Opinion
No. 01-09-01140-CV
Opinion issued November 17, 2011.
On Appeal from the 295th District Court, Harris County, Texas, Trial Court Case No. 2007-73468.
Cory Daniel Itkin, Arnold Itkin LLP, Houston, TX.
Kurt B. Arnold, Arnold Itkin, LLP, Houston, TX.
Russell S. Post, Beck Redden Secrest, L.L.P., Houston, TX.
Stephen Douglas Pritchett, Beck Redden Secrest, L.L.P., Houston, TX.
Rick Thompson, Hankinson Levinger L L P, Dallas, TX.
Deborah G. Hankinson, Hankinson Levinger LLP, Dallas, TX.
Hubert Oxford III, Benckenstein Oxford, LLP, Beaumont, TX.
Karen Kay Maston, Johnson, Trent, West Taylor, LLP, Houston, TX.
Reagan Lee Butts, Cotton, Bledsoe, Tighe Dawson, P.C., Midland, TX.
Barry Nathan Beck, Cotton, Bledsoe, Tighe Dawson, P.C., Midland, TX.
David Wayne Lauritzen, Cotton, Bledsoe, Tighe Dawson, P.C., Midland, TX.
Panel consists of Justices JENNINGS, SHARP and BROWN.
OPINION
Jason Jenkins was injured at the Equistar chemical plant, and the jury found that Occidental Chemical Corporation negligently designed the plant's acid addition system, awarding Jenkins damages. In two issues, Jenkins contends that the trial court erred in entering judgment in favor of Occidental on the grounds that his claims were barred by two statutes of repose. In its first issue, Occidental responds to Jenkins's two issues. In its second issue, Occidental raises three alternative grounds on which the trial court's judgment could be affirmed. We sustain Jenkins's issues and overrule Occidental's issues. We reverse the trial court's judgment and remand for entry of judgment on the jury's liability and damages findings in Jenkins's favor.
See TEX. CIV. PRAC. REM. CODE ANN. §§ 16.008, 16.009 (West 2002).
Background
Occidental owned a chemical plant in Bayport. In 1992, Occidental installed an acid addition system at the plant to regulate the acidity of a chemical compound it produced. Occidental employee Neil Ackerman developed the conceptual design for the system, shepherded the design process from start to finish, and was responsible for ?getting it done." He worked in collaboration with a team of Occidental employees and under the supervision of team leader Kathryn Hanneman. Ackerman had an engineering degree but was not a licensed engineer. Hanneman and other members of the design team were licensed engineers. Occidental hired a third party engineering firm to create the detailed design drawings for the acid addition system. It also ordered some of the components of the acid addition system and hired an independent contractor to install the acid addition system.
Six years later, Occidental sold the plant, with the acid addition system in place. Eight years after Occidental sold the plant, the acid addition system sprayed acetic acid at Jenkins, an operator at the plant, partially blinding him. Jenkins sued Occidental for negligently designing the acid addition system. Occidental pled, as affirmative defenses, that Jenkins's claims were barred by two statutes of repose — one governing claims against registered or licensed professionals who design improvements to real property and the other governing claims against those who construct such improvements. See TEX. CIV. PRAC. REM. CODE ANN. §§ 16.008, 16.009 (West 2002).
Jenkins brought claims against other defendants as well, but Occidental was the only remaining defendant at the time of trial. Jenkins also asserted breach of warranty and strict liability claims against Occidental, but the trial court granted a directed verdict on those claims.
After a two-week trial, the jury found in favor of Jenkins on his negligent design claim and attributed seventy-five percent of the liability to Occidental. Occidental submitted questions to the jury related to its statute of repose defenses, in response to which the jury made the following findings about the acid addition system: (1) it was an improvement; (2) it was not designed by a licensed or registered engineer; and (3) it was designed under the supervision of a licensed or registered engineer. The trial court rendered a take-nothing verdict on the basis of Occidental's statute of repose defense.
The jury assigned five percent of the liability to Jenkins and twenty percent to Equistar, the owner of the plant at the time of the injury, whom Occidental designated as a responsible third party.
Standard of Review
In this review, we must interpret the statutes of repose set forth in sections 16.008 and 16.009 of the Civil Practice and Remedies Code. The meaning of a statute is a question of law, which we review de novo. MCI Sales Serv., Inc. v. Hinton, 329 S.W.3d 475, 500 (Tex. 2010); Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 437 (Tex. 2009). In construing sections 16.008 and 16.009, our primary goal is to ascertain and give effect to the Legislature's intent as expressed by the words of the statute. MCI Sales, 329 S.W.3d at 500; Entergy Gulf States, 282 S.W.3d at 437. We give the words of the statute their plain and common meaning unless the statute defines the words otherwise, a different meaning is apparent from the context, or using the common meaning would lead to absurd results. FKM P'ship, Ltd. v. Bd. of Regents of Univ. of Houston Sys., 255 S.W.3d 619, 633 (Tex. 2008). When the words of the statute are clear, they are determinative. Entergy Gulf States, 282 S.W.3d at 437.
Occidental relies on several jury findings to support its statute of repose defenses but challenges the jury's finding that the acid addition was not designed by an Occidental employee. Occidental asserts that it conclusively proved the opposite. It further asserts that it conclusively proved alternative elements of its statute of repose defense on which it failed to request a jury finding: that the system was planned by an Occidental employee licensed in engineering and that it was inspected by an Occidental employee licensed in engineering. A statute of repose provides an affirmative defense, and Occidental bore the burden of proving all factual requisites to the application of the statutes of repose. See Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 121 (Tex. 1996) (holding that defendant bore burden of establishing right to summary judgment on basis of statute of repose defense); Nexen Inc. v. Gulf Interstate Eng'g Co., 224 S.W.3d 412, 416 (Tex. App.-Houston [1st Dist.] 2006, no pet.) (observing that statute of repose operates as affirmative defense on which defendant bears burden of proof); see also TEX. R. CIV. P. 94. Unless Occidental conclusively established each element of its defense, its failure to obtain a jury finding in its favor is fatal. See Texaco, Inc. v. Pennzoil, Co., 729 S.W.2d 768, 805-806 (Tex. App.-Houston [1st Dist.] 1987, writ ref'd n.r.e.) (holding that, unless an affirmative defense is established as matter of law, defendant bears burden of obtaining jury findings necessary to support defense); Whitney Nat'l Bank v. Baker, 122 S.W.3d 204, 207 (Tex. App.-Houston [1st Dist.] 2003, no pet.) (stating that, when affirmative defense was not submitted to jury, court reviews record to determine whether issue was disputed or whether defense was conclusively established by evidence).
Occidental has not argued that it is entitled to any deemed jury findings.
Occidental's Statute of Repose Defenses
In two issues, Jenkins argues that the trial court erred in entering judgment in favor of Occidental on the basis of the statutes of repose because Occidental did not conclusively establish its entitlement to the defenses provided by these statutes of repose. The trial court's final judgment is based, in part, on the jury's findings that the acid addition system was an improvement and was designed under the supervision of an engineer. The trial court interpreted these findings as establishing Occidental's right to a take-nothing judgment on the basis of its statute of repose defenses. The trial court did not specify which statute of repose — section 16.008 or section 16.009 — it relied on in reaching that conclusion. We address each in turn.
A. Introduction to sections 16.008 and 16.009 of the CPRC
Sections 16.008 and 16.009 of the Civil Practice and Remedies Code are ten-year statutes of repose. See TEX. CIV. PRAC. REM. CODE ANN. §§ 16.008, 16.009. Section 16.008 provides that a suit ?against a registered or licensed architect, engineer, interior designer, or landscape architect . . . who designs, plans, or inspects the construction of an improvement to real property or equipment attached to real property" may not be brought more than ten years after substantial completion of the improvement or the beginning of operation of the equipment. TEX. CIV. PRAC. REM. CODE ANN. § 16.008(a). Section 16.009 provides that a suit "against a person who constructs or repairs an improvement to real property" may not be brought more than ten years after substantial completion of the improvement. TEX. CIV. PRAC. REM. CODE ANN. § 16.009(a).
Thus, sections 16.008 and 16.009 "differ in who they protect and the object of the work protected." Sonnier v. Chisholm-Ryder Co., Inc., 909 S.W.2d 475, 479 (Tex. 1995). Section 16.009 relates only to improvements to real property but protects a broader class of person: anyone who constructs or repairs such an improvement. TEX. CIV. PRAC. REM. CODE ANN. § 16.009(a); see also Sonnier, 909 S.W.2d at 479. Section 16.008 protects only registered or licensed design professionals, but applies to a broader category of work: improvements to real property and equipment attached to real property. TEX. CIV. PRAC. REM. CODE ANN. § 16.008(a); see also Sonnier, 909 S.W.2d at 479.
B. Section 16.008 does not bar Jenkins's claim against Occidental
In his first issue, Jenkins argues that the trial court erred in rendering judgment for Occidental under section 16.008 because (a) Occidental is not a registered engineering firm, (b) Occidental failed to prove conclusively that the acid addition system was designed by a registered or licensed engineer, and (c) Occidental's finding that the design was supervised by a registered or licensed engineer is immaterial. Occidental does not contend that it is a registered engineering firm or that Ackerman was a registered or licensed engineer. Instead, it contends that the jury finding that the acid addition system was designed under the supervision of a licensed engineer is sufficient to establish application of the statute. Alternatively, it contends that the evidence conclusively established that the acid addition system was designed, inspected and planned by Henneman rather than Ackerman or any third party. We conclude that supervision of the design by a licensed engineer does not invoke the statute, by the statute's plain language and in light of distinctive language in its sister statute. We also conclude that Occidental did not conclusively prove that Henneman designed, inspected, and planned the acid addition system.
1. Supervision by a licensed engineer does not, alone, implicate the protections of section 16.008
By its clear and unambiguous language, section 16.008 limits its scope to claims ?against a registered or licensed . . . engineer . . . who designs, plans, or inspects" the construction of an improvement to real property. TEX. CIV. PRAC. REM. CODE ANN. § 16.008(a). The jury found that the acid addition system was an improvement to real property. Section 16.008 thus applies if the acid addition system was designed, planned, or inspected by a registered or licensed engineer. The jury found that it was not. The jury's finding that the acid addition system was designed under the supervision of a registered or licensed engineer is not material to the application of section 16.008, which makes no reference to one who supervises the design of an improvement. See id.
It is undisputed that Occidental is not a registered or licensed engineering firm. Therefore, it cannot argue that the entity itself was a ?registered or licensed . . . engineer . . . who design[ed]" the acid addition system. SEE TEX. CIV. PRAC. REM. CODE ANN. § 16.008(a).
Although our holding is dictated by the plain language of the statute, examining section 16.008 in the context of its sister statute buttresses our conclusion. See TEX. GOV'T CODE ANN. § 311.023 (West 2005). Sections 16.008 and 16.009 were enacted for a similar purpose but have different parameters. See Sonnier, 909 S.W.2d at 479. The legislature chose to limit the class of persons protected by section 16.009 only with respect to the nature of their work: it applies to any person who "constructs or repairs an improvement to real property." See TEX. CIV. PRAC. REM. CODE ANN. § 16.009(a). By comparison, the legislature chose to limit the class of persons protected by section 16.008 not only with respect to the nature of their work but also with respect to the nature of the persons: it expressly applies only to "registered or licensed" design professionals. Id. § 16.008(a). The legislature could have offered this protection to unlicensed persons performing the same work, but it chose not to do so.
Occidental relies on Texas Gas Exploration Corp. v. Fluor Corp., 828 S.W.2d 28 (Tex. App.-Texarkana 1991, writ denied) and Sowders v. M.W. Kellogg Co., 663 S.W.2d 644, 646 (Tex. App.-Houston [1st Dist.] 1983, writ ref'd n.r.e.), to support its contention that section 16.008 applies when an improvement is designed under the supervision of, but not by, a registered or licensed engineer. While both opinions contain factual discussions regarding supervisory work by a licensed engineer, the holdings in these cases do not support Occidental's position.
The issue in Texas Gas was not whether the claims against the defendant, Fluor, fell within the scope of sections 16.008 and 16.009; rather, the issue was whether the statutes applied retroactively and whether Fluor was estopped from relying on them. 828 S.W.2d at 30. Occidental relies on a statement in the opinion that the ?design and construction [of an expansion to a gas processing plant] were both performed under the supervision of a Texas-registered professional engineer." But nothing in the opinion indicates that the expansion was not designed by a licensed engineer — a question that was not at issue. See Id. at 30-31.
Sowders also did not address the issue presented here. In Sowders, the plaintiffs contended that the statute of repose for architects and engineers did not apply to their claims against M.W. Kellogg, because it was a manufacturer, not a designer, of the propane unit in question. Sowders, 663 S.W.2d at 646. The court held that the record did not support Sowders's contention that M.W. Kellogg was merely a manufacturer, reciting affidavit testimony that M.W. Kellogg was hired to construct and install the propane unit and that ?the aforementioned engineering services were performed by or under the responsible charge of the engineers authorized to practice professional engineering in New York State." Id. at 649. As in Texas Gas, the court's reference to ?supervision" relates to the construction as well as the design of the unit at issue. It does not suggest that the unit was not designed by registered or licensed engineers. See id.; Tex. Gas Exploration, 828 S.W.2d at 30-31.
We conclude that the jury's finding that a registered or licensed engineer supervised the design of the acid addition system does not establish Occidental's right to the protections of section 16.008.
2. Occidental did not conclusively establish that Henneman designed, planned, and inspected the acid addition system
Occidental asserts that it conclusively proved that Henneman, a licensed engineer and the head of Occidental's design team for the project, designed the acid addition system. The jury disagreed, and there is evidence in the record that supports the jury's finding. The evidence at trial was that Niel Ackerman, who was not a registered or licensed engineer, created the conceptual design for the acid addition system. No one employed by Occidental prepared the detailed plans; Occidental contracted out the design drafting to a third party engineering firm, HMW Design. Henneman testified that the conceptual design originated from Ackerman. She also testified that the plant modification document for the acid addition system came from Ackerman. That document identifies Ackerman as the "originator" and includes instructions "per Neil Ackerman." According to Henneman, the task of the originator is to "start the process." Henneman also testified that Ackerman was in charge of shepherding the design process from start to finish. Ackerman testified that he coordinated everyone working on the project and was responsible for presenting the final design. This evidence is sufficient to support the jury's finding that the acid addition system was designed by Ackerman, who was not a registered or licensed engineer, rather than by Henneman.
Occidental points out that Henneman initialed the final document, but this does not, alone, conclusively establish that Henneman designed the acid addition system. Henneman also testified that she was the one who decided to replace the old system for modifying the acid and Ph-balance, that the design process was a collaborative process, and that Ackerman "did not do this all by himself." But the jury was free to disregard this testimony. Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 774-75 (Tex. 2003) ("the jury 'could believe all or any part of the testimony of any witness and disregard all or any part of the testimony of any witness.'") (quoting Pilkington v. Kornell, 822 S.W.2d 223, 230 (Tex. App.-Dallas 1991, writ denied)); Benavente v. Granger, 312 S.W.3d 745, 748 (Tex. App.-Houston [1st Dist] 2009, no pet.) ("A jury may believe one witness and disbelieve another, and it may resolve inconsistencies in any witness's testimony.").
Occidental alternatively asserts that it conclusively proved that Henneman planned and inspected the acid addition system. See TEX. CIV. PRAC. REM. CODE ANN. § 16.008(a) (statute of repose applies to claims ?against a registered or licensed . . . engineer . . . who designs, plans, or inspects" the construction of an improvement to real property). Occidental did not submit a jury question on this issue. Jenkins points out that Occidental's liability arises out of the design of the acid addition system, not the planning or inspection of the system. Assuming without deciding that Occidental could invoke section 16.008 on the basis of Henneman's planning or inspection of the acid addition system, we conclude that Occidental did not conclusively prove that Henneman planned and inspected the system.
Occidental relies on evidence regarding Henneman's role in forming the design team and as head of that team. Henneman also reviewed and commented on some of the design drawings. While this evidence demonstrates that Henneman had some involvement in the design process, it does not conclusively establish that she personally planned and inspected the construction of the acid addition system. The jury could have reasonably concluded that Henneman's role was supervisory in nature and that Ackerman performed the actual planning and inspection of the construction.
The jury also could have reasonably concluded that the planning and inspection of the construction of the acid addition system was performed by an employee of HMW Design, the third party contractor Occidental hired to do the design drafting. For example, the design drawings reflect that they are ?by" HMW employee Chet Wood, and those that are stamped ?APPROVED FOR CONSTRUCTION" bear his initials on the approval signature line. Henneman testified that HMW put together the drawings and material regarding ?how [the acid addition system] was to actually be constructed."
At trial, one of the reasons espoused by the court for including in its charge a jury question on the design of the acid addition system that was specific to a registered or licensed engineer ?employed by Occidental" was the possibility that the jury might conclude that the system was designed by an HMW employee.
The jury likewise could have reasonably concluded that Henneman planned and inspected the construction of the acid addition system. But Occidental neglected to obtain a jury finding on this issue. Occidental therefore failed to establish its statute of repose defense on this basis. See Texaco, 729 S.W.2d at 805-806; Whitney Nat'l Bank, 122 S.W.3d at 207.
We sustain Jenkins's first issue.
C. Section 16.009 does not bar Jenkins's claim against Occidental
In his second issue, Jenkins argues that the trial court erred in rendering judgment for Occidental under section 16.009 because (a) the jury's liability finding is based on negligent design rather than negligent construction, (b) Occidental admitted it did not construct the acid addition system, and (c) Occidental is not entitled to "respondeat repose" for the acts of third party contractors. See TEX. CIV. PRAC. REM. CODE ANN. § 16.008(a). Occidental contends that it did "construct" the acid addition system, within the meaning of the statute, by hiring and supervising a third party contractor who constructed the system.
By its plain language, Section 16.009 applies only to claims brought against "a person who constructs or repairs an improvement to real property" in an action "arising out of a defective or unsafe condition of the real property or a deficiency in the construction or repair of the improvement." See T EX . C IV . P RAC . R EM . CODE ANN. § 16.009(a). Thus, a defendant seeking repose under Section 16.009 must prove three requisites to the statute's application:
The Code Construction Act defines "person" as including a "corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity." TEX. GOV'T CODE ANN. § 311.005(2) (West 2005).
(1) "the defendant must be the one who constructs or repairs";
(2) "that which the defendant constructs or repairs must be an improvement to real property"; and
(3) the action must "aris[e] out of a defective or unsafe condition of real property or a deficiency in the construction or repair work."
Williams v. U.S. Natural Res., Inc., 865 S.W.2d 203, 206 (Tex. App.-Waco 1993, no writ) (first and second criteria) (emphasis in original); TEX. CIV. PRAC. REM. CODE ANN. § 16.009(a) (first, second, and third criteria); see generally Sonnier, 909 S.W.2d at 481-82 (generally endorsing Williams's analysis).
The jury found that the acid addition system was an improvement to real property, and Jenkins does not challenge that finding in this appeal. Therefore, the second criterion is satisfied. The parties' arguments focus on whether the first criteria is satisfied. We hold that it is not and therefore do not reach the issue of whether this is an action arising out of an unsafe condition of real property or a deficiency in the construction work. Compare TEX. CIV. PRAC. REM. CODE ANN. § 16.009(a) (applying to actions "arising out of a defective or unsafe condition of real property or a deficiency in the construction or repair" work), with id. § 16.008(a) (applying to actions "arising out of a defective or unsafe condition of the real property, the improvement, or the equipment.")
1. Occidental did not establish that it was "a person who constructs or repairs an improvement to real property"
As discussed above, Occidental bore the burden of proof on its statute of repose defenses. See Ryland, 924 S.W.2d at 121; Nexen, 224 S.W.3d at 416. Unless an affirmative defense is established as a matter of law, the defendant also bears the burden of obtaining the jury findings necessary to support the elements of the defense. Texaco, 729 S.W.2d at 805-806; Whitney Nat'l Bank, 122 S.W.3d at 207. Over Jenkins's objection, Occidental declined to request any jury findings with respect to its role in the construction of the acid addition system. The evidence establishes that Occidental prepared the general conceptual design of the acid addition system but hired and paid third party contractors to draft the detailed designs that specified ?how it was actually to be constructed" and to actually construct the system. We therefore determine whether an owner-operator who prepares a conceptual design and hires and pays a third party to construct an improvement, without more, is ?a person who constructs or repairs an improvement" within the meaning of the statute. We hold that it is not.
Section 16.009 expressly limits its application to claims against individuals or entities who ?construct[] or repair[] an improvement." TEX. CIV. PRAC. REM. CODE ANN. § 16.009(a). A person who merely constructs a product that is later annexed to real property is not a person who ?constructs or repairs an improvement." Sonnier, 909 S.W.2d at 481 (holding statute of repose did not apply to manufacturer of tomato chopper because it had not annexed device to real property). It is the annexation that transforms the product from personalty to an improvement, and the performance of that task by a third party does not transform the product's designer and manufacturer into one who ?construct[ed] . . . an improvement." See id. Occidental did not build the acid addition system or annex it to real property — that work was performed by a third party contractor. For the same reason that a manufacturer whose product is later annexed to real property is not a constructor under section 16.009, the construction and installation of the acid addition system by a third party contractor does not transform Occidental into an entity that ?constructs . . . an improvement to real property." TEX. CIV. PRAC. REM. CODE ANN. § 16.009(a).
Occidental's payment for the installation is consistent with its role as the property owner-operator at the time — a role that the statute is expressly not intended to cover. See TEX. CIV. PRAC. REM. CODE ANN. § 16.009(e)(2) (stating that statute does not apply to person in possession or control of real property at time of injury). The statute of repose is not intended to protect owners because they have control over the realty and have ?authority to go onto the premises to inspect the improvement for unsafe conditions" and ?to check for any defective alterations." Hernandez v. Koch Mach. Co., 16 S.W.3d 48, 52 (Tex. App.-Houston [1st Dist.] 2000, pet. denied). It does not convert Occidental into a constructor. Occidental did not conclusively establish that it was a ?direct actor" in the construction or repair of the acid addition system. See Petro Stopping Ctrs., Inc. v. Owens-Corning Fiberglas Corp., 906 S.W.2d 618, 620 (Tex. App.-El Paso 1995, no writ) (?The statute only grants repose to the direct actors in the construction or repair of an improvement to real property."). Nor is Occidental an entity in the construction industry. See Galbraith Eng'g Consultants, Inc. v. Pochucha, 290 S.W.3d 863, 867 (Tex. 2009) (noting that the statute "only precludes suits against persons or entities in the construction industry that annex personalty to realty."). Section 16.009 does not apply to a claim against a defendant "who may have performed some function in relation to an improvement to real property but who cannot be considered a constructor or repairer of the improvement." Williams, 865 S.W.2d at 207.
Thus, Occidental did not conclusively establish that it "constructed] or repaired] an improvement to real property," and Jenkins's claims against Occidental are not within the scope of section 16.009 according to its plain language. See TEX. CIV. PRAC. REM. CODE ANN. § 16.009.
2. Occidental did not perform a role equivalent to that of a general contractor
Occidental observes that statutes of repose are remedial in nature and, therefore, are given a "comprehensive and liberal construction rather than a technical construction which would defeat the purpose motivating its enactment." McCulloch v. Fox Jacobs, Inc., 696 S.W.2d 918, 921 (Tex. App.-Dallas 1985, writ refd n.r.e.). Occidental cites three cases to support its contention that the phrase "a person who constructs or repairs" should be liberally construed to include a property owner who hires a third party contractor to construct or repair an improvement: Fuentes v. Cont'l Conveyor Equip. Co., Inc., 63 S.W.3d 518, 521-22 (Tex. App.-Eastland 2001, pet. denied); Reames v. Hawthorne-Seving, Inc., 949 S.W.2d 758, 763 (Tex. App.-Dallas 1997, pet. denied); McCulloch, 696 S.W.2d at 922. The cases cited by Occidental extend section 16.009's protection to persons or entities that did not perform the actual construction work but were responsible for the construction work such that their alleged liability arose out of their involvement in the construction. We conclude that the reasoning of these cases is not applicable because (a) Occidental did not establish involvement in the construction work beyond preparing a concept design, purchasing some of the components parts, hiring a third party, and paying for the work — work that is consistent with Occidental's role as a property owner, a role that the statute expressly excludes from its protection — and (b) its liability does not stem from any purported involvement in the construction process.
Reames addresses the applicability of section 16.009 in a situation when a general contractor is sued for construction work performed by its subcontractor. 949 S.W.2d at 763. The court reasoned that because the general contractor ?bore ultimate responsibility to [the property owner]" for construction of the conveyor belt and ?was involved in the actual construction of the conveyor belt," it was entitled to protection under section 16.009. Id. The analysis in Reames expressly turns on the defendant's position as the general contractor and its responsibility to the property owner. Id. (stating that the defendant's ?relationship to the installation was that of a general contractor. Such a general contractor is protected under section 16.009.").
The Fuentes court relied on Reames to hold that a conveyor belt system manufacturer hired by the property owner to ?supervise and assist" in the installation of its conveyor belt system was protected by section 16.009. Fuentes, 63 S.W.3d at 521-22 (citing Reames, 949 S.W.2d at 763). The Fuentes court reasoned that the property owner hired the manufacturer ?to supervise the installation because it wanted [the manufacturer] to bear the ultimate responsibility for the proper installation" of its own equipment. Id. The dual role of supervising and assisting the construction amounted to constructing an improvement. Id. (citing Reames, 949 S.W.2d at 763).
The reasoning of Reames and Fuentes is not applicable here. In both cases, the defendants did not physically ?hammer the nails and turn the screws," but they had ?ultimate responsibility" for the construction, and their liability stemmed from their responsibility for that work. See Reames, 949 S.W.2d at 763; Fuentes, 63 S.W.3d at 521-22; see also Jackson v. Coldspring Terrace Prop. Owners Ass'n, 939 S.W.2d 762, 768-69 (Tex. App.-Houston [14th Dist.] 1997, writ denied) (holding that statute of repose barred claims against successor-in-interest of licensor of entity that constructed pool because its potential liability ?could only vicariously result from [its predecessor-in-interest] ?putting out' itself as the manufacturer of a defective construction of the pool"). The same is not true here. Occidental was not the general contractor and did not serve in an equivalent capacity. Cf. Reames, 949 S.W.2d at 763. It did not bear ultimate responsibility to the property owner for construction of the acid addition system. Cf. Fuentes, 63 S.W.3d at 521-22; Reames, 949 S.W.2d at 763. To the contrary, Occidental was the property owner to whom the third party contractor owed such responsibility. Cf. Fuentes, 63 S.W.3d at 521-22; Reames, 949 S.W.2d at 763.
There is some evidence that Occidental conducted a safety check on the project at some point. The timing, scope, details, or purpose of that safety check, however, are not in the record.
In McCulloch, the Dallas court of appeals applied the prior version of the statute, article 5536(a), to claims brought against a community developer, Fox Jacobs. The McCulloch court articulated this test for determining whether an owner is entitled to protection from the statute of repose for contractors:
The statute was intended to apply to litigation against architects, engineers, and others involved in designing, planning or inspecting improvements to real property, as distinguished from materialmen and suppliers and from tenants and owners who possess or control the property. Thus, the critical inquiry is whether Fox Jacobs' role in constructing the pool was more analogous to that of a builder or to an owner or supplier.
McCulloch, 696 S.W.2d at 922 (internal citations omitted).
Unlike this case, Fox Jacobs's role was more consistent with that of a general contractor: Fox Jacobs not only hired contractors to create a conceptual layout and perform certain portions of the work in constructing the pool, an engineer to design the pool, and a contractor to perform the actual construction, it also supervised, inspected, and approved the construction process. Id. Additionally, though Fox Jacobs was the nominal owner of the pool at the time of construction, it did not and never intended to retain possession or control over the pool after construction was completed. Id. Thus, Fox Jacobs ?functioned not as an owner but as a builder or supervisor." Id. On this basis, the court concluded: ?By furnishing money, planners, engineers, and subcontractors for the construction of the pool, and by performing supervisory and inspection duties, Fox Jacobs functioned as a ?person performing or furnishing construction . . . of . . . [an] improvement.'" Id. (ellipsis and bracketed materials in original).
McCulloch does not apply under these facts. Occidental is not analogous to the developer in McCulloch. Occidental was the property owner, not a general contractor or other third party hired to manage and oversee various aspects of the construction work. The ?critical inquiry" under McCullogh — whether Occidental's role in the construction was more analogous to that of a builder or that of an owner or supplier — weighs against Occidental. See McCullogh, 696 S.W.2d at 922.
McCulloch was decided under the prior version of section 16.009, which expressly extended protection to persons who ?furnish[]" construction or repair services. Id. When the Legislature recodifed the statute of repose in 1985, it changed the text of the statute from applying to ?any person performing or furnishing construction or repair" to ?a person who constructs or repairs," though the term ?furnishing" remains in section 16.009's title. Compare Act of May 14, 1975, 64th Leg., R.S., ch. 269, § 1, 1975 Tex. Gen. Laws 649, 649, with Act of May 17, 1985, 69th Leg., R.S., ch. 959, § 1, 1985 Tex. Gen. Laws 3242, 3254.
Additionally, Jenkins does not contend that Occidental bears any responsibility for any negligence in the construction of the acid addition system. The jury held Occidental liable for its role in the design of the acid addition system, not any purported role in construction. Section 16.009 is designed to protect against liability arising out of the construction of an improvement to real property, not out of the design of such an improvement — which is addressed in Section 16.008. See TEX. CIV. PRAC. REM. CODE ANN. §§ 16.008, 16.009.
We conclude that Reames, Fuentes, and McCullogh do not support Occidental's interpretation of section 16.009 as applying to this case. We sustain Jenkins's second issue. Accordingly, we hold that the trial court erred in entering judgment in favor of Occidental on its statute of repose affirmative defense under either section 16.008 or 16.009.
Because we have sustained Jenkins's first and second issues, we overrule Occidental's first issue.
Occidental's Cross-Points
In its second issue, Occidental raises three cross-points, arguing that if the trial court's judgment cannot be affirmed on the ground upon which it was rendered, it is nevertheless the correct outcome on these alternative grounds: (1) the only cause of action available to Jenkins is a premises liability action, (2) Jenkins cannot recover under a negligent design theory because he did not prove the elements of a products liability claim, and (3) Jenkins's claim is barred by the statute of limitations. We reject each of these alternative grounds.
A. Jenkins's claims arise out of Occidental's design of the acid addition system, not any ownership or control of the premises
Occidental contends that, because Jenkins was injured while operating an improvement to real property, his claim sounds exclusively in premises liability. Because Occidental no longer owned the premises at the time of Jenkins's injury, Occidental asserts that it cannot be held liable for its negligent design of the improvement. We do not find support for Occidental's position in the cases on which it relies. See Keetch v. Kroger Co., 845 S.W.2d 262, 264 (Tex. 1992); McDaniel v. Cont'l Apartments Joint Venture, 887 S.W.2d 167, 171 (Tex. App.-Dallas 1994, writ denied); Billmeier v. Bridal Shows, Inc., No. 02-08-00314-CV, 2009 WL 1176441, at *3 (Tex. App.-Fort Worth April 30, 2009, no pet.) (mem. op.).
Billmeier and Keetch are slip and fall cases that do not involve injuries caused by improvements to real property; they involve injuries caused by a wet spot on the floor. Keetch, 845 S.W.2d at 264; Billmeier, 2009 WL 1176441, at *2. These cases distinguish between injuries arising out of an owner or operator's contemporary negligent activity and injuries arising out of a condition of the premises, in the context of claims founded on the defendant's ownership or control of the premises. See Keetch, 845 S.W.2d at 264; Billmeier, 2009 WL 1176441, at *3-4. These cases do not provide any basis for holding that premises liability claims are the only available claims when a previous owner negligently designs an improvement to real property. See Keetch, 845 S.W.2d at 264; Billmeier, 2009 WL 1176441, at *3-4.
McDaniel, on the other hand, does involve an injury caused by an improvement to land. 887 S.W.2d at 171. But McDaniel belies, rather than supports, Occidental's position. McDaniel died when a balcony at an apartment complex collapsed on top of her. Id. at 169. Her heirs sued the independent contractor who remodeled and extended the balcony eight years before it collapsed, the joint venture that owned the apartment complex at the time of remodeling, and the joint venture's individual members. Id. In the portion of the Dallas Court of Appeals's opinion relied on by Occidental, the court held that McDaniel could only recover against the former property owners under a premises liability claim because her injury arose out of the condition of the balcony rather than concurrent negligent activity by the owners. Id. at 171-72. But the court of appeals affirmed the trial court's judgment against the independent contractor for his role in designing and building the remodeled balcony. Id. at 173-174.
Thus, the McDaniel opinion supports the existence of a duty on the part of a party who designed and constructed an improvement to real property, independent of any duty owed by the owner or operator of the premises on which the improvement is located. See id. Occidental played both roles from McDaniel — the role of the party who designed the faulty improvement, who was subject to liability, and the role of the former premises owner, who was not subject to liability. See id. But the jury's liability finding against Occidental relies on the first role and not the second. Thus, under McDaniel, Occidental is subject to liability for its design work.
Occidental has not cited any case holding that a former premises owner who negligently designed an improvement to land can only be held liable under a traditional premises liability theory, and we have not found any. We see no reason why the fact that Occidental's acid addition system was annexed to real property would alleviate Occidental from duties otherwise owed with respect to the safety of the system's design. Cf. RESTATEMENT (SECOND) OF TORTS § 385 (?One who on behalf of the possessor of land erects a structure or creates any other condition thereon is subject to liability to others upon or outside of the land for physical harm caused to them by the dangerous character of the structure or condition after his work has been accepted by the possessor, under the same rules as those determining the liability of one who as manufacturer or independent contractor makes a chattel for the use of others."). In cases where an improvement to real property was designed by a licensed engineer, section 16.008's statute of repose has been applied to place a time limit on just such liability. E.g., Galbraith Eng'g, 290 S.W.3d at 869 (applying statute of repose to cut-off liability of engineer who designed drainage system for home). Nor do we see any reason why Occidental's status as a former land owner would alleviate it from duties owed with respect to the negligently designed acid addition system, which continued to pose a danger after Occidental no longer owned the premises. Cf. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 912 (Tex. 1997) (?under some circumstances, one who creates a dangerous condition, even though he or she is not in control of the premises when the injury occurs, owes a duty of care"); Lefmark Mgmt. Co. v. Old, 946 S.W.2d 52, 54 (Tex. 1997) (stating that ?a person who creates a dangerous condition owes" a duty of care even if the person is not in control of the premises at the time of the injury); Strakos v. Gehring, 360 S.W.2d 787 (Tex. 1962) (observing that liability of premise owner or operator for failure to warn of or make safe dangerous premises condition does not necessarily supplant liability of creator of danger).
We therefore reject Occidental's contention that Jenkins could recover against Occidental only under a premises liability cause of action. We overrule the first cross-point raised in Occidental's second issue.
Because we determine that Jenkins was not limited to a premises liability claim, we do not reach Occidental's further contention that Jenkins cannot satisfy the requirements for bringing a premises liability claim against a former owner.
B. Jenkins's claim is not a strict products liability claim against a product manufacturer
Occidental next contends that, to recover for negligent design, Jenkins was required to establish the elements of a products liability claim, which Occidental identifies as requiring proof that (1) the acid addition system was a product, (2) the system was placed in the stream of commerce, and (3) Occidental was a manufacturer. Jenkins responds that these are elements of a claim for strict products liability, not his common law negligent design claim. There is no dispute that Jenkins cannot prevail on the strict products liability cause of action that he did not bring. The question is whether Texas recognizes a negligent design claim outside the bounds of a strict products liability claim against a manufacturer, and if so, whether a party bringing such a claim must prove the three elements challenged by Occidental here.
The Supreme Court of Texas has recognized that a claim for negligent design or negligent manufacturing is legally distinct from a strict products liability claim. See Am. Tobacco Co., Inc. v. Grinnell, 951 S.W.2d 420, 437 (Tex. 1997) (?The [plaintiff's] negligent design and manufacturing claims are conceptually distinguishable from the strict liability claims."). Occidental relies on American Tobacco for the proposition that a negligent design claim can only be brought against a manufacturer, quoting a portion of the Court's opinion distinguishing negligent design claims from strict products liability claims: ?While strict liability focuses on the condition of the product, ?[n]egligence looks at the acts of the manufacturer and determines if it exercised ordinary care in design and production.'" Id. (quoting Caterpillar, Inc. v. Shears, 911 S.W.2d 379, 384 (Tex. 1995)). We do not read this quote as eliminating common law negligence claims against designers of products who are not manufacturers. The American Tobacco Court discussed the duties at issue in terms of a manufacturer's duties because the defendant in the case was a manufacturer. See 951 S.W.2d at 437.
The Court further noted that a party cannot prevail on a negligent design claim without proving the existence of a safer alternative design. Am. Tobacco, 951 S.W.2d at 437. Here, the jury's finding that Occidental's negligent design caused Jenkins's injury was predicated on the existence of a safer alternative design. Occidental has not challenged this jury finding.
Similar to Occidental's last argument, we note that if Occidental were correct that negligent design claims could only be asserted against product manufacturers, it would render meaningless one of the very statutes of repose upon which Occidental relied at trial: if only product manufacturers can be held liable for design negligence, there is no need for a statute of repose that protects architects, engineers, landscape architects, and interior designers who design improvements to real property. See TEX. CIV. PRAC. REM. CODE ANN. § 16.008(a). This is particularly true when there is a separate statute of repose that governs product liability actions against sellers and manufacturers. See id. § 16.012(b) (providing a fifteen year period of repose). Additionally, chapter 150 of the Civil Practices and Remedies Code places certain procedural requirements on claims against licensed or registered architects, engineers, land surveyors, and landscape architects. See id. § 150.001-.003 (West 2011). Cases governed by this chapter have involved negligence claims against non-manufacturers based on the design of improvements to real property. See, e.g., Sharp Eng'g v. Luis, 321 S.W.3d 748, 752 (Tex. App.-Houston [14th Dist.] 2010, no pet.) (concluding section 150.002 was not satisfied with respect to carpenter's claim against engineers for negligent design of roof that carpenter fell through while performing framing work); Elness Swenson Graham Architects, Inc. v. RLJ II-C Austin Air, LP, No. 03-10-00805-CV, 2011 WL 1562891, at *5 (Tex. App.-Austin Apr. 20, 2011, pet. filed) (mem. op.) (holding that section 150.002 was satisfied with respect to hotel owner's claims against former owner's architect for negligent design of foundation and drainage).
Occidental relies on New Texas Auto Auction Services, L.P. v. Gomez De Hernandez, for the proposition that Jenkins was required to prove that the acid addition system was a product and that Occidental placed it in the stream of commerce. See 249 S.W.3d 400, 402 (Tex. 2008) (holding that auctioneer who handled sale of car between seller and buyer could not be held liable for allegedly defective condition of car). But New Texas Auto Auction did not involve a common law negligent design claim. See id. Instead, it involved claims against an auctioneer for strict products liability and for negligent failure to replace the tires on a car it auctioned off. See id. The New Texas Auto Auction Court held that the auctioneer could not be held liable in strict products liability because it was not actually the seller of the vehicle. See id. at 404. The Court observed that the limitation of strict liability claims to products placed in the stream of commerce "arises from the justifications for strict liability itself." Id. at 403-04. Jenkins did not assert a strict liability claim. Occidental cites to no case that holds or otherwise indicates that the stream-of-commerce requirement has be extended to ordinary negligence actions brought against non-manufacturers.
We conclude that Jenkins asserted a claim for negligence in the design of the acid addition system, not a claim for strict products liability. The elements that Occidental asserts Jenkins has not proved are not elements of his claim. The jury found that Occidental was negligent in its design of the system — including a safer alternative design finding — and that this negligence proximately caused Jenkins injuries. Occidental has not challenged these jury findings. Nor has Occidental asserted that it did not owe a duty to Jenkins with respect to its design of the acid addition system, except to the extent that it argues that only a property owner or operator may be held liable for injuries caused by improvements to real property — a contention we have rejected.
We overrule the second cross-point raised in Occidental's second issue.
C. Jenkins's claim was not barred by limitations
Finally, Occidental contends that the trial court's take-nothing judgment can be affirmed on the alternative ground that Jenkins's claim was barred by the statute of limitations. See TEX. CIV. PRAC. REM. CODE ANN. § 16.003(a) (West Supp. 2010). Jenkins was injured on April 21, 2006. Jenkins joined Occidental to this action on July 21, 2008, more than two years after the injury. Jenkins points out that his joinder of Occidental was timely because it was less than sixty days after another defendant, Sperian, named Occidental as a responsible third party. See id. § 33.004(e) (repealed 2011) (?If a person is designated under this section as a responsible third party, a claimant is not barred by limitations from seeking to join that person, even though such joinder would otherwise be barred by limitations, if the claimant seeks to join that person not later than 60 days after that person is designated as a responsible third party."). Occidental argues that Jenkins should not be permitted to rely on the joinder rule for responsible third parties because Sperian's naming of Occidental as a responsible third party was the result of collusion between Sperian and Jenkins. But Occidental does not support this accusation with evidence of collusion in the record. We therefore decline to consider whether section 33.004(e) would be rendered inapplicable by conclusive behavior between litigants. See TEX. R. APP. P. 38.1(i) (requiring that parties support their appellate arguments with citations to the record when appropriate); Nguyen v. Kosnoski, 93 S.W.3d 186, 188 (Tex. App.-Houston [14th Dist.] 2002, no pet.).
Jenkins had previously sued and nonsuited Occidental.
The legislature has now repealed section 33.004(e), and it will not apply to claims filed on or after September 1, 2011. Acts of May 30, 2011, 82nd Leg., R.S., ch. 203, §§ 5.02, 6.01-.02, 2011 Tex. Sess. Law Serv. ch. 203.
Accordingly, we overrule the third and final cross-point raised in Occidental's second issue.
Conclusion
This is an unusual case in which a property owner performed its own design work for an improvement to real property. Section 16.008 is the statute of repose that would typically apply to a defendant in Occidental's position, but Occidental is not entitled to that defense because the jury found that it allowed an unlicensed, unregistered engineer to design the acid addition system. Occidental's efforts to invoke Section 16.009 are the equivalent of trying to fit a square peg into a round hole — Occidental did not ?construct[] or repair[]" the acid addition system, and we will not read this language to mean something it does not say. Occidental's alternative grounds for affirming the trial court's judgment require us to treat Jenkins's claim against Occidental as if it were based on Occidental's status as the property owner or as if it were a strict liability products claim. But these are not the claims Jenkins pled and tried.
We therefore reverse the trial court's take-nothing judgment and remand for entry of judgment in favor of Jenkins on the basis of the jury's findings on liability, proportionate responsibility, and damages.