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Oct 9, 2019

Texas Supreme Court Holds That “Negligent-Hiring” Claims Can Fall Within the Scope of Chapter 95 of the Texas Civil Practice Remedies Code

By: Shabaz Nizami

Chapter 95 of the Texas Civil Practice Remedies Code offers immunity for real property owners on personal injury, death or property damage claims from contractors, subcontractors and their employees 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. Tex. Civ. Prac. & Rem. Code § 95.002. If a claim falls within the scope of Chapter 95, the claimants are then required to prove that the property owner and/or its agents: (1) exercised actual control over the work performed by the contractor or sub-contractor, or enjoyed a contractual right to exercise such control; (2) possessed actual knowledge of the danger or condition causing injury; and (3) failed to warn of that danger.  Tex. Civ. Prac. & Rem. Code §§ 95.003(1)-(2). Assuming that a claim falls within the scope of Chapter 95 and unless the claimant can prove all of the foregoing elements, the property owner would be immune from liability.

The Texas Supreme Court has issued several opinions in interpreting the scope of Chapter 95’s applicability. For example, in May of 2015, the Court held in Abutahoun v. Dow Chemical Co., 463 S.W.3d 42 (Tex. 2015) that Chapter 95 applies “to all negligence claims that arise from either a premises defect or the negligent activity of a property owner or its employees by virtue of the ‘condition or use’ language in section 95.002(2).” Id. at 50.

Recently, the Texas Supreme Court specifically addressed whether a claim for negligent-hiring also falls within the scope of Chapter 95. The case, Endeavor Energy Services, L.P. v. Evelyn Cuevas, Individually and as Next Friend of C.C. and E.C., Minor Children, and on Behalf of the Estate of Angel Cuevas, Jr., et. al., No. 17-0925 (Tex. May 3, 2019), involved a contractor and its employee that were hired by a mineral lease holder (i.e. the property owner) to drill a well on the premises. While performing the drilling, a rope that was being used by a rig hand in lifting a pipe had unexpectedly caught onto a mechanical pulley and, as a result, jerked the pipe upward so violently that it struck the employee in the head, ultimately killing him. His survivors filed suit against the property owner with claims for ordinary-negligence and premises-liability only.

The property owner moved for a traditional and no-evidence motion for summary judgment on the employee’s claims, seeking to dismiss each of them on the basis that Chapter 95 bars both of these claims because the employee cannot establish that the property owner had actual knowledge of any dangerous condition on the worksite. The employee then filed a supplemental petition, asserting additional claims that the property owner had also negligently hired, retained and supervised the Contractor. The trial court granted summary judgment in favor of the property owner on all of the employee’s claims against the property owner, including the negligent-hiring claim. The Court of Appeals affirmed the property owner’s summary judgment on all of the employee’s claims except for the negligent-hiring claim. In doing so, the Court of Appeals was focused on the fact that the property owner’s alleged negligent activity (i.e. the hiring of the contractor) occurred before the injury to the employee, rather than it occurring “contemporaneously” with the employee’s injury on the premises and, therefore, concluded that Chapter 95 applies only when the property owner’s negligent activity occurs “on the premises at the time the claimant is injured”. In support of this position, the Court of Appeals relied on the Supreme Court’s holding in Abutahoun, which held that “negligent activity encompasses a malfeasance theory based on affirmative, contemporaneous conduct by the owner that caused the injury” and that “Chapter 95 applies to an independent contractor’s claims for damages caused by the contemporaneous negligent acts of a property owner.”  See 463 S.W.3d 42 at 50 and 52.

However, the Court in this case immediately pointed out that Abutahoun did not involve a negligent-hiring claim and, instead, depended on proof of only one party’s negligence. The Court acknowledged that that even though they have not previously ruled definitively on the existence, elements and scope of a negligent-hiring claim, they have recognized that a negligent-hiring claim is factually similar to a negligent entrustment claim because both of these claims require separate acts of negligence by two separate parties. In their attempt to provide more clarification on this matter, the Court went on to provide the following general description as to what these separate acts should entail in a negligent-hiring claim:

(1) The employer’s negligence in hiring the employee; and

(2) The employee’s subsequent negligent act or omission.

Both of these negligent acts must proximately cause the injury. In the case at hand, the employee’s negligent-hiring claim depended on the following separate negligent acts: (1) the property owner’s negligence in the hiring of the contractor and (2) the contractor’s subsequent negligence in using the oil well on the property owner’s premises.

Accordingly, the Court went on to note that its statements in Abutahoun regarding the property owner’s “contemporaneous acts” on the property does not apply to both of these separate negligent acts that are required of a negligent-hiring claim and that the plain language of Chapter 95 only requires that the claim arises from the use of an improvement to the property, not that the property owner’s negligent act (i.e. the hiring of the contractor or employee) involve the use of the improvement or that the use of the improvement be the only cause of the injury.

Because the employee’s negligent-hiring claim depended on, in part, on proof that the contractor’s contemporaneous use of an improvement had caused the injury, the Court was of the opinion that that alone was enough to have the employee’s negligent-hiring claim fall within the scope of Chapter 95, regardless of when the other negligent act occurred or whether it involved the use of the improvement to property.

Finally, in addressing the employee’s concern that including negligent-hiring claims within the scope of Chapter 95 will bar every single negligent-hiring claim because the property owner can never have actual knowledge of the risk that ultimately causes the employee’s injury at the time the property owner negligently hires the contractor (which can be long before the injury occurs), the Court points out that nothing in the plain language of Chapter 95 requires that the property owner have actual knowledge of the risk at the time of the property owner’s negligent act. Rather, when Chapter 95 applies to a negligent-hiring claim, the employee can recover if the property owner exercised or retained some control over the manner in which the work was performed on the “improvement to real property” and also had actual knowledge of the danger or condition that ultimately results in the injury, so long as this actual knowledge was obtained or acquired by the property owner sometime reasonably before the injury occurs.

The Supreme Court’s opinion in this case should provide much needed clarification regarding negligent-hiring claims that are asserted from contractors, sub-contractors and their employees against property owners. Both Plaintiffs and Defendants should be aware that these particular types of negligent-hiring claims maybe subject to Chapter 95.