. , d/b/a WEATHERFORD U. S. LIMITED PARTNERSHIP
Defendants.

AEC

OIL'S RENEWED MOTION FOR SUMMARY JUDGMENT BASED ON RECENT SUPPLEMENTAL AUTHORITY
Defendant AEC Oil & Gas (USA) Inc. , sued herein as AEC Oil & Gas (USA), Inc. , d/b/a

Ballard Petroleum Holdings , LLC ("AEC Oil"), submits this Renewed Motion for Summary

Judgment on the issue of statutory employer immunity based on opinions issued since the
Court' s ruling of December 14 , 2005 , in which this Court entered an interlocutory order denying

AEC Oil' s original Motion for Summary Judgment. As grounds , AEC Oil states:

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AEC Oil filed a Motion for Summary Judgment and supporting brief on the issue
of statutory employer immunity on October 15 , 2004 (Docket Nos. 39 and 40) (" MSJ,,
MSJ , AEC Oil demonstrated why it was immune from suit as a matter of law under C.
41- 401. In that motion , AEC Oil acknowledged that Baker Hughes, the employer of the
1 In its
S. 9 8-

decedent , was an independent contractor.
(Docket No. 50).

See, e.

MSJ Brief, ~ 8; PIs. ' Resp. Br. at pp. 8-

In their opposition brief (Docket No. 50), Plaintiffs advanced two basic
arguments. First , Plaintiffs argued that Utah workers ' compensation law , which does not

recognize the statutory employer doctrine as urged here , should apply in this case. That
argument was rejected by the Court in its Order on Pending Motions of December 14 , 2005

which determined that Colorado law applies (Docket No. 74) ("Order ). Accordingly, Plaintiffs
choice-of- law argument does not prevent entry of summary judgment in favor of AEC Oil.

The second argument advanced by Plaintiffs in their opposition focused on a
perceived " independent contractor" exception to the statutory employer doctrine under Colorado

law. In making that argument , Plaintiffs relied on the decision of the Court of Appeals in
Newsom v. Frank M. Hall Company,

2004 WL 352680 (Colo. App. 02CA1375 , Feb. 26

2004)

Newsom f'). See

PIs.' Resp. Br. at p. 7 (Docket No. 50). In particular , Plaintiffs relied

on the Court of Appeals ' holding that a statutory employment relationship does not exist with the
general contractor if the subcontracting

companv that hires the injured worker is an " independent

contractor.

Newsom! however , as explained further below , was recently reversed by the
Frank M. Hall

Colorado Supreme Court in

Co. v. Newsom 125 P.3d 444 (Colo. 2005)

I AEC Oil incorporates its prior MSJ submissions herein by this reference.

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("Newsom ff'),

and that opinion serves as the primary basis for this renewed motion for
Newsom II

summary judgment.

was decided on December 19 , 2005 , after this Court entered its

Order. (Copy attached as

Exhibit A

AEC Oil' s MSJ was denied pursuant to the Order on Pending Motions dated
December 14 ,

2005 (Docket No. 74) (" Order

). The Order focused predominantly on the choice

oflaw issue , concluding that Colorado law , including workers ' compensation law , applied.
Order , pp. 3-

See

As noted , the sole substantive basis for Plaintiffs ' opposition to summary

judgment

reliance on

Newsom f

is now totally discredited in light of

Newsom II

The crux

of Plaintiffs ' opposition was set forth at page 8 of their brief , where Plaintiffs asserted:

Thus , under the 9 8- 41-401(1)(a)(I) exception , a statutory employment relationship does not exist if the subcontractor is an independent contractor as to the general contractor.
Significantly, both sides recognized that Baker Hughes was an independent contractor. See

PIs.

Resp. Br. at pp. 8- 9 (Docket No. 50). Indeed , the bulk of Plaintiffs ' opposition brief was devoted to a painstaking, but now immaterial , factual dissertation on Baker Hughes s status. The merits
of Plaintiffs '

opposition , and the asserted materiality of the facts Plaintiffs submitted in their
Newsom f

opposition , therefore , depended simply on whether the Court of Appeals ' holding in

accurately stated Colorado law on statutory employer immunity.

The Court in its Order briefly noted that there are questions of fact related to

whether AEC Oil was entitled to immunity. While the Court did not identify what those facts
were , those facts presumably were the ones relied on by Plaintiffs,

facts related to the now

irrelevant issue of whether an independent contractor relationship existed. AEC Oil respectfully

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submits that judgment as a matter oflaw is now required in light of well-settled law

and the

recent decision by the Colorado Supreme Court in

Newsom II as well as a recent decision by the

Tenth Circuit in

Carpenter v. Tom Brown , Inc. No. 05CV8030 , 2006 WL 322577 (lOth Cir.

Feb. 13 ,

2006) (copy attached as

Exhibit B) . Under these authorities , any questions of fact

relating to independent contractor status are not "material " and do not foreclose summary

judgment under Rule 56 , Fed. R. Civ. P.
The Colorado Supreme Court' s decision in
Newsom II decided after this Court'

Order , eliminated the uncertainty created by the Court of Appeals decision. In particular, the
Supreme Court

reversed the Court of Appeals , holding:

We understand section 8- 41- 401(1)(a), C.R.S. (2003), to relieve a general

contractor of its liability as an employer, for the death or injury of a person to whom it contracts out work , whenever that person is engaged in an independent trade , occupation , profession , or business and is free from the general contractor control and direction , without at the same time relieving the general contractor of liability for the subcontractor s employees. We therefore find that Hall & Company was liable , as Newsom s statutory employer , for the injuries he suffered and was correspondingly immune from a personal injury suit by him. Accordingly, the judgment of the cOUli of appeals is reversed.
Newsom 11
125

P.3d at 445. The holding was based on the Supreme Court' s conclusion that:

(TJhe legislature did not intend to strip a subcontractor s employees of any additional protection afforded by the general contractor, whether or not the subcontractor himself satisfies the conditions of subsection 8- 40- 202(2)(b) establishing his independence. . .. As the employee , of a subcontractor that kept insured its liability for compensation, and for whom the general contractor was liable as a statutory employer, Newsom had "no right of contribution or action of any kind" against Hall & Company. (the general contractor) 98- 41- 401(2).
Id.

at 451.

In short , the Supreme Court held that a general contractor was a " statutory employer" of a

subcontractor s employee and thus was immune from suit. In doing so , the court

reiected the

g.,

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precise argument relied upon by Plaintiffs in their opposition to summary judgment. In light
this important decision by the Colorado Supreme Court , Plaintiffs ' sole argument against

summary judgment must be rejected under Colorado law. Plaintiffs ' reliance on the so-called
exception to the statutory employer rule " is now clearly without merit. Since the alleged
disputed issues of fact previously urged by Plaintiffs

(see , e.

p. 11 ,

Docket No. 50) relate

solely to whether Baker Hughes was an independent contractor, there are
material fact , and AEC Oil is entitled to summary judgment.

remaining issues of

Finally, it is noteworthy that the Tenth Circuit also recently reaffirmed the
application of the statutory employer defense.

Carpenter v. Tom Brown , Inc. No. 05CV8030
2006) (attached as

2006 WL 322577 (10th Cir. Feb. 13
accident on a drilling rig.
articulated by the Tenth Circuit in 2 In

Ex. B) was also a case involving an

Carpenter the Tenth Circuit followed well settled Colorado law as
Stuart v. Colorado Interstate Gas Company,

271 F.3d 1221

(10th Cir. 2001). AEC Oil also cited and relied upon the

Stuart

case.

See, e.

AEC Oil's

Opening Br. at p. 9 (Docket No. 40). Both

Stuart

and

Tom Brown

are factually and legally on

point. Both cases were dismissed by the trial courts (Judges Brimmer and Johnson , respectively)
under Colorado law based on statutory employer immunity.
In sum , since this Court' s ruling of December 14 , 2005 , both the Colorado

Supreme Court and the Tenth Circuit have made it absolutely clear that AEC Oil is entitled to judgment as a matter of law under the statutory employer doctrine.

2 AEC Oil notes that Tom Brown, Inc. operated at applicable times in the same industry
not only involved the same industry as this case , it as AEC Oil. Furthermore Tom Brown involved a corporate affiliate of AEC Oil. Tom Brown , Inc. was merged into EnCana Oil & Gas (USA) Inc. (formerly known as AEC Oil) on January 1 , 2005.

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CONCLUSION
At the time this Court denied AEC Oil' s Motion for Summary Judgment , there was some
degree of legal uncertainty, due to

Newsom I as to whether the independent contractor status of

the decedent and his actual employer , Baker Hughes , would fall within a perceived exception to
the statutory employer rule. The subsequent decision of the Colorado Supreme Court in

Newsom

II

has eliminated any such uncertainty. AEC Oil respectfully requests this Court to adhere to the

long and clear line of precedent that requires dismissal of this case. There are no remaining

issues of material fact and AEC Oil is entitled to summary judgment.
WHEREFORE , Defendant AEC Oil renews its Motion for Summary Judgment on the

Issue of Statutory Employer; requests that this Court grant summary judgment in favor of AEC
Oil and against Plaintiffs; and requests such other and further relief as the Court may deem
proper.

DATED this 4th day of April , 2006.
Respectfully submitted
By:

s/ Terence M. Ridlev Terence M. Ridley Michael D. Alper Wheeler Trigg Keunedy LLP 1801 California Street , Suite 3600 Denver, Colorado 80202- 2617 Telephone No. : 303- 244- 1800
Telecopier No. :
303- 244~1879
Mail: ridley(1j)wtklaw. com

alper(1j)wtklaw. com
Attorneysfor Defendant AEC Oil

Gas (USA) Inc.

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CERTIFICATE OF SERVICE
I hereby certify that on April 4 , 2006 , I electronically filed the foregoing AEC Oil' Renewed Motion for Summary Judgment Based on Recent Supplemental Authority with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following email addresses:
Michael D.

Alper

alper(1j)wtklaw. corn purdy(1j)wtklaw. com

P. Keith Nelson Keith-Nelson(1j)rbmn. com

Geoffrey Race
grace(1j)warllc. com kcarreaga(1j)warllc. com rono(1j)warllc. com sgreen(1j)warllc. com
Terence M. Ridley

Lawrence Michael Brooks , Jr mbrooks(1j)warllc. com kcarreaga(1j)warllc. com rono(1j)warllc. com Glen Frank Gordon glen(1j)schuetze- gordon. com
glorianne(1j)schuetze- gordon. com

ridley(1j)wtklaw. com norris(1j)wtklaw. com
Robert A. Schuetze

John R. Lund
jrl(1j)scmlaw. com intakeclerk(1j)scmlaw. com

bob(1j)schuetze- gordon. com deb(1j)schuetze- gordon. com

Christian W. Nelson
Christian- Nelson(1j)rbmn. com

and I hereby certify that a copy of the document has been served to the following non- CM/ECF participant in the manner indicated by the non- participant' s name:
Trystan B. Smith Snow , Christensen & Martineau
10 Exchange Place , 11th Floor

Salt Lake City, UT 84145- 5000

(x) First Class Mail ( ) Hand Delivery ( ) Facsimile ( ) Overnight Delivery ( ) E- Mail

By:

s/ Terence M. Ridlev Terence M. Ridley Michael D. Alper Wheeler Trigg Kennedy LLP 1801 California Street , Suite 3600 Denver, Colorado 80202- 2617 Telephone No. : 303- 244- 1800 Telecopier No. : 303- 244- 1879 Mail: ridley(1j)wtklaw. com alper(1j)wtklaw. com
Gas (USA) Inc.

Attorneys for Defendant AEC Oil

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