I. INTRODUCTION

Premises owners of commercial establishments have relied on Chapter 95 of the Texas Civil Practice and Remedies Code (“Chapter 95”) to defend against negligence actions brought by independent contractors since its advent in 1996. Chapter 95 affords premises owners complete immunity against claims (1) based on the personal injury, death, or property damage to co-owners, contractors, subcontractors, or employees of the same (2) that resulted from “the condition or use of an improvement to real property where the contractor or subcontractor constructs, repairs, renovates, or modifies the improvement.”[1] This immunity is only thwarted upon proof that:

(A) the property owner exercised or retained some control over the manner in which the work was performed, other than the right to order the work to start or stop or to inspect progress or receive reports; and

(B) 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.[2]

Chapter 95 language seems ambiguous on its face to many, particularly in the context of understanding what the statute contemplates insofar as the “same improvement” requirement, a premises owner’s control, or an agent’s actual knowledge of the dangerous condition. Fortunately, the Texas Supreme Court provides great insight as to its application. This article compiles, summarizes, and highlights the key components of all eight Texas Supreme Court Chapter 95 cases in an effort to assist practitioners and premises owners alike in efficiently and effectively determining the viability of a Chapter 95 defense for their own claims.

II. CASE LAW

1. Abutahoun v. Dow Chem. Co., 463 S.W.3d 42 (Tex. 2015)

The Court’s first encountered Chapter 95 in Abutahoun v. Dow Chem. Co. The Abutahoun Court established Chapter 95’s applicability to claims rooted in a property owner’s contemporaneous acts of negligence. In Abutahoun, defendant Dow Chemical Company (“Dow”) hired a contractor to install pipelines at its facility in Texas. Dow’s employees, along with the contractor’s employees, performed the installation work on the site. The plaintiff, an employee of the contractor, alleged injuries from asbestos exposure resulting from both his and the other Dow employees’ pipeline work. Dow moved for summary judgment based on Chapter 95 immunity.

On appeal, the Texas Supreme Court considered whether Chapter 95 applies to negligence claims based on the property owner’s negligence – as opposed to the contractor’s negligence. Reasoning that “the Legislature did not distinguish between negligence claims based on contemporaneous activity or otherwise, and neither shall we,” the Court found that it did. Chapter 95 accordingly applied to the plaintiff’s claim based on the contemporaneous acts of negligence promulgated by the Dow employees, and because the plaintiff did not argue the exceptions to Chapter 95 immunity, the Court affirmed the appellate court’s reversal of the trial court’s judgment and issued a take-nothing judgment in Dow’s favor.

Importantly, the Court also took this opportunity to outline its appreciation for the statutory phrase “condition or use of the real property” in dicta. Emphasizing the disjunctive conjunction in “condition or use,” the Court clarified that Chapter 95 protects against claims for negligence based on both an improvement’s (1) use – pursuant to respondeat superior theory of liability – or its (2) condition – rooted in premises defect liability.

Key Take-Aways:

  • Chapter 95 applies to negligence claims resulting from the contemporaneous acts of a property owner’s direct employees.
  • Chapter 95 encompasses negligence based on both a respondeat superior and premise defect theory of liability.

2. First Texas Bank v. Carpenter, 491 S.W.3d 729 (Tex. 2016)

In First Texas Bank v. Carpenter, the Court elaborated on the nature of work subject to Chapter 95 immunity, namely construction, repairs, renovations, or modifications of improvements. In Carpenter, First Texas Bank (“Bank”) tasked its “go-to” maintenance man, the plaintiff, with inspecting its roof for a suspected leak. After the plaintiff reported hail damage on the roof, the bank asked the plaintiff to show it to an adjuster in hopes of securing financial assistance with the repairs. The plaintiff sustained injuries after falling off the Bank’s ladder during this presentation. The plaintiff sued the Bank for injuries, and the Bank moved for Chapter 95 immunity in defense. The Texas Supreme Court examined two issues on appeal, namely (1) whether proof of an executed contract is necessary to qualify as a Chapter 95 contractor and (2) whether the nature of plaintiff’s work at the time of the injury implicates Chapter 95.

The Court found that a contract between the premises owner and its contractors is not necessary to establish a worker’s status as a Chapter 95 contractor. Rather, the Court explained that a Chapter 95 contractor is merely “someone who makes improvements to real property.” Nonetheless, the Court noted that Chapter 95 does not apply to all contract work on improvements – only those involving construction, repairs, renovations, or modifications to real property. Here, the Carpenter record did not evidence a mutual understanding by both the plaintiff and the Bank that the plaintiff would in fact make the repairs to the roof, with or without the adjuster’s approval to assist with the payment. The Court accordingly affirmed the appellate court’s reversal of the trial court’s judgment in favor of the Bank as Chapter 95 could not apply without proof that the Bank in fact hired the plaintiff to repair the roof and the plaintiff merely presented the damage to the adjuster as a preliminary step in rendering the repairs.

Key Take-Aways:

  • A Chapter 95 contractor is one who, regardless of a formal contract, makes improvements to real property.
  • Chapter 95 does not apply to all contract work to improvements; it only covers contract work involving the construction, repair, renovation, or modification of an improvement.

3. Ineos USA, LLC v. Elmgren, 505 S.W.3d 555 (Tex. 2016)

In Ineos USA, LLC v. Elmgren, the Court (1) determined that a premises owner’s employee cannot successfully claim Chapter 95 protection; (2) expanded the application of the “same improvement” statutory language and (3) heightened the showing of actual knowledge required to defeat Chapter 95 immunity. In Ineos, Ineos USA LLC (“Ineos”) hired a contractor to replace the valves for one furnace that served as a one component within a larger processing system at the facility. Prior the valve replacement, Ineos and the contractor’s employees shut down the furnace connected to the valve to be replaced as required. However, a furnace 200 feet away leaked and caused an explosion which injured the plaintiff, the contractor’s employee. The plaintiff sued Ineos and one of its direct employees on a negligence theory. Both Ineos and its employee moved for summary judgment on a Chapter 95 basis. The Texas Supreme Court granted the defendants’ petitions to review to determine whether (1) a direct employee qualifies for Chapter 95 immunity, (2) different pieces of connected equipment can constitute the same improvement under Chapter 95, and (3) the premises owner’s actual knowledge necessary to destroy Chapter 95 immunity must be specific.

The Court first held that a premises owner’s employee cannot claim Chapter 95 immunity. However, importantly, the Court noted that if an employee is found liable and the premises owner is subject to vicarious liability for the same, the premises owner may still invoke Chapter 95 immunity. The Court accordingly affirmed the appellate court’s reversal of the lower court’s judgment granting the defendant-employee’s motion for summary judgment.

As to the second issue, the plaintiff argued that Chapter 95 immunity could not protect Ineos here as the improvement which caused the injury was not the same improvement subject to the plaintiff’s work “because although the furnaces were interconnected, they were not so integrated as to be an indivisible improvement.” The Court rejected this argument explicitly favoring a broad definition of improvement under Chapter 95. The Court reasoned that “the valves and furnaces, though perhaps ‘separate’ in a most technical sense, were all part of a single processing system within a single plant on Ineos’s property.”

Finally, the plaintiff argued that Ineos could not enjoy Chapter 95 immunity based on Ineos’s actual knowledge of the dangerous condition. The plaintiff only presented evidence that Ineos knew of the dangerous condition of having explosive gases and hydrocarbons in the plant as a whole. The Court condemned this relaxed interpretation of the actual knowledge exception and explained the importance of identifying the specific dangerous condition which caused an injury. Only evidence of actual knowledge as to the specific dangerous condition that caused the injury challenges Chapter 95 immunity. Here, the plaintiff misidentified the dangerous condition – his injuries did not result from the presence of gas at the plant itself, but rather from the presence of gas in the pipe on which he was working. For these reasons, the Court affirmed the summary judgment in Ineos’s favor based on Chapter 95 immunity.

Key Take-Aways:

  • A premises owner’s employee cannot claim Chapter 95 immunity, but a premises owner may claim Chapter 95 immunity when its employee’s negligence is imputed to it.
  • Chapter 95’s “same improvement” requirement is interpreted broadly to account for individual pieces of equipment within an overall system.
  • Chapter 95’s actual knowledge requirement is specific to the dangerous condition which caused the injury.

4. Endeavor Energy Res., L.P. v. Cuevas, 593 S.W.3d 307 (Tex. 2019)

In Endeavor Energy Res., L.P. v. Cuevas, the Texas Supreme Court found that Chapter 95 applies to a claim against a premises owner for negligent hiring. The defendant and premises owner, Endeavor Energy Resources (“Endeavor”), hired a contractor to drill a well on its premises. An employee for the contractor died after striking his head while working on the job. The survivors of the employee filed suit against Endeavor claiming, inter alia, negligent hiring of the contractor. Endeavor moved for summary judgment on a Chapter 95 basis. The Court granted Endeavor’s petition for review to determine whether Chapter 95 applies to a negligent hiring claim.

On appeal, the employee’s survivors argued that Chapter 95 cannot apply here as an action for negligent hiring does not “arise from the condition or use of an improvement to real property.” The Court disagreed finding that Chapter 95 does in fact apply to negligent hiring claims. The Court reasoned that a negligent-hiring claim is twofold as it hinges on the negligence of both the hiring party, the premises owner, and the hired party, the contractor. Notably, “the statute’s plain language requires only that the claim arise from the use of an improvement to the property, not that the property owner’s negligence involve the use of the improvement, or that the use of the improvement be the only cause of the injury.” Thus, the Court concluded that negligent hiring claims afford Chapter 95 protection because the decedent must still establish the contractor acted negligently with respect to the improvement. The Court therefore reversed the appellate court’s judgment accordingly.

Key Take-Aways:

  • A premises owner can claim Chapter 95 immunity against a claim for negligent hiring when the contractor for which the premises owner is sued for negligently hiring nonetheless negligently used the improvement to real property causing the injury.

5. Los Compadres Pescadores, L.L.C. v. Valdez, 622 S.W.3d 771 (Tex. 2021), reh’g denied (June 11, 2021)

In Los Compadres Pescadores, L.L.C. v. Valdez, the Court explained when a dangerous condition amongst workplace constitutes a dangerous condition of a specific improvement – i.e., when the dangerous condition, by reason of its proximity to the improvement, creates a probability of harm to the contractor working on the improvement in an ordinary manner. The Court solidified an example as to what constitutes sufficient evidence of a premises owners’ actual knowledge of a danger condition. The defendant-premises owner, Los Compadres Pescadores (“Los Compadres”), hired plaintiffs, employees for Paredes Power Drilling, to construct a concrete foundation into the ground to support buildings it intended to construct thereafter. Los Compadres hired an individual named Torres to manage and supervise the project. Before preforming their duties, the plaintiffs voiced concerns to Torres regarding the proximity of AEP Texas Central Company’s (“AEP”) power lines which hung over Los Compadres’s property and requested that he do something to remedy the situation. Despite the plaintiffs’ request, the power line remained in place, and Torres instructed the plaintiffs to continue with the work. The plaintiffs ultimately made contact with the power lines while attempting to place a piece of rebarb into the concrete foundation. The plaintiffs sued Los Compadres, and a jury found Los Compadres “knew or should have known about an unreasonably dangerous condition yet failed to adequately warn the plaintiffs of the condition or make the condition reasonably safe.”

On appeal to the Court, Los Compadres claimed Chapter 95 immunity. In response, plaintiffs refuted Chapter 95 application here on the basis that their injuries did not “arise from the condition or use of an improvement to real property where the contractor or subcontractor constructs, repairs, renovates, or modifies the improvement.” The Court clarified that the inquiry is not whether the power line acted as a dangerous condition of the premises or workplace as a whole, but rather whether it served as a dangerous condition of the improvement subject to the Chapter 95 work. To assist in making this distinction, the Court explained that “if 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 itself” and not merely to the workplace as a whole. Here, the Court found that the power line – a dangerous condition on the land itself – yielded a dangerous condition in the improvement subject to the contractors’ work.

Given Chapter 95’s application, the plaintiffs needed to show that Los Compadres possessed actual knowledge of this danger but failed to warn the plaintiffs nonetheless. The Court found that the record conclusively satisfied this burden. The Court pointed to the conversation prior to the plaintiffs’ job where they communicated to Torres the issue with the power lines and requested a remedy for the same, but he told the plaintiffs to continue despite the power lines remaining unmoved and energized. Imputing Torres’s knowledge to Los Compadres, the Court found this sufficient to constitute actual knowledge. In a last ditch effort, Los Compadres attempted to argue that the open and obvious nature of the dangerous condition negated any need for a warning, but the Court rejected this defense as the energized nature of the power line – unlike its presence – was not in fact open and obvious. The Court accordingly affirmed the jury verdict.

Key Take-Aways:

  • If a dangerous workplace condition, by reason of its proximity to an improvement, creates a probability of harm to the contractor constructing, repairing, renovating, or modifying the improvement in an ordinary manner, then the dangerous condition is imputed to the improvement.
  • Courts impute the actual knowledge of an agent to its principal – the premises owner.

6. Energen Res. Corp. v. Wallace, 642 S.W.3d 502 (Tex. 2022)

In Energen Res. Corp. v. Wallace, the Court held that Chapter 95 can apply to a negligence claim that arises from the condition or use of multiple improvements, only one of which need be the “same improvement.” The Court further demonstrated the Court’s seeming reluctance to find a premises owner exercised control sufficient to oppose Chapter 95 immunity. In Wallace, Energen Resources Corporation (“Energen”) hired a contractor to drill water wells on its land to facilitate the drilling of simultaneous oil well constructions done by separate contractors. The contractor ultimately contracted with a subcontractor to complete construction of the water wells. While on the job, an unexpected “gas kick” occurred at the oil well, and three days later, gas from the water well caught fire and exploded burning a subcontractor’s employee and damaging its equipment. The subcontractor and its employee sued Energen. Energen claimed Chapter 95 immunity on summary judgment. The Texas Supreme Court granted the subcontractor’s petition for review to analyze Chapter 95’s “same improvement” requirement and a premises owner’s control exception in application here.

On appeal, the plaintiffs rejected Chapter 95’s applicability on the basis of the “same improvement” requirement arguing that their injuries resulted from both the oil well and the water well and not just the water well which was the subject of their Chapter 95 work. The Court for the first time in a Chapter 95 context looked to the allegations in plaintiffs’ petition as evidence that the water well caused their injuries, at least in part. Furthermore, the Court clarified that that the negligent condition of the oil well did not negate the negligent condition of the water well. In other words, the Court clarified that a separate improvement’s contribution to a contractor’s injuries does not affect Chapter 95 applicability where the same improvement caused the contractor’s injuries.

Upon the Court finding Chapter 95 applied, the plaintiffs attempted to demonstrate Energen’s control by citing to a recommendation by Energen’s senior geologist regarding the depth of the water wells. However, the Court found this argument unpersuasive noting “merely making suggestions or recommendations which need not necessarily be followed, or prescribing alterations and deviations does not establish control.” Instead, the Court found Energen lacked any control detrimental to its Chapter 95 immunity by way of the fact that (1) the general contractor, not Energen, contracted with the subcontractor, and (2) the subcontractor’s manager testified that he never talked with or received information from anyone at Energen. The Court accordingly reversed the court of appeals’ judgment and reinstated the trial court’s take-nothing judgment.

Key Take-Aways:

  • Chapter 95 can apply to a negligence claim that arises from the condition or use of the same improvement notwithstanding additional negligence elsewhere attributable elsewhere.
  • Allegations made by plaintiffs within their pleadings can support a judgment in favor of a premises owner based on Chapter 95.
  • Evidence of suggestions or recommendations as to the contractor’s work do not constitute control as contemplated by Chapter 95.

7. SandRidge Energy, Inc. v. Barfield, 642 S.W.3d 560 (Tex. 2022)

In SandRidge Energy, Inc. v. Barfield, the Court applied the open and obvious doctrine to protect a premises owner in the context of Chapter 95. In Barfield, SandRidge Energy (“SandRidge”) contracted with OTI Energy Services (“OTI”) to modify lines connecting its oil and gas operations. Plaintiff, an employee for OTI tasked with connecting neutral lines to existing energized poles, sustained injuries after coming in contact with the energized pole. SandRidge moved for summary judgment under Chapter 95 and argued that the plaintiff could not demonstrate its duty to warn OTI of the energized pole given the danger it posed was open and obvious.

For the first time, the Texas Supreme Court found a premises owner did not maintain a duty to warn a contractor’s employees of a specific dangerous condition in a Chapter 95 context given the condition’s open and obvious nature. The Court applied the open and obvious defense here reasoning that the employee (1) admittedly knew the line was energized and dangerous, (2) was attempting to de-energize the pole prior to attaching the lines in accordance with his routine practice in the past, and (3) could not have obtained a more refined understanding of the danger posed via a warning from SandRidge. Notably, the Court declined to decide whether the necessary-use exception also applies to Chapter 95 cases as it did not even arguably apply here. The Court reinstated the trial court’s granted summary judgment accordingly.

Key Take-Aways:

  • Chapter 95 proponents may argue the open and obvious doctrine to demonstrate a lack of failure to warn of a dangerous condition.
  • The Court is undecided as to whether the necessary-use exception applies in a Chapter 95 context.

8. Weekley Homes, LLC v. Paniagua, 646 S.W.3d 821 (Tex. 2022)

In Weekley Homes, LLC v. Paniagua,  the Texas Supreme Court confirmed that judicial admissions in an opposing party’s pleadings may provide competent summary-judgment evidence under Chapter 95. In Paniagua, Weekly Homes LLC (“Weekly”) hired a contractor to construct townhomes on its land. Each townhome plot contained both a concrete driveway and a temporary electricity pole. While on the job, two of the contractor’s employees sustained injuries after lightning struck the temporary electricity pole which was conducted by water that accumulated on the driveway. The employees sued Weekly for negligence, and Weekly pled Chapter 95 immunity on summary judgment. In support of his contention that the employees’ injuries arose from the condition or use of the “same improvement,” Weekly pointed to the plaintiffs’ petition which claimed they “were working” at the driveway and “working at” the townhome construction site when the accident occurred. The Texas Supreme Court granted Weekly’s petition for review to determine whether a defendant can properly rely on the allegations within a plaintiff’s petition as Chapter 95 summary judgment evidence.

On appeal, the Court recognized that generally pleadings are not in fact competent summary-judgment evidence; however, the Court emphasized that courts may properly grant summary judgment based on deficiencies in an opposing party’s pleadings or allegations which serve as truthful judicial admissions in a petition. The Court cited to Energen Res. Corp. v. Wallace to support its ultimate conclusion that defendants may rely on the plaintiffs’ allegations within the pleading to demonstrate Chapter 95 applicability. The Court therefore reversed and remanded.

Key Take-Aways:

  • Courts permit premises owners to rely on plaintiffs’ allegations within pleadings to demonstrate the applicability of Chapter 95 in a summary judgment proceeding.

III. CONCLUSION

The Texas Supreme Court has molded Chapter 95 case law in a direction more favorable to premises owners with each passing case. It stands to reason that this trend will continue in the Court’s review of Chapter 95 cases for 2023. Until then, with the benefit of eight Texas Supreme Court cases from the last decade, practitioners and premises owners alike are well equipped with resources to gauge the prospects of success of a Chapter 95 defense.

[1] Tex. Civ. Prac. & Rem. Code Ann. § 95.002 (West).

[2] Tex. Civ. Prac. & Rem. Code Ann. § 95.003 (West) (internal punctuation omitted).