Opinion
No. 1:02-cv-245 Edgar
August 12, 2003
MEMORANDUM
I. Introduction
Plaintiff Linda Anderson, a resident of Tennessee, filed this action on August 22, 2002, against defendants, Fru-Con Construction Corporation ("FCCE"), Fru-Con Technical Services, Inc. ("FCTS"), and Fru-Con Engineering, Inc. (FCEI"), Missouri corporations. [Court File No. 1]. The jurisdiction of this Court is based upon diversity of citizenship, 28 U.S.C. § 1332.
Plaintiff alleges that on December 5, 2001, her husband, Samuel Franklin Anderson, deceased, was an employee of BASF Corporation ("BASF"). On that date, plaintiff alleges Samuel Anderson was working on the premises on BASF under the direction of employees of either FCCE, FCTS or FCEI.
Plaintiff asserts that employees of either FCCE, FCTS or FCEI were, pursuant to a contract with BASF, supervising and conducting the maintenance, cleaning, decontamination and purging of a butadiene tank located on the BASF premises at 2120 Polymer Drive, Chattanooga, Hamilton County, Tennessee. She further alleges that certain BASF employees, including her deceased husband, Samuel Anderson, were involved in the maintenance, cleaning, decontamination and purging of the aforementioned Butadiene tank.
Plaintiff asserts that the defendants' employees:
(1) "Failed to allow tank with water to cool before opening the bleed line with Butadiene;"
(2) Opened the valve before sufficient time had elapsed to allow cooling, and knew or should have known that Butadiene was in the bleed line;
(3) Knew or should have known of the explosive and volatile nature of Butadiene at the high temperatures resulting from the maintenance, cleaning and purging process at the time the valve of the bleed line to the tank containing Butadiene was opened;
(4) Failed to require and/or maintain a back flow preventer in the bleed line;
(5) Failed to bleed or flush the bleed lines before heating the Butadiene tank;
(6) Knew or should have known at the time they allowed BASF employees to remove the blind flanges — which stop the flow from the bleed line — that the line contained Butadiene and was volatile at that temperature;
(7) Failed to require personal protective equipment for the workers assisting in the maintenance, cleaning and purging process of the Butadiene tank;
(8) Failed to review and/or comply with procedures for the said Butadiene tank decontamination process;
(9) Failed to direct or position Samuel Anderson, and other workers, in a safe location during the opening of the automatic valve on the bleed line;
(10) Negligently hired and/or entrusted an employee with the procedures for the decontamination purging of the Butadiene tank;
(11) Failed to pump cold water or cool air into the Butadiene tank before purging the system;
(12) Failed to properly supervise the maintenance, cleaning, decontamination, and purging of the Butadiene tank and lines;
(13) Failed to warn BASF employees, including plaintiff's decedent, of the dangers of opening the valve with the Butadiene tank and lines at high temperature;
(14) The employees of either FCCC, FCTS or FCEI who conducted the maintenance, cleaning, decontamination and purging process of the Butadiene tank were not qualified to do so;
(15) The employees of either FCCC, FCTS or FCEI who conducted the maintenance, cleaning, decontamination and purging of the Butadiene tank did so in violation of their own training and all applicable regulations and procedures.
[Court File No. 1, pp. 3-4].
Plaintiff asserts that the error or omissions of the employees of either FCCC, FCTS or FCEI set forth above constitute negligence which proximately caused the death Samuel Franklin Anderson, by causing the release of Butadiene in the bleed line into the tank, which cause the Butadiene to expand and expel water, at approximately 200 degrees onto Samuel Franklin Anderson's body. Plaintiff asserts that on December 10, 2001, Samuel Franklin Anderson died from injuries and burns resulting from the expulsion of nearly 200 degree water onto him. [Court File No. 1, p. 4]. Further, and in the alternative, plaintiff asserts that her decedent was an intended third-party beneficiary of the contract between FCCC, FCTS or FCEI and BASF and that defendants breached the aforesaid contract proximately causing the death of her decedent. Id. Plaintiff asserts that the acts or omissions of the employees of FCCC, FCTS or FCEI were done in the course and scope of their employment and/or agency and, in the alternative, the employees of FCCC, FCTS or FCEI committed the negligent acts and/or omissions in their individual capacity; and, that such negligent acts and/or omissions, individually, jointly, severally, or in combination with one another proximately cause the death of her decedent, Samuel Franklin Anderson [Court File No. 1]. Accordingly, plaintiff seeks compensatory damages in the amount of $5,000,000. [Court File No. 20].
Currently pending before the Court are the (1) plaintiff's motion for summary judgment [Court File No. 16]; and (2) defendants' motion for summary judgment [Court File No. 17].
II. Background A. Depositions
The parties have submitted the following depositions and/or portions of depositions in support of their respective motions for summary judgment:
(1) The deposition of plaintiff, Ava Linda Anderson, dated November 26, 2002 [Court File No. 16];
(2) The deposition of Dale Leslie Poole, BASF's shipping and receiving supervisor, dated November 25, 2002 [Court File No. 16, 18];
(3) The deposition of John A. Edmonds, dated November 25, 2002 [Court File No. 16, 18];
(4) The deposition of John Christopher Snodgrass, an electrical engineer employed as BASF's site reliability engineer, dated November 25, 2002 [Court File No. 16, 18];
(5) The deposition of William Thomas Derryberry, an employee of BASF's shipping and receiving department at the time of the December 25, 2001 accident, dated November 25, 2002 [Court File No. 16, 18];
(6) The deposition of Charles R. Weeks, vice president of human resources at FCCE, dated May 16, 2003 [Court File No. 16];
(7) The deposition of Herman Andrew Donnelli, Jr., vice president for business unit special projects at FCCE at the time of the December 25, 2001 accident, dated April 16, 2003 [Court File No. 16, 18];
(8) The videoconference deposition of Stacey Ann Gregerson, workers' compensation claims manager for FCCE, dated May 29, 2003 [Court File No. 16, 18];
(9) The deposition of Robert Allen Gagliano, operations manager at BASF's Chattanooga plants, dated November 26, 2002 [Court File No. 16, 18];
(10) The deposition of William Dewayne Robinson, Jr., project manager for FCCE at BASF's Chattanooga area plants, dated November 26, 2002 [Court File No. 16, 18]; and,
(11) The deposition of Elbert L. Watkins, Jr., corporate safety director at FCCE, dated May 16, 2003 [Court File No. 16].B. Factual Background
On March 22, 2001, BASF and FCCE entered into a Master Agreement for Maintenance and Construction Work ("Master Agreement" or "Agreement"). [Court File No. 19, Exhibit A]. Generally, speaking, the Master Agreement governs work to be performed by FCCE for the benefit of BASF. Id., Article I. The Master Agreement also indicates that all work authorized under the Agreement shall be reflected in purchase orders generated by BASF. Id.
Further, the Master Agreement incorporates "Attachment A," which sets forth the scope of services under the Agreement. [Court File No. 19, Exh. A]. Attachment A states:
Scope of services includes, but is not necessarily limited to, the following services:
Mechanical Civil/Structural Instrument/Electrical Insulation HVAC Sheet Metal Coating Cleaning
1. Heavy Equipment Operating (lift) Pipefitting Machining/Machinery Repair Welding Boilermaking Pipe Fabrication (shop) Ironworking Scaffold Erecting 2. Carpentry Railroad Maintenance/Repair Concrete Work/Foundation Building Repairs General Labor Plumbing Earthwork Janitorial Road Repair Structural Steel 3. Electrical Systems Maintenance Instrument Technicians Electrical (commercial- Instrument Installation- industrial construction) (wiring/tubing) Telecommunications Wiring DCS 4. Asbestos Abatement Insulating 5. Heating Air Conditioning Ventilating Refridgeration 6. 7. Chemical Coating/Acid Brick Painting Fireproofing 8. Vacuum Truck Hydroblasting [Court File No. 19, Exhibit A, Attachment A]. "Attachment B" to the Master Agreement sets forth the applicable compensation and billing rates [Court File No. 19, Exhibit A, Attachment B]. Attachment B includes a handwritten modification which provides that FCCE would provide part time temporary employees to BASF at 1.4 times the base salary. Id; [Court File No. 18; Donnelli, dep., pp. 47-48]. The handwritten agreement also specified that in some instances the part time temporary people supplied to BASF would be ex-BASF employees. [Court File No. 19, Exhibit A, Attachment B]; [Court File No. 19, Donnelli dep., pp. 49-51].BASF produces chemicals, including butadiene. The services which FCCE was to provide to BASF included general contracting, new construction, engineering services, repair and maintenance. [Court File No. 18, Gagliano dep'n, p. 11; Robinson, dep'n, p. 7]. FCCE does not clean and decontaminate butadiene tanks. [Id; Robinson dep'n, p. 11]. At BASF's Chattanooga facilities, FCCE never prepared any vessel for production. Id. Pursuant to BASF policy, FCCE did not do maintenance on vessels or line breaks until BASF employees had emptied the vessels and/or emptied and cleared the lines. Id. at pp. 11-12.
BASF maintains two plants in the Chattanooga, Tennessee area — Plant 1, known as Amnicola, and Plant 2, known as Polymer Drive. BASF produces butadiene at both plants [Court File No. 18, Gagliano dep'n, p. 84]. BASF schedules decontamination of the butadiene tanks approximately once every two years. [Court File No. 18; Poole dep'n, p. 14]. BASF is in charge of decontaminating its own butadiene tanks. [Court File No. 18, Snodgrass dep'n, p. 33; Gagliano dep'n, p. 61; Derryberry dep'n, p. 43].
BASF scheduled the decontamination of one of the butadiene tanks at Plant 2 to begin December 3, 2001. [Court File No. 18, Poole, dep'n, pp. 15, 20]. In preparation for this event, BASF took notice that John Edmonds, the BASF employee who had generally performed the cleaning/decontamination of the butadiene tanks, had recently retired. [Court File No. 18, Gagliano dep'n, pp. 15-16]. Edmonds, who retired on June 30, 2001, had worked at Plant 2 for approximately 32 years. [Court File No. 18, Edmonds dep'n, p. 15]. During his employment at Plant 2, Edmonds had been involved in the decontamination/cleaning of the butadiene tanks for approximately 20 years. [Court File No. 18; Edmonds dep'n, pp. 18-19].
During discussions on the decontamination/cleaning, one of the BASF employees suggested that BASF bring Mr. Edmonds back to assist in decontaminating the butadiene tank. [Court File No. 18; Robinson dep'n, p. 17]. FCCE employee Bill Robinson was present at this meeting. It was Robinson's understanding, based upon statements from BASF employees that Edmonds had more knowledge than anyone present about decontamination/cleaning the butadiene tank. [Court File No. 18; Robinson dep'n, p. 32]. However, there was some concern about hiring John Edmonds back from retirement as a BASF employee because BASF does not have provisions to rehire retired employees [Court File No. 18; Poole dep'n, p 19].
As a result, a BASF representative eventually suggested that FCCE hire/rehire John Edmonds so that he could assist BASF in the decontamination process. [Court File No. 18; Poole dep'n, p. 20; Robinson dep'n, pp. 16, 28-29]. FCCE agreed to accommodate BASF in its request to hire/rehire Edmonds [Court File No. 18, Robinson dep'n, p. 17].
At that time, BASF was aware that Bill Robinson had no training with regard to cleaning/decontaminating butadiene tanks. [Court File No. 18, Gagliano dep'n, p. 36]. Moreover, BASF was aware that FCCE had no procedures for cleaning the tanks, the procedures were BASF's procedures [Court File No. 18, Poole dep'n, p. 18]. Rather, BASF was under the impression that FCCE would hire Edmonds and loan him to BASF for the butadiene tank decontamination. [Court File No. 18, Poole dep'n, p. 53; Gagliano dep'n, p. 36]. In so doing, BASF knew that Edmonds had been trained by BASF in cleaning/decontaminating the butadiene tanks, and it expected him to follow BASF's written procedures. [Court File No. 18; Gagliano dep'n, p. 86].
BASF first contacted Mr. Edmonds concerning his willingness to work on the butadiene project [Court File No. 16, Edmonds dep'n, pp. 27-28]. Based upon this conversation, Edmonds testified it was his understanding that "I'd have to hire in . . . Fru-Con would hire me in and then I would perform that task for BASF." Id. at p. 29.
Once Mr. Edmonds agreed to do the butadiene tank cleaning/decontamination for BASF, Bill Robinson of Fru-Con contacted Mr. Edmonds to arrange for his employment. [Court File No. 18, Robinson dep'n, p. 18]. As part of the arrangement, BASF generated a purchase order for Mr. Edmonds. [Court File No. 18, Snodgrass dep'n, p. 8]. The purchase order only included provisions for payment of Mr. Edmonds time. If someone at FCCE or FCTS was going to supervise Mr. Edmonds, there would have been a provision on the purchase order for the supervisor's time because it was cost reimbursable under the contract between BASF and FCCE. [Court File No. 18, Donnellidep'n, p. 100].
John Edmonds reported to Bill Robinson of FCCE on December 2, 2001 [Court File No. 18, Edmonds dep'n, p. 50]. Mr. Edmonds completed his application and other employment documents. Id. He also underwent a drug screening. Id. Bill Robinson offered safety gear to Mr. Edmonds, but he declined as he was still in possession of his BASF safety equipment and intended to use it. [Court File No. 18, Robinson dep'n, p. 29]. Bill Robinson further testified that he did not offer Mr. Edmonds any protective gear, such as a raincoat, because "BASF supplies that for their employees." Id.
Once Mr. Edmonds completed his paperwork, Mr. Robinson had Mr. Edmonds watch a Process Safety Management video that was made by BASF. [Court File No. 18, Robinson dep'n, p. 9]. The screening of the video, which was required by BASF, covers the operation and hazards found in the Chattanooga BASF plants, including butadiene. Id.
Once Mr. Edmonds completed his drug screening, he reported to BASF employees at Plant 2. [Court File No. 18, Edmonds dep'n, p. 53]. Mr. Edmonds testified he reported to either Dale Poole or Ronnie Miller of BASF who told him to "go to it." Id. at pp. 53-54. When Mr. Edmonds reported, BASF employee Bill Derryberry was at the butadiene tank which was to be cleaned/decontaminated. Id. at 54. Mr. Edmonds stated that Mr. Derryberry had not begun the actual decontamination/cleaning procedure, but he was in the process of obtaining all the equipment which would be needed for the decontamination procedure. Id.
Mr. Edmonds stated that he arrived at the butadiene tanks sometime between 10:00 A.M. and 11:00 A.M. on December 3, 2001. [Court File No. 18, Edmonds dep'n, p. 64]. He estimated that the decontamination process had begun by 1:00 P.M. on December 3, 2001. Id. at pp. 64-65.
The decontamination of the butadiene tank involved three steps:
1. decontaminating the vessel using boiling water,
2. preparing the vessel for entry, and
3. returning the vessel to service.
[Court File No. 19, Exhibit B]. More specifically, BASF's Quality System Procedure for "Monomer Storage Butadiene Vessel Decontamination" stated that the process involved:
Filling the butadiene tank with water and:
[h]eat[ing] the water to 190 ° F or greater. Maintain [ing] temperature on the system for 24 hours. After 24 hours . . . drain the hot water . . . Refill the vessel with water in order to cool the vessel . . . The vessel is now ready for internal inspection . . . Visually inspect the inside of the drum for "popcorn" polymer build-up in the vapor space of the vessel. Remove any build-up before returning the vessel to service. . . .[Id., section 6.3.2 — section 6.3.8]. During the decontamination/cleaning procedure, there was always someone from BASF present to oversee/supervise the process. [Court File No. 18, Gagliano dep'n, p. 90].
Sometime during the night of Tuesday, December 4, 2001, or the early morning hours of Wednesday, December 5, 2001, the temperature in the butadiene tank reached 195 ° F. [Court File No. 18, Edmonds dep'n, p. 82]. Although BASF's procedure required this temperature to be maintained for 24 hours, BASF engineers/employees determined the process could be shortened to 12 hours. [Court File No. 18, Poole dep'n, pp. 29-30, 43-44]. Dale Poole advised Mr. Edmonds and Bill Derryberry that the process was to be shortened and that preparations needed to be made to have the tank drained and filled with cold water. [Court File No. 18, Edmonds dep'n, pp. 95-96; Poole dep'n, p. 32-33]. The 12 hour heating period would end at approximately 5:00 P.M. on Wednesday, December 5. [Court File No. 18, Poole dep'n, pp. 32-33]. BASF had already scheduled an inspector for the butadiene tank for the next day [Court File No. 18, Edmonds dep'n, p. 96] and the tank would need to be cool enough for the inspector to enter it.
When advised of the time change, Mr. Edmonds advised Dale Poole that he was scheduled to leave at 3:00 P.M. that day. [Court File No. 18, Edmonds dep'n, p. 97]. As a result, the decedent, Samuel Anderson was called to the tank to observe the process [Court File No. 18; Edmonds dep'n, p. 99]. At about the same time, John Edmonds told Dale Poole there was a line that had not been purged. [Court File No. 18, Edmond dep'n, pp. 98-99; Poole dep'n, p. 33]. Edmonds told Poole that the plan had been to purge the line with cold water the next morning. [Court File No. 18, Edmonds dep'n, p. 100]. However, there was a discussion as to whether purging the line with hot water would cause any problems. [Court File No. 18, Edmonds dep'n, pp. 98-100]. Those involved in the discussion thought there would be no problem in purging the line with hot water and Dale Poole told John Edmonds to go ahead and purge the line. [Court File No. 18, Edmonds, pp. 100, 102, 104-105].
When the drain line was opened a reaction in the butadiene tank caused hot water to spill from the open manway at the top of the tank. [Court File No. 18, Edmonds dep'n, pp. 108, 112]. As a result of the hot water spilling from the tank, John Edmonds, Dale Poole and Sam Anderson all sustained burns. [Court File No. 18, Edmonds dep'n, p. 112-115]. Sam Anderson eventually died as a result of his injuries.
At the time of their injuries, none of the injured were wearing protective clothing such as rain gear, which might have kept the hot water off of them. [Court File No. 18, Edmonds dep'n, p. 18].
After the accident, the Tennessee Department of Labor Division of Occupational Safety and Health ("TOSHA") conducted an official investigation of the accident. The TOSHA findings appear in the record. [Court File No. 19, Exhibit D].
III. Plaintiff's Motion for Summary Judgment [Court File No. 16];
Defendants' Motion for a Summary Judgment [Court File No. 171]
Plaintiff has moved for a summary judgment [Court File No. 16]. She claims that under the contract between FCCE and BASF, FCCE was:
responsible for the safety, equipment, supervision, furnishing of competent employees, inspections, testing, and hold BASF harmless from liability for any and all claims for the decontamination and cleaning of the Butadiene tank at BASF (Discovery Exhibit 6).
As a portion of this contract, Fru-Con was specifically required to comply with OSHA 29 C.F.R. § 1910.119, "Process Safety Management of Highly Hazardous Chemicals" (Discovery Exhibit 6, Attachment A; and OSHA 29 C.F.R. § 1910.119), along with all other regulations, and federal and state laws. Several sections of 29 C.F.R. § 190.119 applied to this Defendant and its contractual obligation . . .
Here, Fru-Con agreed to be responsible for safety, supervision and furnishing of equipment and qualified personnel for the job (Discovery Exhibit 6, Article V). Simply because the contract required Fru-Con to perform its duties according to BASF's operating procedures, it did not relieve them of their contractual obligation. Violation of the terms of the contract constitutes liability . . .
[Court File No. 16, Motion for Summary Judgment, pp. 16-17].
Plaintiff further asserts that John Edmonds was not a "loaned employee." [Court File No. 16, Motion for Summary Judgment, pp. 18-23].
Defendants have also moved for a summary judgment [Court File No. 17]. They contend that FCCE did not contract to clean, decontaminate or purge the butadiene tank which is the subject of this suit and, therefore, they did not breach any duty owed to the decedent, Sam Anderson. [Court File No. 18, pp. 9-11]. They also contend (1) that during the period of time at issue in this action, John Edmonds was a loaned employee from FCCE to BASF and (2) the decedent Sam Anderson was not an intended third party beneficiary of the contract between FCCE and BASF. [Court File No. 18, pp. 11-21].
A. Standard of Review
Summary judgment is appropriate where no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. FED. R. Civ. P. 56(c). In ruling on a motion for summary judgment, the Court must view the facts contained in the record and all inferences that can be drawn from those facts in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. ZenithRadio Corp., 475 U.S. 574, 587 (1986); National Satellite Sports, Inc. v. Eliadis Inc., 253 F.3d 900, 907 (6th Cir. 2001). The Court cannot weigh the evidence or determine the truth of any matter in dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
The moving party bears the initial burden of demonstrating that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To refute such a showing, the non-moving party must present some significant, probative evidence indicating the necessity of a trial for resolving a material, factual dispute. Celotex Corp., 477 U.S. at 322. A mere scintilla of evidence is not enough. Anderson, 477 U.S. at 252; McLean v. Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000). The Court's role is limited to determining whether the case contains sufficient evidence from which a jury could reasonably find for the non-moving party. Anderson, 477 U.S. at 248, 249; National Satellite Sports, 253 F.3d at 907. B. Borrowed or Loaned Servant Doctrine
Defendants assert that during the time period at issue in this action, John Edmonds was a loaned employee to BASF and subject to the control of BASF and not an employer of FCCE who was supervising the decontamination process on behalf of FCCE. [Court File No. 18, pp. 11-12].
Because this Court's jurisdiction over this action is based upon diversity of citizenship pursuant to 28 U.S.C. § 1332, this Court must apply the substantive law of the State of Tennessee, the State in which this Courtis situated. Erie Railroad v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188(1938).
Plaintiff, seeks damages from defendants for their alleged negligence in causing the death of her decedent, Samuel Franklin Anderson. Under Tennessee law, a negligence claim requires proof of the following:
(1) a duty of care owed by the defendant to the plaintiff; (2) conduct by the defendant falling below the standard of care amounting to a breach of that duty; (3) an injury or loss; (4) causation in fact; and (4) proximate or legal cause.Coln v. City of Savannah, 966 S.W.2d 34, (Term. 1998) (citing Bradshaw v. Daniel, 854 S.W.2d 865, 869 (Tenn. 1983). However,
[t]he exclusive remedy provision of the [Tennessee] worker's compensation law states that any party responsible for paying benefits, either an immediate employer or a "statutory employer" under § 50-6-113, is immune from actions other than worker's compensation when an employee suffers injuries at the workplace.Phillips v. Bridgestone/Firestone, Inc., 772 F. Supp. 379, 384 (M.D. Tenn. 1991). The exclusive remedy provision, Tenn. Code Ann. § 50-6-108 states:
50-6-108. Right to compensation exclusive.-(a) The rights and remedies herein granted to an employee subject to the Workers' Compensation Law on account of personal injury or death by accident, including a minor whether lawfully or unlawfully employed, shall exclude all other rights and remedies of such employee, such employee's personal representative, dependents or next of kin, at common law or otherwise, on account of such injury or death.
Term. Code Ann. § 50-6-108 (1999).
Here, defendants seek the immunity provided under the Tennessee worker's compensation laws under the "borrowed servant" or "loaned employee" doctrine. "Under this doctrine, if it is determined that a worker's regular employer lends him to a "special employer" to perform certain duties, the special employer can be considered an employer for purposes of worker's compensation. Phillips, 112 F. Supp. at 387 (citing Winchester v. Seay, 219 Tenn. 321, 409 S.W.2d 378 (1966)). Three conditions must be satisfied for an employee to be considered a "borrowed servant":
(a) The employee has made a contract of hire, express or implied, with the special employer;
(b) The work being done is essentially that of the special employer;
(c) The special employer has the right to control the details of the work.Phillips, 112 F. Supp at 387 (citing Winchester, 409 S.W.2d at 381, quoting Larson on Compensation, 48). See also Owen v. St. Louis Spring Co., 136 S.W.2d 498, 500 (Tenn. 1940)("It is frequently a matter of difficulty to determine whether an employee, in a particular instance, should be regarded as a loaned employee in the service of a special employer, or whether he should be regarded as remaining in the service of his general employer. A test running through our cases although not always in terms noted, is indicated by the question "In whose work was the employee engaged at the time?"). Furthermore, the issue of the status of loaned or borrowed servant is only a question of fact for a jury "when the evidence is disputed or reasonable minds might draw differing inferences of fact from the undisputed evidence." Carpenter v. Hooker Chemical Plastics Corp., 553 S.W.2d 356, 359 (Tenn.Ct.App. 1977).
Here, the Court finds that there is no genuine issue of material fact and as a matter or law all three conditions for John Edmonds to have been a loaned or borrowed servant of BASF at the time of the December 5, 2001 accident, have been satisfied.
First, John Edmonds expressly made a contract of hire with BASF for purposes of decontaminating/cleaning the butadiene tank in early December 2001. "[A]n employee cannot consent to work for a special employer in the dark; `for compensation purposes, (the employee cannot have an employer thrust upon him against his will or without his knowledge.'" Latham v. Technar, Inc., 390 F. Supp. 1031, 1039 (E.D. Tenn. 1974) (quoting Larson on Compensation, 48.10).
John Edmonds testified in his deposition that sometime around the first of December he received a telephone call from someone at the BASF Polymer plant [Court File No. 16, Edmonds dep'n, p. 27]. He testified that he believed this phone call was from Ronnie Miller in BASF's production department. Id. at 28. He stated that Mr. Miller called and "asked me if I would come in and help them . . . [d]econtaminate the storage tank." Id. Mr. Edmonds stated that Mr. Miller called him to help decontaminate the storage tank, "[b]ecause I'm good. I mean, I'm the only one that ever did that, for the last 20 years. I was always in charge of doing it." Id. Mr. Edmonds also testified that before he retired he told BASF, "if they needed, you know, anything like that I would help, they could call me on the phone and ask me a question or whatever. Id.
Mr. Edmonds stated that his understanding of the situation from Mr. Miller's phone call was:
What I'm saying, the way I understand it, that I would have to work through Fru-Con. . . . I'd have to hire in, you know, Fru-Con would hire me in and then I would perform that task for BASF . . .Id. at 29. Mr. Edmonds stated his understanding for the reason that he would have to hire in through Fru-Con was:
I think in order to work for BASF you have to carry — and I'm not sure what the amount of insurance would be. For an individual, I would've probably had to go out and buy like a million-dollar-insurance policy in order to work for them . . .
That was my understanding . . . We didn't discuss that. He just said that, you know, I would have to work for them. That was my understanding . . . I talked to, I think her name is Gail Bagdonas or something, and she said unless you're going to do — that was before I retired. She said unless you're going to do a lot of work it's not worth it, you know.Id. at 29-30. During his deposition, Mr. Edmonds was asked:
Q Okay. So there was some kind of, whatever procedure that BASF had, it was just easier for you to go to work for Fru-Con to do this task?
A Right. But that wasn't discussed with me.
Id. Further, Mr. Edmonds was asked whether to his knowledge Bill Robinson or anyone else at Fru-Con had ever reviewed the procedure for decontaminating the butadiene tanks; and, whether Bill Robinson knew why he was going to the BASF Polymer Drive plant, he responded:
A They — the only thing I know, they requested that, to him, to hire me in to do a job for them.
Q "They," BASF?
A BASF.
Id. at 36.
Thus, the evidence of record shows that John Edmonds made an express agreement of hire with BASF. After being contacted by a BASF representative, Edmonds agreed to work on the decontamination/clearing of the butadiene tank at BASF's Polymer Drive plant. Further, despite the fact that Edmonds agreed to be hired in by Fru-Con, his deposition showed that he was aware that he was performing the butadiene tank decontamination for and on behalf of BASF.
Second, the evidence of record shows that the work at issue, the decontamination of the butadiene tank was the work of BASF, not the work of Fru-Con.
First, the written procedures for the butadiene vessel (tank) decontamination are BASF procedures [Court File No. 19, Exhibit B]. BASF's written procedures for "Monomer Storage Butadiene Vessel Decontamination" expressly state:
4.0 Responsibility
4.1 Production is responsible for performing all tasks associated with the decontamination process.
4.2 Maintenance may be responsible for opening manways, removing relief valve assemblies, preventative maintenance, and inspection of the vessel.Id.
In her motion for summary judgment, plaintiff argues that pursuant to the contract between FCCE and BASF, FCCE was responsible for the decontamination/cleaning of the butadiene tank. However, Article I of the Master Agreement between BASF and FCCE which covers the scope of work to be performed under the contract, states
CONTRACTOR [FCCE] agrees to supervise and direct the performance of and/or perform, such construction and maintenance work at BASF's premises located at (hereinafter called the "Plant") as may from time to time be authorized in purchase orders (the "Purchase Order(s)") issued by BASF to CONTRACTOR (hereinafter called the "Work"), and to provide such tools, construction equipment, construction materials, supervisory personnel, laborers, skilled craftsmen, and administrative and technical personnel as shall be required to supervise and execute such Work in an economical and efficient manner all in full compliance with BASF's operating and safety regulations.
[Court File No. 19, Exhibit A].
The scope of work section of the Master Agreement between BASF and FCCE lists maintenance and construction as falling within the scope of FCCE's work at BASF's plants. However, it does not list production as falling within the scope of FCCE's work. However, BASF's decontamination procedures for the butadiene vessel decontamination states it is the responsibility of "production" to decontaminate/clean the butadiene vessels. Similarly, the "Scope of Services" which is attached to the Master Agreement, and is set forth in detail, supra, lists neither production nor butadiene vessel decontamination as falling within the scope of services to be provided by FCCE. [Court File No. 19, Exhibit A, Attachment A].
In her response to Fru-Con's motion for a summary judgment [Court File No. 22], plaintiff argues that the purchase order which BASF issued to FCTS at the time it was agreed that Fru-Con would hire John Edmonds shows that Fru-Con was responsible for the butadiene tank decontamination. The purchase order, purchase order 30404930, which is dated December 3, 2001, states that it is for labor charges for John Edmonds [Court File No. 16, exhibit 12a]. The purchase order also states that it "contains the following services" and it lists the code "NPS00441" and "Material Handling Labor." More importantly, neither the words "butadiene" or "decontamination," nor the terms "butadiene vessel decontamination" appear on the purchase order. Further, as is noted above, the purchase order listed only Mr. Edmonds services. If FCCE or FCTS or someone connected with Fru-Con were going to be supervising Mr. Edmonds in the butadiene tank decontamination/clearing, the purchase order also would have made a provision for the time spent by a Fru-Con employee in supervising Mr. Edmonds because such time would have been compensable under the Master Agreement between BASF and FCCE. [Court File No. 18, Donnelli, dep'n, p. 99-100]. Thus, plaintiffs contention that the purchase order shows that FCCE or FCTS were responsible for the butadiene tank decontamination/cleaning in early December 2001, are flatly contradicted by the terms of the purchase order.
Plaintiff also contends that the fact that the purchase order was for $5,000.00 shows that Fru-Con was responsible for the decontamination/cleaning of the butadiene tank. However, William Robinson testified that BASF asked him to provide them with the cost of employing John Edmonds for two weeks. He stated he made the calculations and the estimated the cost at $1,800.00. Robinson stated that BASF told him they might want to keep John Edmonds for more than two weeks so they made out the purchase order for $5,000.00 [Court File No. 18, Robinson dep'n, p. 22].
Moreover, Fru-Con was never involved in the decontamination and cleaning of the butadiene tanks [Court File No. 18, Donnelli dep'n, p. 13]. Historically, FCCE and/or FCTS did not do the type of work involved in the butadiene tank decontamination/cleaning [Court File No. 18, Robinson dep'n, pp. 10-11]. When William Robinson was asked whether FCCE had ever prepared a vessel for production, he responded that "[a]s far as BASF plants are concerned locally here, we don't even do initial line breaks. They empty vessels, empty the line, clear the lines, before we do any maintenance on them. That's BASF policy." Id. at 11-23. Further when Herman Donnelli was asked whether FCCE or FCTS understood completely the ramifications of what John Edmonds was going to be doing in the butadiene tank decontamination/clearing process, he responded:
No, sir. We, we don't have access to operating procedures among BASF. We do have access to pipe specifications, electrical specifications as far as new construction and maintenance, that sort of thing. But as far as any kind of operations activities, we don't get involved in that part of the phase.
[Court File No. 18, Donnelli dep'n, pp. 99-100]. Likewise, William Robinson testified that the plant operations at the BASF Polymer plant consisted of "ownership of the equipment as far as the production, the storage, the containment of their chemicals to produce latex." [Court File No. 18, Robinson dep'n, p. 31-32]. Mr. Robinson further testified that FCCE did not perform plant operations at BASF because the contract between BASF and FCCE did not permit it. Id. at 32. Rather, he stated that plant operations were BASF's responsibility. Id.
In addition, at the time of the December 5, 2001 accident at the Polymer Drive butadiene tank the butadiene tank decontamination/cleaning procedure was being videotaped [Court File No. 18, Gagliano dep'n. p. 96]. The videotape was being produced by BASF, the videotaping was being done by BASF employees, and the tape was for BASF's purposes — namely, for future training purposes. Id.
Accordingly, the Court finds that based upon the pleadings of the parties, there is no genuine issue of material fact that the butadiene tank decontamination/cleaning which was being performed on December 5, 2001 was essentially the work of BASF and that neither the Master Agreement between BASF nor the purchase order which was issued from BASF to FCCE for John Edmonds labor/services made the butadiene tank decontamination either a function, duty or responsibility of FCCE.
Further, the evidence unquestionably shows that BASF had the right, and in fact did exercise the right, to control the details of John Edmonds work in the butadiene tank decontamination/cleaning. First, the written procedures which John Edmonds was to follow for the decontamination/cleaning of the butadiene tank were BASF's procedures. Moreover, the evidence shows that FCCE had no procedures for the tank decontamination.
Additionally, there were no FCCE, FCTS or other Fru-Con supervisors or supervisory personnel present at the Polymer Drive plant butadiene decontamination. All of the other individuals, including supervisors, who were present at the scene at the time of the December 5, 2001 accident were BASF employees.
Most importantly, during the process of the butadiene tank decontamination/cleaning, BASF expressly exercised its right to control the process, including John Edmonds work, telling him that BASF had decided to make a deviation from its own written procedures for the butadiene tank decontamination/clearing and directing John Edmonds to follow that change in procedure.
John Edmonds testified that on December 5, 2001, Dale Poole informed him that the engineers at BASF had determined it was only necessary for the approximately 195 ° F water to remain in the butadiene tank for 12 hours, as opposed to the 24 hours which BASF's written butadiene decontamination procedure required. [Court File No. 18, Edmonds dep'n, pp. 95-96; Court File No. 18, Edmonds dep'n, pp. 58-59]. More specifically, Edmonds stated that BASF had already scheduled the inspector for the butadiene tank the next day, and although the written procedure for the butadiene tank inspection called for the approximately 195 ° F water to remain in the tank for another 12 hours, he was told in the mid-afternoon of December 5, 2001, that the process of transferring the hot water to a wastewater storage tank would be begun shortly thereafter. Id. Likewise, Dale Poole, who told John Edmonds the decision had been made to stop heating/steaming the butadiene tank after 12 hours, stated that he did not know who exactly made the decision to shorten the period the butadiene tank would be filled with 195 ° F degree water by 12 hours, but it was someone in BASF's engineering group. [Court File No. 18, Poole dep'n, p. 29-32].
Finally, the Court notes that a TOSHA "Amended Citation and Notification of Penalty" is found in the record. [Court File No. 19, Exhibit D]. The Amendments to the Citation, which is dated June 17, 2002 states in pertinent part:
In that three employees were exposed to hot (210 ° F) water splashing over them from the top of a 1, 3 — Butadiene (BD) storage tank during a tank decontamination process on 12/5/01. The 18, 837 gallon east BD storage tank (D-2104), which was located in the (2) BD storage tank diked area near the railroad delivery tracks, had been emptied of BD and filled with water. The water was heated to 210 ° F, and was initially planned to be held in the tank for 24 hours to clean the tank of potential butadiene peroxides and resultant "popcorn polymers." At approximately 2:45 PM an automatic water drain valve below the tank on a pipeline leading from the tank was opened to purge possible butadiene (BD) from it (since the tank was to be entered for inspection the next day). There was approximately one pound of butadiene liquid (about 2.7 cups liquid volume, with butadiene having a boiling point of about 24 ° F) in the line and /or valve that, when released upon opening of the valve, rapidly vaporized into about 43 gallons of BD vapor (at the bottom of the tank) which rose through the water and expanded to about 58 gallons of BD vapor when it reached the open manhole at the top of the tank. The BD vapor displaced the 210 ° F water in the tank, causing it to spill out the 18" diameter manhole on the top of the tank and onto the three employees located below the tank. The employee exposure to scalding water resulted in one fatality and two serious burn injuries. These employees included a Shift Supervisor, a Shipping and Receiving Supervisor, and a Frucon Construction Corp contractor Maintenance worker under the control of BASF Corp.
[Court File No. 19, Exhibit D](emphasis added).
Accordingly, the Court finds there is no genuine issue of material fact that BASF Corporation had the right to exercise control over the butadiene tank decontamination, including John Edmonds' role in that decontamination/cleaning. In fact, the undisputed evidence before the Court shows that on December 5, 2001, BASF not only had the right to exercise control over the processes and procedures of the butadiene tank decontamination, it actually did exercise such control by telling John Edmonds that it had changed the procedure for the decontamination/cleaning — by shortening the period of time that the butadiene tank was to be filled with hot water by a 12-hour period and by scheduling an inspection of the butadiene tank based upon the shortening of the decontamination/cleaning period. Further, a BASF supervisor — Dale Poole — directed John Edmonds to take steps to being pumping the very hot water from the butadiene tank based upon BASF's change to the decontamination procedure.
Thus, for the reasons set forth in detail in the discussion above, the Court finds there is no genuine issue of material fact and that as a matter of law at the time of the December 5, 2001 accident which claimed the life of plaintiff's decedent, Samuel Franklin Anderson, John Edmonds, although he was on the payroll of Fru-Con, was an employee "loaned" to BASF for the purpose of assisting BASF in the performance of one its tasks related to the operations of the Polymer Drive plant, the decontamination/cleaning of one of the butadiene tanks. Accordingly, plaintiff's negligence action against FCCE, FCTS, and FCEI is barred by the sole remedy provision of the Tennessee worker's compensation law, Tenn. Code Ann. § 56-6-108.
C. Intended Third-Party Beneficiary
Plaintiff also seeks damages from FCCE, FCTS and FCEI on the ground that her decedent, Samuel Franklin Anderson, was a third-party beneficiary of the Master Agreement between BASF and Fru-Con.
Under Tennessee law, contracts generally are "presumed to be `executed for the benefit of the parties thereto and not third persons.'" Owner-Operator Independent Drivers Ass'n, Inc. v. Concord EPS, Inc., 59 S.W.3d 63, 68 (Tenn. 2001) (quoting Oman Constr. Co. v. Tennessee Cent. Ry. Co., 370 S.W.2d 563, 572 (1963)). However,
third parties may enforce a contract if they are intended beneficiaries of the contract. See Willard v. Claborn, 220 Tenn. 501, 419 S.W.2d 168, 169 (1967); Moore Constr. Co. v. Clarksville Dept. of Elec., 707 S.W.2d 1, 9 (Tenn.Ct.App. 1985). If, on the other hand, the benefit flowing to the third party is not intended, but merely incidental, the third party acquires no right to enforce the contract. Willard, 419 S.W.2d at 170. In order to maintain an action as intended beneficiary, the third party must show: "(1) a valid contract made upon sufficient consideration between the principal parties and (2) the clear intent to have the contract operate for the benefit of a third party." First Tennessee Bank Nat'I Ass'n v. Thoroughbred Motor Cars, Inc., 932 S.W.2d 928, 930 (Tenn.Ct.App. 1996) (citing United American Bank of Memphis v. Gardner, 706 S.W.2d 639, 641 (Tenn.Ct.App. 1985)). The evidence of intent to confer a benefit must be clear and direct:
It must appear, in order that a third person may derive a benefit from a contract between two other parties, that the contract was made and entered into directly or primarily for the benefit of such third person, and before he can avail himself of the exceptional privilege of suing for a breach of agreement to which he is not a party he must at least show that it was intended for his direct benefit.Abraham v. Knoxville Television, Inc., 757 S.W.2d 8, 11 (Tenn.Ct.App. 1988). Owner-Operator, 59 S.W.3d at 68-69. Finally,
where "the terms of the contract itself or the circumstances surrounding its execution clearly indicate the contract was intended to operate to the benefit of some third person," the beneficiary though not a party to the contract, may maintain an action against the promisor . . .
third-party beneficiaries c[an] be grouped into three classifications:
First, where the performance of the promise will constitute a gift to the beneficiary; the beneficiary is a donee beneficiary. Second, if no purpose to make a gift appears from the terms of the contract and the performance of it will satisfy an actual or supposed asserted duty of the promise to the beneficiary; the beneficiary is a creditor. Third, in all other cases the beneficiary is deemed to be an incidental beneficiary.Owner-Operator, 59 S.W.3d at 69 (quoting Willard v. Claborn, 419 S.W.2d 168, 170 (1967)). Therefore,
A third party is an intended third-party beneficiary of a contract, and thus is entitled to enforce the contract's terms, if
(1) The parties to the contract have not otherwise agreed;
(2) Recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties; and
(3) The terms of the contract or the circumstances surrounding performance indicate that either:
(a) the performance of the promise will satisfy an obligation or discharge a duty owed by the promisee to the beneficiary; or
(b) the promisee intends to give the beneficiary the benefit of the promised performance.Id. at 70.
A review of the Master Agreement [Court File No. 19, Exhibit A] reveals that the agreement is between BASF and Fru-Con. There is no express intent in the Master Agreement that either of the parties intended to bestow a benefit upon any third party; and there is no indication in the agreement, nor has plaintiff argued that Samuel Anderson was either a creditor or donee beneficiary of BASF.
In Article V of the Master Agreement, Fru-Con agreed to certain responsibilities for work which it was required to perform under the contract. [Court File No. 19, Exhibit A, p. 2]. Likewise, Fru-Con agreed to maintain insurance, and to indemnify BASF [Court File No. 19, Exhibit A, Article VII, Article IX]. Finally, FCCE agreed to:
warrant that the Work, shall conform to the requirements of all applicable Federal, State and local laws, regulations, rules and orders . . . it is specially understood that BASF is an Equal Opportunity Employer and CONTRACTOR warrants that CONTRACTOR complies with the Fair Labor Standard Act of 1938, as amended.
[Court File No. 19, Exhibit A, Article XVII, subsection F].
While it may be argued that BASF's employees at the Chattanooga area plants were third-party beneficiaries of these portions of the agreement, these portions of the agreement applied only to work which FCCE, FCTS or FCEI was obligated/required to perform under the Master Agreement and the purchase orders issued pursuant thereto. However, as is set forth in detail, supra, the decontamination/cleaning of the butadiene tank was not something which fell within the scope of work which FCCE, FCTS or FCEI contracted to perform under the Master Agreement, nor did the terms of BASF's purchase order for John Edmonds' labor make the butadiene tank decontamination/cleaning an obligation of FCCE, FCTS or FCEI. Rather, as is stated above, the evidence set forth in the pleadings of the parties show that the butadiene tank decontamination/cleaning was a production function of the Polymer Drive plant which BASF had not delegated/assigned to FCCE, FCTS or FCEI under the Master Agreement.
Thus, assuming arguendo that there might be circumstances where BASF employees would be third-party beneficiaries of the Master Agreement, those situations would be limited to those acts of Fru-Con which it was obligated to perform at BASF's Chattanooga area plants pursuant to the Master Agreement. However, in this instance, the butadiene tank decontamination/cleaning was a production function of BASF and was not within the scope of duties FCCE, FCTS or FCEI had agreed to perform under the Master Agreement. Moreover, as is explained in detail above, the butadiene tank decontamination/cleaning was being performed by BASF employees — including John Edmonds who had been loaned by Fru-Con to BASF. Hence, as the butadiene tank decontamination was not being performed by Fru-Con employees pursuant to the terms of the Master Agreement, plaintiff's decedent, Samuel Anderson, was not a third-party beneficiary of the Master Agreement under the facts of this case.
Accordingly, plaintiff's motion for summary judgment [Court File No. 16] will be DENIED; and defendants' motion for summary judgment [Court File No. 17] will be GRANTED.
A separate judgment will enter.
JUDGMENT
In accordance with the accompanying memorandum opinion, it is ORDERED and ADJUDGED that plaintiff's motion for summary judgment [Court File No. 16] is DENIED; and defendants' motion for summary judgment [Court File No. 17] is GRANTED. The plaintiff's claims are DISMISSED WITH PREJUDICE. The defendants are entitled to JUDGMENT in their favor. Costs are awarded to the defendant. The Clerk shall close the file.