- Increased Insurance Premiums: Are They Recoverable from Third-Party Tortfeasors?
- Texas Supreme Court Clarified the Applicable Standard for Proving Attorney’s Fees
- The Oregon Rule and Presumption of Fault
- Drivers’ Liability: The Unavoidable Accident Defense
- Fraudulent Concealment: When does the statute of limitations begin to run for a breach of contract claim, if fraudulent concealment is asserted?
- Application of the Discovery Rule to Breach of Contract Claims
- Proper Procedure to Obtain Entry on Real Property of a Nonparty for Purposes of Inspection and Photographing
- Designating Unknown Responsible Third Parties: How to Properly Designate an Unknown Driver
- Premises Liability: Do Open and Obvious Naturally Occurring Conditions Pose an Unreasonable Risk of Harm?
- The Borrowed Servant Doctrine – At What Point Will the General Employer’s Liability Be Severed?
Recent Chapter 95 Decisions by the Supreme Court of Texas
The Supreme Court of Texas has issued two recent opinions regarding the applicability of Chapter 95 of the Texas Civil Practice & Remedies Code, First Texas Bank v. Carpenter and Ineos USA, LLC v. Elmgren. Both of these opinions provide openings for plaintiffs to assert Chapter 95 is not applicable as an affirmative defense or avoid its applicability all together.
First Texas Bank v. Carpenter
First Texas Bank (“FTB”) asked Chris Carpenter to investigate a roof leak in its roof. Carpenter had been FTB's “go-to guy” for roof repairs for years. After his initial inspection, Carpenter informed FTB the building had hail damage. In connection with its insurance claim, FTB asked Carpenter to show the insurance adjuster the hail damage. Carpenter and the adjuster used one of Carpenter's ladders to ascend to the first tier of FTB’s roof and used one of FTB's ladders to access the second tier. In the process of descending from the second tier, Carpenter fell, crushing two vertebrae.
Carpenter filed suit against FTB and asserted the ladder was defective. In connection with its defense, FTB sought the protections afforded by Chapter 95. Chapter 95.003 provides, in part:
A property owner is not liable for personal injury... to a contractor, subcontractor, or an employee of a contractor or subcontractor who constructs, repairs, renovates, or modifies an improvement to real property... unless:
(1) the property owner exercises or retains some control over the manner in which the work is performed... and;
(2) the property owner had actual knowledge of the danger or condition... and failed to adequately warn.
Carpenter asserted Chapter 95 was inapplicable because he did not have a contract with FTB and was therefore not a “contractor” as required by Chapter 95. The trial court granted FTB's motion for summary judgment. The intermediate court of appeals reversed the trial court.
The Supreme Court of Texas began its analysis by noting Chapter 95 did not define the term “contractor.” Thus, it recognized the generally accepted definition as a “party to a contract.” The Carpenter court then turned its attention to Chapter 95's applicability. In undertaking this inquiry, the court noted Chapter 95's applicability does not hinge on whether the agreement for the work to be done is written, formal or detailed. Rather, its applicability turns on the type of work to be done. Based on this analysis, the Carpenter court determined Carpenter was a “contractor” for purposes of Chapter 95 because he was FTB's roofing contractor. Chapter 95 is only applicable, however, to contractors, subcontractors, and their employees who “construct[ ], repair[ ], renovate[ ], or modify[ ] an improvement to real property.” It does not apply to one injury apart from such work.
The court concluded that because the record was unclear as to whether FTB hired Carpenter to perform work covered by Chapter 95 at the time of his injury. Therefore, the case was remanded back to the trial court for further proceedings.
Based on the holding in Carpenter in assessing Chapter 95's applicability in the future it will be necessary to determine (1) whether an agreement, written or oral, was in place and (2) was the injured party in the course of performing the work provided for in the agreement.
Ineos USA, LLC v. Elmgren
In Ineos USA, LLC v. Elmgren, the court was presented with two primary issues: (1) whether Chapter 95 applies to negligence claims other than premises liability (Elmgren asserted a negligent undertaking claim in the trial court) and (2) whether the protection afforded by Chapter 95 extends to a property owner's agent or employee.
Ineos USA, LLC owns a petrochemical plant in Alvin, Texas. Johannes Elmgren worked as a boilermaker for Zachary Industrial, an independent contractor that provided services at the plant. Elmgren was injured in June 2010 while replacing a vale on a furnace header. At the time Elmgren was injured, both Ineos and Zachary employees conducted a lockout-tagout procedure to isolate the section where the valves Elmgren was replacing were located. A “sniff test” was conducted an indicated no gas was present in the section. As Elmgren and a co-worker were removing the second valve, a burst of gas exploded out of the pipe, resulting in burns to his torso, neck, and face.
Elmgren and his wife filed suit against Ineos and Jonathan Pavlovsky, an employee he alleged was the “furnace maintenance team leader.” Ineos and Pavlovsky filed motions for summary judgment asserting Elmgren's claims were barred by Chapter 95. Elmgren asserted Chapter 95 did not apply to the claims against Ineos and Pavlovsky and was not entitled to its protection because he was not a “property owner.” The trial court granted the summary judgments. The intermediate court of appeals affirmed in part and reversed in part.
After the intermediate court of appeals issued its opinion, the Supreme Court of Texas issued its opinion in Abutahoun v. Dow Chemical Co., 463 S.W.3d 42, 50 (Tex. 2015), holding that Chapter 95 applied “to all negligence claims that arise from either a premises defect or the negligent activity of a property or its employees by virtue of the ‘condition or use’ language in section 95.002(2).” Thus, the trial court was correct in applying Chapter 95 to all of Elmgren's negligence-based claims.
The second part of the court's analysis focused on whether the protection afforded by Chapter 95 extended to Pavlovsky, Ineos's employee. Pavlovsky asserted the intermediate court of appeals erred in holding that Chapter 95 did not apply to him based on the language in Abutahoun that it applies “to all negligence claims that arise from either a premises defect or the negligent activity of a property owner or its employees.”
The court first looked at whether Pavlovsky was entitled to protection as a “property owner.” Section 95.001 defines a “property owner” as “a person or entity that owns real property primarily used for commercial or business purposes.” The Elmgren court concluded that because Pavlovsky did not own the real property where Elmgren was injured, he was not a “property owner” as defined.
The court next examined whether Pavlovsky was entitled to Chapter 95's protections as Ineos's agent. Because Chapter 95's definition of “property owner” contained “no language including agents who act on behalf of or hold themselves out as the property owner,” the Elmgren court concluded its protections did not extend to a property owner's agent.
Finally, the Elmgren court examined Pavlovsky's argument that the term “property owner” must include the owner's employees because otherwise claimants could circumvent Chapter 95's protections because the employer would ultimately be liable under the doctrine of respondeat superior. This argument was rejected by the court on the grounds that “Chapter 95 protects a property owner even against claims asserting vicarious liability based on respondeat superior, ...”
It is the second part of the Elmgren court's holding that creates the biggest problem for property owners and insurers. Because employees are often covered under the same insurance policies that provide coverage to property owners, claimants can effectively circumvent the protections afforded by Chapter 95 by asserting claims against individual employees.