Becerra v. Phil Dollar Oilfield Services Inc

Filing 66

ORDER granting 30 defendant Zurich's motion for summary judgment...judgment in its favor will be entered when the case is concluded as to all claims and parties. Signed by Honorable Joe Heaton on 02/17/2015. (lam)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
SAUL BECERRA SR.,

)
)
Plaintiffs,
)
vs.
)
)
PHIL DOLLAR OILFIELD SERVICES, )
INC., a foreign corporation, and
)
ZURICH AMERICAN INSURANCE CO., )
)
Defendants.
)

NO. CIV-14-0249-HE

ORDER
Plaintiff Saul Becerra filed this suit against defendant Phil Dollar Oilfield Services,
Inc. (“Phil Dollar”) seeking compensation for injuries he sustained while working on a well
site in Beaver County. Phil Dollar was performing services at the site for the well operator,
Unit Petroleum Company (“Unit”), as was plaintiff’s employer, Hardberger & Smylie, Inc.
(“Hardberger”). Plaintiff alleges his injuries were the result of Phil Dollar’s negligence.
By an amended complaint, plaintiff added Zurich American Insurance Company
(“Zurich”) as a defendant in this case. Zurich is the worker’s compensation insurer for
Hardberger, plaintiff’s employer, and has paid workers compensation benefits to plaintiff
since his injury. The relief plaintiff seeks against Zurich is a determination that Zurich has
no right of subrogation as to any amount plaintiff may recover from Phil Dollar. Zurich
maintains it does have a right of subrogation as to such amounts and has moved for summary
judgment on the claim against it. The motion is at issue.
Under Fed.R.Civ.P. 56(a), summary judgment is appropriate “if the movant shows that

there is no genuine dispute as to any material fact and the movant is entitled to judgment as
a matter of law.” In making this determination, a court views the evidence in the light most
favorable to the party opposing summary judgment. Grynberg v. Total, S.A., 538 F.3d 1336,
1446 (10th Cir. 2008). Applying this standard, the court concludes that summary judgment
should be granted in favor of Zurich.
Both parties view the present dispute as purely one of contract interpretation. The
existence and terms of the pertinent contracts are not disputed. The workers compensation
policy issued by Zurich to plaintiff’s employer, Hardberger, included an endorsement
waiving its subrogation rights as to any person or organization, so long as the waiver was
“required by a written contract.”1 Plaintiff maintains there was such a contract requiring the
waiver, that being the Unit Master Contract entered into between Unit and Hardberger.2 The
determinative question here is whether that contract required a waiver of subrogation as to
claims against Phil Dollar.
The Unit Master Contract includes a waiver of subrogation provision which provides
as follows:

1

The endorsement is Doc. #34-1: “We have the right to recover our payments from anyone
liable for an injury covered by this policy. We will not enforce our right against the person or
organization named in the Schedule. (This agreement applies only to the extent that you perform
work under a written contract that requires you to obtain this agreement from us.)” The “Schedule”
portion of the endorsement states: “ALL PERSONS OR ORGANIZATIONS. APPLIES WHEN
REQUIRED BY A WRITTEN CONTRACT”.
2

The Unit Master Contract is apparently used by Unit with all of its contractors. There is
also a Unit Master Contract between Unit and Phil Dollar. As pertinent to this dispute, the
provisions of that contract are identical to those in the contract between Unit and Hardberger.

2

(d) Waiver of Subrogration. Prior to commencing work for us, you shall
obtain from your insurers a waiver of subrogation against us, our nonoperating concurrent working interest owners, joint ventures, partners, agents,
servants, and employees and anyone for whom we are performing operations
or services....
Doc. #30-1, p. 7. So the question, for present purposes, becomes whether Phil Dollar should
be viewed as “us” or whether it is a working interest owner, joint venturer, partner, agent,
servant or employee of Unit.
Plaintiff argues that the term “us” in the referenced language includes Phil Dollar
because it should be understood to include “Unit Group” and “Unit Group” is defined to
include independent contractors. “Unit Group” is indeed a defined term in the Unit Master
Contract and does include “contractors” within its scope.3 However, while the definitions
including that for “Unit Group” are “For the purposes of this contract ...”,4 the term is
actually used only in the indemnity section of the contract. Thus, for indemnity purposes,
Hardberger is obligated to indemnify both “us” and “our other contractors besides you,” with
the reach of that obligation extending to Phil Dollar as an “other contractor.” But the portion
of the contract addressing insurance and waiver of subrogation (and the contract generally)
is different and more limited: it extends only to “us” and those relationships identified above
(i.e., “working interest owners, joint ventures ...). And in the contract generally, “us” is used
interchangeably with “we,” which is defined to include Unit Corporation and its
3

Doc. #30-1 at 8: “‘Unit Group’ will mean us, our parent, any of our subsidiaries and
affiliated companies, as well as our other contractors besides you.” (Emphasis added.)
4

See Doc. #30-1 at 8: “11. Indemnification. (a) Definitions. For purposes of this
contract....”

3

subsidiaries.5 Independent contractors of Unit are not included in that definition.
So if Phil Dollar is not part of “us”, is it otherwise an entity as to which the contract
requires a waiver of subrogation? As noted above, Hardberger was also required to have its
insurer waive subrogation as to “our non-operating working interest owners, joint ventures,
partners, agents, servants, and employees” and other others for whom Unit was performing
services.6 There is no suggestion in the parties’ submissions that Phil Dollar fits within any
of those categories. Rather, it was explicitly defined by the Unit Master Contract between
it and Unit (which was identical to that between Unit and Hardberger) to be an independent
contractor rather than an agent, servant, or employee.7 As a result, Phil Dollar is not within
the scope of the waiver of subrogation provision of the Unit Master Contract.
As the provisions of the Unit Master Contract do not require Hardberger to obtain a
waiver of subrogation from its insurer as to Phil Dollar, the waiver of subrogation provision
in the workers compensation policy issued by Zurich is not triggered and does not apply.
Zurich retains its subrogation rights.
5

The Unit Master Contract [Doc. #30-1, at 1] defines “Parties” to the contract as follows:
“Unit Corporation and each of its directly and indirectly owned subsidiaries, including, but not
limited to, Unit Petroleum Corporation and Unit Drilling Company, and any future direct or
indirect subsidiaries of Unit Corporation (individually and collectively sometimes referred to as
‘we’ or ‘Unit’).”
6

Para. 10(d) of the contract. Doc. #30-1, p. 7.

7

In some contexts, a court is not bound by a contract’s characterization of a particular
relationship as being that of “independent contractor” and will look to the substance of the
underlying relationship. See Thornton v. Ford Motor Co., 297 P.3d 413, 419 (Okla.Civ.App. 2012).
Here, however, where the question is the scope of the contractual agreement itself (i.e., the reach
of the waiver of subrogation provision), the parties’ characterization of the relationship ends the
issue.

4

Defendant Zurich’s motion for summary judgment [Doc. # 30] is GRANTED.
Judgment in its favor will be entered when the case is concluded as to all claims and parties.
IT IS SO ORDERED.
Dated this 17th day of February, 2015.

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