Ineos United States, LLC v. Elmgren, 14-0507

• Decision Date: 17 June 2016
• Docket Number: No. 14-0507,14-0507
• Parties: INEOS USA, LLC F/K/A INNOVENE USA, LLC, INEOS POLYMERS, INC., A/K/A INEOS OLEFINS, INEOS OLEFINS & POLYMERS USA, A DIVISION OF INEOS USA, LLC, AND JONATHAN "BUBBA" PAVLOVSKY, PETITIONERS, v. JOHANNES "JOE" ELMGREN AND VALARIE ELMGREN, INDIVIDUALLY AND AS NEXT FRIENDS OF THEIR MINOR CHILDREN, RESPONDENTS
• Court: Supreme Court of Texas

INEOS USA, LLC F/K/A INNOVENE USA, LLC, INEOS POLYMERS, INC., A/K/A

INEOS OLEFINS, INEOS OLEFINS & POLYMERS USA, A DIVISION OF INEOS USA, LLC,AND JONATHAN "BUBBA" PAVLOVSKY, PETITIONERS, v. JOHANNES "JOE" ELMGREN AND VALARIE ELMGREN, INDIVIDUALLY ANDAS NEXT FRIENDS OF THEIR MINOR CHILDREN, RESPONDENTS

No. 14-0507

SUPREME COURT OF TEXAS

Argued January 12, 2016

June 17, 2016

ON PETITION FOR REVIEW FROM THE COURT OF APPEALS FOR THE FOURTEENTH DISTRICT OF TEXAS

JUSTICE BOYD delivered the opinion of the Court.

This appeal presents three issues regarding Chapter 95 of the Texas Civil Practice and Remedies Code, which protects property owners against liability to contractors, subcontractors, and their employees under certain circumstances. The first issue is whether the statute applies to negligence claims other than those that assert premises liability. Applying our recent decision in Abutahoun v. Dow Chemical Co., 463 S.W.3d 42 (Tex. 2015), we hold that it does. The second issue is whether the statute applies to claims against a property owner's employee. Applying the statute's plain language, we hold that it does not. The third issue is whether the plaintiffs' evidence creates a fact issue that precludes summary judgment despite the statute's protection. We hold that it does not. Because we disagree with the court of appeals on the first issue but agree on the second and third, we affirm the court of appeals' judgment in part and reverse and render judgment in part.

I.Background

Ineos USA, LLC,¹ owns a petrochemical plant in Alvin, Texas. Plaintiff Johannes Elmgren worked as a boilermaker for Zachry Industrial, an independent contractor that provided maintenance services at the plant. In June 2010, Elmgren was injured while replacing a valve on a furnace header. The furnace is part of a processing system through which hot, combustible gas flows through pipes under pressure. Before removing a valve, that part of the pipe system must be shut off from the gas supply. On the night of Elmgren's injury, employees of both Ineos and Zachry conducted a lockout-tagout procedure to isolate the section containing the valves Elmgren was going to replace. Sometime later, the employees conducted a "sniff test," and its results indicated that no gas was present in that section of the system. Elmgren and a coworker removed and replaced one valve, but around 3:00 a.m., as they were removing a second valve, a burst of gas exploded out of the pipe, causing burns to Elmgren's torso, neck, and face.

Elmgren and his wife Valerie, on behalf of themselves and their minor children, filed suit against Ineos and Jonathan Pavlovsky, an Ineos employee who the Elmgrens alleged was the "furnace maintenance team leader." The Elmgrens theorized that a leaky pipe valve several hundred feet away from the valve on which Elmgren was working caused gas to enter the pipes,resulting in the explosion when Elmgren opened the system. They alleged that the "super-heated gas leak was an unreasonably dangerous condition;" the defendants "knew or should have known of the . . . dangers;" the defendants should have warned Elmgren, protected him, or corrected the danger; by failing to do so, the defendants breached a duty to furnish Elmgren a "safe place and conditions" in which to work; the defendants acted negligently and with reckless disregard for the dangers; and the defendants' negligence proximately caused Elmgren's injuries.²

Ineos and Pavlovsky filed motions for summary judgment asserting that Chapter 95 of the Texas Civil Practice and Remedies Code protects them from liability on all of the Elmgrens' claims. In response, the Elmgrens argued that Chapter 95 does not apply to their claims, that their evidence established Ineos' liability even if Chapter 95 applies, and that Chapter 95 does not protect Pavlovsky because it only applies to claims against a "property owner." The trial court granted the defendants' motions, and the Elmgrens appealed.

The court of appeals affirmed in part and reversed in part. 463 S.W.3d at 672. Construing the Elmgrens' petition to assert separate claims for premises liability, negligent activity, and negligent undertaking, the court interpreted Chapter 95 to apply only to the premises-liability claim, and thus reversed the summary judgment on the non-premises negligence claims. Id. at 667-71. The court affirmed the summary judgment in Ineos' favor on the premises-liability claim, holding that Chapter 95 applies to that claim and the Elmgrens submitted no evidence to avoid thestatute's protection. Id. at 666. Finally, the court reversed the summary judgment on all claims against Pavlovsky, holding that Pavlovsky failed to conclusively establish that Chapter 95 protects him as the property owner's employee. Id. at 667, 671. Based on these holdings, the court remanded the case to the trial court for further proceedings on the Elmgrens' non-premises claims against Ineos and on all of their claims against Pavlovsky. Id. at 672. Ineos and Pavlovsky filed a petition for review, which we granted.

II.Negligence Claims

Chapter 95 of the Texas Civil Practice & Remedies Code applies to a claim:

(1) against a property owner, contractor, or subcontractor for personal injury, death, or property damage to an owner, a contractor, or a subcontractor or an employee of a contractor or subcontractor; and

(2) 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.

TEX. CIV. PRAC. & REM. CODE § 95.002. The statute defines a "claim" to mean "a claim for damages caused by negligence, including a counterclaim, cross-claim, or third party claim." Id. § 95.001(1). A "property owner" is a "person or entity that owns real property primarily used for commercial or business purposes." Id. § 95.001(3).

The section of Chapter 95 that grants liability protection on which Ineos and Pavlovsky rely provides:

A property owner is not liable for personal injury, death, or property damage 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, other than the right to order the work to start or stop or to inspect progress or receive reports; and

(2) the property owner had actual knowledge of the danger or condition resulting in the personal injury, death, or property damage and failed to adequately warn.

Id. § 95.003.

Under the common law, an independent contractor or its employee can recover against a property owner for premises liability or negligence if the owner exercised some control over the relevant work and either knew or reasonably should have known of the risk or danger. See Redinger v. Living, Inc., 689 S.W.2d 415, 418 (Tex. 1985) ("[W]hen the general contractor exercises some control over a subcontractor's work he may be liable unless he exercises reasonable care in supervising the subcontractor's activity."); CMH Homes, Inc. v. Daenen, 15 S.W.3d 97, 101 (Tex. 2000) ("[I]t follows that an owner or occupier is not liable for deterioration of its premises unless it knew of or by reasonable inspection would have discovered the [danger]."). When Chapter 95 applies, however, it grants the property owner additional protection by requiring the plaintiff to prove that the owner "had actual knowledge of the danger or condition," so the owner is not liable based merely on what it reasonably should have known. TEX. CIV. PRAC. & REM. CODE § 95.003(2). If Chapter 95 applies, it is the plaintiff's "sole means of recovery." Abutahoun, 463 S.W.3d at 51.

On appeal from the trial court's summary judgment, the Elmgrens argued that the trial court erred because Chapter 95 only applies to premises-liability claims, and not to non-premises negligence claims like those based on negligent activity or negligent undertaking. The court of appeals agreed, holding that Chapter 95 "does not as a matter of law reach distinct claims fornegligent activity and negligent undertaking." 431 S.W.3d at 671. The court thus reversed the summary judgment on the Elmgrens' non-premises negligence claims. Id.

The court noted in its opinion that the Dallas Court of Appeals had construed Chapter 95 to reach the opposite result a month earlier. See id. at 670 n.7 (citing Dow Chem. Co. v. Abutahoun, 395 S.W.3d 335, 347 n.5 (Tex. App.—Dallas 2013) ("The plain meaning of the text of Chapter 95 does not preclude its applicability where a claim is based upon negligent actions of the premises owner."), aff'd, 463 S.W.3d 42 (Tex. 2015)). After the court of appeals issued its decision in this case, we granted the petition for review in Abutahoun and ultimately affirmed, agreeing with the Dallas Court's construction of Chapter 95. Abutahoun, 463 S.W.3d at 51-53.

In Abutahoun, we first noted that the statute defines the term "claim" to mean "a claim for damages caused by negligence," without distinguishing between different categories of negligence claims. Id. at 48 ("The Legislature did not distinguish between negligence claims based on contemporaneous activity or otherwise, and neither shall we."). We then noted that Chapter 95 applies to a claim that "arises from the condition or use of an improvement to real property." Id. (emphasis added) (quoting TEX. CIV. PRAC. & REM. CODE § 95.002(2)). A year before the Legislature enacted Chapter 95, we analyzed the phrase "condition or use" as used in the Texas Tort Claims Act and concluded that "condition" refers to premises and "use" refers to activities. Id. at 50 (citing DeWitt v. Harris Cty., 904 S.W.2d 650, 653 (Tex. 1995)). Because the Legislature then used the same phrase in Chapter 95 without defining it, we concluded in Abutahoun that Chapter 95 applies "to all negligence claims that arise from either a premises defect or the negligent...