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Scott v. Hydra-Walk, Inc.

United States District Court, D. North Dakota

September 18, 2019

Lukeus Scott, Plaintiff,
Hydra-Walk, Inc.; and Key Energy Services, Inc. d/b/a Hydra-Walk, Inc., Defendants.


          Daniel L. Hovland, United States District Court Chief Judge.

         Before the Court is Defendants Hydra-Walk, Inc. and Key Energy Services, Inc. d/b/a Hydra-Walk, Inc.’s motion for summary judgment filed on December 13, 2018. See Doc. No. 19. The Plaintiff filed a response to the motion on February 1, 2019. See Doc. No. 31. The Defendants filed a reply on February 13, 2019. See Doc. No. 34. For the reasons set forth below, the motion for summary judgment is granted.

         I. BACKGROUND

         The Plaintiff, Lukeus Scott, has alleged claims for products liability/strict liability and negligence, asserting his employer Key Energy Services, Inc. (“Key Energy”) is bound by successor liability to answer for the design, manufacture, sale, and leasing of a Hydra-Walk system, which he alleges was defective and unreasonably dangerous.

         Hydra-Walk, Inc. (“Hydra-Walk”) designed and manufactured the Hydra-Walk pipe-handling system which was utilized by the oil and gas industry to pick up and lay down pipe. The Hydra-Walk system consists of a pipe-sled and ramp on a platform which is raised and lowered by hydraulics, all controlled by an operator who stands on the ground at the control panel of the Hydra-Walk system and manipulates the controls.

         On June 12, 2013, Key Energy employed Lukeus Scott as a Hydra-Walk system operator. At no time was Scott employed by Hydra-Walk. On June 24, 2013, Scott sustained injuries while working at an equipment yard near Dickinson, North Dakota. He was performing maintenance tasks on a Hydra-Walk system when it became unstable and overturned, crushing him. As a result, Scott alleges he sustained severe injuries to his spine, right hand, legs, and internal organs.

         Key Energy was Scott’s employer at the time he suffered injuries caused by the Hydra-Walk system. As a result of a 2008 purchase agreement, Key Energy and Hydra-Walk merged. Key Energy is the surviving entity and Hydra-Walk ceased to exist as a separate entity. Key Energy now owns the equipment and patents it acquired as a result of the merger with Hydra-Walk. After the merger, the Hydra-Walk system was no longer manufactured. Key Energy continues to provide Hydra-Walk pipe-handling services, by renting the Hydra-Walk units and supplying the employees necessary to operate them for use on Key Energy drilling rigs as well as competitors’ drilling rigs. The Hydra-Walk unit that injured Scott was designed, manufactured, and sold or leased by Hydra-Walk, prior to the 2008 merger of Key Energy and Hydra-Walk. At no time did Key Energy design or manufacture the Hydra-Walk system.

         Key Energy has maintained workers compensation coverage continuously since commencing operations in North Dakota in 1998. See Doc. Nos. 23-24. Key Energy reported Scott’s injury to North Dakota Workforce Safety and Insurance (“WSI”) on June 25, 2013. WSI accepted Scott’s injury claim and awarded benefits under Key Energy’s employer account to Scott. See Doc. No. 23-7. Scott accepted WSI benefits. Scott alleges he has been unable to work since the accident, receiving partial wage loss payment for the past five years and continuing to this day. As of June 12, 2018, WSI made payments on Scott’s claim in the amount of $341, 537.13. See Doc. No. 23-8. The Defendants now move for summary judgment, asserting Scott’s claims are barred under statutory immunity.


         Summary judgment is appropriate when the evidence, viewed in a light most favorable to the non-moving party, indicates that no genuine issues of material fact exist and that the moving party is entitled to judgment as a matter of law. Davison v. City of Minneapolis, Minn., 490 F.3d 648, 654 (8th Cir. 2007); see Fed.R.Civ.P. 56(a). Summary judgment is not appropriate if there are factual disputes that may affect the outcome of the case under the applicable substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue of material fact is genuine if the evidence would allow a reasonable jury to return a verdict for the non-moving party. Id. The purpose of summary judgment is to assess the evidence and determine if a trial is genuinely necessary. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

         The Court must inquire whether the evidence presents a sufficient disagreement to require the submission of the case to a jury or whether the evidence is so one-sided that one party must prevail as a matter of law. Diesel Mach., Inc. v. B.R. Lee Indus., Inc., 418 F.3d 820, 832 (8th Cir. 2005). The moving party bears the responsibility of informing the court of the basis for the motion and identifying the portions of the record which demonstrate the absence of a genuine issue of material fact. Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011). The non-moving party may not rely merely on allegations or denials in its own pleading; rather, its response must set out specific facts showing a genuine issue for trial. Id.; Fed.R.Civ.P. 56(c)(1). If the record taken as a whole and viewed in a light most favorable to the non-moving party could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial and summary judgment is appropriate. Matsushita, 475 U.S. at 587. The Court must consider the substantive standard of proof when ruling on a motion for summary judgment. Anderson, 477 U.S. at 252. Because the Court’s authority over the claims alleged is based on diversity jurisdiction, the substantive law of North Dakota applies. Atkinson v. McLaughlin, 462 F.Supp.2d 1038, 1047 (D.N.D. 2006).


         The purpose of workforce safety and insurance law in North Dakota is to ensure certain relief for workplace injuries, regardless of questions of fault. See N.D. Cent. Code § 65-01-01. Thus, an employer may not employ any person in a hazardous employment without first applying for workforce safety and insurance coverage for the protection of its employees. N.D. Cent. Code § 65-04-33. If the employer secures “the payment of compensation to that employer’s employees by contributing premiums to the fund, the employee . . . do[es] not have a claim for relief against the contributing employer . . . for damages for personal injuries, but shall look solely to the fund for compensation.” N.D. Cent. Code § 65-01-08. Thus, when the employer is in compliance with the workers’ compensation statutes, the employee’s exclusive remedy against the employer is limited to recovery under the workers’ compensation statutes (the “exclusive remedy rule”). See Smith v. Vestal, 494 N.W.2d 370, 373 (N.D. 1992); see also N.D. Cent. Code § 65-05-06 (“The payment of compensation or other benefits by the organization [WSI] to an injured employee . . . are in lieu of any and all claims for relief whatsoever against the employer of the injured or deceased employee.”). To that end, civil claims for workplace injuries are generally barred. See N.D. Cent. Code § 65-01-01; see also N.D. Cent. Code § 65-04-28 (“Employers who comply with the provisions of this chapter shall not be liable to respond in damages at common law or by statute for injury to or death of any employee, wherever occurring, during the period covered by the premiums paid into the fund.”). “The sole exception to an employer’s immunity from civil liability under this title . . . is an action for an injury to an employee caused by an employer’s intentional act done with the conscious purpose of inflicting the injury.” N.D. Cent. Code § 65-01-01.1. Because Scott does not claim his injuries were intentionally caused by Key Energy, this exception does not apply.

         There is no dispute that Key Energy is a “contributing employer, ” or that it was in compliance with the workers’ compensation statutes. Key Energy has maintained workers’ compensation coverage since it first commenced operations in North Dakota in 1998, which includes coverage for Scott. It reported Scott’s injury to WSI on June 25, 2013, the day after his injury occurred. WSI accepted Scott’s injury claim and awarded him benefits under Key Energy’s employer account. Scott accepted WSI benefits and has received payments from WSI. As of June 12, 2018, WSI made payments on ...

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