The Supreme Court Speaks on the Scope of Chapter 95 Property Owner Protection

In June 2016, the Texas Supreme Court issued two opinions interpreting the applicability of Chapter 95 of the Texas Civil Practice & Remedies Code. While members of the Plaintiff's bar may be celebrating one of the Court's rulings, property owners should take note and protect themselves.

Generally, Chapter 95 limits a property owner's liability for injuries sustained by a contractor who "constructs, repairs, renovates, or modified an improvement to real property." Prior to the Texas Supreme Court recent rulings, an independent contractor injured while working at a property could not prevail on a negligence based claim against the property owner unless the owner exercised control over performance of the work and had actual knowledge of the applicable danger, but failed to warn of the danger that resulted in the injury. Over the years since the statute was enacted, Plaintiffs have challenged its status hoping that courts will narrow its protection.  These challenges have been met with mixed results.  The two recent cases discussed below show both the narrowing and expansion of Chapter 95.

First Texas Bank v. Chris Carpenter

In First Texas Bank v. Chris Carpenter, the Supreme Court provided a focused analysis on one word in the statute – "contractor." In that case, Mr. Carpenter had a long standing relationship with First Texas Bank ("FTB") and was the person whom FTB called when the roof needed repairs. Carpenter did not have a written or exclusive contract with the bank. FTB asked Carpenter to investigate a roof leak and he discovered hail damage. FTB decided to file an insurance claim and asked Carpenter to show an insurance adjuster the roof damage. While descending an FTB ladder, Carpenter fell fracturing two vertebrae. Carpenter sued FTB asserting the ladder was defective. FTB immediately sought protection under Chapter 95 and asserted that it did not control Carpenter's work or know of any ladder defect. Carpenter claimed he was not a "contractor" because he and FTB did not have a written contract making Chapter 95 inapplicable.

The Court pointed out that the statute does not define "contractor." Thus, the Court used a commonly accepted and recognized definition…"a party to a contract; one who contracts to do work for or supply goods to another." Rejecting Carpenter's argument, the Court reasoned that the statute's applicability "turns on the type of work being done, not whether the agreement for the work is written, formal, or detailed." The Court determined that Carpenter was a contractor within the meaning of the statute. However, because the Court found that the record did not clearly demonstrate whether FTB actually hired Carpenter to perform work covered under the statute, the case was remanded to the trial court for further proceedings. The lesson that emerged from the Carpenter case is that a formal contract between a property owner and a contractor is not necessary to invoke Chapter 95 protection. The work to be performed must also be covered by the statute.

Ineos USA, LLC v. Elmgren

In a case decided one week after Carpenter, the Texas Supreme Court in Ineos USA, LLC v. Elmgren, was again asked to craft an exception to the scope of Chapter 95.  In that case, the Court analyzed whether Chapter 95's coverage extended to all negligence based claims, specifically, claims based on respondeat superior, negligent activity, and negligent undertaking or, instead, only applied to premises liability claims. Mr. Elmgren, an employee of an independent contractor, worked as a boilermaker at Ineos' facility. He was injured when a furnace header he was working on exploded resulting in burns to his face and body. Elmgren sued not only Ineos, but also asserted a negligence claim based on respondeat superior against the employee of Ineos who supervised the work he performed.  In narrowing the application of Chapter 95, the Court found that the statute  does not protect property owners' agents, employees or representatives; rather, it only applies to protect property owners directly.  However, the Court also expanded the scope of Chapter 95, holding that the statute protects property owners against all negligence based claims, including those based on respondeat superior. Thus, the Court slightly narrowed the statute applicability, while simultaneously expanded its scope by bringing all negligence claims within its purview.