BRYCE J. WALLACE, ELITE DRILLERS CORPORATION, and Intervenor UNITED FIRE & CASUALTY COMPANY and its parent, UNITED FIRE GROUP, INC., v. ENERGEN RESOURCES CORPORATION
No. 08-17-00248-CV
COURT OF APPEALS EIGHTH DISTRICT OF TEXAS EL PASO, TEXAS
April 24, 2020
Appeal from the 143rd District Court of Reeves County, Texas (TC# 15-04-21001-CVR)
O P I N I O N
is not liable under
Energen owns a mineral leasehold estate in Reeves County, Texas. In September 2013, Energen received regulatory approval to drill its Langley 2-36 1H oil and gas well. (Oil Well or Langley Well). Energen contracted with Nabors Drilling Technologies USA, Inc. (Nabors) to drill the well on its property.3 Pursuant to their drilling agreement, Nabors furnished equipment and labor to perform drilling services under the “direction, supervision and control” of Energen, and Energen assumed all risk, responsibility and liability for the drilling of the Oil Well and its operations. Based on geological data, Energen planned for Nabors to drill the Oil Well to a total vertical depth of 10,945 feet. On a daily basis, Energen received reports of well activity, events and operations.
To assist with the drilling and operations of the Oil Well, Energen contracted with Dubose Drilling, Inc. (Dubose) to drill a nearby Water Well on its property to a depth of approximately 500 to 550 feet. Energen set the Water Well site approximately 500 feet from the Oil Well. Initially, Dubose drilled the Water Well to the target depth but found no water. Energen then
suspended any further drilling. But later, after further input from their in-house geologists, Energen decided it wanted to resume drilling the Water Well to a deeper depth. Geologists recommended drilling to a depth of 800 feet based on their research of known aquifers in the area. When contacted for further drilling, Dubose informed Energen it had already scheduled its rig for another job, but it offered to locate another contractor.
Dubose subcontracted with Elite to complete the drilling of the Water Well. Working for Elite, Wallace was assigned to supervise the work of completing Energen‘s Water Well. After drilling to a depth of approximately 900 feet, Elite workers confirmed they found an acceptable amount of water in the aquifer that had been targeted and they were instructed to complete the well. While Elite workers completed the Water Well, Energen‘s drilling activity continued on the nearby Oil Well.
On January 14, 2014, the Oil Well experienced a gas kick that resulted in gas circulating to the surface causing workers to shut in the well with mud. For days afterwards, workers noted continuing instances of lost circulation and lost returns while the well remained operating and otherwise flowing. Meanwhile, on the nearby Water Well, Wallace continued supervising Elite workers as they completed casing of the water well with a steel liner, welded joints, and packed in gravel.
On January 17, 2014, while completing the Water Well, Wallace noticed air pressure increasing when they ran the drill pipe to a depth of nearly 500 feet to blow out drilling mud. After shutting off the air compressor, Wallace soon realized that the increased pressure originated not from Elite‘s equipment but from natural gas arising from down hole. Reacting, he yelled for everyone to run. Soon, the gas exploded into a ball of fire that engulfed Wallace and the well site generally. Following the explosion, natural gas continued flowing and the Water Well remained
on fire for several days. From the fire, Wallace sustained severe burns to his body. Elite sustained property damage to its rig and equipment that resulted in lost business.
Energen filed a traditional motion for partial summary judgment asserting that
Responding, Wallace and Elite asserted that by relying on
work did not in any way involve the constructing, repairing, renovating or modifying of the Oil Well, which was the improvement which they alleged was either defective or negligently used. In the alternative, Wallace and Elite further argued that, even if
In ruling on the motion, the trial court agreed with Energen and ordered that Wallace and Elite take nothing on their negligence claims against Energen. This appeal followed.
II. DISCUSSION
Wallace and Elite present two related issues contending the trial court erred in granting summary judgment. In Issue One, they contend that Energen failed to meet its evidentiary burden of establishing that
We begin with the threshold question of whether Energen conclusively established the application of
A. Chapter 95
- against a property owner, contractor, or subcontractor for personal injury, death, or property damage to an owner, a contractor, or a subcontractor or an employee of a contractor or subcontractor; and
- 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.
To establish liability,
A property owner is not liable for personal injury, death, or property damage to a contractor, subcontractor, or an employee of a contractor or subcontractor who constructs, repairs, renovates, or modifies an improvement to real property, including personal injury, death, or property damage arising from the failure to provide a safe workplace unless:
- the property owner exercises or retains some control over the manner in which the work is performed, other than the right to order the work to start or stop or to inspect progress or receive reports; and
- the property owner had actual knowledge of the danger or condition resulting in the personal injury, death, or property damage and failed to adequately warn.
Relevant to this case,
In construing the statute, the Supreme Court of Texas highlighted the interplay of
Chemical Co., 463 S.W.3d 42, 46 (Tex. 2015) (citing
B. Traditional Summary Judgment Standard of Review
A trial court‘s granting of summary judgment is reviewed de novo. Tarr v. Timberwood Park Owners Ass‘n, 556 S.W.3d 274, 278 (Tex. 2018). A party moving for traditional summary judgment has the burden to prove that no genuine issue of material fact exists, and the movant is entitled to judgment as a matter of law.
If the movant establishes its right to judgment as a matter of law, the burden shifts to the nonmovant to present evidence raising a genuine issue of material fact precluding summary judgment. Ballard v. Arch Ins. Co., 478 S.W.3d 950, 953 (Tex.App.—Houston [14th Dist.] 2015, no pet.); Hovorka v. Cmty. Health Sys., Inc., 262 S.W.3d 503, 508 (Tex.App.—El Paso 2008, no pet.). To determine if a fact issue exists, we must consider whether reasonable and fair-minded jurors could differ in their conclusions in light of all the evidence presented. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007). We review summary judgment evidence in the light most favorable to the party against whom the summary judgment was rendered, crediting evidence favorable to that party if reasonable jurors could and disregarding contrary evidence unless reasonable jurors could not. SeaBright Ins. Co. v. Lopez, 465 S.W.3d 637, 641 (Tex. 2015).
As a property owner seeking protection, Energen shoulders the burden of establishing
Here, the parties do not dispute that Energen is a property owner, Elite is a subcontractor, Wallace is an employee of a subcontractor, and the claims at issue are for personal injury and property damage. See
C. Complaints about Appellee‘s Briefing
Before reaching the threshold question of whether Energen established the applicability of
1. Objection concerning the pleading of summary judgment grounds
In their reply brief, Wallace and Elite first object that Energen presented arguments in its briefing that were not presented in its motion for summary judgment contending these arguments may not be raised for the first time on appeal nor otherwise form the basis for affirming the trial court‘s ruling. It is well-settled that “a motion for summary judgment must itself expressly present the grounds upon which it is made.” McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993); see
without detail and argument.” McConnell, 858 S.W.2d at 340 (quoting Roberts v. Sw. Tex. Methodist Hosp., 811 S.W.2d 141, 146 (Tex.App.—San Antonio 1991, writ denied)).
At trial, Energen moved for summary judgment on the grounds that “(1)
By their objection, Wallace and Elite contend that not until Energen‘s responsive briefing on appeal did it raise the “principal argument” that claimants’ allegations of negligence present a premises defect claim based on a dangerous condition of the Water Well—as opposed to a negligent activity claim based upon the drilling of the Oil Well. They further assert that Energen took a nearly opposite position in the trial court when it stated that “the water well and the oil and gas well are the same improvement for the purpose of
On review, Energen‘s primary argument in the trial court for the application of
Plaintiffs allege that these injuries occurred while drilling and completing the Water Well. A water well is an improvement to real property within the meaning of Chapter 95. Therefore, Plaintiffs’ claims against Energen fall squarely within the plain language of Chapter 95
and are governed by the statute as a matter of law.
As an alternative basis of the motion, however, Energen also presented a secondary argument that connected the Oil Well and the Water Well by claiming that the water well facilitated
the production of the oil well. Energen‘s motion stated, “[i]t is undisputed that the purpose of drilling the Water Well was to obtain water for use in the fracing [sic] and completion of the Langley Well, which in turn would allow the Langley Well to produce oil and gas.” Thus, Energen argued, “[t]o the extent Plaintiffs claim that their injuries were caused by a condition of Energen‘s Langley Well and not the Water Well,
We conclude that Wallace and Elite‘s objection reads Energen‘s motion too narrowly. Although Energen‘s primary argument heavily focused on the Water Well, the scope of the motion nonetheless broadly argued that
Regardless of secondary arguments exchanged by the parties below, we conclude that Energen‘s motion for summary judgment itself broadly asserted that
2. Objection concerning the pleading of an affirmative defense
Secondly, Wallace and Elite also object that affirmative defenses or avoidances not pleaded in an answer may not be argued for the first time on appeal. Specifically, Wallace and Elite argue that Energen‘s argument in which it contends that the claims arose from a premises condition of
the Water Well rather than a negligent activity on the Oil Well is in fact an affirmative defense which Energen failed to properly plead in its answer.
Having overruled the briefing objections, we return to our consideration of the threshold question of
D. Chapter 95‘s Applicability to the Claims
On appeal, Wallace and Elite argue that their claims do not meet
As stated earlier,
related statutes.” 463 S.W.3d at 48. Relevant to this case, Abutahoun highlighted three distinct elements required for applicability which are included among
First, the Court noted that the phrase “arises from,” has been consistently defined “as being intended, at minimum, to capture causation.” Abutahoun, 463 S.W.3d at 48 (citing Ryder Integrated Logistics, Inc. v. Fayette Cnty., 453 S.W.3d 922, 928–29 (Tex. 2015) (per curiam) (construing how “arising from” was used in the
Second, Abutahoun further noted that the inclusion of the disjunctive phrase, “condition or use,” reflected the Legislature‘s intent for the statute to apply to all negligence claims that arise from either a premises defect or negligent activity of a property owner or its employees. Id. at 50 (citing
Third, in construing the final clause providing, “where the contractor or subcontractor constructs, repairs, renovates, or modifies the improvement,” Abutahoun explained that this ending phrase of the provision operated in line with causation to limit
Id. at 48 (citing
A year after Abutahoun‘s release, the Supreme Court in Ineos again addressed
pressure. Id. When the worker removed a valve as part of performing his work, a burst of gas exploded out of the pipe that he worked on causing burns to his torso, neck, and face. Id. In filing suit against the plant owner, the worker theorized that a leaky valve located several hundred feet away from the valve on which he performed his work had caused gas to enter the pipes, which in turn resulted in an explosion when he opened the pipe system on which he was performing his work. Id. at 560.
Adding clarity to
1. Negligent Activity and Premises Defect
Relying on Abutahoun and Ineos, Wallace and Elite contend they advanced a theory from the outset of their case alleging that “the natural gas entered into the Water Well as a result of the
negligent activities of [Energen] and its representatives in the drilling of the nearby Oil Well, and that, but for the negligent drilling and resulting condition of the Oil Well, natural gas would never have entered the aquifer and then borehole of the Water Well.” They stress that the evidence established they were not working on the Oil Well at the time of the incident; but rather, they worked on the Water Well, an improvement
In opposition, Energen does not argue on appeal that the improvements were connected or otherwise part of the same system. Nor does Energen argue that the evidence established that Wallace and Elite in fact worked on the Oil Well. Rather, Energen contends that the evidence established that the claims arose not from a negligent activity of the Oil Well but from a premises condition of the Water Well, which is the same improvement upon which Wallace and Elite were working. Said differently, Energen argues that Wallace and Elite improperly re-cast their claim from premises defect on the Water Well to negligent activity on the Oil Well to avoid
In Abutahoun, the Court observed that “[t]he Legislature‘s enunciation of the two concepts of ‘condition or use’ [was] consistent with [the] Court‘s common law jurisprudence, also reflected in
Abutahoun recognized that a property owner‘s duty to keep premises in a safe condition “may subject the property owner to direct liability for negligence in two situations: (1) those arising from a premises defect, [and] (2) those arising from an activity or instrumentality.” Id. at 50 (citing Redinger v. Living, Inc., 689 S.W.2d 415, 417 (Tex. 1985) and Keetch v. Kroger Co., 845 S.W.2d 262, 264 (Tex. 1992)). While premises defect encompasses a nonfeasance theory based on the owner‘s failure to take measures to make the property safe, “negligent activity encompasses a malfeasance theory based on affirmative, contemporaneous conduct by the owner that caused the injury[.]” Id. (citing Del Lago Partners, Inc. v. Smith, 307 S.W.3d 762, 776 (Tex. 2010)); see also State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006) (explaining that negligent activity claims require that “the claimant‘s injury result from [the] contemporaneous activity itself rather than from a condition created on the premises by the activity“); Keetch, 845 S.W.2d at 264 (explaining that a premises defect claim exists when the injury allegedly occurred as a result of a condition created by the activity while a negligent activity theory requires that the person have been injured by or as a contemporaneous result of the activity itself rather than by a condition created by the activity). Notwithstanding their differences, Abutahoun confirmed that “both claims are a species of negligence,” as required by the statute‘s terms. 463 S.W.3d at 50.
When construing the same “condition or use” phrasing in relation to the
categorized as based on a premises defect or a condition or use of tangible personal property....” Sampson, 500 S.W.3d at 386. Accordingly, to determine whether Energen met its evidentiary burden of showing that
Although Keetch is not a
2. The True Nature of the Claims
Guided by Keetch, we must determine whether Wallace and Elite alleged that their injuries and damages occurred by or as a contemporaneous result of the drilling activity on the Oil Well, or by a premises condition that was created on the Water Well. Keetch, 845 S.W.2d at 264. As earlier stated, Energen neither disputes that the improvements are distinct from each other nor that Wallace and Elite worked on the Water Well, not the Oil Well. See Ineos, 505 S.W.3d at 567 (
We conclude that Wallace and Elite not only plead negligent activity on the Oil Well, occurring while they worked on the Water Well, but also presented
Wallace and Elite alleged the following series of events and conditions in support of their claims: that on January 14, 2014, the Oil Well experienced a gas kick at a depth of 8,898 feet, and in turn the kick caused the well to be shut-in which resulted in gas circulating to the surface; that during the gas kick, the Oil Well experienced a complete loss of fluid returns so severe that defendants were unable to keep the hole full; that the shutting in of the well following the gas kick caused pressure to build which should have been measured, reported, isolated and identified; that encountering high pressure gas and simultaneous loss of gas and drilling fluids to an unknown zone was not routine and demanded a prudent safety procedure and hazard reassessment, known as a management of change (MOC); and that other difficulties and uncertainties were additionally encountered to include the quality of the cement job which raised the probability that a seal did not exist for the entire length of casing and that the cement job was not performed to specification.
Among their allegations, Wallace and Elite claimed that Energen was fully aware that claimants were “simultaneously drilling the nearby Water Well,” and that the resulting injuries were solely and proximately caused by the negligence of Energen and its representatives who had continued their active drilling of the Oil Well at the time and location of the incident in question. They further claimed they relied upon Energen “to warn them of any defective and/or dangerous conditions of which [Energen] knew, should have known or were on notice, that could foreseeably be encountered by [claimants] or impact the drilling and completion of the Water Well.” Notably, Wallace and Elite alleged that “the high volumes of natural gas [was] not present in the aquifer as a result of natural reasons, but such presence is directly connected to the drilling of the Oil Well and the actions and/or omissions of those involved in the drilling of the Oil Well.” Based on the allegations of the pleading, we conclude that Wallace and Elite alleged a claim of negligent drilling
on the Oil Well that proximately caused injuries and damages which they sustained while they were working on the Water Well. Cf. Keetch, 845 S.W.2d at 264.
As Abutahoun instructed,
As evidentiary support of negligent drilling, Wallace and Elite presented daily operational reports of the Oil Well, which were produced by Energen, describing pertinent events and conditions occurring for a period of days beginning with the gas kick on January 14 through the eruption of fire on January 17. The daily reports showed that the Oil Well continued operating,
round the clock, throughout this relevant period, while multiple conditions and events were reported by representatives of Energen as follows:
Daily Morning Report:
- Report date 1/15/2014, Work date 1/14/2014 at 21:00: Well Control Shut in Well and Line up through Gas Buster; Turned on Flare Line, Displace Mud; at 2:30: Lost Circulation Attempt to Circ. & No Returns;
- Report date 1/16/2014, Work date 1/15/2014 at 13:30: Circulate and Condition Stop & Circulate Gas thru Gas Buster.
Energen Drilling Report:
- Report date 1/15/2014, [Work date 1/14/2014] at 21:15: Well kicked ... 8,898‘; at 2:45 Unable to break circ. no returns.
- Report date 1/16/2014, [Work date 1/15/2014] at 6:00: still no returns; 12:30 Drill without returns for a total of 15’ & returns slowly came back; 23:45: Well flowing.
- Report date 1/17/2014, [Work date 1/16/2014] at 13:30: Unable to circ.
- Report date 1/18/2014, [Work date 1/17/2014] at 14:00: Monitor fire on water well rig by Frac water pits; at 18:00: Drill & survey.
Drilling Mud Report:
- Undated Report: drilled to 8,898‘, took kick, shut well in, lost returns, still no returns.
Viewing the evidentiary inferences in favor of Wallace and Elite, as we must, we conclude that a fact issue exists as to whether contemporaneous drilling on the Oil Well caused the injuries that were sustained by claimants while they worked on the Water Well. See Wilson, 168 S.W.3d at 822-24 (describing that a matter is conclusively established if reasonable people could not differ as to the conclusion to be drawn from the evidence). Unlike the complete absence of ongoing activity established in Keetch, the evidence here raised a question of fact as to whether the continuing operations on the Oil Well—which included periods of lost circulation and lost returns—proximately caused high volumes of natural gas to enter the aquifer from which Wallace and Elite were simultaneously drilling to complete the Water Well. Cf. Keetch, 845 S.W.2d at 264;
activity occurred on the Oil Well that resulted in the creation of a dangerous condition on the Water Well. Cf. Keetch, 845 S.W.2d at 264 (holding that recovery on a negligent activity theory requires
In characterizing the claims as alleging a premises defect of the Water Well, Energen argues that “an injury caused by the release of natural gas or chemicals from an improvement presents a cause of action for a dangerous condition of that improvement.” In support of their argument, Energen relies on two cases which allege claims against property owners but without
On review, the Texas Supreme Court characterized the claim as one sounding in premises liability given the allegation that the former property owner had created a dangerous condition on the property Id. at 648. However, because the evidentiary record established that the former owner sold the plant eight years earlier, the Court found that the owner was not liable for plaintiff‘s injuries. Id. “Without ownership, possession, or control of the plant, [the former owner] could not assess the continued safety of the acid-addition system or cure any deficiencies.” Id. Plainly, unlike the present case, Jenkins includes no allegations or evidentiary proof of contemporaneous activity to support a claim of negligent activity. Thus, we conclude that Jenkins is distinguishable and unpersuasive to the circumstances of this case.
Similarly, we are not persuaded by Exxon Corp. v. Garza, 981 S.W.2d 415, 418 (Tex.App.—San Antonio 1998, pet. denied). In Garza, the plaintiff worked as a truck driver hauling gas condensate to and from a refinery to a leasehold owned by Exxon. Id. at 418. While on Exxon‘s property, Garza injured his knee when he hurriedly exited his truck after he smelled strong gas fumes and saw that a fire had erupted on a nearby electrical transformer. Id. In filing suit against Exxon, Garza alleged that Exxon had been negligent in allowing a contractor “to install the wrong kind of connections in the transformers on the Yates Lease.” Id. at 420. Rejecting the claim of negligent activity, our sister court found that plaintiff was not injured “by or as a contemporaneous result of the negligent installation.” Id. We conclude that Garza is distinguishable from the allegations and evidentiary record presented in this case.
In summary, we conclude that the record of this case contains evidence sufficient to create a fact issue about whether the fire on the Water Well and resulting injuries to Wallace and Elite were proximately caused as a contemporaneous result of Energen‘s negligent drilling of the Oil Well. See Abutahoun, 463 S.W.3d at 50; Cf. Keetch, 845 S.W.2d at 264. Thus, we hold that Energen‘s summary judgment motion did not establish as a matter of law that
Accordingly, we sustain Issue One.
Having determined that a factual issue precludes summary judgment on whether
Accordingly, we do not reach Issue Two.
III. CONCLUSION
We conclude that Energen has not conclusively established that the claims asserted by Wallace and Elite arose from a condition or use of the Water Well where Wallace and Elite constructed, repaired, renovated, or modified the Water Well as required by
GINA M. PALAFOX, Justice
April 24, 2020
Before Alley, C.J., Rodriguez, and Palafox, JJ.