Thornhill v. Ronnie's I-45 Truck Stop, Inc.

• Decision Date: 01 May 1997
• Docket Number: I-45,No. 09-94-236,09-94-236
• Citation: 944 S.W.2d 780
• Parties: Sandra K. THORNHILL, et al., Appellants, v. RONNIE'STRUCK STOP, INC., et al., Appellees. CV.
• Court: Texas Court of Appeals

Page 780

944 S.W.2d 780

Sandra K. THORNHILL, et al., Appellants, v. RONNIE'S I-45 TRUCK STOP, INC., et al., Appellees.

No. 09-94-236 CV.

Court of Appeals of Texas,

Beaumont.

May 1, 1997.

Robert D. Rapp, Mandell & Wright, H. Victor Thomas, Bennett, Brocks, Baker & Lange, Houston, for appellants.

Joseph J. Naples, III, Russell Serafin, Vinson & Elkins, Ciano Pasta, Howard R. King, John Engvall, Jr., Funderburk & Funderburk, Randy Donato, Donato & Associates, Houston, Guy E. Hopkins, Guy E. Hopkins & Associates, M. Kaye Applewhite, Assistant County Attorney, Conroe, S. Ronald Keister, Assistant Attorney General, Austin, for appellees.

Before BURGESS, STOVER and CARR, ^* JJ.

OPINION

CARR (Assigned), Justice.

This is an appeal from a judgment n.o.v. in a premises liability case based on a wrongful death and survival action after the deaths of George Thornhill and Dale Ross ¹ in a motel fire at Ronnie's I-45 Truck Stop in Spring, Texas.

A jury found, ² among other things, that: (1) the first lien holder, appellee, Allegheny International Credit Corporation, ("AICC") was a possessor of the motel whose negligence in failing to remedy numerous fire hazards was a proximate cause of the deaths and the surviving families' injuries; (2) appellee State Fire Marshal's negligence in failing to have the fire hazards corrected or to close the motel was a proximate cause of the deaths and injuries; and (3) appellants suffered damages in the total amount of $4,350,000.

AICC moved to have the trial court disregard the jury finding that it was a "possessor" of the motel. The State Fire Marshal moved to have the trial court disregard the adverse liability jury findings on the basis of no duty, no evidence and/or insufficient evidence, and sovereign immunity. The trial court granted both AICC's and the State Fire Marshal's motions and entered a take-nothing judgment in favor of AICC and the State Fire Marshal.

Appellants now bring this appeal which presents us with separate issues concerning the State Fire Marshal and AICC.

The trial evidence in our record can be summarized as follows:

Ronnie's I-45 Truck Stop was a motel in Spring, Texas. On April 26, 1987, a fire destroyed the motel. George Thornhill, 34, and Dale Ross, 41, were guests of the motel and were killed in the blaze.

David Glassel built and owned and operated the motel complex where the fire occurred. Glassel was an officer and a director. Glassel borrowed approximately $15,000,000 from AICC to finance the business. The loans were secured by a mortgage on the motel and other property.

Glassel first defaulted on the loans in 1985, approximately two years before the fire. Glassel remained in continuous default from March of 1986 until the April 1987 fire and AICC could have foreclosed at any time. From the time the motel was built, numerous fire hazards existed which Glassel chose not to remedy. In 1986, the State Fire Marshal conducted a fire safety inspection and found needed corrections.

Glassel testified that he had no hope of ever repaying the AICC loan; that by the fall of 1986, he advised AICC that he no longer could go on and that AICC could repossess the property. Glassel told AICC that they need not even foreclose, as he would voluntarily turn over the premises.

AICC told Glassel that they wanted him to stay on and operate the motel for them. AICC had taken a security interest in Glassel's collection of antique automobiles, which were housed in a museum on the property, as additional collateral for the loans. AICC proposed that if Glassel would remain on and run the motel and complex for them, they would allow him to keep his antique automobile collection. He agreed.

According to Glassel, AICC delayed foreclosure not because it had any expectation that the loan would be repaid, but because it did not want to assume the liabilities of ownership. Glassel also testified that but for this new agreement with AICC, he would have left and the motel would have been closed down; that AICC was completely calling the shots in the operation and control of the motel, with Glassel taking directions virtually on a daily basis; that he fully advised AICC's vice president of the nature and extent of the fire hazards and violations, and informed and sent AICC's vice president copies of the Fire Marshal's letters enumerating the violations; that he requested additional funds from AICC to, among other things, correct the fire hazards, and was led to believe by AICC that funding would be forthcoming.

At the time of the fire, Ronnie's was in bankruptcy. AICC's trial position was that Ronnie's operated the hotel as a debtor-in-possession; that the parties had no agreements other than the loan agreements; and, that AICC's sole business and relationship with Glassel and Ronnie's was that of a lender.

At the time of the fire the State Fire Marshal's office was an entity created by the Legislature which was under the administrative control of the State Board of Insurance.

On June 2 and 3, 1986, State Fire Safety Inspector, J.O. Lewis, conducted a fire safety inspection. He noted four statutory violations throughout the commercial complex: 1) the absence of a "No Smoking, Stop Engine" sign at the fuel pumps; 2) smoke detectors missing in some of the rooms; 3) interior stair cases not completely enclosed; and, 4) fire escapes constructed of wood. He also noted thirty-eight (38) discrepancies or conditions not in compliance with National Fire Protection Association (NFPA) recommendations. In addition, the report concluded that "everything above the first floor of the Antique Car Building and the fourth floor of the Old Hotel Building" not be utilized. The report was forwarded to Glassel on June 5, 1986.

On June 9, 1986, Inspector Lewis prepared a memo directed to Vernon Ray, Statewide Supervisor of the Inspection Program, and Regional Manager Mark Cheney "recommend[ing] the immediate closing of parts of this facility until such hazards are corrected."

On June 11, 1986, Regional Manager Cheney prepared a memo directed to Vernon Ray, Statewide Supervisor of the Fire Safety Inspection Program in which Cheney concluded by saying:

In the event any loss of life or injury occurs on or after June 9, 1986, we want it to be recorded that it was recommended that the aforementioned business be closed and not used until all hazards were corrected.

State Fire Marshal Liability

The dispositive issues presented regarding the State Fire Marshal's liability are whether or not:

(1) information contained in the State Fire Marshal's written inspection reports and memoranda constitutes tangible personal property within the meaning of Section 101.021(2) of the Texas Tort Claims Act (2) the State Fire Marshal has waived on appeal its governmental immunity legal argument by not presenting such argument to the trial court; and

(3) we should either (a) impose liability on the State Fire Marshal because, under the facts of this case, its governmental immunity has been waived under Texas Tort Claims Act Section 101.021(2) wherein a governmental unit is liable for death caused by a "condition of real property" or (b) accept appellants' invitation to remand, in the interest of justice, their "condition of real property" claim.

For the following reasons, we answer the first three issues in the negative and decline appellants' invitation.

Tangible Personal Property Issue

At trial, appellants presented evidence that after inspection of the motel, employees of the State Fire Marshal issued internal reports finding numerous state fire code violations and recommending that action be taken to close the motel. Appellants also presented evidence that the State Fire Marshal, in spite of these reports, failed to take any legal action to penalize the owner of the motel for such violations or to obtain an order to close the premises pursuant to its authority under TEX.INS.CODE ANN. § 5.44 (Vernon 1981) (repealed 1987).

The State Fire Marshal is generally immune from liability unless the requirements of TEX.CIV.PRAC. & REM.CODE ANN. § 101.021 (Vernon 1986), entitled "Governmental Liability" are met. It provides in relevant part as follows:

A governmental unit in the state is liable for:

(2) personal injury and death so caused by a condition or use of tangible personal or real property if the governmental unit would, were it a private person, be liable to the claimant according to Texas law.

To meet the requirements of Section 101.021, appellants submitted Question No. 7 to the jury, which states in part as follows:

Do you find from a preponderance of the evidence that the State Fire Marshal was negligent, and that such negligence, if any, was caused by the use or condition of tangible personal property which was a proximate cause of the injury in question?

The term "use" as used herein means to put or bring into action or service; to employ for or apply to a given purpose.

In answering this question, the tangible personal property is the State Fire Marshal's use or misuse of State Fire Marshal inspection reports and memoranda generated by their personnel.

The jury answered this question in the affirmative, and thus, found that the State Fire Marshal's use or misuse of inspection reports and memoranda was a proximate cause of the injury in question.

Under certain appellate decisions interpreting Section 101.021 that existed at the time of trial, the jury finding was sufficient to impose liability on the State Fire Marshal under the Texas Tort Claims Act. See Texas DMHMR v. Petty, 848 S.W.2d 680, 683-84 (Tex.1992); University of Texas Medical Branch at Galveston v. York, 808 S.W.2d 106 (Tex.App.--Houston [1st Dist.] 1991), rev'd, 871 S.W.2d 175 (Tex.1994); City of Houston v. Arney, 680 S.W.2d 867, 874 (Tex.App.--Houston [1st Dist.] 1984), rev'd, 871 S.W.2d 175 (Tex.1994).

However, there was also authority which indicated that the use or misuse of written reports did not constitute the "use of...