C&H POWER LINE CONSTRUCTION CO. v. ENTERPRISE PRODUCTS OPERATING, LLC
2016 OK 102
| Okla. | 2016Background
- C&H Power Line Construction employee James Neece struck an unmarked high‑pressure (36"; >1,000 psi) natural gas pipeline while operating a large auger in Texas on June 7, 2010; the resulting explosion killed Neece and severely injured another employee.
- C&H had timely notified the Texas One‑Call system; Enterprise received notice but did not mark its pipeline; other operators did mark their lines.
- C&H claimed the blast destroyed or greatly diminished the company’s value, alleging negligence, negligence per se, and gross negligence by Enterprise, and asserted lost business value including a near‑term sale that fell through.
- The Texas‑law substantive case was tried in Oklahoma; a jury awarded C&H $26 million in actual damages and $1 million punitive damages; the trial court added $3,476,160 prejudgment interest, for a total judgment of $30,476,160.
- Enterprise appealed raising multiple procedural and evidentiary objections (jury instructions, excluded evidence, alleged reference to Enterprise’s net worth, unanimity for exemplary damages, and prejudgment interest). The Oklahoma Supreme Court affirmed.
Issues
| Issue | C&H's Argument | Enterprise's Argument | Held |
|---|---|---|---|
| Measure of business‑destruction damages | Market‑value difference before and after the occurrence captures all recoverable business loss | Jury should be limited; damages for death/injury, emotional distress, or workers’‑comp changes are not recoverable and should be excluded; total destruction must be shown | Court upheld instruction using the before‑and‑after market‑value measure (Sawyer standard); jury could consider factors affecting market value, including loss of key employees or goodwill |
| Instruction on negligence/negligence‑per‑se | Standard negligence instructions and causation suffice; jury decides impact on market value | Proposed instructions would require proof of total destruction or give a negligence‑per‑se defense tied to Texas admin rules (e.g., second‑call duties) | Court refused Enterprise’s proposed instructions; found court instructions correctly reflected law and issues for jury determination |
| Exclusion of evidence (owner’s alleged frivolous spending; insurance proceeds) | Excluding irrelevant, prejudicial evidence (owner’s spending) and collateral‑source evidence was proper | Evidence of mismanagement and insurance receipts should be admissible to rebut value/ability to replace assets | Court affirmed exclusion: spending details irrelevant to business valuation; insurance payments barred by collateral‑source rule or were improper impeachment by prior witness testimony |
| Jury unanimity for exemplary/gross negligence and prejudgment interest | Jury need not be unanimous under Oklahoma procedural law; prejudgment interest is procedural—Oklahoma law controls pleading/practice; Texas substantive law governs entitlement | Texas requires unanimity for exemplary damages and requires pleading prejudgment interest | Court applied Oklahoma procedural rules: no unanimity requirement for verdicts under forum law; substantive Texas law controls entitlement to prejudgment interest but Oklahoma procedural rules govern pleading/requesting it; trial court did not err |
Key Cases Cited
- Sawyer v. Fitts, 630 S.W.2d 872 (Tex. App. 1982) (measure of damages for business destruction is difference in value before and after injury)
- Waples‑Platter Co. v. Commercial Standard Ins. Co., 294 S.W.2d 375 (Tex. 1956) (if not totally destroyed, measure is difference between reasonable market values immediately before and after the damage)
- Florafax Int’l, Inc. v. GTE Market Resources, Inc., 933 P.2d 282 (Okla. 1997) (appellate standard: jury verdict conclusive where competent evidence supports it)
- Owens‑Corning Fiberglass Co. v. Martin, 942 S.W.2d 712 (Tex. 1997) (number of jurors required to reach a verdict is procedural under Texas law)
- Estrada v. Port City Properties, Inc., 258 P.3d 495 (Okla. 2011) (collateral‑source rule application)
- Covel v. Rodriguez, 272 P.3d 705 (Okla. 2012) (trial court must give jury instructions that accurately reflect the law)
- Flanders v. Crane Co., 693 P.2d 602 (Okla. 1984) (choice‑of‑law: substantive law of foreign state controls rights; forum procedural law governs pleading and enforceability)