Smith v. Shell Oil Co.

746 F.2d 1087
CourtCourt of Appeals for the Fifth Circuit
DecidedNovember 27, 1984
DocketNos. 82-4364, 83-4056
StatusPublished
Cited by21 cases

This text of 746 F.2d 1087 (Smith v. Shell Oil Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Smith v. Shell Oil Co., 746 F.2d 1087 (5th Cir. 1984).

Opinion

JOHN R. BROWN, Circuit Judge:

This appeal arises from claims for personal injuries resulting from a gas fire on a fixed platform on the outer Continental Shelf which occurred on November 6, 1980. Because we find ample evidence to support the jury’s findings as well as the trial court’s findings regarding indemnity, we affirm. We reverse the award of interest from the date of judgment and remand for modification to allow interest from the date of judicial demand.

How It All Began

Shell Oil Company (Shell) engaged Pressure Services, Inc. (PSI) to perform reconditioning work on the well located on a fixed platform on the outer Continental Shelf. Before reconditioning work could be performed, the well had to be killed. Shell contracted with PSI to perform the well killing services and to change corroded tubing.1 Sherman Michael Smith and Kevin Porche were employed by PSI. Shell also sought the services of Western Wire-line Services, Inc. (Wireline) to provide wireline services after the well had been killed.2 Henry Latham was employed by Wireline.

Movable housing units and an office building were leased by Shell from Offshore Sanitation and Equipment Rental Services, Inc. (OSERS) to accomodate the men during the workover operations.3

Prior to the reconditioning operation a prognosis was prepared by Shell engineers and furnished to PSI. The prognosis indicated that the current status of the well [1090]*1090was an active gas reservoir.4 The prognosis provided that preliminary operations would cover killing the well and pulling and replacing the tubing. With this procedure in mind, Shell ordered from PSI specific equipment for the operation.5 Included in that list was a request for two open tanks.

On November 4, 1980 the equipment, living quarters, and the office were arranged on the platform. The living quarters were placed within twelve to eighteen inches of an open tank into which gas would be bled. On November 5, the well killing operations began. To kill the well, salt water was pumped into the tubing to displace gas. A bleeding line was run from the casing head through an adjustable choke and out an open pipe which lay over an open tank. Gas and salt water bled from the end of this line into the open tank.

On November 6, near the time of the accident, Porche was working on the well killing operations. Smith retired from 36 hours of work at approximately 1:00 to 1:30 that afternoon and returned to the crew quarters to shower and sleep until approximately 5:45 p.m. Latham, the Wireline employee, gratuitously relieved a PSI employee and operated the adjustable choke on the bleeding line. Roman, the Shell platform supervisor, replaced Smith that afternoon. Late in the afternoon gas and fluid were vented through the bleeding line into the open tank next to the living quarters. The wind had died down. Latham was manipulating the adjustable choke on the bleeding line which was allowing gas to escape. However, gas collected in the work area and the living quarters and ignited. An explosion and fire occurred and all three men were severely burned.

Smith and Porche sued Shell and Wire-line and Latham sued Shell, PSI, and OS-ERS. Shell cross-claimed and brought a third party claim against PSI, Wireline, and OSERS seeking indemnity. PSI also cross-claimed against Shell and Wireline for indemnity. At the close of all the evidence, the trial court granted plaintiffs’ oral motion for a directed verdict against Shell for strict liability claims under La.Civ.Code Ann. art. 2322. Liability against Shell, PSI, and OSERS for negligence and the existence of defective equipment and living quarters was submitted to the jury on special interrogatories pursuant to F.R.Civ.P. 49(a). The jury found Shell 50% at fault and PSI 50% at fault; however, OSERS and Wireline were not found to be negligent. By consent the indemnity issue was resolved by the trial judge. The trial court found that PSI was required under the blanket service agreement (see note 1 supra and note 8 infra) to indemnify Shell but since Wireline and OSERS were exonerated by the jury each escaped liability for indemnity.

Onshore Negligence

In the trial court, PSI moved for j.n.o.v. and new trial contending that the jury findings were inconsistent.6 PSI argues that [1091]*1091the findings are inconsistent because there was no finding of negligence on the part of any of its employees and there was no evidence adduced at trial which would support an independent finding of negligence on the part of PSI. In Maxey v. Freightliner Corp., 665 F.2d 1367, 1371 (5th Cir. 1982) (en banc), we reiterated the standard of review for a j.n.o.v. established in Boeing Co. v. Shipman, 411 F.2d 365 (5th Cir.1969) (en banc); see also Moncrief v. U.S., 730 F.2d 276, 279-80 (5th Cir.1984). In Boeing we determined that a motion for a j.n.o.v. should be granted only when the facts and inferences point so strongly and overwhelmingly in favor of the moving party that reasonable persons could not arrive at a contrary verdict. We are required to consider all of the evidence in the light and with all reasonable inferences most favorable to the party opposed to the motion. If there is evidence of such quality and weight that reasonable and fair minded persons in the exercise of impartial judgment might reach different conclusions, the motion must be denied and the case submitted to the jury. There must be a conflict in substantial evidence to create a jury question.

We affirm the District Court’s denial of the motion for j.n.o.v. because the evidence was sufficient to create a question for the jury under the standard established in Boeing. There was sufficient evidence adduced at trial from which the jury could have inferred that PSI was liable for onshore negligence. The testimony at trial indicated that PSI was an expert in snubbing and workover operations and conducted its normal activities in the presence of gas. Pursuant to its contract with Shell, PSI was engaged to kill an active gas well and to change tubing. The prognosis prepared by Shell made clear that gas would be displaced during the operations. PSI had the prognosis in its possession in advance of the operation and before its crew [1092]*1092went aboard the platform. Thus, there was ample evidence that PSI knew of the hazardous nature of the activities to be performed on the platform. From this evidence the jury could have concluded that PSI failed to take proper precautions in light of its knowledge of the presence of gas and the possible hazardous conditions created thereby. The jury could have found that PSI failed to anticipate the danger created from the use of an open tank which could not contain the vented gas. We agree with the trial court’s conclusion that the jury apparently concluded that both PSI and Shell were at fault because they relied on the wind to dissipate the gas and because they failed to furnish the proper equipment to remove the gas from the work area.

For the same reasons we also affirm the trial court’s denial of PSI’s motion for a new trial. On appeal we review whether the District Court has abused its discretion in denying a new trial. Bunch v.

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