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Joel Monge v. Rg Petro-Machinery (Group) Co.

December 7, 2012

JOEL MONGE, PLAINTIFF - APPELLANT,
v.
RG PETRO-MACHINERY (GROUP) CO. LTD.; EAGLE ENERGY SERVICES L.L.C.; BRONCO ENERGY SERVICES L.L.C.; EAGLE WELL SERVICE CO. INC. OF KANSAS; EAGLE WELL SERVICE INC.; BRONCO DRILLING COMPANY INC.; BRONCO DRILLING COMPANY L.L.C., DEFENDANTS - APPELLEES, AND RICHARD ENERGY LLC; RICHARD MOORE, DEFENDANTS, AND LIBERTY INSURANCE CORPORATION, INTERVENOR.



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA (D.C. NO. 5:09-CV-01188-R)

The opinion of the court was delivered by: Matheson, Circuit Judge.

United States Court of Appeals Tenth Circuit

PUBLISH

Elisabeth A. Shumaker Clerk of Court

Before LUCERO, O'BRIEN, and MATHESON, Circuit Judges.

In 2007, employees of Richard Energy, an Oklahoma company, traveled to China and arranged with RG Petro, a Chinese manufacturer, to purchase rigs that are used to repair oil wells. Richard Energy took possession of the rigs in China and exported them to the United States. The rigs were consigned to Eagle Well Service, Inc. ("EWS"), a Kansas corporation, and delivered in Kansas. EWS later moved one of the rigs to Oklahoma, where Joel Monge, an EWS employee covered by workers' compensation, was seriously injured during an accident involving the rig.

Mr. Monge filed a diversity action against EWS under Oklahoma's intentional tort exception to the exclusive remedy of Oklahoma's Workers' Compensation Act and against Richard Energy and RG Petro under Oklahoma's manufacturers' products liability laws. RG Petro filed a motion to dismiss based on lack of personal jurisdiction, and EWS filed a motion for summary judgment contending the intentional tort exception does not apply. The district court granted both motions. Mr. Monge filed a motion to alter or amend the court's summary judgment order, which the district court denied except for a request to fix a date in the order.

Mr. Monge appeals, arguing that there is a genuine issue of material fact as to his claim against EWS; that the district court abused its discretion in denying his motion to alter or amend the judgment; and that the district court erred in finding that it lacked personal jurisdiction over RG Petro. Richard Energy settled with Mr. Monge and is not involved in this appeal.*fn1 Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

I. BACKGROUND

A. Factual Background

RG Petro manufactures workover rigs, which are used to fix oil wells by drawing pipe from the ground. A traveling block connects sections of pipe to the rig cable as they are pulled from the ground. As the cable is pulled in, the pipe and the traveling block are pulled toward the crown of the derrick, or the top of the rig's tower. If the rig's operator pulls too much pipe, or pulls the pipe too quickly, the traveling block can strike the crown and damage the rig in an accident known as a "crown out."

A device known as a "crown saver" is designed to prevent crown outs by stopping the traveling block when the pipe has been pulled too high. As the pipe rises, the rig's cable winds around a drum. When too much cable has been pulled, the cable winding around the drum touches the actuating rod of the crown saver, thereby stopping the traveling block.

Rigs are also equipped with a "crown bumper." A crown bumper is a large block of rubber encapsulating metal rods that in turn are welded to the crown of the rig. In the event of a crown out, the rubber block absorbs some of the impact of the traveling block. It therefore serves the purpose of preventing or mitigating damage and injury from a crown out.

Rig 43, the rig on which Mr. Monge was injured, was manufactured in China by RG Petro and exported to the United States by Richard Energy, an Oklahoma company. It was consigned to EWS, a Kansas company, and shipped by Richard Energy from China to Kansas. EWS later moved it to the worksite in Oklahoma where Mr. Monge was injured. Further facts relevant to personal jurisdiction will be discussed later. On September 29, 2008, Mr. Monge was injured approximately 40 minutes after a crown out. At the time of the crown out, the rig's supervisor and regular operator, Jesus Vazquez, was in a nearby truck with the seat down and his hat over his head. Another rig hand, Ipolito Villalobos, was operating the rig. He testified at his deposition that he had been training by doing simple tasks in operating the rig for about six months, and that he did not have very much experience. Mr. Monge was on the rig floor, and another hand, Phillipe Acevedo, was on the derrick.

Jesse Escobedo was Mr. Vazquez's supervisor and the tool pusher. He generally oversaw operations and ensured the rig had all the necessary equipment and supplies. He was not on the site that day.

Mr. Villalobos mistakenly pulled an extra section of pipe, and the traveling block struck the crown bumper. The actuating rod for the crown saver had been removed, rendering the crown saver inoperable. After the crown out, Mr. Vazquez approached the rig. He and the others looked up at the crown and did not see anything wrong, so they resumed pulling pipe.

Mr. Monge's expert reported that the welds attaching the crown bumper to the rig's crown were too small and had not completely fused the steel tubes in the bumper to the backing plate. The impact of the crown out weakened the already faulty welds. About 40 minutes after the crown out, the crown bumper detached and fell, striking Mr. Monge and knocking him from the rig. Mr. Monge was rendered a quadriplegic. Further facts regarding the incident will be presented below.

B. Procedural Background

Mr. Monge filed suit in the United States District Court for the Western District of Oklahoma. Although workers' compensation is normally the exclusive remedy for an employee claim against an employer in worker injury cases in Oklahoma, Mr. Monge filed suit against EWS under the intentional tort exception to Oklahoma's Workers' Compensation Act. He alleged that EWS had (1) intentionally bypassed the crown saver and ignored that it was not functional, (2) failed to train its employees on how to use the crown saver, and (3) allowed an inexperienced worker to operate the rig without supervision and without the crown saver. Mr. Monge also sued RG Petro and Richard Energy under Oklahoma's manufacturers' products liability laws. RG Petro filed a motion to dismiss for lack of personal jurisdiction. The district court held an evidentiary hearing on that issue and ordered the parties to file supplemental briefs. It concluded that Mr. Monge had failed to prove by a preponderance of the evidence that the court could exercise either specific or general personal jurisdiction over RG Petro.

EWS filed a motion for summary judgment. The district court concluded that Mr. Monge had not proven that there was a genuine issue of fact as to an element of his prima facie case--that EWS knew that an injury such as Mr. Monge's was substantially certain to result from EWS's conduct. The court therefore granted summary judgment in favor of EWS.

Mr. Monge then filed a motion to alter or amend the judgment under Rule 59 of the Federal Rules of Civil Procedure on the basis of previously unavailable evidence. The district court denied the motion on two grounds: (1) the evidence had previously been available and Mr. Monge's counsel had not established that he had made diligent efforts to discover the evidence; and (2) the evidence would not have affected the court's summary judgment decision in favor of EWS.

II. DISCUSSION

Mr. Monge argues that the district court (1) improperly interpreted and applied the intentional conduct exception to the Workers' Compensation Act known as the "substantial certainty test;" (2) abused its discretion in denying Mr. Monge's motion to alter or amend the judgment; and (3) erred in finding that it lacked personal jurisdiction over RG Petro. We will analyze these arguments in turn.

A. The Intentional Conduct Exception and Summary Judgment

Mr. Monge argues that the district court erred in granting summary judgment for EWS because the court improperly interpreted and applied the intentional conduct exception to the Workers' Compensation Act.

We review de novo a district court's decision to grant summary judgment, applying the same standards the district court should apply. E.E.O.C. v. C.R. England, 644 F.3d 1028, 1037 (10th Cir. 2011). A court "shall grant summary judgment if the movant shows 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). "[W]e construe all facts and reasonable inferences in a light most favorable to the nonmoving party." Champagne Metals v. Ken-Mac Metals, Inc., 458 F.3d 1073, 1078 (10th Cir. 2006) (citation omitted) (quotations omitted). "A dispute is genuine if there is sufficient evidence so that a rational trier of fact could resolve the issue either way." Crowe v. ADT Sec. Servs., Inc., 649 F.3d 1189, 1194 (10th Cir. 2011) (quotations omitted); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "A fact is material if under the substantive law it is essential to the proper disposition of the claim." Id. (quotations omitted).

We examine the legal background on the substantial certainty test, additional factual background, and how the law applies to this case. We finally consider additional arguments made by Mr. Monge.

1. The Substantial Certainty Test

Under Oklahoma's Workers' Compensation Act, workers' compensation is normally the exclusive remedy for an employee to recover from the employer for job- related injuries. But Oklahoma law has recognized an exception when an employee "has been wilfully injured by his employer." Parret v. UNICCO Serv. Co., 127 P.3d 572, 574 (Okla. 2005) (quotations omitted). In Parret, the Oklahoma Supreme Court adopted the substantial certainty test to determine whether an injury resulted from intentional conduct. Id. at 575.*fn2

To recover from an employer beyond a workers' compensation remedy, an "employer must have (1) desired to bring about the worker's injury or (2) acted with the knowledge that such injury was substantially certain to result from the employer's conduct." Id. at 579. "Under the second part of this standard," the substantial certainty test, "the employer must have intended the act that caused the injury with knowledge that the injury was substantially certain to follow." Id. "[M]ore than knowledge and appreciation of the risk is necessary." Id. (quotations omitted). Even recklessness or wantonness is not enough. Id. There must be more than knowledge of "foreseeable risk," "high probability," or "substantial likelihood"; there must be "knowledge of the 'substantial certainty' of injury." Id.

In Price v. Howard, 236 P.3d 82 (Okla. 2010), the Oklahoma Supreme Court further explained that "[e]stablishing that an employer has acted in a manner resulting in an employee's injuries being substantially certain presents a formidable barrier to recovery in tort." Id. at 90. This is because "nothing short of a demonstration of the employer's knowledge of the substantial certainty of injury will suffice. The employer's cognizance of a foreseeable risk, high probability, or substantial likelihood of injury are insufficient to impose tort liability." Id. at 88 (bold in original). Most recently, while reviewing a trial court's dismissal of a Parret complaint for failure to state a claim, the Oklahoma Supreme Court stated that "[s]ubstantial certainty . . . is found when an employer intended the act that caused the injury with knowledge that the injury was substantially certain to follow." Jordan v. W. Farmers Elec. Co-op., 2012 OK 94, ¶ 9, ___ P.3d ___ (Okla. Nov. 13, 2012). Such "knowledge may be inferred from the employer's conduct and all the surrounding circumstances." Id. (quotations omitted).

2. Additional Background

The evidence presented by the parties included affidavit and deposition testimony from Rig 43 workers, a safety alert, and expert reports.

a. Affidavit of Jesus Vazquez

In an affidavit, the rig's supervisor and regular operator, Jesus Vazquez, stated that "[EWS] should have known through their inspections that the [actuating rod] was not placed correctly and was not being used for its purpose--to prevent the traveling blocks from striking the top of the rig." ROA, Vol. III at 91. He also stated that, "[w]ithout the [actuating rod] in use, it is easy to see how this accident was certain to happen." Id.

b. Deposition of Ipolito Villalobos

Mr. Villalobos, who was operating Rig 43 the day Mr. Monge was injured, stated at his deposition that EWS should have fixed the crown saver because, in his opinion, the crown out would never have happened otherwise. After the accident, he left EWS in part for better pay and in part because he felt better about safety at a different company. He also testified that he had not received any training about crowning out before the accident. Id. at 69. Rather, Mr. Vazquez had just told him to "make sure [to] count the tubing [(sections of pipe)] and [not] go up too high." Id.

Mr. Villalobos further testified that he had never before been on a rig during a crown out and that, at the time of Mr. Monge's injury, he felt he was being safe and that his co-workers would have let him know if he was not. "[C]rowning out really wasn't a big issue for me, a big problem, because you have [the crown bumper]," such that if "you miss count [and] crown out . . . no damage is really done to the actual frame." Id. at 81.

c. Deposition Testimony of Jesse Escobedo

Mr. Escobedo, the tool pusher for the rig, testified at his deposition that he had seen pipe pulled past the safety stopping point at least 10 times during his career, but he had never seen the pipes taken past that point on Rig 43. He stated that he had never tested the crown saver to determine if it was functioning because "[n]obody ever hit the crown . . . when [he] was there." Id. at 139. He testified that he was assigned to Rig 43 when it was brand new and that, at the time, he did not know about crown savers, had never used one, and was not trained on how to use one.

Mr. Escobedo also stated that Mr. Monge would not have been hurt if the crown saver had been activated. Id. at 140. He confirmed that when EWS's safety inspector checked the rig, he always checked the crown saver as "all right." Id. at 140.

d. Minerals Management Service Safety Alert

The record contains a safety alert from the Minerals Management Service of the U.S. Department of Interior. It informed rig owners that a crown out can occur even if a crown saver is activated when pipe ...


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