HOUSTON, TX –
On January 28, 2016, the Houston Court of Appeals (14th District) issued its opinion in Oiltanking Houston, L.P. v. Delgado (No. 14-14-00158-CV) in which the three judge panel reversed a $21 million jury verdict and rendered a take-nothing judgment in favor of the company that the jury had found responsible for a workers death.
According to the court’s opinion, Javier Delgado, an employee of L-Con, Inc., died in an explosion on June 2, 2012, when hydrocarbon fumes ignited while he was welding on a flange on one end of a pipe used to transport crude oil. The explosion occurred at Oiltanking’s oil storage facility in Channelview, near the Houston Ship Channel. Three other employees were also injured in the explosion.
Members of Delgado’s family filed a wrongful death claim against Oiltanking, which owned the premises where the explosion had occurred and who had hired Delgado’s employer to work on the pipe.
According to the appellate opinion, extensive evidence was offered at trial regarding: (1) implementation of welding procedures to block off the pipe, pump out the contents, disconnect it from the oil storage tank, install a plug to isolate the portion being welded, remove residual hydrocarbons inside the pipe, vent hydrocarbon vapor inside the pipe, and perform “sniff” tests for vapors; (2) which aspects of the process were controlled by Oiltanking, and which ones were performed by Mr. Delgado’s employer, L-Con; and (3) the chain of events leading to the explosion.
Following the close of evidence in the case, the trial judge dismissed Oiltanking’s claims against Mr. Delgado’s employer, L-Con, finding there was no evidence to support a claim that they had done anything wrong. The case was then submitted to the jury.
Jury questions 1, 3, and 4 each asked: “Did the negligence, if any, of Oiltanking proximately cause the occurrence in question?” Jury Question No. 2 asked: “Did Oiltanking exercise or retain some control over the manner in which L-Con performed its work, other that the right to order the work to start or stop or to inspect progress or receive reports?” The jury answered yes (11-1) to these four questions and awarded $21,057,710.63 in actual damages. Oiltanking appealed the jury verdict.
On appeal, Oiltanking argued that the jury’s “yes” answers where not supported by the evidence and that they were immune from liability under Chapter 95 of the Texas Civil Practice and Remedies Code because “[T]here is no evidence in the record supporting a finding that Oiltanking had actual knowledge of a hydrocarbon gas leak during the welding.”
Chapter 95, which was enacted by the Texas Legislature as part of S.B. 28 in 1995, under the guise of protecting home owners from being sued by independent contractors who might be injured while performing work at their homes. However, over the past 20 years it has been increasingly used by refineries and other industries to escape liability for serious injuries and death to workers. Under Chapter 95, a plaintiff must prove that the premises or refinery owner had both: (1) actual knowledge of the dangerous condition; and (2) retained at least some control over the manner in which the work was performed.
In the Delgado case, the Court of Appeals found that “Taken together, the ‘yes’ answers to Jury Questions Nos 2 and 3 satisfy the control and actual knowledge requirements for a property owners liability on claims arising from death or injury to an independent contractor’s employees who construct, renovate, or modify an improvement on real property.” Despite this finding, Justice Boyce and the other members of the appellate panel then rendered take-nothing judgement in favor of Oiltanking.
Justice Boyce stated in the court’s opinion, “Knowledge that Oiltanking’s facility handles crude oil, that ‘elaborate safety precautions’ are warranted because the facility handles crude oil, and that the pipe at issue had been used to transport crude oil from an adjacent tank shortly before L-Con’s work began, is at most knowledge of a potential danger or condition from the presence of flammable vapors. . . [K]nowledge of this nature does not establish that ‘Oiltanking had actual knowledge of the danger’ as required under section 95.003(2). . . We reverse the trial court’s judgement and render a take-nothing judgment in favor or Oiltanking.”
Justice Boyce was appointed to the Court of Appeals in December 2007 by Governor Rick Perry. Prior to becoming an appellate judge, Justice Boyce worked for 18 years at Fulbright & Jaworski, a large international law firm that represented Phillips Petroleum Company after the 1989 explosion at that corporation’s chemical plant located along the Houston Ship Channel. That explosion resulted in in at least 23 deaths, 314 injured, and more than $1 billion in damages.