In the last two weeks, the Texas Supreme Court has issued opinions regarding the application of Chapter 95. As a brief reminder, Chapter 95 of the Texas Civil Practice and Remedies Code limits a real property owner’s liability for negligence claims that arise out of a contractor’s or subcontractor’s work on an improvement to the property. The Texas Supreme Court noted in 2021 that Chapter 95 applies to a claim (1) for damages caused by negligence resulting in personal injury, death, or property damage, (2) asserted against a person or entity that owns real property primarily used for commercial or business purposes, (3) asserted by an owner, contractor, or subcontractor, and (4) that arises from the condition or use of an improvement to real property where the contractor or subcontractor constructs, repairs, renovates, or modifies the improvement. Los Compadres Pescadores, L.L.C. v. Valdez, 622 S.W.3d 771, 782 (Tex. 2021). In a prior opinion, the Texas Supreme Court held that a claim satisfies the fourth requirement only if the claim results from a condition or use of the same improvement on which the contractor is working when the injury occurs. Ineos USA, L.L.C. v. Elmgren, 505 S.W.3d 555, 567 (Tex. 2016).
On March 18, 2022, the Texas Supreme Court issued its opinion in SandRidge Energy, Inc. v. Barfield, __ S.W.3d __, No. 20-0369 (Tex. Mar. 18, 2022). In this case, the Court undertook to analyze whether the common law defense of an “open and obvious” condition obviated a landowners duty to warn of a dangerous condition under Chapter 95. In this case, the plaintiff worked as a power lineman on a crew responsible for adding neutral lines to existing policies carrying energized overhead lines. As part of that work, he was required to de-energize the lower sections of the poles. While working in an elevated bucket, the plaintiff used a “hot stick” tool to remove energized “hot taps, disconnecting fuses if necessary,” from the upper crossbars, where the overhead supply lines remained energized. The plaintiff encountered a stuck hot tap. He was jerking on the hot stick to get it loose, when he sustained an electrical shock. His employer had advised the plaintiff that hot lines were a known hazard.
The Court began its analysis by noting that Chapter 95 requires an owner to adequately warn a contractor of a danger only when the landowner knows of the condition and exercises come control over the manner in which the work is performed. The Court also noted that it was undisputed that the plaintiff fully appreciated the dangerous condition as he was working to de-energize a part of it when he was injured. The Court noted that even though Chapter 95 does not define “adequate warning,” there was nothing in the statutory scheme to indicate that it meant anything other than its usage at common law. Having determined that, the Court found that if a warning would not improve upon an invitee’s knowledge of the danger, then the law does not require the landowner to deliver one. This applies to both the common law and Chapter 95. Thus, the open and obvious doctrine likewise applies to Chapter 95. Although the Court had suggested this to be the case in earlier opinions, this is the first opportunity the Court had to actually apply the doctrine to a case involving Chapter 95. Because the plaintiff admitted he knew the energized lines posed a danger, his knowledge of the danger would not have been improved by any warning. Thus, the landowner established that it did not fail to adequately warn.
The Court also rejected the plaintiff’s argument that the necessary-use exception applied and that he had raised a fact issue as to the exception. The Court once again reminded courts and litigants that it had doubts that this exception even applies to independent contractors. Unfortunately, the Court determined it need not resolve that issue in this case because the exception was not established. In order to invoke the exception, a plaintiff must show that the landowner would anticipate that the invitee is unable to take measures to avoid the risk. The plaintiff had worked near the energized supply line for at least six months prior to his accident, had disconnected hot taps hundreds of times, and every pole he had de-energized had energized lines atop it. His hot stick tool was specialized for use on energized lines. Further, the owner could expect the plaintiff’s employer would take the energized lines into account in instructing and equipping the plaintiff to avoid the risk.
On March 11, 2022, the Texas Supreme Court issued its opinion in Energen Resources Corp. v. Wallace, 2022 WL 726976 (Tex. 2022). In this case, the Court undertook to outline the limits of when a claim “arises from the condition or use” of an improvement under Chapter 95. Specifically, the Court considered whether a claim can arise from the condition or use of an improvement even when negligence elsewhere is alleged to have contributed to the injuries. The Court concluded that it can so long as the other statutory elements are satisfied. In this case, the owner of the leasehold rights to some land (Energen Resources) hired Nabors Drilling and NPC to drill an oil well. After those companies began to work on the oil well, Energen contracted with Dubose Drilling to complete a water well to facilitate drilling and operations of the oil well. Dubose was unsuccessful in its initial attempts to find a water source. It later subcontracted with Elite Drillers to complete the water well and Elite assigned its president, Wallace, to supervise the project. The wells were approximately 500 feet apart from each other, and Energen continued drilling the oil well while Elite worked on the water well. On January 14, 2014, a “gas kick” – an unexpected migration of gas from the reservoir to the wellbore – occurred at the oil well. It was shut in to prevent any further loss of natural gas. Three days later, Elite’s crew sent pressurized air into the water well to clear drilling mud. Upon noticing that the air pressure had increased substantially, Wallace shut off the air compressor, but the pressure continued to build. He realized that natural gas was flowing out of the wellbore and warned those nearby to run. Moments later, the gas flowing from the water well caught fire and exploded. Wallace suffered severe burns and Elite’s equipment was damaged. Elite and Wallace brought claims for negligence against Energen. Energen filed a motion for summary judgment asserting application of Chapter 95. It argued that if the plaintiffs were contending a condition of the oil well, rather than the water well, gave rise to their claims, the water well’s purpose to facilitate the oil well’s production brought the claims within Chapter 95. Plaintiffs argued that Chapter 95 did not apply because the improvement on which they were working was not the same improvement from which their claims arose. The trial court granted summary judgment for Energen. The El Paso Court of Appeals reversed finding that Chapter 95 did not apply because the plaintiffs were complaining about a negligent activity at the oil well, not a premises defect of the water well. On review, the Texas Supreme Court noted that the parties only disputed whether the fourth requirement identified in Valdez had been established.
The Court found that for a claim to fall with Chapter 95’s ambit, negligence regarding the condition or use of the improvements on which plaintiffs were working must be a cause of their damages, finding this requirement apparent from the face of the text and as confirmed by the common law. The Court went on to note that it is not enough for a plaintiff’s damage to arise from the condition or use of an improvement if such condition or use does not involve the essential element of negligence. The Court noted that the plaintiffs in the case before it contended that negligent drilling at the oil well, a separate improvement, caused their injuries. The Court noted that the water well was the relevant improvement for purposes of a Chapter 95 analysis. The Court noted, however, that the plaintiffs had alleged that Energen failed to exercise reasonable care in relation to the defective and dangerous conditions in the drilling and completion of the water well. The plaintiffs also alleged that a high volume of natural gas built up in the water well and ignited, resulting in the explosion. In other words, plaintiffs’ own petition alleged that their damages were caused by negligence arising from a dangerous condition of the water well. The Court rejected the reasoning applied by the court of appeals noting that although Chapter 95 distinguishes between claims for negligent activities and those for premises defects, it applies to both types of claims. Thus, the dispositive issue is not whether the claim should be characterized as one for negligent activity or premises defect. Rather, the dispositive issue is whether there was negligence regarding the condition or use of the improvement on which plaintiffs were working and, if so, whether that negligence was a cause of the plaintiff’s damages. Second, the Court noted that although Chapter 95 requires a causal connection, the negligence need not be the only cause of the damages. Negligence away from the water well (drilling on the oil well) that contributed to plaintiffs’ damages did not negate the conclusion that negligence at the water well also caused the same damages.
ABOUT THE AUTHOR:
Craig Reese leads the Firm's appellate and coverage practice group. He has over 25 years of practice experience including appeals at the federal and state level, insurance coverage/defense, and commercial litigation. Craig has represented clients in a wide variety of litigation including insurance coverage, general insurance defense, bad faith litigation, and commercial matters. His appellate experience includes cases before every level of the state courts of appeals and appeals to the Fifth Circuit Court of Appeals. In addition, he is a former briefing attorney to the Honorable H.M. Lattimore for the Second Court of Appeals in Fort Worth.
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