Lewis v. Exxon Corp.

In this tort suit by plaintiff, Vernon L. Lewis, the issue is whether Exxon proved its affirmative defense: that Lewis was performing work which was part of Exxon’s trade, business or occupation. LSA-R.S. 23:1061.

The trial court concluded that Exxon was the statutory employer of Lewis, resulting in tort immunity for Exxon and its employee, Robert D. Litt. LSA-R.S. 23:1032. The court of appeal affirmed. Lewis v. Exxon Corp., 417 So.2d 1292 (La.App. 1 Cir.1982). A writ was granted to review the judgment, 422 So.2d 422 (La., 1982), which is affirmed.

FACTS

Exxon Corporation operates a chemical plant and refinery in Baton Rouge, Louisiana. Exxon employs nearly nine hundred people who are cross-trained to do construction and maintenance work, including four hundred and twenty to four hundred and thirty craftsmen. This number includes approximately twenty-seven welders and a hundred and thirteen pipefitters. In March of 1977, Exxon had about a hundred and twenty-six men assigned to construction work. Exxon’s employees and contractors’ employees are used interchangeably on Construction projects to maintain a steady level of Exxon employment. Although Exxon is capable of handling projects of any size, larger construction projects are generally performed by independent contractors. How much expansion or modification is done by Exxon employees and how much by others is an economic decision.

H.E. Wiese, Inc., had contracted to convert an inoperative Exxon ethanol (ethyl alcohol) unit to production of isopropanol (rubbing alcohol), thereby giving Exxon three isopropanol units. An incidental part of the contract, included as a matter of convenience, was installation of a metering device, an orifice run, on an eight inch gas line in one of the existing isopropanol units, unit number two. The device would have been installed regardless of whether the ethanol unit was converted to isopropanol. It was intended to measure the residual gas sent back to the refinery from all the iso-propanol units. While Lewis, . a pipe-fitter/welder employee of Wiese, was welding an orifice flange on the eight inch gas line, a seal plug, intended to isolate that section of the line, blew out and he was injured. In March of 1977, the time of the accident, the gas line was not serving iso-propanol unit number four, the one being converted, because unit four was not yet in operation.

Although this orifice run was intended to eventually unite the three isopropanol units, orifice devices were added almost daily at Exxon, and their installation was a routine practice for Exxon employees. There are “hundreds and hundreds” of orifice devices in the Exxon plant. (Tr. 1655)

Before Lewis started welding, Robert D. Litt, the Exxon section supervisor for iso-propanol unit number two, issued a “hot work permit” (Tr. 677). There was evidence that use of the seal plug to block residual gas in the line was not a safe procedure. Exxon’s safety standards warn that seal plugs have been known to blow out. Although employees of Exxon and Wiese jointly decided to use the seal plug, Litt had the final responsibility in the matter.

Exxon closed the ethanol plant because there was a low profit margin in ethanol and the ethanol unit did not meet current environmental standards. Subsequently, Exxon decided to convert the plant to the manufacture of isopropanol. The same basic process is used to manufacture ethanol and isopropanol. Building a completely new isopropanol unit would have cost about forty-two million dollars and the conversion from ethanol to isopropanol cost about sixteen million dollars. Normally, Exxon classifies capital improvements as construction work and expense items as maintenance. Seven million dollars of this conversion represented a capital expenditure: nine million dollars was carried on Exxon s books as current expenses for replacing old instruments with new ones. Thus, the conversion was primarily an expense or maintenance job. The contract between Wiese and Exxon had a lump sum price of $3,224,089, approximately a fifth of the total cost of the conversion. Additional personnel or time would have been needed to do the conversion project with Exxon employees, but Exxon had people qualified to do all the work that was done by Wiese.

At the conversion project’s peak, approximately seventy pipefitters were employed; the job could have been completed with only twenty pipefitters in a longer space of time. It involved about a hundred thousand man hours and nine crafts, required a maximum of a hundred and seventy to a hundred and eighty people and lasted from August of 1976 until May of 1977.

Edward N. Boyle, Jr., head of project development at the Baton Rouge Exxon chemical plant, testified that his department was responsible for the isopropanol unit four plans. Twenty percent of the engineering drawings were made by Exxon and the balance by four contracting firms. All of the drawings could have been done by Boyle’s office.

An Al-dox unit for the manufacture of cosmetic alcohols had been built by Exxon employees in 1961 at a cost of about five million dollars. Also, the Exxon ethanol north unit burned completely in May of 1970 and the twelve story structure was rebuilt by Exxon employees. Approximately ninety people, representing all crafts, worked on the very dangerous and complex reconstruction. The employees worked in two shifts, seven days a week, twelve hours a day, in this emergency situation.

Although it is not Exxon’s custom to engage in major construction or major conversion projects with its own employees, the company has the capability and has done construction work when economically feasible.

LAW

When a principal engages a contractor to perform work which is a part of the principal’s trade, business or occupation, the principal remains liable for compensation to any injured employee of the contractor. LSA-R.S. 23:1061, supra. When the work performed by the contractor is part of the principal’s trade, business or occupation, workmen’s compensation is the exclusive remedy of the contractor’s injured employee. LSA-R.S. 23:1032, supra. A principal can be engaged in more than one business. Fonseca v. Marlin Marine Corp., 410 So.2d 674 (La., 1981); Slocum v. Lamartiniere, 369 So.2d 201 (La.App. 3 Cir.1979), writ denied 372 So.2d 569 (La., 1979); Doss v. American Ventures, Inc., 261 La. 920, 261 So.2d 615 (1972). In a tort suit by an injured employee of a contractor, the principal has the burden of proving that the work being performed was part of its trade, business or occupation. Reeves v. Louisiana & Arkansas Railway Co., 282 So.2d 503 (La., 1973). This factual issue turns on the particular circumstances of each case. Lushute v. Diesi, 354 So.2d 179 (La., 1977); Doss v. American Ventures, Inc., supra. Because the issue is factual, summary judgment is generally inappropriate. Thompson v. South Central Bell Tel. Co., 411 So.2d 26 (La., 1982); Quinn v. Progress Drilling, Inc., 401 So.2d 978 (La., 1981). Compare Barnes v. Sun Oil Company, 362 So.2d 761 (La., 1978). If the work being performed by the contractor’s employee is customarily performed by employees of the principal, it is a part of the principal’s trade, business, or occupation. Thompson, supra; Reeves, supra; Blanchard v. Engine & Gas Compressor Services, Inc., 613 F.2d 65 (5 Cir.1980).

CONCLUSION

This was primarily a renovation project rather than new construction: a minor portion of the total cost was new capital investment. Reeves, supra, held that Humble Oil & Refining Company was not the statutory employer of the plaintiff injured in that case. Reeves involved the construction of a new petroleum coking unit, a job for which Humble had neither the design capability nor the manpower. On the other hand, Exxon had the design capability and manpower to do the renovation involved here. Exxon had performed work of similar magnitude with its own employees, but generally contracted out large projects in order to keep a steady level of employment. Because Exxon did construction and renovation with its own employees, it was in the construction business. A principal can be engaged in more than one business, Doss, supra; Slocum, supra.

In this factual situation, the Exxon-Wiese contract as a whole is irrelevant. Lewis was not working on unit four, which was being converted to isopropanol production by Wiese. Lewis was installing an orifice flange on the premises of unit number two, which was intended to meter the gas residue from units two, three and, eventually, four. Installation of the orifice flange was an incidental and nonessential part of the entire contract. Since such installations were routinely made by Exxon’s employees, the work being done by Lewis was customarily performed by Exxon’s employees. Thus, as to Lewis, Exxon had the status of a statutory employer. LSA:R.S. 23:1061, 1032, supra.

DECREE

For the foregoing reasons, the judgment of the court of appeal is affirmed.

AFFIRMED.

CALOGERO, J., concurs.

DENNIS, J., dissents and assigns reasons.

LEMMON, J., dissents and assigns reasons.

. LSA-R.S. 23:1061, “Principal contractors: liability” provides:

“Where any person (in this section referred to as principal) undertakes to execute any work, which is a part of his trade, business, or occupation or which he had contracted to perform, and contracts with any person (in this section referred to as contractor) for the execution by or under the contractor of the whole or any part of the work undertaken by the principal, the principal shall be liable to pay to any employee employed in the execution of the work or to his dependent, any compensation under this Chapter which he would have been liable to pay if the employee had been immediately employed by him; and where compensation is claimed from, or proceedings are taken against, the principal, then, in the application of this Chapter reference to the principal shall be substituted for reference to the employer, except that the amount of compensation shall be calculated with reference to the earnings of the employee under the employer by whom he is immediately employed.

“Where the principal is liable to pay compensation under this Section, he shall be entitled to indemnity from any person who independently of this Section would have been liable to pay compensation to the employee or his dependent, and shall have a cause of action therefor.”

. LSA-R.S. 23:1032, “Exclusiveness of right and remedies; employer’s liability to prosecution under other laws” provides:

“The rights and remedies herein granted to an employee or his dependent on account of an injury, or compensable sickness or disease for which he is entitled to compensation under this Chapter, shall be exclusive of all other rights and remedies of such employee, his personal representatives, dependents, or relations, against his employer, or any principal or any officer, director, stockholder, partner or employee of such employer or principal, for said injury, or compensable sickness or disease. For purposes of this Section, the word ‘principal’ shall be defined as any person who undertakes to execute any work which is a part of his trade, business or occupation in which he was engaged at the time of the injury, or which he had contracted to perform and contracts with any person for the execution thereof.

“Nothing in this Chapter shall affect the liability of the employer, or any officer, director, stockholder, partner or employee of such employer or principal to a fine or penalty under any other statute or the liability, civil or criminal, resulting from an intentional act.

“The immunity from civil liability provided by this Section shall not extend to: 1) any officer, director, stockholder, partner or employee of such employer or principal who is not engaged at the time of the injury in the normal course and scope of his employment; and 2) to the liability of any partner in a partnership which has been formed for the purpose of evading any of the provisions of this Section.”

. Interrogatories propounded to Exxon asked that the company list every construction project similar to this one which had been performed by Exxon’s employees as a part of its trade, business or occupation. Exxon responded that it had rebuilt an ethylene unit in 1970. Exxon supplemented its answer immediately prior to trial with information relating to a second construction project, the building of the “Al-dox unit” (Tr. 72) in 1961. Trial was commenced on June 10 and 13, 1980, and completed in September of 1980. In August, after trial had commenced but before its completion, Exxon attempted to supplement its answers by listing four other conversion projects it had undertaken in the 1950’s. The trial court granted plaintiffs motion to strike the amendment and sustained a continuing trial objection to testimony about that information. Plaintiff contends that the trial and appellate courts then erred in relying on the inadmissible testimony. Since there is no indication of such reliance and the record gives an ample independent basis for the judgments, this argument lacks merit.