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An oil refinery company did not have a duty of care to a worker who was injured in an oil pump explosion.
In Grice v. CVR Energy Inc., a three-judge panel of the 10th U.S. Circuit Court of Appeals affirmed on Tuesday a district court’s ruling granting summary judgment to the CVR Energy Inc. of Sugar Land, Texas, holding that the company did not assume responsibility for workplace safety at the oil refinery.
Benjamin Grice, an employee of Coffeyville, Kansas-based Coffeyville Resources LLC, had been working at an oil refinery when an oil pump exploded, causing him to suffer severe burns. The explosion killed one of his co-workers. Investigators found that the excessive wear and tear caused the pump’s rotating parts to contact and shattered the pump’s seal. It is undisputed in the record that a double mechanical seal would have prevented the explosion.
Mr. Grice received workers compensation benefits for his injuries and filed a complaint against his employer’s parent company under the theory of assumption of liability. He argued that CVR Energy had assumed responsibility for workplace safety by entering into a services agreement. A district court granted summary judgment to the CVR, concluding that the agreement merely provided “a cost-allocation mechanism for shared services.” Mr. Grice appealed.
The 10th U.S. Circuit Court of Appeals affirmed the decision. Although Mr. Grice argued that the service agreement “unambiguously proves” that CVR Energy undertook duties necessary to protect workers from harm, the court disagreed, finding that the agreement created a system for CVR and its subsidiaries to share in the cost of operating the business. Although the agreement states that CVR would provide services including safety and environmental advice, the court disagreed with Mr. Grice’s assertions that these were “unequivocal descriptions” and that without further context, there is “little hint regarding the scope and nature of the management services or safety advice.”
The appellate court found that there would be “no reason to give safety advice to Coffeyville if CVR Energy was ultimately responsible for workplace safety from the ground up,” which suggests that the company only retained a level of control similar to “ordinary parental oversight” of subsidiaries.
As a result, the court held that Mr. Grice failed to present evidence that CVR treated the agreement as obligating the parent company to provide comprehensive safety services, and that therefore, CVR Energy did not assume a duty to Mr. Grice.
Neither attorney in the case immediately responded to requests for comment.
California regulators have announced final approval of new regulations aimed at preventing incidents such as the 2012 Chevron Corp. fire at oil refineries.