Supreme Court Continues to Outline Defenses Available to Property Owners in Claims Made by Contractors and Guests

By J. Edward Johnson

Over the past several months, the Texas Supreme Court has issued two opinions providing guidance to property owners concerning potential liability for injuries occurring on their property.  Although the facts and defenses were unique in each case, in both cases the Supreme Court came down on the side of owners facing claims arising out of negligence, premises liability, and the actions of third-party criminals.

4Front Engineered Solutions v. Rosales, et al.

On December 23, 2016, the Supreme Court overturned a multi-million dollar jury verdict against a warehouse owner after a subcontractor fell off a stand-up forklift.  Here, the co-defendant contractor hired the subcontractor to assist in repairing a lighted sign that hung about twenty feet above the warehouse.  The owner provided the forklift to assist in the repair, and the contractor was operating the forklift at the time of the incident.  At trial, the jury found for the plaintiff/subcontractor, and placed 75% of the liability on the warehouse owner.  A final judgment was entered against the owner for more than $10 million, which included almost $3 million in exemplary damages.  The Thirteenth Court of Appeals later reversed the award of exemplary damages, but upheld the remainder of the verdict.  However, in finding no evidence to support causes of action for negligent entrustment or premises liability against the owner, the Supreme Court reversed the liability finding and entered a take-nothing judgment in favor of the property owner.

Negligent Entrustment

Both on appeal and at the Supreme Court, the warehouse owner argued that Chapter 95 of the Texas Civil Practice and Remedies Code was applicable and should operate to bar Plaintiff's claims.  Although the Supreme Court has recently applied the protections of Chapter 95 in similar cases against property owners (discussed here), the Supreme Court declined to address this issue and instead found that the negligent entrustment claim failed because the Plaintiff could not show that (1) the co-defendant contractor was an unlicensed, incompetent, or reckless forklift operator and (2) the owner knew or should have known the same.

Importantly, although the Supreme Court acknowledged there was evidence that the co-defendant contractor was negligent (including evidence that the owner failed to ask the contractor if he was OSHA certified or had been trained on operating the forklift), the Supreme Court found no evidence showing that the owner’s failures to screen the contractor would have revealed the risk that establishes liability for negligent entrustment.  In sum, the Supreme Court found that a lack of formal training, certification, or legal license did not establish that the contractor was incompetent or reckless.

Premises Liability

Likewise, the Supreme Court again sidestepped the Chapter 95 argument and quickly rejected the Plaintiff's premises liability claim noting that there was no evidence of any condition of the premises of which the owner was required to warn or make safe.  The accident happened outside on a sidewalk, and the Supreme Court again confirmed that no duty can be imposed for premises conditions that are open and obvious.

UDR Texas Properties, L.P. v. Petrie

On January 27, 2017, the Supreme Court considered a case where an apartment complex guest was assaulted and robbed in the parking lot.  The guest/plaintiff filed suit against the apartment complex, and alleged that the complex failed to use ordinary care to make the complex safe.  In signing a take-nothing judgment, the trial court held that the complex owed no duty to Plaintiff.

On appeal, although the Plaintiff failed to offer any evidence of an unreasonable risk of harm, the Fourteenth Court of Appeals reversed the trial court and noted "there is evidence of foreseeability of an unreasonable risk of harm that a person at the complex would be the victim of violent criminal conduct."  More specifically, the Court of Appeals found that "the potential unreasonableness and foreseeability of harm is considered as a whole, not as separate elements requiring independent proof."

The Supreme Court disagreed, and noted that even if foreseeability was established under the factors laid out in Timberwalk Apartments, Partners, Inc. v. Cain, the Plaintiff must still independently show that the risk was "unreasonable" in order to recover.  Specifically, the Supreme Court noted that a risk would be unreasonable when "the risk of a foreseeable crime outweighs the burden placed on property owners – and society at large – to prevent the risk."  Thus, the Supreme Court found that the Court of Appeals erred by not considering whether the foreseeable risk to Plaintiff was unreasonable (largely because the Plaintiff presented no such evidence).

Takeaway from these Decisions

As reflected in these two decisions, the Supreme Court appears to be continuing its efforts to expand protections for property owners from ancillary negligence based claims better asserted against other parties.