Black v. Cabot Petroleum Corp.

877 F.2d 822, 1989 WL 61321
CourtCourt of Appeals for the Tenth Circuit
DecidedJune 12, 1989
DocketNo. 87-1102
StatusPublished
Cited by9 cases

This text of 877 F.2d 822 (Black v. Cabot Petroleum Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Black v. Cabot Petroleum Corp., 877 F.2d 822, 1989 WL 61321 (10th Cir. 1989).

Opinion

EBEL, Circuit Judge.

This diversity case concerns the application of Colorado’s workers’ compensation statute. The principal issue is whether a general contractor whose subcontractor carries adequate workers’ compensation insurance is immune from suit by the subcontractor’s injured employee.

The facts necessary for resolving this appeal are not in dispute. Plaintiffs are the spouse and children of Glen L. Black (“Black”), a welder killed in an oil field accident. Defendant Cabot Petroleum Corporation (“Cabot”) is an oil drilling company that was responsible for plugging and capping the oil well involved in the accident.

Pursuant to a farm out agreement, Cabot undertook to determine whether a previously-drilled oil well in Colorado could be made productive. Cabot concluded that the well should be abandoned. Colorado regulations required Cabot to plug and cap the well before abandoning it. The capping process includes cutting off the well head and welding a steel plate over the well’s opening. Cabot hired an independent contractor, Cleo Keith Welding Service (“Cleo Keith”), to cap the well. Black was a self-employed welder who often worked for Cleo Keith on a subcontract basis. Cleo Keith hired Black to perform the work necessary for the capping. While Black was cutting off the well head at the site, it fell on him and killed him.

At the time of the accident, Cleo Keith had a workers’ compensation insurance policy in effect with the Colorado State Insurance Fund. Cabot also had a workers’ compensation insurance policy in effect at that time.

Plaintiffs sued Cabot under a products liability theory and for negligence. Cabot moved for summary judgment, asserting that plaintiffs’ claims were barred by the Colorado Workmen’s Compensation Act (the “Act”). Colo.Rev.Stat. §§ 8-40-101 to 8-54-127. The district court granted Cabot’s motion, holding that Colorado law applied to the suit and that the Act constituted plaintiffs’ exclusive remedy.

On appeal, plaintiffs contend that Oklahoma law rather than Colorado law applies to the suit. Plaintiffs further argue that even if Colorado law does apply, the Act does not bar their claims because (1) Cabot was not a statutory employer of Black; (2) Cabot was not immune from suit under Colo.Rev.Stat. § 8-48-102 as an owner of real property or improvements; and (3) Cabot had not complied fully with the Act’s notice and filing requirements.

I. CHOICE OF LAW

At the outset, we agree that Colorado law applies to this case. The undisputed facts show that the underlying accident occurred in Colorado. At the time of the accident, both Black and his wife were residents of Colorado, although they had recently moved there from Oklahoma. Black and his wife had obtained Colorado drivers licenses, had opened bank accounts in Colorado, and had registered several of their vehicles in Colorado. Cleo Keith, the contractor who hired Black, likewise was located in Colorado. Cabot, although chartered in Delaware and headquartered in Texas, was registered to do business in Colorado and was working on the Colorado well involved in the accident.

A federal district court sitting in a diversity case must apply the choice of law rules of the state where it sits, which in this instance is Oklahoma. Vandeventer v. Four Corners Electric Co., 663 F.2d 1016, 1017 (10th Cir.1981). We conclude that under Oklahoma’s “most significant relationship” choice of law rule, the law of Colorado applies here. See, e.g., Brickner v. Gooden, 525 P.2d 632, 637 (Okla.1974) (considering place where injury occurred, place of conduct causing injury, domicile and place of business of parties, and place where relationship of parties occurred).

II. APPLICATION OF WORKERS’ COMPENSATION STATUTE

Although conceding that Cabot had its own workers’ compensation insurance [824]*824policy in effect at the time of the accident, plaintiffs assert that Cabot should not be immune from suit. Plaintiffs argue that Cabot did not meet the various requirements for being a statutory employer under Colorado law and that, even if Cabot was a statutory employer and was properly insured, it lost its immunity by failing to follow the Act’s notice and filing requirements.1

In response, Cabot maintains, among other things, that regardless of the effect of its own insurance policy or its compliance with the Act’s requirements, Section 8-48-101(2) of the Act immunizes Cabot from suit because Black’s direct employer, Cleo Keith, carried workers’ compensation insurance at all relevant times. Colo.Rev.Stat. § 8-48-101(2). That section provides that general contractors (such as Cabot) are immune from suit for injuries to employees of their subcontractors (such as Cleo Keith) so long as the subcontractors maintain workers’ compensation insurance.2

Cabot argues, inter alia, that we need not address the effect of Cabot’s own insurance because Section 8-48-101(2) and a Colorado Supreme Court decision interpreting it, Buzard v. Super Walls, Inc., 681 P.2d 520 (Colo.1984), are controlling here. We agree.

The Colorado Supreme Court in Buzard held that under Section 8-48-101(2), an injured employee of an adequately-insured subcontractor cannot recover from the general contractor or from other “upstream” employers. In that case, defendant Super Walls was the general contractor on a construction project. Super Walls subcontracted part of the work to Hawkins Construction Co., which in turn subcontracted part of it to plaintiff Buzard. Buzard was injured when a roof that he was working on collapsed. All three parties, the general contractor (Super Walls), the subcontractor (Hawkins Construction), and the “sub-subcontractor” (Buzard himself), carried workers’ compensation insurance. Buzard sued Super Walls, claiming that, as a “sub-subcontractor,” he should be allowed to reach upstream and impose tort liability on the general contractor, Super Walls.

The Colorado Supreme Court rejected Buzard’s claim. The court found that the “legislature ... intended that workers’ compensation be the remedy for all contractors ‘downstream’ from the one contracting out work, regardless of how many intermediate contractors there might be.” 681 P.2d at 522. The court held that under the Act, if a downstream subcontractor obtains workers’ compensation insurance, then all upstream subcontractors and general contractors are immune from suit:

Under section 8-48-101(2) if [Buzard] has obtained insurance he cannot reach “upstream” to Hawkins Construction or Super Walls to establish tort liability; they are immune from suit as any insured employer would be. See section 8-43-104, C.R.S.1973 (1983 Supp.). Statutory immunity goes hand in hand with statutory liability. Krueger v. Merriman Electric, 29 Colo.App. 492, 488 P.2d 228 (1971); Frohlick Crane Service, Inc. v. Mack, 182 Colo. 34, 510 P.2d 891 (1973). The requirement that Buzard, acting as an employer, obtain insurance in order for Super Walls to be immune from suit guarantees that there will be [825]*825immunity only when full workers’ compensation benefits are obtainable.

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Bluebook (online)
877 F.2d 822, 1989 WL 61321, Counsel Stack Legal Research, https://law.counselstack.com/opinion/black-v-cabot-petroleum-corp-ca10-1989.