November 20, 2015

November 20, 2015

This week, the Supreme Court of Texas issued no opinions, but did grant oral arguments in six cases. Two of these cases are of particular importance.

Elmgren v. Ideos USA, LLC (Cause No. 14-0507)

In this case, defendants Ineos USA, LLC and Jonathan Pavlovsky appeal a decision by the Court of Appeals for the 14th District in Houston which held that Chapter 95 of the Texas Civil Practice & Remedies Code does not encompass claims for negligent activity or negligent undertaking. The plaintiff, Johannes Elmgren, was removing a valve on an industrial furnace-which was undergoing repair by Ineos and Pavlovsky-when leaking gas became superheated and exploded, burning Elmgren's torso, neck, and jaw line.

Under Chapter 95 of the Texas Civil Practice & Remedies Code, a property owner is "not liable for personal injury" arising 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 of Appeals held that this provision only pertains to premises liability and does not foreclose recovery on the bases of negligent activity or negligent undertaking.

In addition, the court held that the furnace valve that Elmgren removed could not be separated as a distinct "improvement" from the parts of the "gas process" that Ineos and Pavolsvsky were repairing. The result: Ineos and Pavlovsky succeed in asserting Chapter 95 immunity, but are still potentially liable under Elmgren's theories of negligent activity and negligent undertaking.

The Supreme Court of Texas is presented with these broad issues: (1) whether Chapter 95 applies to negligent activity and negligent undertaking claims; and (2) to what extent will the Court find an improvement to be divisible for purposes of determining the scope of immunity under Chapter 95.

Hoskins v. Hoskins (Cause No. 15-0046)

In this case, Leonard Hoskins appeals a decision by the Fourth Court of Appeals in San Antonio which held that the Texas Arbitration Act preempts common law standards for vacating arbitration awards. Leonard seeks to vacate an arbitration award on the basis that the arbitrator acted in "manifest disregard for the law." The United States Supreme Court already held in Hall Street Associates, LLC v. Mattel, Inc. that the Federal Arbitration Act precludes the use of "manifest disregard for the law" as a common law ground for vacating an award.

In Hoskins v. Hoskins, the Supreme Court of Texas is asked to decide whether the Texas Arbitration Act preempts the common law "manifest disregard for the law" basis for vacating an arbitral award.

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