459 P.3d 1162
Alaska2020Background
- Baker Hughes Oilfield Operations (BHOO) signed an April 2013 construction contract with UIC Construction to build a replacement Baker Petrolite facility; Baker Hughes and Baker Petrolite are related corporate entities (parent/subsidiaries).
- UIC employees (the workers) were exposed to hazardous fumes during the project, received workers’ compensation from their employer UIC, and later sued Baker Hughes, BHOO, and Baker Petrolite for negligence.
- The Baker entities moved for summary judgment, arguing they were "project owners" under AS 23.30.045(f)(2) and thus protected by the Act’s exclusive-remedy provision (AS 23.30.055).
- The superior court granted summary judgment, concluding all three corporations "engaged the services" of the contractor and "enjoyed the beneficial use" of the work; it relied on contract language (indemnities, additional-insureds), a June 2013 letter, and an assignment document.
- On appeal the Alaska Supreme Court held that "project owner" status requires actually contracting for the work (i.e., engaging the contractor’s services by contract) and enjoying the beneficial use of the work, found genuine factual disputes (assignment, who hired/oversaw UIC, and the preliminary-letter effect), and ruled indemnity clauses do not control statutory status.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a "project owner" under AS 23.30.045(f)(2) may include non-contracting affiliates | "Project owner" requires the entity that actually made the contract with the contractor (BHOO only) | Project owner status can extend to related entities that participated or benefited; contract/integration clauses and indemnities bind affiliates | Held: "Project owner" requires engaging the contractor's services by contract and enjoying the beneficial use; affiliates are not project owners merely by participation or affiliation |
| Whether contractual indemnity/additional-insured provisions can make an affiliate a statutorily defined project owner | Indemnities do not alter statutory definitions; statutory status controls | Indemnity/insurance clauses and contractual assignments show potential liability and thus project-owner status | Held: Contractual indemnities/insurance requirements do not satisfy the statutory definition; statutory definitions control whether an entity is a project owner |
| Whether the assignment and June 2013 letter established Baker Petrolite as a project owner at time of injury | Assignment and the preliminary-letter do not conclusively show Baker Petrolite contracted for the work or that UIC consented; facts disputed | Assignment and the letter prove Baker Petrolite was beneficiary/assignee, so a project owner | Held: Material factual disputes exist about the validity/date/effect of the assignment and the letter; summary judgment inappropriate |
| Whether parent corporation status alone makes parent a project owner | Parent status alone insufficient; must meet statutory elements | Parent (Baker Hughes) is potentially liable through corporate relationships and contractual provisions; should be protected by exclusive remedy | Held: Parent status alone does not make an entity a project owner; must show the parent engaged the contractor by contract and enjoyed the beneficial use |
Key Cases Cited
- Cornelison v. TIG Ins., 376 P.3d 1255 (Alaska 2016) (summary judgment standard; review de novo)
- Bachner Co. v. State, 387 P.3d 16 (Alaska 2016) (statutory interpretation principles)
- Norville v. Carr-Gottstein Foods Co., 84 P.3d 996 (Alaska 2004) (contract interpretation may present factual questions)
- Schiel v. Union Oil Co. of California, 219 P.3d 1025 (Alaska 2009) (discussion of the chain-of-contracts concept for project-owner liability)
- Nelson v. Municipality of Anchorage, 267 P.3d 636 (Alaska 2011) (application of project-owner definition within a chain of contracts)
- Anderson v. Alyeska Pipeline Service Co., 234 P.3d 1282 (Alaska 2010) (consideration of contract terms when determining project-owner status)
- Trudell v. Hibbert, 272 P.3d 331 (Alaska 2012) (project owners contracted with injured employee's employer)