TBJ FEBRUAY 2022
Back to the Drawing Board
Examining CPRC Chapter 95 and Los Compadres Pescadores v. Valdez.
Written by Robert H. Ford
At a recent CLE, I heard a friend (and darn good trial lawyer) lament
out loud that “it seems like every time we think we have Chapter 95 [of
the Texas Civil Practices & Remedies Code] figured out, the Texas
Supreme Court tells us, ‘not so fast,’ and sends us back to the drawing
board.” Well, the court’s recent decision in Los Compadres
Pescadores, L.L.C. v. Valdez1 is one of those
“back-to-the-drawing-board” directives. There’s a good deal in Los
Compadres that we need to unpack, and even more about its possible
impact that merits thoughtful consideration, but the gist is this: in
Los Compadres, the Texas Supreme Court—for the first time since
its 2015 opinion in INEOS v. Elmgren2—offered new
guidance on how to determine whether an independent contractor’s
personal injury or property damage arose from the same improvement to
real property that the contractor was hired to construct, repair,
renovate, or modify, such that Chapter 95 and its heightened standard of
proof apply to the contractor’s case.
THE FACTS
Named defendant Los Compadres Pescadores, LLC (“Los
Compadres”)—translated into English as “The Fishing Buddies”—set out to
build on its South Padre Island property a fourplex condominium, which
it hoped to lease as residential apartments.3 South Padre’s
sandy soil required that the building be set on concrete pilings buried
deep into the ground.4 Los Compadres hired as a project
supervisor and manager Luis Martin Torres, who in turn received a bid
from Luis Paredes Jr., d/b/a Paredes Power Drilling (“Paredes”), to
construct the pilings.5 Based on this bid, Los Compadres
contracted with Paredes to build the pilings.
Utility provider AEP Texas Central Company (“AEP”) owned a
high-voltage power line that hung about two-and-a-half stories above Los
Compadres’ back property line, within a utility easement that AEP
owned.6 Importantly, Paredes knew about the power line before
beginning work and further told Los Compadres’ project manager, Torres,
“that Torres needed to ‘do something about it’ because it was ‘too
close’ to the worksite.”7 Torres assured Paredes that he
would “take care of it,” but when Paredes and his crew arrived at the
site to break ground, the power line was still in place, suspended over
the property’s back boundary.8 When Paredes asked why the
power line had not been moved, Torres told Paredes to start working at
the front end of the property because Torres was not yet sure
what would be done about the power line.9
Following Torres’ instructions, Paredes and his crew began the first
day’s work at the front of the property, “warn[ing] his crew to stay at
least twenty feet away from the line.”10 On the second day,
Torres informed Paredes that he and his crew should continue to work
around the line, which was still energized, prompting Paredes and his
crew to continue working at the front of the property.11 By
the third day, Torres had informed Paredes that the power line would
remain energized for the duration of the job but that Paredes “needed to
continue drilling because the work had to be done.”12
(Notably, Paredes apparently never warned his two crew members, Juan
Valdez and Alfredo Teran, that the line was energized, an omission which
prevented Los Compadres from escaping liability on the grounds that the
hazard was “open and obvious.”13)
On that third day, as Paredes and his two crew members lifted a piece of
rebar to insert it into one of the pylon holes—the first that was
drilled near the back of the property line—the top end of the rebar
apparently contacted the power line, conducting electricity down the
rebar, “thr[owing] the men off their feet, briefly knock[ing] them
unconscious, and caus[ing] burns to their hands and feet.” As the
Supreme Court noted in its recitation of the facts, “[a]lthough the
power line carried over seven thousand volts, the lower end of the rebar
was in contact with the concrete before the higher end contacted the
power line, grounding the circuit and likely saving the men’s lives.
After taking a day off, Paredes returned and finished the
job.”14
THE LAWSUIT
Paredes’ two crew members—Valdez and Teran (collectively
“plaintiffs”)—sued AEP and Paredes for negligence, and Paredes, in turn,
filed a crossclaim against AEP.15 Finally, AEP joined as a
third-party defendant Los Compadres, whom the plaintiffs then sued as
well.16 Ultimately, the jury found that each of the three
defendants—Los Compadres, Paredes, and AEP—negligently caused the
plaintiffs’ injuries and further found Los Compadres liable under a
premises-liability theory because it had exercised or retained some
control over the manner in which the injury-causing work was
performed.17 The jury awarded Valdez $150,000 and Teran
$83,200 for pain and mental anguish.18 The 13th Court of
Appeals in Corpus Christi affirmed19 and the Texas Supreme
Court granted Los Compadres’ petition for discretionary review, which
challenged the jury’s verdict on the basis that there was legally
insufficient evidence to establish, among other things,20
that Los Compadres had actual knowledge (as opposed to mere
constructive knowledge) of the dangerous condition that resulted in
harm, as required by Chapter 95.
THE TEXAS SUPREME COURT'S HOLDING
On appeal, the Texas Supreme Court agreed with Los Compadres that
Chapter 95 applied to the case, though the court ultimately affirmed the
jury verdict anyway, finding that there was legally sufficient evidence
to support the verdict, even under Chapter 95’s heightened standards of
proof.21
The Texas Supreme Court began by summarizing that:
Chapter 95 applies to a claim, counterclaim, cross-claim, or third-party 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 (a property owner), (3) asserted by an owner, contractor, or subcontractor or an employee of a contractor or subcontractor, and (4) “that arises from the condition or use of an improvement or an employee of a contractor or subcontractor,” and (5) “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.”22
The parties in Los Compadres “agree[d] that the claims
asserted [in the case] satisf[ied] the first three requirements, but
they dispute[d] whether the claims ar[ose] from the condition or use of
an improvement that Paredes [and his crew members,] Valdez and Teran,
were constructing, repairing, renovating, or modifying when the injuries
occurred.”23
The Texas Supreme Court reaffirmed its holding in Ineos v.
Elmgren that “a claim satisfies the fourth requirement only when
the injury results ‘from a condition or use of the same
improvement on which the contractor (or its employee) is working
when the injury occurs.’”24 Los Compadres argued that this
fourth element was satisfied “because the power line was a dangerous
condition of the ‘workplace’ on which Valdez and Teran were working when
they were injured.”25 The Texas Supreme Court disagreed,
reasoning that Chapter 95’s plain language does not allow for the fourth
requirement to be satisfied “whenever the injury arises from a dangerous
condition of the claimant’s ‘workplace.’”26
Instead, “to constitute a condition of the improvement on which Valdez
and Teran were working when they were injured, the power lines had to
affect the ‘state of being’ of the pilings they were hired to
construct.”27 And, “[w]hether the power line constituted a
dangerous condition of the piling necessarily depends on the piling’s
proximity to the power line.”28 So, “[i]f a dangerous
condition, by reason of its proximity to an improvement, creates a
probability of harm to one who ‘constructs, repairs, renovates, or
modifies’ the improvement in an ordinary manner, it constitutes a
condition of the improvement,” such that Chapter 95
applies.29 “Under these facts,” the Texas Supreme Court
wrote—“in which the plaintiffs were directly exposed to the dangerous
condition because of its close proximity to the improvement on which
they were working—we conclude that the energized power line created a
dangerous condition of the piling itself.”30
CONCLUSION
The Texas Supreme Court’s recent holding in Los Compadres
highlights the difficulty in determining whether Chapter 95 applies in
scenarios where the injury-producing hazard is a disconnected condition
of the improvement. Los Compadres now teaches us that spatial
proximity is key—something that both the plaintiff’s and defense bar
ought to keep in mind as they litigate these complex
cases.TBJ
ROBERT H. FORD
is a partner and trial lawyer in the Houston office of Bradley Arant
Boult Cummings. Licensed in Texas and Louisiana, he regularly tries
complex civil cases for plaintiffs and defendants in both states, with
an emphasis on commercial litigation, personal-injury disputes,
construction litigation, and trade secrets.