Higgins v. Upshaw Consulting Services, LLC et al
Filing
129
ORDER granting 93 Motion for Summary Judgment; denying as moot 96 Motion to Stay; denying as moot 98 Motion for Joinder; granting 117 Motion for Summary Judgment. Signed by U.S. District Judge Jeffrey L. Viken on 2/25/20. (SB) Modified on 2/25/2020 delivered to Plaintiff via USPS (CLR).
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
CIV. 16-5010-JLV
JESSE HIGGINS,
Plaintiff,
ORDER
vs.
UPSHAW CONSULTING SERVICES,
LLC; CONTINENTAL RESOURCES, INC.;
and FLUID END SALES, INC. D/B/A
FIVE STAR RIG & SUPPLY,
Defendants.
INTRODUCTION
Plaintiff Jesse Higgins brought this personal injury diversity action against
defendants Upshaw Consulting Services, LLC (“Upshaw”), Continental
Resources, Inc. (“Continental”), and Fluid End Sales, Inc. d/b/a Five Star Rig &
Supply (“Five Star”), following an oil rig injury.1 (Docket 43). Plaintiff originally
hired counsel to prosecute this action on his behalf. However, the court
permitted plaintiff’s counsel to withdraw and was unable to appoint replacement
counsel. (Dockets 89 & 112). Plaintiff is proceeding pro se and is presently
incarcerated.
1Defendants
raised a number of cross claims and third-party claims, but
the court dismissed those claims upon defendants’ stipulation. (Docket 104).
The only claims remaining in this action are plaintiff’s.
Defendants Five Star and Continental filed motions for summary
judgment. (Dockets 93 & 117). Defendants also jointly moved to stay
discovery pending resolution of those motions. (Dockets 96, 98 & 99). The
court granted plaintiff five extensions of his deadline to respond to the defense
motions and set a final deadline of January 17, 2020, for his responses.
(Dockets 105, 112, 114, 116 & 126). Plaintiff did not file any responses.
For the reasons given below, the court grants summary judgment to
defendants Five Star and Continental. The court further extends the deadline
for defendant Upshaw to file a summary judgment motion.
I.
Facts
The following factual recitation is derived from plaintiff’s amended
complaint, Five Star’s and Continental’s statements of undisputed material
facts, and other record evidence where appropriate. (Dockets 43, 95 & 118).
Defendants’ statements of undisputed material facts are deemed admitted
because plaintiff failed to controvert them. Fed. R. Civ. P. 56(e)(2); D.S.D. Civ.
LR 56.1(D). The facts are viewed in the light most favorable to plaintiff, the
non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475
U.S. 574, 587-88 (1986).
In February of 2014, plaintiff was employed as a rig hand by Cyclone
Drilling, Inc. (“Cyclone”).2
2The
(Dockets 43 at ¶ 6 & 118 at ¶ 3).
Continental hired
court granted Five Star permission to implead Cyclone as a third
party defendant. (Docket 61). Cyclone was dismissed from the case pursuant
to the defendants’ joint stipulation. (Docket 104).
2
Cyclone to drill for oil in Harding County, South Dakota.
Id. Cyclone agreed in
its contract with Continental that it was an independent contractor and that its
employees were not employees of Continental.3
(Docket 119 at p. 2).
Cyclone
employed Paul Hildebrant and Tyler Yackley, who served as the rig’s
manager—referred to as a “toolpusher”—and driller, respectively. (Docket 118
at ¶¶ 6, 9, & 11). Mr. Yackley, as the rig’s driller, operated the rig and
supervised plaintiff.
Id. at ¶¶ 12, 14.
Continental hired Dakota Territory Consulting (“DTC”) as an independent
contractor to represent it on plaintiff’s rig.
Id. at ¶¶ 15-16. DTC employed Joel
Young as Continental’s “company man” assigned to the rig.
Id. at ¶ 15. Mr.
Young was responsible for managing the rig’s drilling plan.
Id. at ¶ 17. Part of
his supervisory responsibilities involved ordering regular surveys to monitor any
angular deviation of the drill shaft.
Id. Mr. Young did not direct Cyclone
employees’ performance of the surveys.
Id. at ¶ 25.
Deviation surveys are performed with a tool called a wireline machine.
Id.
at ¶ 21. The wireline unit consists of a wire attached to a survey tool, operated
by a motor. Id. at ¶ 26. The survey tool weighs approximately 10 pounds.
The unit works by dropping the survey tool down the drill shaft.
Id.
The
machine operator then reels the tool back up the shaft using the motor.
3Continental
Id.
Id.
did not file a complete copy of its contract with Cyclone. It
did file a copy of its contract with Upshaw. (Docket 47-1). The contractual
language cited in Continental’s brief is identical to the language from its contract
with Upshaw. The court presumes the contracts are identical, as they appear to
be form documents.
3
The operator controls the speed that the tool is reeled up the shaft.
tool reports the shaft’s deviation.
Id.
The
Id.
On or before February 7, Mr. Young instructed Mr. Hildebrant and Mr.
Yackley to perform a survey of the drill shaft’s inclination.
Id. at ¶ 28. Mr.
Yackley assigned the task of operating the wireline unit on February 7 to
plaintiff. Id. at ¶ 29.
Mr. Young did not know plaintiff would operate the unit.
Id. at ¶ 23. When plaintiff used the unit to reel the survey tool out of the drill
shaft, the wire “did not slow as it neared the stop of the drilling hold, but instead
accelerated.” Id. at ¶ 30. Mr. Hildebrant testified in a deposition that plaintiff
caused the acceleration by accidentally increasing the reeling speed.4
(Docket
120-1 at p. 9). The survey tool attached to the wire emerged from the drill shaft
“at a higher speed than safe” and hit the top of the rig.
Id. at ¶ 32. The impact
broke the welds holding the wireline machine in place.
Id. The unit fell on top
of plaintiff, causing “multiple serious bodily injuries[.]” (Dockets 43 at ¶ 34 &
118 at ¶ 33).
Plaintiff alleged Five Star manufactured the wireline unit at issue.
(Docker 43 at ¶ 52). He asserted the unit was defective and was “not labeled
with any instructions to inform the user which direction to turn the governor
valve to slow or stop the hydraulic winch.”
Id. at ¶ 54. In its answer, Five Star
asserted the unit was “modified” and denied it manufactured the unit in the state
4Chad
Stout testified plaintiff caused the acceleration by turning a valve on
the wireline machine the wrong way. (Docket 120-3 at p. 4). The portions of
Mr. Stout’s deposition on file with the court do not identify his role in the
incident, but he appears to be a Cyclone employee.
4
which harmed plaintiff. (Docket 52 at ¶ 54). Five Star denied plaintiff’s
labeling claim. Id. at ¶ 56. Five Star’s statement of undisputed material facts
does not contain any facts about its alleged role in the accident or plaintiff’s
injuries. (Docket 95).
On May 9, 2018, plaintiff was indicted by a South Dakota jury on felony
charges. (Docket 88-1) (indictment filed ex parte).
Plaintiff was convicted in
state court and sentenced to 15 years of incarceration.
See South Dakota Dep’t.
of Corrs., Offender Locator, available at https://doc.sd.gov/adult/lookup/ (last
visited Feb. 12, 2020). Plaintiff was federally indicted on June 19, 2018, and
was sentenced to two years of incarceration consecutive to his state sentence.
United States v. Higgins, CR. 18-50072 (Dockets 2 & 47).
II.
Summary Judgment Standard
Under Federal Rule of Civil Procedure 56(a), a movant is entitled to
summary judgment if the movant can “show that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). Once the moving party meets its burden, the nonmoving
party may not rest on the allegations or denials in the pleadings, but rather must
produce affirmative evidence setting forth specific facts showing that a genuine
issue of material fact exists.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256
(1986). Only disputes over facts which might affect the outcome of the case
under the governing substantive law will properly preclude summary judgment.
Id. at 248. “[T]he mere existence of some alleged factual dispute between the
5
parties will not defeat an otherwise properly supported motion for summary
judgment; the requirement is that there be no genuine issue of material fact.”
Id. at 247-48 (emphasis in original).
If a dispute about a material fact is genuine, that is, if the evidence is such
that a reasonable jury could return a verdict for the nonmoving party, then
summary judgment is not appropriate.
Id.
However, the moving party is
entitled to judgment as a matter of law if the nonmoving party failed to “make a
sufficient showing on an essential element of her case with respect to which she
has the burden of proof.”
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
In such a case, “there can be ‘no genuine issue as to any material fact,’ since a
complete failure of proof concerning an essential element of the nonmoving
party’s case necessarily renders all other facts immaterial.”
Id. at 323.
In determining whether summary judgment should issue, the facts and
inferences from those facts must be viewed in the light most favorable to the
nonmoving party. Matsushita, 475 U.S. at 587-88 (1986). The key inquiry is
“whether the evidence presents a sufficient disagreement to require submission
to a jury or whether it is so one-sided that one party must prevail as a matter of
law.” Anderson, 477 U.S. at 251-52.
These standards govern despite plaintiff’s failure to respond to the pending
summary judgment motions.
See Mack v. Dillon, 594 F.3d 620, 622 (8th Cir.
2010). “Summary judgment must be denied even if no opposing evidentiary
6
matter is presented” if the moving party cannot meet the Rule 56 standard.
Heath v. John Morrell & Co., 768 F.2d 245, 249 (8th Cir. 1985).
III.
Analysis
This case is before the court on its diversity jurisdiction. Accordingly,
South Dakota substantive law governs. O’Neal v. Remington Arms Co., LLC,
817 F.3d 1055, 1060 (8th Cir. 2015).
A.
Five Star
Plaintiff’s allegations against Five Star, although crafted by counsel, are
not a model of clarity. In a count simply titled “liability of Five Star,” plaintiff
alleged the following:
1.
The wireline machine unit “was in a defective condition which
made it unreasonably dangerous[.]” (Docket 43 at ¶ 53).
The defect existed when the unit left Five Star’s control and
reached plaintiff “without a substantial unforeseeable change
in its condition.” Id. at ¶¶ 55, 57. The unit was not
“reasonably fit for the ordinary and foreseeable purposes for
which it was sold or manufactured and expected to be used.”
Id. at ¶ 59. The defect proximately caused plaintiff’s injuries.
Id. at ¶ 62.
2.
The unit could have been designed to “prevent foreseeable
harm” and the reasonable alternative design would “have
reduced the foreseeable risk of harm” “at reasonable cost[.]”
Id. at ¶¶ 58, 60. The “omission of the alternative design
rendered the . . . unit not reasonably safe.” Id. at ¶ 61.
3.
The unit “was not labeled with any instructions to inform the
user which direction to turn the governor valve to slow or stop
the hydraulic winch[.]” Id. at ¶ 54. The unit could have
been labeled “to prevent foreseeable harm.” Id. at ¶ 58.
7
The court construes plaintiff’s complaint to allege counts of strict liability for
defective product design and failure to warn.5 Both claims fail because plaintiff
did not support them with expert testimony.
1.
Strict liability product defect
In South Dakota, a manufacturer “is strictly liable for physical harm
caused by a product in a defective condition unreasonably dangerous to the
user[.]” Karst v. Shur-Co., 878 N.W.2d 604, 609 (S.D. 2016). To prove a strict
liability product defect claim, plaintiff must show:
1.
The wireline unit was “in a defective condition unreasonably
dangerous to the user;”
2.
The defect existed when the unit “left the control” of Five Star;
3.
The unit “was expected to and did reach” plaintiff “without a
substantial unforeseeable change in the condition the product
was in when it left” Five Star’s control; and
4.
The defect was a proximate cause of plaintiff’s injuries.
See South Dakota Pattern Jury Instruction 20-120-10.
Five Star argues plaintiff cannot maintain his product defect claim
because he failed to identify any expert witnesses by the deadlines set in the
court’s scheduling orders. (Docket 94 at pp. 2, 4-6). The court set a deadline
of November 27, 2018, for disclosure of plaintiff’s experts. (Docket 93 at p. 2).
This deadline was after the court permitted plaintiff’s counsel to withdraw.
(Docket 89). Five Star asserts in its briefing—but, confusingly, not in its
statement of undisputed material facts—that plaintiff did not identify any
5To
the extent plaintiff intended to assert negligence claims, they also fail
for lack of expert testimony.
8
experts.6 (Docket 94 at p. 2). Given that plaintiff was without counsel and very
likely incarcerated when the deadline passed, the court finds he did not disclose
any experts.
“Product liability often ‘involves technical issues which do not easily admit
to evidentiary proof and which lie beyond the comprehension of most jurors.’ ”
Nationwide Mut. Ins. Co. v. Barton Solvents Inc., 855 N.W.2d 145, 151 (S.D.
2014) (quoting Burley v. Kytec Innovative Sports Equip., Inc., 737 N.W.2d 397,
407 (S.D. 2007)). “Expert testimony is generally necessary to establish
elements of negligence and strict liability.” Id. “[I]n attempting to establish the
elements of products liability, unless it is patently obvious that the accident
would not have happened in the absence of a defect, a plaintiff cannot rely merely
on the fact that an accident occurred.” Id. (internal quotation omitted). “It is
not within the common expertise of a jury to deduce merely from an accident and
injury that a product was defectively designed.” Burley, 737 N.W.2d at 407.
This is not a case where a jury could infer the presence of a defect simply
from the facts of the accident. On the facts as presented to the court, the
wireline unit fell on top of plaintiff after the survey tool ejected from the drill shaft
at high speed and collided with the top of the rig. The collision caused the welds
connecting the unit to the rig to break. It appears likely that the collision, or
perhaps issues with the welding, caused the unit to fall on plaintiff. Expert
6Expert
disclosures are not filed with the court. (Docket 91 at p. 2). The
court has no direct evidence corroborating Five Star’s assertion that plaintiff did
not disclose any experts.
9
testimony would be needed to establish that an unreasonably dangerous defect
in the unit itself caused the fall. Plaintiff produced no expert testimony on the
issue of causation. Five Star is entitled to summary judgment. Burley, 737
N.W.2d at 407-08.
2.
Failure to warn
Five Star also argues plaintiff needs expert testimony to prove his failure to
warn claim. (Docket 94 at pp. 6-7). To prove a strict liability failure to warn
claim, plaintiff must show:
1.
a danger existed associated with a foreseeable use of the
product;
2.
an inadequate warning was given regarding the danger;
3.
as a result of the inadequate warning, the product was
rendered defective and unreasonably dangerous;
4.
the defective and unreasonably dangerous condition existed
at the time it left the control of the manufacturer;
5.
the product was expected to and did reach the user without a
substantial unforeseeable change in the condition that it was
in when it left the manufacturer’s control; and
6.
the defective condition was the legal cause of [plaintiff’s]
injuries.
Burley, 737 N.W.2d at 409; see also South Dakota Pattern Jury Instruction
20-120-40. “The issue under strict liability is whether the manufacturer’s
failure to adequately warn rendered the product unreasonably dangerous . . . .
the product itself need not be defective.” Id. (internal quotations omitted).
Plaintiff “must establish a causal relationship between [Five Star’s] failure to
warn and [his] injury.” Id. at 410.
10
Five Star’s inexplicable failure to adduce relevant facts does not assist the
court’s analysis. Plaintiff alleged in his complaint the wireline unit “was not
labeled with any instructions” regarding the mechanisms to slow the reeling of
the wire. (Docket 43 at ¶ 54) (emphasis added). Five Star declined to inform
the court whether its unit bore instructions or warning labels. If it is indeed
true that Five Star completely failed to label its unit or otherwise provide
direction on the proper use of the reeling mechanisms, a properly supported
failure to warn claim would be far from frivolous.7
Nevertheless, the present record would not allow a jury to infer Five Star’s
alleged failure to warn caused plaintiff’s injuries. “[T]he fact that an accident
occurred . . . does not perforce mean that [Five Star’s] failure to warn was the
legal cause” of plaintiff’s injury. Burley, 737 N.W.2d at 410. As noted above, it
appears likely the unit’s fall was caused by the collision between the survey tool
and the rig or welding issues. Plaintiff must show it is foreseeable that the
survey tool would collide with the rig if ejected from the drill shaft at high speed
because a user improperly sped up the wire reeling, causing the unit to fall; that
Five Star failed to warn about that danger; and that the failure to warn
proximately caused plaintiff’s injuries. At the very least, expert testimony would
be required to show a user’s improper use of the reeling motor would foreseeably
cause a unit to fall.
7If
Five Star had adduced evidence of providing a warning—“even if the
warning [was] arguably inadequate”—summary judgment would be appropriate
because there is no evidence in the record that plaintiff read any warnings.
Karst, 878 N.W.2d at 613-14.
11
“This is not one of those cases in which it is patently obvious that the
accident would not have happened but for an inadequate warning.” Barton
Solvents, 855 N.W.2d at 151. Five Star is entitled to summary judgment on
plaintiff’s failure to warn claim.
B.
Continental
Plaintiff alleges Continental “retained supervisory control” over Cyclone’s
“operations at the well site.” (Docket 43 at ¶ 18). He then alleges Continental
“negligently exercised its retained control” in a number of ways, causing his
injuries. Id. at ¶¶ 19, 34. Continental argues it had no legal duty to protect
plaintiff from harm because its independent contractor, Cyclone, was plaintiff’s
employer. (Docket 119 at pp. 4-9). The court agrees and grants summary
judgment to Continental.
To prove his negligence claim, plaintiff must show: “(1) a duty on the part
of [Continental]; (2) a failure to perform that duty; and (3) an injury . . . resulting
from such a failure.” Kuehl v. Horner (J.W.) Lumber Co., 678 N.W.2d 809, 812
(S.D. 2004) (internal quotation omitted).
Before liability may be imposed on the theory of negligence there
must be a duty on the part of the defendant to protect a plaintiff
from injury. While negligence actions are generally not suited for
summary judgment, such a result is proper when the duty question
is resolved in the defendant’s favor. The existence of such a duty is
a question of law[.]
Id. (internal citations omitted).
“[O]ne who hires an independent contractor generally does not have a duty
to insure the contractor performs his work in a safe manner.” Clausen v.
12
Aberdeen Grain Inspection, Inc., 594 N.W.2d 718, 721 (S.D. 1999). However,
this general rule is subject to many exceptions. See Haufle v. Svoboda, 416
N.W.2d 879, 880 (S.D. 1987); see also Restatement (Second) of Torts §§ 410-429
(1965) (laying out exceptions). The exception identified in the complaint “is
where the employer was directly negligent in exercising retained control over the
work[.]” Clausen, 594 N.W.2d at 721 (internal quotation omitted).
“In determining whether an individual is an employee or an independent
contractor, each case must be determined on its own facts and all the features of
the relationship are to be considered.” Egemo v. Flores, 470 N.W.2d 817, 820
(S.D. 1991). In South Dakota,
two primary factors [are] used to determine whether one is an
employee or an independent contractor:
(1)
Whether the individual has been and will continue to be
free from control or direction over the performance of
the services, both under contract of service and in fact;
and
(2)
Whether the individual is customarily engaged in
an independently established trade, occupation,
profession or business.
Davis v. Frizzell, 504 N.W.2d 330, 331 (S.D. 1993).
Continental asserts it did not have sufficient control over plaintiff’s work to
support his negligence claim. (Docket 119 at pp. 6-9). In particular, it asserts
the only role it had in the survey process that resulted in plaintiff’s injury was
ordering it. Id. at pp. 6-7. Continental concedes its representative, Mr. Young,
directed the Cyclone employees to perform the survey, but argues the manner of
13
performing the survey was outside its control.8 Id. In particular, Continental
notes Mr. Young did not even know plaintiff would perform the survey. Id. at
p. 6.
Turning to the first factor, the “right of control” test, the contract between
Continental and Cyclone provided that Cyclone’s employees, like plaintiff, are
not employees of Continental. (Docket 119 at p. 2). It also appears plaintiff, as
a Cyclone employee, was not controlled by Continental in the performance of his
duties. Plaintiff was supervised on a day-to-day basis by Mr. Yackley, the
Cyclone driller. In his complaint, plaintiff alleged that Continental maintained
control over operations on the rig through its company man, identified by
Continental as Mr. Young.9 (Docket 43 at ¶ 15). But the evidence before the
court shows Mr. Young had no direct control over plaintiff’s work, at least with
respect to the survey at issue here. The court finds Continental did not control
plaintiff’s survey work.
The second factor, the “independently established trade or business” test,
“require[s] [plaintiff] have some relationship with an economic enterprise that is
8Although
Mr. Young was Continental’s “company man” on the drill site, it
appears he was not directly employed by the company. (Docket 118 at
¶¶ 15-16). Since Continental appears to assume that distinction is irrelevant,
the court need not consider the matter further.
9The
complaint also alleges Continental controlled the drill site through
“periodic inspections” by Upshaw to identify “safety risks and deficiencies.”
(Docket 43 at ¶ 16). Plaintiff further asserts Continental required Cyclone to
carry out a safety program. Id. at ¶ 17. Even taking these allegations as true,
they do not demonstrate that Continental controlled the performance of
plaintiff’s work duties on the present factual record.
14
independent of the company” allegedly employing him. Moonlight Rose Co. v.
S.D. Unemployment Ins. Div., 668 N.W.2d 304, 310 (S.D. 2003). This factor
appears to most often be at issue when questions arise whether individual
workers are employees or independent contractors for a company. See
Moonlight Rose, 668 N.W.2d at 306-07 (street salesmen); Davis, 504 N.W.2d at
330-31 (used car lot manager); Appeal of Hendrickson’s Health Care Serv., 462
N.W.2d 655, 656 (S.D. 1990) (home health care workers).
Here, plaintiff was not hiring himself out to multiple drilling companies.
He was an employee of Cyclone. The record evidence establishes only that
Cyclone was an independent contractor of Continental. The court does not
know if Cyclone performed drilling work for other oil companies. In general,
there is little evidence whether Cyclone was “customarily engaged in an
independently established . . . business.” Davis, 504 N.W.2d at 331.
Given the record evidence showing Continental’s lack of control over
plaintiff’s work duties and Cyclone’s contractual agreement to independent
contractor status, the court will not weigh the independently established
business factor heavily. Examining this case “on its own facts[,]” the court is
satisfied Continental established it owed no duty to plaintiff as the employee of
its independent contractor. Egemo, 470 N.W.2d at 820. Accordingly,
Continental is entitled to summary judgment on plaintiff’s negligence claim.
15
C.
Upshaw
Upshaw did not file a summary judgment motion. The time to file
dispositive motions passed on June 11, 2019. (Docket 91 at p. 2). If Upshaw
intends to proceed to trial on the negligence claim brought against it, Upshaw
must promptly inform the court so trial arrangements can be made.
If, however, Upshaw intends to move for summary judgment, the court will
reset the motions deadline. The court’s pretrial deadlines may only be modified
“for good cause[.]” Fed. R. Civ. P. 16(b)(4). Plaintiff’s incarceration and his
refusal or inability to participate in the summary judgment proceedings up to
this point present a unique circumstance. The court finds forcing a complex
personal injury case to proceed to trial with an incarcerated, pro se plaintiff for
want of a deadline extension could waste judicial resources.10 Accordingly, the
court finds good cause exists to reset the motions deadline. The court will allow
Upshaw until March 30, 2020, to file any dispositive motion.
IV.
Conclusion
The court acknowledges the one-sided nature of the record likely distorts
what appears to be a complex personal injury case that could have been, in other
circumstances, meritorious. Although summary judgment is appropriate on
the present record, this order is of no precedential value in future products
liability or independent contractor cases.
10The
court does not imply it will automatically grant Upshaw’s motion for
summary judgment, if one is filed, merely to save judicial resources.
16
ORDER
For the reasons given above, it is
ORDERED that defendant Five Star’s motion for summary judgment
(Docket 93) is granted.
IT IS FURTHER ORDERED that defendant Five Star’s motion to stay
discovery (Docket 96) and defendant Continental’s motion for joinder (Docket 98)
are denied as moot.
IT IS FURTHER ORDERED that defendant Continental’s motion for
summary judgment (Docket 117) is granted.
IT IS FURTHER ORDERED that Upshaw has until March 30, 2020, to file
any dispositive motions.
Dated February 25, 2020.
BY THE COURT:
/s/ Jeffrey L. Viken
JEFFREY L. VIKEN
UNITED STATES DISTRICT JUDGE
17
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