Pool v. Dravo Coal Co.

788 P.2d 1146, 1990 Wyo. LEXIS 173, 1990 WL 26960
CourtWyoming Supreme Court
DecidedMarch 15, 1990
DocketNo. 89-167
StatusPublished
Cited by4 cases

This text of 788 P.2d 1146 (Pool v. Dravo Coal Co.) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pool v. Dravo Coal Co., 788 P.2d 1146, 1990 Wyo. LEXIS 173, 1990 WL 26960 (Wyo. 1990).

Opinions

GOLDEN, Justice.

The issue before us is whether a partnership employee who has received worker’s compensation benefits for a work-related injury may maintain a tort action against an individual partner which contracted with the partnership employer to manage the partnership’s day-to-day operations.1 The [1147]*1147resolution of this issue turns on whether a managing individual partner is an employer entitled to immunity from an employee’s tort action under the Wyoming Worker’s Compensation act or an independent contractor potentially liable to such action.

Kelly L. Pool (Pool), an employee of Carbon County Coal Company (CCCC), received injuries on November 30, 1984, in a mining accident at his employer’s underground coal mine near Hanna, Wyoming. He received worker’s compensation benefits through his employer’s statutory account established under the Wyoming Worker’s Compensation Act. CCCC, a Colorado general partnership, was formed by partners Dravo Coal Company (Dravo), a Delaware corporation, and Union Pacific Minerals, Inc. (UPMI), formerly Rocky Mountain Energy Company (RMEC), a Utah corporation. Although Pool received worker’s compensation benefits through the partnership’s statutory account, he filed a tort action against the individual partners, Dravo and UPMI, as well as individual defendants, seeking money damages for his personal injuries. His theories of recovery were negligence, culpable negligence, strict liability, and corporate negligence. His wife sought damages for loss of consortium.

The Pools appeal from the trial court’s order granting summary judgment for Dra-vo under a proper W.R.C.P. 54(b) certification.

We affirm.

In Brebaugh v. Hales, 788 P.2d 1128 (Wyo.1990), a case of first impression, we held that an individual partner enjoys the same immunity as the partnership from suit by an injured partnership employee who has received worker’s compensation benefits through the partnership’s contribution. That decision was the logical result of our holding in Hays v. State, ex rel. Workers’ Compensation Division, 768 P.2d 11 (Wyo.1989), adopting the aggregate theory of partnership, namely, “[a] partnership is not an entity separate from its partners. 1C A. Larson, Workmen’s Compensation Law, at § 54-31. Therefore, since the partnership is nothing more than the aggregate of the individuals making it up, a partner-employee would also be an employer.” Hays, 768 P.2d at 14.

Brebaugh involved the same partnership in issue here. In that case, the injured employee failed to present the partnership agreement and management contract executed by the partnership and Dravo in a timely manner for the summary judgment decision. Here, however, that partnership agreement and management contract are properly before us. Indeed, Pool precisely relies on those very contract documents in urging us to reverse the trial court’s summary judgment.

Dravo and Pool agree that Pool was a partnership employee who received worker’s compensation benefits from that employer’s statutory account, thus entitling that employer to immunity from the present tort action. Further, they agree that this court must answer the issue at hand by deciding whether the effect of that management contract is to strip Dravo of the tort immunity it would otherwise enjoy. In Brebaugh, we said that unless an individual partner has contracted away the management powers of the employer, he is as much the employer as anyone can be. Here we must examine the contract documents to see whether in them Dravo contracted away its employer’s powers of management.

Pool asserts that Dravo is a third party from whom he and his wife may seek tort damages, and not a statutory employer cloaked with immunity, because the management contract made Dravo an independent contractor which owed safety duties to the partnership’s employees separate and apart from the safety duties owed to them by their statutory employer. We disagree.

As we examine the partnership agreement and the management contract, we are mindful that, “While it is true that a contract is not conclusive evidence of the status of the relationship between the parties, it is a strong indication of the intended association.” Noonan v. Texaco, Inc., 713 P.2d 160, 165 (Wyo.1986). The overriding [1148]*1148consideration in establishing independent contractor status is whether or not the employer can control details of the work giving rise to potential liability. Id. at 164.

In 1978, Dravo and UPMI’s predecessor in interest, RMEC, executed a written partnership agreement creating CCCC, a Colorado general partnership. In that agreement, the partners specifically referred to a written management contract between CCCC, the partnership, and Dravo, one of the partners. The parties executed the management contract the same day as the partnership agreement was executed.

Under the provisions of the partnership agreement, the partnership’s business was to acquire, develop, and conduct underground coal mining operations on lands as to which UPMI (RMEC) owned mining rights. Dravo bore 56.5 percent and UPMI (RMEC) bore 43.5 percent of the initial funding of $45 million required for fixed assets, mine development, and railroad spur track. For working capital needs beyond that first $45 million, the partners shared equally. Each partner would recoup its share of that initial funding from partnership profit in proportion to each partner’s initial outlay. As to all other partnership profits, issues, and expenses, the partners shared equally.

The partners had equal management rights which were exercised through a management committee. Each partner had two representatives on that committee. Dravo had the general charge of the conduct of the day-to-day partnership operations subject to the supervision and control of the management contract and the management provision of the partnership agreement. The partnership’s management committee appointed the partnership’s chief operating officer, called a general manager, who was responsible and reported to Dravo. The general manager had charge and control of the mine’s day-to-day operation. The partnership paid as a partnership expense the compensation due Dravo as managing partner under the management contract.

Under the provisions of the management contract, Dravo supervised the operation and maintenance of the underground coal mine and performed all functions and services normally required for that operation and maintenance. In return for Dravo’s management, the partnership paid Dravo a $500,000 annual management fee. In performing its management work Dravo:

A hired and fired the partnership’s employees;
A acquired all property and assets required to conduct the partnership’s business;
A paid the partnership’s direct costs and expenses from the partnership’s funds;
A obtained and maintained insurance coverage for the partnership’s operations at the partnership’s expense;
A complied with federal and state laws concerning compensation, social security, and unemployment benefits at the partnership’s expense;

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Related

STATE EX REL. WORKERS'COMP. v. Brown
805 P.2d 830 (Wyoming Supreme Court, 1991)
State ex rel. Wyoming Workers' Compensation Division v. Brown
805 P.2d 830 (Wyoming Supreme Court, 1991)
Brebaugh v. Hales
788 P.2d 1128 (Wyoming Supreme Court, 1990)

Cite This Page — Counsel Stack

Bluebook (online)
788 P.2d 1146, 1990 Wyo. LEXIS 173, 1990 WL 26960, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pool-v-dravo-coal-co-wyo-1990.