JUNE BERGEN v. ABLE ENERGY, INC.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5074-06T35074-06T3

A-5095-06T3

JUNE BERGEN,

Plaintiff-Appellant,

v.

ABLE ENERGY, INC., ABLE

ENERGY PROPANE, L.L.C., ABLE OIL

COMPANY,

Defendants-Respondents,

and

JOHN BAER, TIMOTHY HARRINGTON,

CHRISTOPHER P. WESTAD,

Defendants.

________________________

BRITTANY WILSON and RICHARD

WILSON, her spouse,

Plaintiffs-Appellants,

v.

ABLE ENERGY, INC., ABLE

ENERGY PROPANE, L.L.C., ABLE

OIL COMPANY,

Defendants-Respondents,

and

CHRISTOPHER P. WESTAD,

JOHN BAER, TIMOTHY HARRINGTON,

Defendants.

_________________________________________________

 

Argued September 17, 2008 - Decided

Before Judges Stern, A. A. Rodr guez and Payne.

On appeal from Superior Court of New Jersey,

Law Division, Sussex County, L-106-05 and

L-147-05.

Anthony M. Arbore argued the cause for

appellant June Bergen (Forster & Arbore,

attorneys; Mr. Arbore, on the joint brief).

Steven J. Loewenthal argued the cause for

appellants Brittany and Richard Wilson

(Nusbaum, Stein, Goldstein, Bronstein &

Kron, attorneys; Mr. Loewenthal, on the joint brief).

Iram P. Valentin argued the cause for

respondents (Kaufman Dolowich & Voluck, LLP,

attorneys; John R. Gonzo, of counsel; Mr.

Valentin and Michael T. Miano, on the brief).

PER CURIAM

In these consolidated appeals by plaintiffs June Bergen, Brittany Wilson and her husband Richard Wilson from orders granting summary judgment in favor of defendants Able Energy, Inc., Able Energy Propane, L.L.C., and Able Oil Co. (collectively, Able) John Baer, Timothy Harrington, and Christopher Westad and denying reconsideration, the plaintiffs challenge the motion judge's conclusion that their tort claims, arising from a propane gas explosion at the workplace of June Bergen and Brittany Wilson, are barred by the exclusivity provisions of the Workers' Compensation Act, set forth in N.J.S.A. 34:15-8, and that the employer's conduct did not constitute an "intentional wrong." Plaintiffs argue additionally that defendants' motion for summary judgment was premature, since it was filed before the conclusion of the period for discovery, although heard after discovery had closed. We disagree with plaintiffs' arguments, and affirm.

I.

Discovery conducted in connection with this case, including answers to interrogatories and depositions by plaintiffs, and in an extensive investigation of the accident by the federal Occupational Health and Safety Administration (OSHA) provides the following factual background of this matter, which we view in a light most favorable to plaintiffs. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995); Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998).

Both Wilson and Bergen were employees of Able Oil Company, working in the office of its facility in Newton, New Jersey. Bergen worked as a dispatcher; Wilson worked at the time of the accident on accounts payable. On March 14, 2003, at approximately 5:00 p.m., during the course of an illegal truck-to-truck transfer of propane at the facility, the receiving "bobtail" truck, driven by defendant Baer, pulled away without disconnecting the hoses between the two vehicles. As a result, the lines broke and a propane leak occurred, followed very shortly thereafter by massive explosions. Both plaintiffs claim physical and psychological injuries as the result of the explosion, which took place after the plaintiffs had left their employer's building but while they were fleeing.

As described by Wilson in her interrogatory answers:

Plaintiff had run from the building because she had heard and seen propane leaking from a broken hose, and because she had been told to run from the building. As a result of the incident . . . Plaintiff ran from the building, through the gates and across Diller Avenue, looking behind her several times as she ran. Plaintiff does not recall if she fell, if she twisted her body, or how she hurt herself.

Bergen stated in her interrogatory responses:

At approximately 5:00 p.m. on 3/14/03 I was in the back office when I heard a very loud hissing noise. Brittany Wilson who worked in the propane department was in the office also. Not knowing what the noise was, we looked at each other sensing something was wrong. Brittany went to the entrance and could see a large white cloud of propane. Jeannie Pelt from customer service yelled "get out" several times. Brittany yelled to me "it's propane." Following behind Brittany we had run into the propane in the air to get out of the office building. It was coming into the office from an open side door. That door is where the transporter was parked and where the propane trucks refilled. I ran as fast as I could still behind Brittany. I remember being by a house that is just past Able's entrance when I heard the first explosion in a series of several explosions, which was followed by debris flying, trucks and vehicles were on fire and being torn apart, buildings were being blown into the air with papers flying everywhere. I remember ducking my head and covering my ears. I kept looking back as I ran. I could hardly breathe. I had to stop a couple of times to catch my breath. We ran and ran until we stopped on Newton/ Sparta Road just past the Quick Chek.

In depositions taken by OSHA following the event, both Timothy Harrington, the Chief Executive Officer of Able Energy, and Christopher P. Westad, its President, admitted that they were aware that transporter-to-bobtail transfers of liquid propane gas had been regularly occurring at the Newton facility since August 2000. The practice commenced because of the distances involved in driving bobtails to Able's fixed-tank facilities in Newark and Pennsylvania. Neither Harrington nor Westad admitted to knowledge that the practice was illegal. Westad acknowledged that he had expressed safety concerns regarding the transfers to Harrington and had suggested that Able should accelerate its ongoing process of obtaining approval for an additional fixed facility in Rockaway. However, he testified to no specific concerns regarding the present transfer practices, stating:

Well, I guess, in my mind, by the very design of the fixed storage transfer operation, that inherent in the design of that, were going to be issues and measures that would be safer.

You know, specifically I had never noted them out in my mind, nor did I have a discussion with anybody about them, but, you know, it was a goal that we were aiming towards and it was also an operation which I mean, it just it was, you know, you have a fixed storage facility. You have 30 or 60 or 90,000 gallons of product and you are not running out all the time.

According to Westad, Harrington agreed with him that they needed to accelerate the process of obtaining approvals in Rockaway, and they contacted Able's lawyers for that purpose. In total, Westad expressed his concerns to Harrington "a handful" of times, and was assured that the company was doing what it could. Approvals for the use of the Rockaway location as a fixed propane storage facility were eventually denied.

The record discloses that Westad was considered to be the executive in the company with experience in the sale and delivery of propane, whereas others focused primarily on the company's oil delivery business. Westad testified that he was unaware of OSHA regulations applicable to propane storage and transfer. He understood that the New Jersey Department of Community Affairs (DCA) had some regulatory authority over propane, and he stated he was familiar with the National Fire Protection Association's standard no. 58, applicable to liquefied propane gas, but he did not check whether Able's operations complied with that standard. Able had never sought to register its propane business with OSHA or the DCA, and for that reason, its Newton facility was not inspected by those entities. However, other inspections occurred.

Brittany Wilson and Able employee Donna Snook confirmed that inspections by some agency took place and stated that, upon notice of an upcoming inspection, the transporter truck was moved off-premises, and the drivers of the bobtails were instructed not to seek to load propane at such times. There was also testimony that the odor of propane was at times present, but complaints were ignored by management, that employees were not properly instructed not to smoke in the vicinity of the transfer operations, and that Able did not provide emergency safety training.

Westad testified that the practice of transferring propane from a transporter to a bobtail commenced while he was on vacation in the summer of 2000. Upon his return, he questioned Operations Manager, Jack Smalley, who was responsible for safety at Newton. Smalley explained the precautions that were undertaken by the bobtail drivers, stating that upon arrival at the facility, the drivers turned off the ignition, hooked the keys over the loading port of the bobtail, chocked the wheels, and turned off all electrical devices and cell phones. They then connected the vapor and liquid lines extending from the transport vehicle, which also had chocked wheels, started the transport, and engaged the valves. During the fill process, the drivers remained in the immediate vicinity of their bobtail. In reliance upon the experience of the drivers, Westad found these procedures to be satisfactory.

The described procedures were not followed by John Baer, the driver whose actions caused the explosions on March 14, 2003. According to statements and admissions by him, he failed to remove the ignition keys from the bobtail, did not chock the wheels of that truck, engaged in two cell phone conversations while loading the propane, and smoked in and around the loading area. Additionally, as previously stated, he drove away from the facility without unhooking the liquid and vapor lines, causing their rupture. Liquid propane, spewing from the fuel line, rapidly vaporized and was ignited. Multiple explosions resulted causing property damage and personal injury but, fortunately, no deaths. The ignition source was never identified. However, more than one such source existed in an area dangerously close to the fuel transfer operations. Additionally, the fueling process itself was occurring at a location in too close proximity to Able's office.

The record indicates that Baer had been fired from his previous job because of unsafe practices, including driving off without disconnecting lines. However, that fact was not known to Able because it did not conduct its usual investigation of applicant qualifications, but instead relied on the recommendations of Westad and another Able employee to whom Baer was known as an experienced propane truck driver.

Following the explosion, the DCA cited Able for thirteen violations of the New Jersey Administrative Code, including (1) the operation, in general, of an illegal liquid transfer site in violation of N.J.A.C. 5:18-1.3; (2) failure to obtain approval for the facility in violation of N.J.A.C. 5:18-6.1; (3) illegal storage of propane in violation of N.J.A.C. 5:18-3.3(o); (4) allowing storage and transfer to occur too close to buildings in violation of N.J.A.C. 5:18-3.3(b) and (c); (5) operating the Newton facility without sufficient signage and warnings to designate non-smoking areas in violation of N.J.A.C. 5:18-3.3(m); (6) utilization of improper procedures by John Baer in violation of N.J.A.C. 5:18-3.1(b) and NFPA-58-1998; and (7) performance of illegal truck-to-truck transfers in violation of N.J.A.C. 5:18-3.3(o). A total penalty of $414,000 was imposed.

Additionally, Able received eight citations from OSHA including (1) failure to maintain a safe facility as the result of the truck-to-truck transfers in violation of Section 5(a)(1) of the OSHA statute; (2) failure to maintain an attendant in close proximity to the transfer operation in violation of 29 C.F.R. 1910.110(b)(14)(1); (3) failure to maintain operations at least fifty feet from Able's work site in violation of 29 C.F.R. 1926.110(v)(14)(vi); maintenance of open flames within the path of escaping propane vapors in violation of 29 C.F.R. 1926.110(b)(17)(v); (4) failure to develop and implement an emergency response plan in violation of 29 C.F.R. 1910.110(q)(1); and (5) failure to provide information and training to employees relating to the hazardous materials present on the work site in violation of 29 C.F.R. 1910.1200(h)(1). A penalty of $21,700 was imposed.

As a final matter, on July 27, 2005, Able pled guilty to fourth-degree criminal mischief in violation of N.J.S.A. 2C:17-3. In an authorized statement constituting the factual basis for the plea Westad admitted:

Able Propane, L.L.C. operated a propane business, at 38 Diller Avenue, Newton, New Jersey. And on March 14th, 2003, an explosion occurred at the Able property. The explosion occurred in connection with an Able Propane L.L.C. employee negligently handling propane[, a] harmful or destructive substance.

The explosion caused damage to multiple properties.

The cumulative total amount of damage to these properties was in excess of $500.

II.

N.J.S.A. 34:15-8 provides that when, by express or implied agreement, the parties have accepted the provisions of the Workers' Compensation Act, their agreement will constitute a surrender of any other form of compensation. The statute then provides:

If an injury or death is compensable under this article, a person shall not be liable to anyone at common law or otherwise on account of such injury or death for any act or omission occurring while such person was in the same employ as the person injured or killed, except for intentional wrong.

[Ibid. (Emphasis supplied).]

This language, first construed by the New Jersey Supreme Court in Millison v. E.I. DuPont De Nemours & Co., 101 N.J. 161 (1985), has been interpreted as requiring either an intent to harm or knowledge by the employer that injury or death is substantially certain to result from the risk presented. Id. at 178. As the Court stated in Millison,

We are confident that the quid pro quo of workers' compensation -- employer makes swift and certain payment without regard to his own fault in exchange for immunity from liability at law -- can best be preserved by applying the "intent" analysis of Dean Prosser to determine what is an "intentional wrong" within the meaning of the Act. According to Prosser,

the mere knowledge and appreciation of a risk -- something short of substantial certainty -- is not intent. The defendant who acts in the belief or consciousness that the act is causing an appreciable risk of harm to another may be negligent, and if the risk is great the conduct may be characterized as reckless or wanton, but it is not an intentional wrong.

[W. Prosser and W. Keeton, [The Law of Torts], 8 at 36 [(5th ed. 1984)]].

See also Restatement 2d of Torts, 8A (meaning of intent is that actor desires to cause consequences of his act or is substantially certain that such consequences will result from his actions).

[Millison, supra, 101 N.J. at 177-78.]

See also Laidlow v. Hariton Mach. Co., Inc., 170 N.J. 602, 610-17 (2002) (clarifying and adhering to Millison standard).

When interpreting the "intentional wrong" exception to the workers' compensation bar, the Millison Court found two components to the analysis: the conduct of the employer and the context in which that conduct takes place. In other words, "may the resulting injury or disease, and the circumstances in which it is inflicted on the worker, fairly be viewed as a fact of life of industrial employment, or is it rather plainly beyond anything the legislature could have contemplated as entitling the employee to recover only under the Compensation Act?" Millison, supra, 101 N.J. at 179. While a determination whether the employer's conduct constitutes an intentional wrong is left to a jury, if the facts warrant such a determination by it, the context prong is determined by the judge as a matter of law, based upon facts found by the jury to exist. Laidlow, supra, 170 N.J. at 623.

In determining whether a reasonable jury could find that Able, as the result of its knowledge of the dangers of truck-to-truck propane transfers, was substantially certain that injury would result, we accept as true the fact that propane is an ultrahazardous substance; liquid propane will explode if leaks occur in proximity to an ignition source; Able regarded fixed propane storage as safer than storage in a transport vehicle and transfer from that vehicle; that it sought to conceal its use of a transport vehicle from inspecting authorities; and that it failed to confirm the qualifications of John Baer as a propane truck driver, who in fact was unqualified. We also accept that prior complaints of propane leakage were unaddressed, that areas in which smoking was not permitted were not clearly defined, and that smoking occurred in dangerous proximity to propane transfer operations. Additionally, we note the extensive list of regulatory violations of a serious nature found by OSHA and the DCA after the explosion occurred. Nonetheless, viewing the record as a whole, as we are required to do by Laidlow, supra, 170 N.J. at 623, and Mull v. Zeta Consumer Prods., 176 N.J. 385, 392 (2003), we cannot conclude that a jury could find that Able knew that its actions were substantially certain to result in injury.

We reach this conclusion for a number of reasons. First, although it can be inferred from the fact that Able moved its transport truck prior to announced inspections that it viewed its storage and transfer operation as hazardous, there is no evidence in the record that Able executives knowingly violated the specific State and Federal regulations for which they were later cited. Indeed, Westad professed no knowledge that propane transfer operations were regulated by OSHA, and he was unfamiliar with the DCA's regulatory provisions, although he recognized their existence. Second, no prior OSHA or DCA violations pertaining to Able's propane operations appear to have existed albeit a circumstance undoubtedly resulting from Able's non-commendable failure to register with the appropriate regulatory agencies. Third, Able had in place certain procedures that, if followed by the drivers of its propane trucks, would significantly reduce the hazards associated with truck-to-truck propane transfers and likely prevent a driver from pulling away with the transfer lines still attached. And fourth, the negligence of John Baer in driving away without disconnecting the lines between his bobtail and the transport truck, in clear violation of established procedures, was a substantial, and at least partially unforeseeable cause of the explosion.

On appeal, plaintiffs argue that their cases "stand[] on all fours" with Laidlow, Mull and Crippen v. Central Jersey Concrete Pipe Co., 176 N.J. 397 (2003), cases in which grounds for application by the jury of the intentional wrong exception was found to exist. We cannot accept that conclusion. Both Laidlow and Mull were cases in which safety devices had been deactivated. In Laidlow, a guard, designed to protect a dangerous nip point in a rolling mill, was inactivated except at times of OSHA inspections. Prior to the plaintiff's accident, there had been several other occasions where employees' gloves were engaged by the nip point but the employees had escaped injury. The plaintiff, himself, had requested on three occasions that the guard be replaced. The danger was clear; the accident that took place was exactly of the sort that the employer would have anticipated, and it occurred in an anticipated manner. Laidlow, supra, 170 N.J. at 620-21.

The facts of Mull closely resembled those of Laidlow, in that a safety interlock switch, which would have prevented the operation of the winder machine upon which the plaintiff was injured while the safety cover was open, had been removed, and the wiring had been modified in a fashion that permitted the winder to automatically start without operator intervention if a companion piece of equipment was activated. Mull, supra, 176 N.J. at 388. No warnings were supplied, and employee complaints were ignored. Id. at 388-89. Moreover, the employer had failed to provide its employees with lockout-tagout procedures, despite having been cited by OSHA for that deficiency. And finally, another employee had been injured when his hand was pulled into the winder, although the accident had occurred in a fashion different from that in issue. Id. at 388. These facts, the Court held, provided grounds for a finding by a reasonable jury that the employer's conduct created a substantial certainty of injury consistent with case law, including Laidlow. Id. at 392.

In Crippen, the employer had failed to cure "serious" hazardous conditions for which it had previously been cited by OSHA, while misleading it with respect to the status of its abatement activities. As a consequence, the plaintiff fell into a sand hopper a permit-required confined space and was suffocated by incoming sand. 176 N.J. at 399-400, 403-04. In determining that a jury could find that the intentional wrong exception had been proven, the Court recognized that the absence of prior accidents was not dispositive. Id. at 408 (citing Laidlow, supra, 170 N.J. at 621). Further, it noted that in a deposition conducted after summary judgment had been granted, the environmental health and safety manager of the company admitted that he knew there was a substantial certainty that an employee could die in one of the employer's permit-required confined spaces. Id. at 410. The Court then held:

Despite defendant's knowledge of the dangerous conditions found by OSHA to have existed approximately eighteen months prior to Crippen's death, defendant deliberately failed to correct the OSHA violations and intentionally deceived OSHA into believing that it had abated the violations because it did not want OSHA to return to the plant. "By its deception, a jury could conclude that [defendant] evidenced an awareness of the 'virtual' certainty of injury from" its failure to correct the safety hazards. Laidlow, supra, 170 N.J. at 621.

[Ibid.]

We regard the circumstances of Laidlow, Mull and Crippen to be different from the circumstances of the present case, an analysis of which compels a different result. See Laidlow, supra, 170 N.J. at 619 (holding that whether the intentional wrong standard can be met requires a case-by-case analysis). Although we have no doubt that the conduct of Able was negligent, and likely reckless, particularly given the hazardous nature of propane when stored or transferred improperly, nothing suggests to us any knowledge on Able's part that an accident, occurring as it did, was essentially inevitable. Indeed, to the extent that Able envisioned circumstances similar to what occurred, Able sought to guard against them, albeit ineffectively. In the circumstances presented, we do not regard attempts by Able to avoid disclosure of their transfer operations, the company's ignorance of governing regulations, its non-compliance with those regulations, and its failure to sufficiently respond to complaints of prior propane leaks, occurring for reasons other than those at issue here, to provide the evidence necessary for a jury to conclude that an intentional wrong occurred. Nor does Able's plea of guilty to fourth-degree criminal mischief provide the necessary factual foundation, since Able admitted only to the negligence of its driver. See N.J.S.A. 2C:17-3a(1) (criminal mischief); N.J.S.A. 2C:2-2 (culpability) and N.J.S.A. 2C:2-7 (liability of corporation for conduct of employee).

III.

In response to defendants' summary judgment motion, plaintiffs cross-moved to compel answers to interrogatories and responses to document demands, and at oral argument, they sought an extension of discovery to permit depositions of Able employees and submission of expert reports. Plaintiffs claimed that they had been misled by statements of defense counsel at a settlement conference, which led plaintiffs to believe that liability was not being contested. The judge denied the plaintiffs' discovery motion.

On appeal, plaintiffs argue that the judge erred in this regard, and that entry of summary judgment was premature. We recognize that such an argument was successful in Crippen, supra, 176 N.J. at 409-10 and in Laidlow, supra, 170 N.J. at 619-20. Nonetheless, we reject it here because the discovery sought by plaintiffs from Able was substantially provided as the result of OSHA's extensive investigation of the accident, which included multiple depositions of Able employees, including Harrington and Westad, as well statements by Baer and other investigatory materials. For purposes of this appeal, we have assumed the hazardous nature of propane and that dangers of propane leakage and explosion inhere in the use of truck-to-truck liquid propane transfers, thereby obviating the need for expert testimony on that issue. We do not regard whether a driver will negligently drive from the site with supply and vapor lines still attached to constitute an issue susceptible to expert testimony. As a consequence, we do not find that the gaps in the record recognized in Laidlow and Mull exist in this case or that the judge's discretionary determination not to extend discovery prior to granting summary judgment to constitute reversible error.

Affirmed.

Richard Wilson has sued for loss of consortium.

According to the OSHA accident summary, "bobtail is an industry term for a truck equipped with a large capacity cargo tank that is typically used to deliver fuel to residential customers and retail users."

National Fire Protection Association.

Truck-to-truck transfers are not specifically prohibited by OSHA.

We need not consider the motion judge's conclusions that plaintiffs as office workers were not the foreseeable victims of the conduct at issue and that their injuries were not of the type to which the intentional wrong exception to the workers' compensation bar applied.

We regard the hazardous nature of the substance as a factor in determining the degree of risk occurring as the result of Able's conduct.

(continued)

(continued)

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A-5074-06T3

February 2, 2009