4Front Engineered Solutions, Inc. v. Rosales

• Citation: 505 S.W.3d 905
• Decision Date: 23 December 2016
• Docket Number: No. 15–0298,15–0298
• Parties: 4FRONT ENGINEERED SOLUTIONS, INC., Petitioner, v. Carlos ROSALES, Individually, and Rosa Mejia, as Next Friend of Carlos Rosales, Jr., Respondents
• Court: Texas Supreme Court

505 S.W.3d 905

4FRONT ENGINEERED SOLUTIONS, INC., Petitioner,

v.Carlos ROSALES, Individually, and Rosa Mejia, as Next Friend of Carlos Rosales, Jr., Respondents

No. 15–0298

Supreme Court of Texas.

Argued October 4, 2016

Opinion delivered: December 23, 2016

Daniel James La Fave, CERBERUS SC, Milwaukee WI, Jessica Z. Barger, R. Russell Hollenbeck, Shelley Jean White, Thomas C. Wright,Wright & Close LLP, Houston TX, for Petitioner.

Brendan K. McBride, The McBride Law Firm, San Antonio TX, Jody Ray Mask, Cowen Mask Blanchard, Brownsville TX, Lino Humberto Ochoa, Ricardo Antonio Garcia, Law Firm of Garcia Ochoa & Mask, McAllen TX, for Respondents.

Lawrence Matthew Doss, Mullin Hoard & Brown, LLP, Lubbock TX, for Amicus Curiae Texas Association of Defense Counsel.

Justice Boyd delivered the opinion of the Court.

A subcontractor sued a premises owner for personal injuries the subcontractor suffered while working with a contractor on the owner's premises. A jury found that all three parties negligently caused the accident and assigned seventy-five percent of the responsibility to the owner, fifteen percent to the contractor, and ten percent to the subcontractor. The premises owner appealed, challenging the judgment on several alternative grounds. We conclude that no evidence supports the jury's liability findings against the premises owner. We therefore reverse the court of appeals' judgment, render judgment in favor of the premises owner, and remand the case to the trial court for further proceedings.

I.Background

4Front Engineered Solutions owns a distribution warehouse in Pharr, Texas. 4Front's warehouse and safety manager, Antonio Ornelas, contracted with Francisco Reyes, a licensed electrician, to repair a lighted sign that hung on an exterior wall about twenty feet above the warehouse's entrance. Reyes had previously performed services for 4Front without incident, sometimes working at heights above twenty feet and usually using equipment he borrowed from 4Front. For this job, Reyes subcontracted with Carlos Rosales, another electrician, to assist him.

Reyes testified that when Ornelas called him about repairing the sign, Reyes asked if he could use a "scissors lift"¹ that he had previously used at the warehouse, and Ornelas told him he could. When Reyes and Rosales arrived to begin the job, however, Ornelas told Reyes that the scissors lift was not available but that Reyes could use 4Front's stand-up forklift instead. Reyes had previously used the same forklift on another job inside 4Front's warehouse. Reyes testified that Ornelas asked Reyes if he was able to operate the forklift to reach and repair the sign, and Reyes (who speaks limited English) answered, "I can move it, but slowly."

Reyes and Rosales worked without incident for three to four hours on the first day and returned two days later to complete the job. On both days, Reyes operated the forklift on a sidewalk under the sign in front of the warehouse. Rosales stood in a "man basket" attached to the forklift as Reyes lifted and positioned the basket so that Rosales could reach the sign. On the second morning, as Rosales was lifted up to the sign, Reyes drove the lift off the sidewalk's edge, causing the lift to topple over. Rosales fell and suffered severe injuries.

Rosales sued 4Front and Reyes for negligence, negligence per se,² gross negligence, and premises liability. A jury found that 4Front negligently entrusted the forklift to Reyes and negligently failed to warn about or make safe a dangerous condition on its premises. The jury also found that Reyes and Rosales were negligent and assigned seventy-five percent of the responsibility to 4Front, fifteen percent to Reyes, and ten percent to Rosales. The jury determined that Rosales's actual damages totaled roughly $8 million. Finally, the jury found that 4Front was grossly negligent and awarded $5 million as exemplary damages. The trial court reduced the amount of exemplary damages but otherwise entered judgment based on the jury's verdict. The court of appeals reversed the gross-negligence finding, struck the award of exemplary damages, and affirmed the remainder of the judgment. ––– S.W.3d ––––. We granted 4Front's petition for review.

4Front raises several arguments. Challenging liability on both the negligent-entrustment and premises-liability claims, 4Front argues that the court of appeals erred by holding that Chapter 95 of the Texas Civil Practice and Remedies Code does not apply to Rosales's claims.³ Focusing on the negligent-entrustment theory, 4Front argues that (1) it owed no legal duty to Rosales because it did not control the manner in which Reyes operated the forklift;⁴ (2) negligent entrustment applies only to automobiles and similar vehicles, not to industrial equipment like a forklift;⁵ (3) the trial court erred by admitting evidence of certain regulations and an interpretation letter issued by the federal Occupational Safety and Health Administration (OSHA); and (4) no evidence supports the jury's finding that Reyes was unlicensed, incompetent, or reckless, or that 4Front knew or should have known that he was. Challenging any responsibility based on premises liability, 4Front argues that there is no evidence that Rosales's injuries resulted from any condition or use of 4Front's premises.

We conclude that, even if Chapter 95 does not apply, even if 4Front owed a negligent-entrustment duty to Rosales, even if the negligent-entrustment theory applies to forklifts, and even if the OSHA evidence was admissible—all issues that we need not and do not decide in this case—no evidence supports the jury's findings of negligent entrustment or premises liability.

II.Negligent Entrustment

When determining whether legally sufficient evidence supports a jury finding, we must consider evidence favorable to the finding if a reasonable factfinder could and disregard evidence contrary to the finding unless a reasonable factfinder could not. Cent. Ready Mix Concrete Co. v. Islas , 228 S.W.3d 649, 651 (Tex. 2007) ; City of Keller v. Wilson , 168 S.W.3d 802, 807 (Tex. 2005). The evidence is legally sufficient if it there is more than a scintilla of evidence on which a reasonable juror could find the fact to be true. Rocor Int'l, Inc. v. Nat'l Union Fire Ins. Co. , 77 S.W.3d 253, 262 (Tex. 2002) ; Cont'l Coffee Prods. Co. v. Cazarez , 937 S.W.2d 444, 450 (Tex. 1996).

To establish 4Front's liability for negligent entrustment, Rosales had to prove that:

(1) 4Front entrusted the forklift to Reyes;

(2) Reyes was an unlicensed, incompetent, or reckless forklift operator;

(3) at the time of the entrustment, 4Front knew or should have known that Reyes was an unlicensed, incompetent, or reckless operator;

(4) Reyes was negligent on the occasion in question; and

(5) Reyes's negligence proximately caused the accident.

See Goodyear Tire & Rubber Co. v. Mayes , 236 S.W.3d 754, 758 (Tex. 2007).⁶ The first, fourth, and fifth elements are undisputed here: 4Front entrusted the forklift to Reyes, Reyes operated it negligently by driving it off the sidewalk's edge, and Reyes's negligence proximately caused the accident. But 4Front contends that Rosales offered no evidence that Reyes was an incompetent or reckless forklift operator or that 4Front knew or should have known that he was.

Rosales did not offer or rely on any affirmative evidence that 4Front "knew" that Reyes was incompetent or reckless. Instead, he relied on evidence that 4Front "should have known," and in fact would have known, that Reyes was incompetent or reckless if it had only inquired about Reyes's qualifications. In particular, Rosales points to evidence that (1) 4Front's manager, Ornelas, admitted that he was familiar with the forklift manual's instruction that all operators must be licensed and trained and that the forklift be operated only indoors on a flat surface; (2) Ornelas failed to ask Reyes if he was OSHA–certified or had any other formal training; (3) other 4Front employees said they would not have allowed Reyes to operate the lift for that job, at least not without first confirming his qualifications and training; and (4) an OSHA regulation and interpretation letter require that forklift owners must ensure that all drivers, including independent contractors, are adequately trained and certified.

We agree with 4Front that none of Rosales's evidence supports the jury's negligent-entrustment finding. In reaching this conclusion, we emphasize the important distinction between an operator who is "incompetent or reckless" and one who is merely "negligent." In a sense, the name "negligent entrustment" can be misleading, because the claim requires a showing of more than just general negligence. Reyes had to prove that Rosales operated the forklift negligently, but more than just that 4Front knew or should have known Rosales would or might operate the forklift negligently. Instead, he had to prove that Reyes was incompetent to operate the forklift or would operate it recklessly , and that 4Front knew or should have known of Reyes's incompetence or recklessness.

We find no such evidence in this record. There is no evidence that Reyes had ever previously caused or even had any accidents when operating a forklift or any similar equipment, or that he had ever recklessly or even negligently operated such equipment. See Mayes , 236 S.W.3d at 758 (finding no evidence that truck driver was, or that owner knew or should have known that he was, incompetent or reckless despite a prior citation for driving without liability insurance, a citation for "exceeding the speed limit by about five miles per hour," and a prior accident in which he rear-ended a vehicle at a stoplight); Williams , 699 S.W.2d at 575 (finding no evidence that truck driver "had any prior speeding tickets, had caused any accidents before this one, was not experienced at driving large trucks, ... was in fact an incompetent or reckless driver, or that [defendant] had actual notice that [he] was a dangerous driver");...