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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Christopher Lovely, Steven Adams, Robert Defoe, Charles Van Curren, and Dustin Leavitt v. Baker Hughes, Inc.; Baker Hughes Oilfield Operations, Inc.; and Baker Petrolite Corporation (3/20/2020) sp-7434

Christopher Lovely, Steven Adams, Robert Defoe, Charles Van Curren, and Dustin Leavitt v. Baker Hughes, Inc.; Baker Hughes Oilfield Operations, Inc.; and Baker Petrolite Corporation (3/20/2020) sp-7434

           Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  REPORTER.  

           Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,  


           303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  



                       THE SUPREME COURT OF THE STATE OF ALASKA                                      


ADAMS,  ROBERT  DEFOE,                                           )    Supreme Court No. S-16967  



CHARLES  VAN  CURREN,  and                                       )  

DUSTIN  LEAVITT,                                                 )    Superior Court No. 3AN-15-06199 CI  




                                                                 )    O P I N I O N  



                                                                 )    No. 7434 - March 20, 2020  



BAKER HUGHES, INC.; BAKER                                        )




INC.; and BAKER PETROLITE                                        )

CORPORATION,                                                     )


                                Appellees.                       )



                     Appeal from the Superior Court of the State of Alaska, Third  


                     Judicial District, Anchorage, Eric A. Aarseth, Judge.  


                     Appearances:   Michael W. Flanigan, Flanigan & Bataille,  


                     Anchorage, for Appellants.   Steven S. Tervooren, Hughes  


                     White Colbo Wilcox & Tervooren, LLC, Anchorage, and  


                     Mark  A.  Solheim and  Stephen  P.  Laitinen,  Larson  King,  


                     LLP, St. Paul, Minnesota, for Appellees.  


                     Before:          Bolger,  Chief  Justice,  Winfree,  Maassen,  and  


                      Carney, Justices.  [Stowers, Justice, not participating.]  


                     MAASSEN, Justice.  

----------------------- Page 2-----------------------

I.          INTRODUCTION  

                        Aconstructioncontractor'semployeeswereinjured onthejoband received  


workers' compensation benefits from their employer.   The workers later brought a  


negligence suit against three other  corporations:                                             the one  that had entered  into  the  


construction contract with their employer, that corporation's parent corporation, and an  


affiliated  corporation  that  operated  the  facility  under  construction.                                                              The  three  


corporations moved for summary judgment, arguing that all three were "project owners"  


potentially liable for the payment of workers' compensation benefits and therefore were  


protected from liability under the exclusive liability provision of the Alaska Workers'  


Compensation  Act.                      The  superior  court  granted  the  motion,  rejecting  the  workers'  


argument  that  status  as  a  "project  owner"  was  limited  to  a  corporation  that  had  a  


contractual relationship with their employer.  


                        We  conclude  that  a  project  owner,  for  purposes  of  the  Act,  must  be  


someone who actually contracts with a person to perform specific work and enjoys the  


beneficial use of that work.   We further conclude that the workers raised issues of  


material fact about which of the three corporate defendants satisfied this definition.  We  


therefore reverse the superior court's grant of summary judgment.  




            A.          The Construction Contract  


                        Baker Petrolite Corporation operated a chemical transfer facility1  on the  


Kenai Spur Highway. A related entity, Baker Hughes Oilfield Operations, Inc., entered  


into  a  construction  contract  with  UIC  Construction,  LLC  for  construction  of  a  


replacement "Baker Petrolite Facility" with more capacity and storage space.  The form  


            1           We note some disagreement in the witness testimony about whether the                                                            

facility would be more properly characterized as a "warehouse."                                                          Because it does not   

appear to be a critical issue, we use the same term as the superior court.                                              

                                                                            -2-                                                                     7434

----------------------- Page 3-----------------------


contract, dated April 5, 2013,  was signed by David Emerson, vice president of Baker  

Hughes Oilfield Operations, as "Owner," and by Chris Phillips for UIC Construction.                                                                                                                            

Both Baker Hughes Oilfield Operations and Baker Petrolite are subsidiaries of Baker                                                                                                           


Hughes, Inc., a Delaware corporation with a principal place of business in Texas.                                                                                                                   

                                The contract purported to represent "the entire and integrated agreement  


betweentheparties[,]. . . supersed[ing]prior negotiations, representationsoragreements,  


either written or oral." The contract listed a number of documents which could pre-date  


or post-date the contract and which were to be considered "as fully a part of the Contract  


as if attached to this Agreement or repeated herein." The contract provided that it would  


govern over any inconsistent documents except a modification.  


                                One contract exhibit included as a "Contract Document" was a June 2013  


letter stating that Baker Petrolite and UIC Construction had reached a "preliminary  


agreement" about "renovation of Baker Petrolite Corporation's existing facility" on the  


Kenai Spur Highway. Like the contract itself, it was signed by Phillips and Emerson, but  


no corporate name accompanied Emerson's signature. The names of both Baker Hughes  


and Baker Hughes Oilfield Operations appeared at the top of the letter.  


                2               The   contract   was   "AIA   Document   A102   -   2007,"   which   contained   a  

provision   that   made   certain  "Contract   Documents,"   including   "Conditions   of   the  

Contract," "fully a part of the Contract."                                                              The parties also signed a form "General                                        

Conditions of the Contract for Construction." The documents were attached as separate                                                                                                     

exhibits in pleadings before the superior court, but we refer to both documents as one                                                                                                              

contract, as the parties apparently intended.                                    

                3               There is no evidence in our record of the precise relationship among the  


three Baker Hughes entities, but the superior court stated in its summary judgment order,  


and the parties appear to agree, that Baker Hughes is the parent corporation and Baker  


Hughes Oilfield Operations and Baker Petrolite are its subsidiaries.  


                                                                                                   -3-                                                                                           7434

----------------------- Page 4-----------------------

                                Several    contract    provisions    are    particularly    relevant    to    the    parties'  

arguments on appeal.                                The contract defined "Owner" generally in  2.1.1 as "the person                                                                        

or entity identified as such in the Agreement" and included in the definition "the Owner                                                                                                    

or   the Owner's authorized                                       representative."     The contract's                                             first page identified                            the  

"Owner"   as   Baker   Hughes   Oilfield  Operations,   Inc.   and   the   "Contractor"   as   UIC  

Construction, LLC.                              At  1.1.2 the contract provided that "[t]he Contract Documents                                                                 

shall not be construed to create a contractual relationship of any kind . . . between any                                                      

persons or entities other than the Owner and the Contractor."                                                                                     

                               In a section addressing indemnification, the contract defined "OWNER"                                                                             

                                           4    Section provided:  

more expansively.                                                                       

                               As  used  in  this  indemnity,  the  name  "OWNER"  means  


                               Owner                  and           its         agents,                employees,                       subcontractors,  


                               independent contractors, officers, and directors, but not any  


                               CONTRACTOR PARTY; and the name "OWNER" means  


                               in  addition  OWNER'S  successors  and  assigns,  all  of  its  


                               affiliated  companies,  and  all  of  its  parent  and  subsidiary  


                               corporations,   but   the   foregoing   excludes   any   separate  


                               contractors performing construction work on the Project.  


For purposes of the indemnity provision, thus, "OWNER" included both "Owner" (i.e.,  


Baker Hughes Oilfield Operations or its "authorized representative") and "its affiliated  


companies." "CONTRACTOR PARTY" was defined in another section to include UIC  


Construction's employees and subcontractors.  


                               One indemnification provision required the "CONTRACTOR . . . to the  


fullest extent permitted by law[] to indemnify . . . OWNER" for damages "from ALL  




out of . . . the injury to or the death of any person, including . . . any natural person  



                               The contractdistinguished terms written in all capital letters fromthose that  


were not.  

                                                                                                  -4-                                                                                                   7434  

----------------------- Page 5-----------------------


included within the definition[] of . . . CONTRACTOR PARTY."  The indemnification  


provision excluded "any liability arising out of the sole negligence or willful misconduct  


of  Owner"  as  well  as  "THE  OWNER'S  SOLE  NEGLIGENCE  AND  WILLFUL  


MISCONDUCT."                        But       another        indemnification              provision          required         the  


"CONTRACTOR[,]  .  .  .  to  the  fullest  extent  permitted  by  law,  to  indemnify  .  .  .  




the extent that such injury [was] covered byworker[s'] compensation laws and benefits."  


In  a  different  section  the  "Contractor"  agreed  to  indemnify  and  hold  harmless  the  


"Owner and its agents and employees from and against claims, damages, losses, and  


expenses . . . arising out of or resulting from the failure of the Contractor to perform its  


obligations . . . as stated in the Contract Documents."  


                    The contract required the "Contractor" to name "[t]he Owner, its affiliates,  


parents  and  subsidiaries  .  .  .  as  insureds  or  additional  insureds"  in  most  of  the  


contractor's  insurance  policies,  but  not  its  workers'  compensation  policy.                                           The  


"Contractor"  was  also  required  to  purchase  workers'  compensation  insurance  and  


provide proof of it to the "Owner."  The "Owner" had "the absolute right to cancel th[e]  


Agreement" if the "Contractor" failed to provide timely proof of workers' compensation  


coverage. The contract set amounts of required insurance coverage, including workers'  


compensation, and provided that the "Owner may (but shall not beobligated to) purchase  


such insurance on the Contractor's behalf and shall be entitled to be repaid by [the]  


Contractor for any premiums paid therefor."  


          B.        The Lawsuit  


                    Christopher Lovely, Steven Adams, Robert DeFoe, Charles Van Curren,  


and Dustin Leavitt (the workers) all worked for UIC Construction on the project.  On  


May 8, 2014, some of UIC's employees sought medical care after breathing fumes with  


a strong odor.  According to a Baker Petrolite incident report, an employee of Baker  

                                                               -5-                                                         7434

----------------------- Page 6-----------------------

Petrolite "was cleaning                                                                           a tote that had last contained [a corrosion                                                                                                                                       inhibitor] which   

contains  mercaptan   and   is very                                                                                                  odorous."     The "odor" from cleaning                                                                                                                         the tote was                       

"transferred" from the existing Baker Petrolite facility "into the new facility via [the]                                                                                                                                                                                                                                            

vent discharge, the open windows/doors of the new facility and the prevailing wind                                                                                                                                                                                                                                                 

direction."    According to the Material Safety Data Sheet, the corrosion inhibitor is                                                                                                                                                                                                                                                          

considered hazardous and when inhaled can cause a number of adverse health effects,                                                                                                                                                                                                             

both   acute   and   chronic,   including   headaches,   dizziness,   and   nausea.     The   workers  

contended that they suffered chronic health problems as a result of their exposure.                                                                                                                                                                                                             

                                                     Theworkersreceived                                                                   workers' compensationfromUICConstruction,their                                                                                                                                                

employer. They later sued Baker Hughes, Baker Hughes Oilfield Operations, and Baker                                                                                                                                                                                                                                              

Petrolite (collectively the corporations), alleging negligence causes of action.                                                                                                                                                                                                         

                                                     The three corporations filed several summary judgment motions.                                                                                                                                                                                                       One of   

them contended that the workers' claims were barred because each of the corporations                                                                                                                                                                                                                  

                                                                                                                                                                                                      5  and thus exempt from liability under  

was a "project owner" as defined by AS 23.30.045                                                                                                                                                                                                                                                                                  

                                                           6       The corporations asserted that they all met the statutory definition of  

AS 23.30.055.                                                                                                                                                                                                                                                                                                                                   


"project owner" because "[t]he Contract states the Owners of the project are [Baker  


Hughes Oilfield Operations] and any of its affiliated companies, including parent and  


                           5                         Alaska   Statute   23.30.045(a),   which   requires   employers   to   "secure   the  

payment to employees of the compensation payable under [the Act]," further provides:                                                                                                                                                                                                                                                                         

"If the employer is a contractor and fails to secure the payment of compensation to its                                         

employees or the employees of a subcontractor, the project owner is liable for and shall                                                                                                                                                                                                                                              

 secure the payment of the compensation to employees of the contractor and employees                                                                                                                                                                                                                          

of a subcontractor, as applicable."                                                                                                       "Project owner" is defined as "a person who, in the                                                                                                                                               

course of the person's business, engages the services of a contractor and who enjoys the                                                                                                                                                                                                                                                     

beneficial use of the work."                                                                                     AS 23.30.045(f)(2).   

                           6                         AlaskaStatute23.30.055provides that workers' compensationis an injured  


employee's exclusive remedy against an employer and other persons who, by statute, are  


"liable for or potentially liable for securing payment of compensation."  


                                                                                                                                                                       -6-                                                                                                                                                            7434

----------------------- Page 7-----------------------

 subsidiary companies."                                                                              Relying on the contract provisions related to indemnification                                                                                                                                      

and the designation of additional insureds, the corporations contended that if any of them                                                                                                                                                                                                                                                            

was "a statutory 'project owner,' each affiliated company [was] as well."                                                                                                                                                                                                                

                                                        The corporations presented other arguments in support of each one's status                                                                                                                                                                                                                  

as a project owner. They contended that Baker Hughes Oilfield Operations "was the first                                                                                                                                                                                                                                                                    

Owner by virtue of its unique Project role," pointing to the testimony of a Baker Hughes                                                                                                                                                                                                                                                   

Oilfield Operations employee who was "tasked with initiating Baker Hughes-related                                                                                                                                                                                                                        

construction projects,and                                                                                  developing newBakerHughes-related                                                                                                                               facilities." Theyargued                                              

that Baker Petrolite was a project owner because Baker Hughes Oilfield Operations had                                                                                                                                                                                                                                                                       

assigned all of its rights under the contract to Baker Petrolite "as of October 31, 2013,   

well before the May 8, 2014 event" that prompted the lawsuit.                                                                                                                                                                                                       They attached a copy of                                                                       

an undated assignment with an October 31, 2013 effective date, signed by the same                                                                                                                                                                                                                                                                   

person, David Emerson, on behalf of both corporations. They also contended that Baker                                                                                                                                                                                                                                                             

Petrolite   was   "the   operator   of   the   site"   and   "enjoyed   the   intended   use   of   UIC's  

construction"   of   the   facility.     As   for   the   parent   corporation,   Baker   Hughes,   the  

corporations asserted that "[p]arent and affiliated companies . . . receive a number of                                                                                                                                                                                                                                                                           

benefits from a successful subsidiary company," relying on a law review note that                                                                                                                                                                                                                                                                        


primarily discussed subsidiary companies in the context of federal patent law.                                                                                                                                                                                                                                                               

                                                        The  workers  responded  that  "the  actual  facts"  did  not  support  the  


corporations' arguments.  According to the workers, the only corporation that might  


qualify as a project owner was Baker HughesOilfield Operations,which they said owned  


the land and which had entered into the construction contract as "the Owner."  They  


contended that nothing in the Alaska workers' compensation statute "was intended to  




                                                        Bryce  Young,  Note,  Recovering  Lost  Profits:                                                                                                                                                                         The  Resurrection  of  

                                                                                                                                                                                              T. T            HOMAS  L.J. 275 (2011).                                                                               

Subsidiaries (Is There Life on Mars?), 8 U. S 

                                                                                                                                                                                -7-                                                                                                                                                                                      7434  

----------------------- Page 8-----------------------

allow 'project owners' to daisy chain every related company into the designation of                                                                                                                                                                                                                  

 'project owner.' "                                           

                                               Theworkersdisputed                                                        whetherthedocumentassigningthecontractto                                                                                                                       Baker  

Petrolite had actually been signed on its effective date - October 31, 2013 - pointing                                                                                                                                                                                         

out that it was undated and "signed by the same person for both parties."                                                                                                                                                                                          To support   

their argument that the purported assignment had no effect on actual operations, they                                                                                                                                                                                                        

attached deposition testimony from an employee of Baker Hughes Oilfield Operations                                                                                                                                                                                    

who confirmed that it was his decision to hire UIC Construction; that he was "the project                                                                                                                                                                                            

manager"; that "theonly oversight authority of the construction project wasthrough                                                                                                                                                                                                           [his]  

office"; and that he visited the construction site "every four to six weeks for progress                                                                                                                                                                                       

meetings or construction review."                                                       

                                               The   superior   court   granted   summary   judgment   to  the   corporations.   

                                                                                                                                                                                                             8  the court found there to be  

Beginning with the statutory definition of "project owner,"                                                                                                                                                                                                                                         

"no  dispute"  that  all  three  corporations  "enjoy[ed]  the  beneficial  use  of"  UIC  


Construction's work.  Turning to whether each of them had "engaged the [contractor's]  


services," the court found it to be undisputed that UIC Construction "was contracted to  


perform work for the benefit of" all three corporations; that the June 2013 letter showed  


Baker Petrolite contracting with UIC Construction "for preliminary work"; that all three  


corporations "require[d] UIC to indemnify themfrompotential workplace liability"; and  


that the contract had been assigned by Baker Hughes Oilfield Operations to Baker  


Petrolite. The court considered theseundisputed facts sufficient to conclude that all three  


corporations had "engaged the [contractor's] services." The court found that the date the  


assignment was signed, though disputed, was irrelevant because "even if the transfer  


                       8                      AS 23.30.045(f)(2) (defining "project owner" as "a person who, in the                                                                                                                                                                              

course of the person's business, engages the services of a contractor and who enjoys the                                                                                                                                                                                                          

beneficial use of the work").                                           

                                                                                                                                                  -8-                                                                                                                                       7434

----------------------- Page 9-----------------------

took place after the date of injury, [the assignment] is still evidence consistent with                                                                                                                                                                                                                                                                                                                    

 [Baker Petrolite] being the benef[iciary] of the work and in the chain of engaging UIC's                                                                                                                                                                                                                                                                                                           


                                                                 The court then concluded that all three corporations were potentially liable                                                                                                                                                                                                                                                          

 for workers' compensation covering UIC Construction's employees: "If [Baker Hughes                                                                                                                                                                                                                                                                                                           

Oilfield Operations] were insolvent and unable to provide the workers' compensation,                                                                                                                                                                                                                                                                       

 [Baker Petrolite and Baker Hughes] are both potentially liable."                                                                                                                                                                                                                                                                    In support of this                                                        

conclusion the court cited the same facts noted above and "the indemnification clause in                                                                                                                                                                                                                                                                                                                                 

the Contract," noting - without reference to specific contract language - that "it is                                                                                                                                                                                                                                                                                                                                    

difficult to imagine [Baker Hughes] not being liable to provide workers' compensation                                                                                                                                                                                                                                                                          

insurance if its subsidiary company were underfunded."                                                                                                                                                                                                                               The court observed that the                                                                                                  

workers had "not shown, nor could they show, that under no circumstances could [the       

three Baker Hughes corporations] never face such liability."                                                                                                                                                                                                                                          The court concluded that                                                                                  

the   three   corporations   were   therefore   "excluded   from   additional   liability"   under  

AS 23.30.055 as project owners.                                                                                                                                It granted summary judgment to the corporations and                                                                                                                                                                                              

later entered final judgment in their favor.                                                                                                                                  

                                                                 The workers appeal.                                                                                 

III.                             STANDARDS OF REVIEW                                                                             

                                                                 We review a grant of summary judgment de novo, drawing all factual                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                         9               We  interpret  a  statute  using  our  

inferences   in   favor   of   the   nonmoving   party.                                                                                                                                                                                                                                                                                                                                                       

independent judgment, "adopt[ing] the rule of law that is most persuasive in light of  


precedent, reason, and policy."10   As a general rule, contract interpretation is a question  


                                 9                               Cornelison v. TIG Ins.                                                                                       , 376 P.3d 1255, 1267 (Alaska 2016).                                                                                                                 



                                                                Bachner Co. v. State, 387 P.3d 16, 20 (Alaska 2016) (quoting Roberson v.  


Southwood Manor Assocs., LLC, 249 P.3d 1059, 1060 (Alaska 2011)).  

                                                                                                                                                                                                           -9-                                                                                                                                                                                             7434

----------------------- Page 10-----------------------

of law that we review de novo, but such interpretation can involve fact questions "when                                                           


the meaning of contract language is dependent on conflicting extrinsic evidence."                                                                        In  


such circumstances,thefactquestions mayprecludesummary judgmenton thecontract's  


IV.	        DISCUSSION  

            A.	         Only An Entity That Meets The Definition Set Out In AS 23.30.045(f)  


                        Is A Project Owner Protected By The Exclusive Liability Provision Of  


                        AS 23.30.055.  


                        The  Alaska  Workers'  Compensation  Act  provides  that  an  employee's  


exclusive remedy against the employer for a workplace injury is for benefits under the  


Act,13 but it also allows the employee to pursue tort actions against third parties who may  


bear some responsibility.14  


                                                     In 2004 the legislature amended the Act, expanding the  


category of entities potentially liable for workers' compensation and therefore protected  

                                                                                                                        15    As amended, the  


from third-party tort claims by the exclusive remedy provision. 

exclusive remedy provision protects not only the employer, as defined in AS 23.30.395,  


but also any person "who, under AS 23.30.045(a), is liable for or potentially liable for  


securing payment of compensation."16                                    The corporations do not argue that they are the  


workers'   "employer"   as   that   term  is   defined   in   AS   23.30.395,   leaving   only  


            11	         Norville v. Carr-Gottstein Foods Co., 84 P.3d  996, 1000  n.1 (Alaska 2004).  

            12          See  id.  at   1004  (setting  out  conflicting  testimony  about  meaning  of  clause  

and  observing  that  genuine  issue  of  fact  existed  as  to  its  meaning).  

            13          AS  23.30.055.  

            14          AS  23.30.015.  

            15          Ch.  80,  SLA  2004.  

            16          AS  23.30.055  (emphasis  added).  

                                                                           -10-	                                                                    7434

----------------------- Page 11-----------------------


AS 23.30.045(a) - extending liability to a "project owner" - as a possible basis for the  


corporations'  asserted  exclusive  liability  defense.                           In  this  case  we  must  determine  


whether corporations that are not parties to a contract, but are related to a corporation  


that is a party, may be "project owners" under the Act and therefore protected from  


liability to the same extent as employers.  


                    The beginning point for our statutory analysis is AS 23.30.045(a), which  




                    If the employer is a subcontractor  and  fails to secure the  


                    payment of compensation to its employees, the contractor is  


                    liable for and shall secure the payment of the compensation  


                    to  employees  of  the  subcontractor.                     If  the  employer  is  a  


                    contractor and fails to secure the payment of compensation to  


                    its employees or the employees of a subcontractor, the project  


                    owner  is  liable  for  and  shall  secure  the  payment  of  the  


                    compensation to employees of the contractor and employees  


                    of a subcontractor, as applicable.  


The terms used in AS 23.30.045(a) are defined in AS 23.30.045(f):  


                    In this section,  


                    (1)        "contractor"  means  a  person  who  undertakes  by  


                    contract performance of certain work for another but does not  


                    include  a  vendor  whose  primary  business  is  the  sale  or  


                    leasing of tools, equipment, other goods, or property;  


                    (2)        "project owner" means a person who, in the course of  


                    the person's business, engages the services of a contractor  


                    and who enjoys the beneficial use of the work;  


                    (3)        "subcontractor" means a person to whom a contractor  


                    sublets all or part of the initial undertaking.  


We construe these definitions together because they are part of the same statute and refer  

                                                               -11-                                                         7434

----------------------- Page 12-----------------------


to each other.                                                                                           To be a "project owner," the entity in question must "engage[] the                                                                                                                                                                                                                                                                                                                                                                                      

 services of a contractor." A "contractor" is an entity that "undertakes by contract certain                                                                                                                                                                                                                                                                                                                                                                                                                                              

work for another." A "subcontractor" enters the mix only if the "contractor" has "sublet"                                                                                                                                                                                                                                                                                                                                                                                                                                         

part of the work it assumed by contract.                                                                                                                                                                  

                                                                                        The parties dispute what it means to "engage the services of a contractor."                                                                                                                                                                                                                                                                                                                                                                                                                       

 The workers argue that the "common understanding" of the phrase refers to "the person                                                                                                                                                                                                                                                                                                                                                                                                                                                    

who actual[ly] makes the agreement with the contractor," and they maintain that only                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

Baker Hughes Oilfield Operations -the named "Owner" under the contract -can meet                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

the statutory definition.                                                                                                                                  The corporations argue that they are all project owners because                                                                                                                                                                                                                                                                                                         

 each one participated in some way in the construction project and their participation                                                                                                                                                                                                                                                                                                                                                                                                            

 shows that they "engaged the services of" UIC Construction as required by the "project                                                                                                                                                                                                                                                                                                                                                                                                                                          

 owner" definition. They maintain that the legislature did not limit "project owner" status                                                                                                                                                                                                                                                                                                                                                                                                                                                       

to those who have a contractual relationship with a contractor, but they provide no legal                                                                                                                                                                                                                                                                                                                                                                                                                                                              

 analysis to support this assertion. Instead, they describe the extent of each corporation's                                                                                                                                                                                                                                                                                                                                                                                                   

 involvement in the project, pointing out, for example, that Baker Hughes's "worldwide                                                                                                                                                                                                                                                                                                                                                                                                                  

 architect .     .   .   put together                                                                                                                                               the initial site plan                                                                                                                  and building                                                                                layout" and                                                                          that Baker   

Petrolite's "management met with [Baker Hughes Oilfield Operations] to develop a                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

 general construction plan."                                                                                                            

                                                                                        "We construestatutes                                                                                                                         according toreason,                                                                                                                 practicality,and common sense,                                                                                                                                         

 considering   the   meaning   of   the   statute's   language,   its   legislative   history,   and   its  

                                            17                                          "[W]hen construing a statute, 'we must, whenever possible, interpret each                                                                                                                                                                                                                                                                                                                                                                                       

part or section of a statute with every other part or section, so as to create a harmonious                                                                                                                                                                                                                                                                                                                                                                                                     

whole.' "     Alaska Airlines, Inc. v. Darrow                                                                                                                                                                                                                                , 403 P.3d 1116, 1127 (Alaska 2017) (quoting                                                                                                                                                                                                      

State, Dep't of Commerce, Cmty. &Econ. Dev., Div. of Ins. v. Progressive Cas. Ins. Co.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               ,  

  165 P.3d 624, 629 (Alaska 2007)).                                                                                                                                               

                                                                                                                                                                                                                                                                               -12-                                                                                                                                                                                                                                                                     7434

----------------------- Page 13-----------------------


purpose."              When the legislature amended the statute in 2004 to add the definition of                                                          

"project owner," it defined the term in relation to the definition of "contractor":                                                                       A  

"project owner" is "a person who, in the course of the person's business, engages the                                                                   

                                                                                                                               19  The definition  

services of         a contractor           and who enjoys the beneficial use of the work."                                                   

of "contractor" requires a contract: In AS 23.30.045, " 'contractor' means a person who  


undertakes by contract performance of certain work for another . . . ."20  


                        We also consider the meaning of "engage." When used as a transitive verb,  


"engage" means "[t]o obtain or contract for the services of; employ."21  As an intransitive  


verb, "engage" can mean "[t]o involve oneself or become occupied; participate:  engage  


                               22   This latter meaning appears to be the way the corporations ask us to  

in conversation." 


construe the word; that is, that they were all "engaged," to one degree or another, in the  


construction project.  But the statute uses "engage" as a transitive verb; it has a direct  


object, "the services." The relevant question is not "Was this corporation engaged in the  


                                         23   but rather "Did this corporation engage the services of the  

construction project?"                                                                                                                                  


contractor?" The common meaning of "engage" in its most relevant sense, as a transitive  


verb, highlights the importance of a contractual relationship between "project owner"  


            18          Id.  at   1121.  

            19          Ch.  80,    3,  SLA  2004;  AS  23.30.045(f)(2)  (emphasis  added).  

            20          AS  23.30.045(f)(1)  (emphasis  added).  

            21          Engage,  THE  AMERICAN  HERITAGE  DICTIONARY  (5th  ed.  2020).   

            22          Id.  (emphasis  in  original).  

            23          A  variety  of  entities  -  for  example,  subcontractors,  suppliers,  inspectors,  

licensing   authorities,   and   affiliates   of  the   contracting parties  -  may  be   engaged  in   a  

construction   project   to   some   degree   without   having  "engaged   the   services   of   the  


                                                                           -13-                                                                     7434

----------------------- Page 14-----------------------

and "contractor."                                Reading the statutory definitions together, we must conclude that a                                                                                                                  

project owner is someone who engages the services of - that is,                                                                                                                     contracts with                          - a  

person to perform specific work and enjoys the beneficial use of that work.                                                                                                                                  

                                    The legislative history supports this interpretation of AS 23.30.045(f). The                                                                                                               

sponsor of the 2004 legislation explained that under the amendments, "the responsibility                                                                                                             

for payment of workers' compensation is extended up                                                                                               the chain of contracts                                     to include   

project owners"; he also indicated that the exclusive liability provision would extend to                                                                                                                                           

"those parties that are upstream in                                                               the chain of contracts                                           from the employer of the                                     

                                                     24         The  phrase  "chain  of  contracts"  implies  linked  contractual  

injured   employee."                                                                                                                                                                                     

relationships.  The corporations point to nothing in the legislative history that supports  


their different interpretation of the statute.  Nor do they explain how the participation of  


Baker  Hughes  and  Baker  Petrolite  in  the  planning  process  would  create  any  legal  


obligations between them and UIC Construction, the statutorily-defined "contractor,"  


                                                                                                                                                                        25 Baker Hughes Oilfield  

which undertook "by contract performance of certain work for"                                                                                                                                                        




                                    Thelegislaturehas expressed anintentthat theActbeinterpreted toprovide  


the "predictable delivery" of compensation coverage to injured workers "at a reasonable  


cost"  to  employers  who  provide  this  coverage.26                                                                                                Construing  the  statute  as  the  


corporations suggest would undermine these goals. Whendetermining potential liability  


for compensation depends on the interactions of corporations without clear lines of legal  


                  24                Minutes, Sen. Labor & Commerce Comm., Hearing on Senate Bill (S.B.)                                                                                                                  

323,                23rd               Leg.,                2d            Sess.,                 20-21                  (Mar.                 4,          2004)                  (emphasis                          added),!C2004-03-041332.PDF, (statement of Sen. Ralph                                                                                                                                            

Seekins, sponsor of S.B. 323).                                      

                  25                AS 23.30.045(f)(1).  


                  26                AS 23.30.001(1).  


                                                                                                               -14-                                                                                                         7434

----------------------- Page 15-----------------------

responsibility, coverage for workers and for others involved inthecompensation process                                                                                                                               

is less predictable. And                                       becauseemployers                                   and their workers' compensation carriers can  

recover all or part of the compensation benefits they have paid from a successful third-                                                                                                                                 

party damages claim, expanding the number ofentities that are exempt fromthose claims                                                                                                                                  

without express legislative direction to do so decreases the opportunities for employers                                                                                                                    

and   carriers  to   offset   their   payments,   effectively   increasing   the   cost   of   workers'  


                                    The corporations argue that the 2004 amendments "protected potentially                                                                                                 

liable parties from 'double-dipping' by injured workers," citing our decision in                                                                                                                                       Schiel  

                                                                                      27      We interpreted "double dipping" in the legislative  

v.   Union Oil Co. of California                                                     .                                                                                                                      

history  as  referring  to  a  situation  in  which  a  contractor  or  subcontractor  first  paid  


workers'  compensation  to  its  employee  and  then,  "because  of  an  indemnification  


agreement, also had to defend against a tort suit the worker filed against the project  


                      28      But "project owner" remains a statutorily-defined term; an entity does not  


become a project owner simply because of an agreement between two other parties that  


the entity will be indemnified if sued.  


                                    In all the cases in which we have considered and applied the "project  


owner" definition, the project owner was a contracting party. In Schiel we discussed the  


"master services contract between  UNOCAL [which we assumed to be the project  


owner] and Peak," the injured worker's direct employer.29                                                                                                             We set out the chain of  


contracts in Nelson v. Municipality of Anchorage, in which the Municipality contracted  


with one business for specific work and that business subcontracted part of the work to  


                  27                219 P.3d 1025 (Alaska 2009).                                    

                  28                Id.  at 1033.                   

                  29                Id.  at 1032-33.   

                                                                                                               -15-                                                                                                        7434

----------------------- Page 16-----------------------


the injured employee's employer.                             We mentioned pertinent contract provisions when                             


discussing "project owner" status in                         Anderson v. Alyeska Pipeline Service Co.                                          

                                                                                                                                      And in  


Trudell v. Hibbert we wrote that "the [project owners] contracted with" the injured  




worker's employer for building repairs. 

                       The only contract the parties identified and discussed here was the April  


2013 construction contract signed by UIC Construction and Baker Hughes Oilfield  


Operations, which incorporated the June 2013 letter memorializing what the superior  


court called a preliminary agreement between Baker Petrolite and UIC Construction.  


UIC Construction is the only "contractor" whose services the corporations contend they  


engaged.  On remand the superior court must consider whether the evidence shows that  


each of the three Baker Hughes corporations was a party to that contract.  


           B.	         The Contract's Indemnity Provisions Are Irrelevant To Whether A  


                       Baker  Hughes  Entity  Is  A  Project  Owner  Under  The  Statutory  



                       The foregoing analysis is based on the language of the Act and does not  


consider the import, if any, of the contract's indemnity provisions, which form a major  


part of the corporations' argument. The corporations' contract analysis appears to begin  


with language from the Act's exclusive remedy provision, AS 23.30.055.  The statute  


states that its protection extends to "employers" as defined in AS 23.30.395 and also  


includes "a person who, under AS 23.30.045(a), is liable for or potentially liable for  


securing payment of compensation." According to the corporations, "it is clear [fromthe  


statutes] that any entity who is potentially liable for workers' compensation benefit  


           30          267  P.3d  636,  638  (Alaska  2011).  

           31          234  P.3d   1282,   1284,   1288  (Alaska  2010).  

           32          272  P.3d   331,   333   (Alaska  2012),  vacated   in  part   on   other  grounds   on  

reh'g,  299  P.3d   1279  (Alaska  2013).  

                                                                     -16-	                                                               7434

----------------------- Page 17-----------------------

payments   to   employees,   regardless   of   whether  the   entity   was   engaged   in   contract  

negotiations, cannot be liable in tort."                                                                                                            

                                                   We disagree.                                         The persons who "cannot be liable in tort" are those who                                                                                                                                                            

"under AS 23.30.045(a)" are "liable for or potentially liable for securing payment of                                                                                                                                                                                                                                               

compensation"; that is, persons who are employers or project owners as defined by                                                                                                                                                                                                                                                 

 statute.   Being "liable for or potentially liable for securing payment of compensation"                                                                                                                                                                                          

does not by itself make someone a "project owner"; rather, being a "project owner," as                                                                                                                                                                                                                                               

defined by statute, makes someone "liable for or potentially liable for securing payment                                                                                                                                                                                                                    

of   compensation."     The   analysis   begins   with   the   statutory   definitions,   not   whether  

 someone is "liable . . . or potentially liable."                                                                                                                                    Theoretically, someone could assume                                                                                        

liability for workers' compensation payments by contract, as the corporations argue they                                                                                                                                                                                                                                     

did here, but not be a "project owner" as statutorily defined and not be entitled to the                                                                                                                                                                                                                                         

protection   of   the   exclusive   remedy   provision.     In   short,   regardless   of   how   the  

corporations defined themselves by contract, andregardlessof the obligations they claim                                                                                                                                                                                                                                 

to have assumed, whether they are protected from third-party liability as project owners                                                                                                                                                                                                                         

 still depends on whether they satisfy the statutory definition.                                                                                                                                                                         33  

                                                    Furthermore, the corporations' contract arguments do not support their  


claim that all three are "liable . . . or potentially liable" for the payment of workers'  


compensation.  The superior court accepted this argument; it concluded that all three  


corporations "would be potentially liable to provide workers' compensation insurance"  


if UIC Construction failed to do so.  The court wrote that Baker Hughes's "potential  


liability [was] acknowledged within . . . the indemnification clause in the Contract," and  


it apparently relied on the same indemnification provisions to support its conclusion that  


                          33                       See Anderson                                         , 234 P.3d at 1288 ("Because Alyeska satisfies the definition                                                                                                                                   

of   'project   owner'   in   AS   23.30.145(f)(2),   it   is   covered   by  the   exclusive   liability  

provisions of AS 23.30.055.").                                      

                                                                                                                                                               -17-                                                                                                                                                       7434

----------------------- Page 18-----------------------

Baker Petrolite was potentially liable as well. The corporations urge us to adopt the same                                                                                                                                                                                                                                                                                                 

rationale.   They ask, "Where                                                                                                          else  would one consider a party's potential liability, save                                                                                                    

 for   first  examining   the   express   or   implied   indemnity   provisions   in   the   contract?"  

 (Emphasis in original.)                                       

                                                              We have accordingly examined the indemnity provisions in the contract,                                                                                                                                                                                                                                      

but we find nothing in them to support the corporations' argument.                                                                                                                                                                                                                                                       All the obligations                  

identified in  3.18, the indemnity section - "to indemnify, defend and hold harmless"                                                                                                                                                                                                                                                                              

 from various claims and causes of action - flowed in the same direction:                                                                                                                                                                                                                                                                                             from the   

Contractor to the Owner.                                                                                               Nowhere in these provisions was the "potential liability" of                                                                                                                                                                                                                     

any Baker Hughes entity for workers' compensation "acknowledged"; indeed, under                                                                                                                                                                                                                                                                                                        

these provisions the Owner assumed no obligation to the Contractor whatsoever.                                                                                                                                                                                                                                                                                                                       A  

different part of the contract permitted, but did not require, "the Owner" (i.e., Baker                                                                                                                                                                                                                                                                                              

HughesOilfield Operations)                                                                                                         to buy workers' compensationinsuranceifthe"Contractor"                                                                                                                                                              

 failed to provide proof that it had done so, but this cannot be construed as                                                                                                                                                                                                                                                                          requiring  all  

three   corporations,   even   those   not   parties   to   the   contract,   to   provide   workers'  


                                                              We  find  no  support  in  the  contract's  indemnity  provisions  for  the  


corporations' argument that all three of them were project owners.  


                               34                             At oral argument on this appeal the corporations relied not just on the                                                                                                                                                                                                                                                             

contractual indemnity provisions but also on AS 45.45.900, which they had not cited in                                                                                                                                                                                                                                                                                                                   

the superior court or in their appellees' brief. The statute prohibits contractual indemnity                                                                                                                                                                                                                                                                        

provisions   that   "purport[]   to   indemnify   the   promisee"   against  loss   "from   the   sole  

negligence or wilful misconduct of the promisee."                                                                                                                                                                                                      Because this argument was not                                                                                                              

briefed, we do not consider it further,                                                                                                                                          State v. Pub. Safety Emps. Ass'n                                                                                                                           , 257 P.3d 151,                                  

 165   (Alaska   2011)   ("[A]rguments   are   waived   on   appeal  if   they   are   inadequately  


                                                                                                                                                                                                -18-                                                                                                                                                                                        7434

----------------------- Page 19-----------------------

                             C.                           Material Factual Disputes Also Precluded Summary Judgment.                                                                                                                                                                                           

                                                          We comment briefly on two documents that the superior court found to                                                                                                                                                                                                                                                

 support the corporations' arguments on summary judgment; we believe both of them                                                                                                                                                                                                                                                                               

implicate factual issues that should have precluded the court's reliance on them.                                                                                                                                                                                                                                                                            First,  

the corporations held out the assignment as proof that Baker Petrolite was a project                                                                                                                                                                                                                                                                   

owner; the superior court stated that the workers did "not dispute" that the assignment                                                                                                                                                                                                                                               

"transferred the Contract from [Baker Hughes Oilfield Operations] to [Baker Petrolite]"                                                                                                                                                                                                                                                   

at some point during construction, and that although the date was disputed, the fact of                                                                                                                                                                                     

the   assignment   was   itself   "evidence   consistent   with   [Baker  Petrolite]   being   the  

benef[iciary] of the work and in the chain of engaging UIC's services."                                                                                                                                                                                                   

                                                          But in fact the workers did argue that the contract had not been assigned at                                                                                                                                                                                                                                         

all because the corporations' actions belied an assignment, and on appeal they continue                                                                                                                                                                                                                                                          

to question both the validity of the assignment and the date any assignment took place.                                                                                                                                                                                                                                                                                                    

A   Baker   Hughes   Oilfield   Operations   employee   testified   that   he   provided   the   only  

oversight    authority   on   the    project    from    start    to    finish,    purported    assignment  

notwithstanding.   The assignment gives no indication that UIC Construction consented                                                                                                                                                                                                                                                      

to it, even though the April 2013 contract prohibited assignment without theother party's                                                                                                                                                                                                                                                                

                                                                         35                And  the  assignment  says  it  was  "executed  by  Assignor  and  

written   consent.                                                                                                                                                                                                                                                                                                                                                 

Assignee . . . on the dates set forth below," but there is no date next to Emerson's two  


 signatures on behalf of the two parties. The validity of the assignment and the date it was  


executed appear to be material to determining which corporation was a "project owner"  


at the time of the accident, and the employees presented enough evidence to show that  


these facts were genuinely disputed.  




                                                          The only exception was that the "Owner" could, without written consent,  


assign the contract "to a lender providing construction financing for the Project."  

                                                                                                                                                                                   -19-                                                                                                                                                                                              7434  

----------------------- Page 20-----------------------


                    We also see fact issues surrounding the June 2013 letter referencing "a  


preliminary agreement." The superior court interpreted the letter as coming from Baker  


Hughes Oilfield Operations but as proving that Baker Petrolite "contracted with UIC for  


preliminary work," as the letter recites.  But the only document in the record identified  


as a "preliminary agreement" is between Baker Hughes Oilfield Operations and UIC  


Construction; Baker Petrolite is not a party.   Furthermore, the June 2013 letter was  


incorporated into the construction contract as one of the "Contract Documents," and as  


such it is inoperative to the extent it conflicts with the contract's terms - one of which,  


as noted above, provides that "[t]he Contract Documents shall not be construed to create  


a contractual relationship of any kind . . . between any persons or entities other than the  


Owner and the Contractor."  


                    In sum, the June 2013 letter by itself does not prove the existence of a  


contractual  relationship  between  Baker  Petrolite  and  UIC  Construction,  despite  its  


recitals.  And even if there were a Baker Petrolite contract for "preliminary work," it  


would  appear  to  be  relevant  to  the  workers'  claims  only  if  they  were  doing  that  


"preliminary work," under that contract, at the time they were injured.  In other words,  


a finding that Baker Petrolite was a project owner for different work under an earlier  


contract would not mean it was a project owner for purposes of this suit.  


                    The parties may well identify other fact issues that need to be addressed on  


remand in the course of determining which of the Baker Hughes entities was a project  



V.        CONCLUSION  


                    We  REVERSE  the  superior  court's  grant  of  summary  judgment  and  


REMAND the case to the superior court for further proceedings consistent with this  


                                                              -20-                                                        7434

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