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  4.  » When Does Chapter 95 Apply and What Constitutes an “Improvement”?

When Does Chapter 95 Apply and What Constitutes an “Improvement”?

On Behalf of | Oct 6, 2021 | Firm News

Recently, the Supreme Court of Texas issued an opinion addressing the applicability of Chapter 95 in an electrocution-injury case. The case involved a property owner’s liability for injuries sustained by its contractor’s employees while they were working on the property. A jury found the property owner liable under both ordinary-negligence and premises-liability theories. The property owner then appealed the judgment claiming that the employees failed to submit legally sufficient evidence to obtain jury findings necessary to establish liability under chapter 95 of the Texas Civil Practice and Remedies Code. In response, the employees argued that chapter 95 did not apply and the evidence supported the jury’s verdict.

The property owner (“Los Compadres”) wanted to have a four-unit condominium built on a piece of property on South Padre Island. Los Compadres hired Martin Torres to manage and supervise the project. Torres obtained bids and hired Luis Paredes, Jr., d/b/a Paredes Power Drilling (“Paredes”) to construct concrete pilings needed for the building’s foundation. Juan Valdez and Alfredo Teran (“employees”) were working for Paredes when they were injured. Before beginning work, Paredes discovered a high-voltage power line that hung above and along the back line of the property. Paredes told Torres when he bid on the project that Torres needed to do something because the power line was too close to the worksite. Torres said that he would take care of it.

When Paredes began work on the project, the power line was still there. Torres told Paredes to go ahead with his work, but to start drilling at the front of the property because they were not sure what was going to be done with the power line. On the second day of work, Torres told Paredes that the power line would not be de-energized and he needed to continue drilling. The next day Paredes began drilling holes near the back property line. After drilling the hole and filling it with concrete, Paredes and the employees worked together to lift the rebar and place it into the concrete. During this process, the top end of the rebar contacted the power line. Electricity shot down the rebar, briefly knocking the men unconscious and causing burns to their hands and feet.

The employees sued the power line company and Paredes for negligence, and later added ordinary-negligence and premises-liability claims against Los Compadres. The jury found Los Compadres liable under both ordinary-negligence and premises-liability. Los Compadres appealed, but the court of appeals affirmed, so it then petitioned the Supreme Court of Texas for review. Los Compadres argued that chapter 95 applied and therefore the jury’s finding that Los Compadres “knew or reasonably should have known” about an unreasonably dangerous condition and failed to make it safe, was insufficient to support liability. Chapter 95 would require proof that Los Compandres had “actual knowledge” of the condition.

According to the Texas Supreme Court, 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 to real property where the contractor or subcontractor constructs, repairs, renovates, or modifies the improvement.”

Los Compadres Pescadores, L.L.C. v. Valdez, No. 19-0643, 2021 Tex. LEXIS 248, at *15 (Mar. 26, 2021).

The dispute between the parties on appeal focused on whether the claims arose from the condition or use of an “improvement.” Los Compadres argued that the fourth requirement was met because the power line was a dangerous condition of the workplace, and the rebar that contacted that dangerous condition was part of the foundation being constructed. The Court refused to accept this interpretation, finding that the statute’s fourth requirement is not satisfied simply when the injury arises from a dangerous condition of the workplace. Specifically, the Court clarified that it is not enough that a dangerous condition existed on the workplace premises, instead, the danger must arise from the condition or use of “an improvement” on which the claimant was working.

According to the Court, an improvement is “any addition to real property, other than fixtures, that can be removed without causing injury to the real property.” Given that definition, the Court addressed how broadly to define “improvement” as it is used in chapter 95. It noted that defining “improvement” to include the entire workplace would negate the statute’s explicit limiting language, specifying that it must be “an improvement.” Therefore, the question before the Court was whether the power line was a dangerous condition of the improvement on which the employees were working when they were injured.

The Court made clear that whether the power line constituted a dangerous condition of the piling the employees were working on necessarily depends on the piling’s proximity to the power line. According to the Texas Civil Practice and Remedies Code, “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.” §95.002(2). In considering that, the Court found that the energized power line created a dangerous condition of the piling itself because they were directly exposed to the dangerous condition because of its close proximity to the improvement on which they were working. The Court held that chapter 95 applied and therefore the employees were required to prove actual knowledge of the dangerous condition. However, finding that the evidence conclusively established Los Compadre’s actual knowledge of the dangerous condition, the Court affirmed the court of appeals’ judgment.

Takeaways:

  • For chapter 95 to apply, the claim must have arrived out of the condition or use of an improvement on which the contractor or employee is working when the injury occurs.
  • The improvement requirement of chapter 95 is not satisfied simply when the injury arises from a dangerous condition of the premises as a whole.
  • Items laying on or hanging over real property can create or constitute a condition of the premises, but in determining whether it is part of the improvement, a court will consider the item’s proximity to the place of the work that caused the harm.

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