Motion for Rehearing Denied as Moot; Opinion of January 28, 2016, 

Withdrawn; Reversed and Rendered and Substitute Opinion filed August 4, 

2016.

In The

Fourteenth Court of Appeals

NO. 14-14-00158-CV

OILTANKING HOUSTON, L.P., OILTANKING HOLDINGS AMERICAS, 

INC., OILTANKING PARTNERS, L.P., AND OILTANKING NORTH 

AMERICA, L.L.C., Appellants

V.

ALBERTO DELGADO, INDIVIDUALLY AND AS REPRESENTATIVE OF 

THE ESTATE OF JAVIER DELGADO, DECEASED, VICTORIA 

DELGADO, INDIVIDUALLY AND AS NEXT FRIEND OF MARIA 

DELGADO, A MINOR CHILD, JIMMY GUTIERREZ, JESUS DELGADO, 

SAMUEL DELGADO, EDGAR DELGADO, JOSE DELGADO, RAUL 

GRANADOS, MARIA GRANADOS, AND DOYLE “PIN” TODD, Appellees

On Appeal from the 127th District Court

Harris County, Texas

Trial Court Cause No. 2012-32487

S U B S T I T U T E O P I N I O N

We deny the motion for rehearing filed by appellees as moot. We withdraw 
2

our opinion issued January 28, 2016, and we issue this substitute opinion in its 

place.

Oiltanking Houston, L.P., Oiltanking Holdings Americas, Inc., Oiltanking 

Partners, L.P., and Oiltanking North America, L.L.C. (collectively, “Oiltanking”) 

appeal from a judgment in favor of the appellees following a jury trial. We reverse

the trial court’s judgment and render a take-nothing judgment in favor of 

Oiltanking.

BACKGROUND

Javier Delgado, an employee of independent contractor L-Con, Inc., died in 

an explosion on June 2, 2012, when hydrocarbon fumes ignited while he was 

welding a flange on one end of a 24-inch pipe used to transport crude oil. The 

explosion occurred at Oiltanking’s oil storage facility near the Houston Ship 

Channel. Javier Delgado was being assisted by L-Con employees Edgar Delgado, 

Raul Granados, and Doyle Todd, who were injured in the explosion. 

Members of Javier Delgado’s family filed a wrongful death claim against 

Oiltanking, which owned the premises and hired L-Con to work on the pipe. 

Edgar Delgado, Granados, and Todd also filed personal injury claims against 

Oiltanking. We refer to Javier Delgado, Edgar Delgado, Granados, and Todd

collectively as “the claimants.”

The 24-inch pipe was connected to an above-ground oil storage tank before 

welding began. Extensive trial testimony addressed (1) implementation of prewelding procedures to block off the pipe, pump out the contents, disconnect it from 

the oil storage tank, install a plug to isolate the portion being welded, remove 

residual hydrocarbons inside the pipe, vent hydrocarbon vapors inside the pipe, and 

perform “sniff” tests for vapors; (2) which aspects of the process were controlled 
3

by Oiltanking, and which were controlled by L-Con; and (3) the chain of events 

leading to the explosion.

Oiltanking designated L-Con as a responsible third party under Chapter 33 

of the Civil Practice and Remedies Code; the trial court struck this designation at 

the close of evidence. Based on this ruling, the jury charge’s liability questions 

contained a single yes-or-no answer blank by which the jury was asked to decide 

whether any negligence on Oiltanking’s part proximately caused the occurrence.

By an 11-1 vote, the jury answered questions in favor of the claimants on 

three distinct liability theories; it also answered in favor of the claimants on a 

separate question submitted under Chapter 95 of the Civil Practice and Remedies 

Code to establish property owner Oiltanking’s liability arising from injuries to an 

independent contractor’s employees who were constructing, repairing, renovating, 

or modifying an improvement to real property.

The jury charge submitted four threshold liability questions followed by 14

questions relating to actual damages predicated on affirmative answers to at least 

one of the liability questions. The jury charge also submitted questions relating to 

punitive damages; the jury did not answer the punitive damages questions because 

its answers to the threshold liability questions were not unanimous.

Jury Questions Nos. 1, 3, and 4 each asked: “Did the negligence, if any, of 

Oiltanking proximately cause the occurrence in question?” These three questions 

defined “negligence” or “negligent” conduct differently under three distinct 

liability theories as set forth below. 

 The jury answered “yes” in response to Jury Question No. 1, which 

submitted a negligent undertaking theory against Oiltanking “[w]ith 

respect to (1) cleaning, de-pressuring, flushing, draining, purging the 
4

24” pipe and making the 24” pipe free of hazardous materials or (2) 

the performance of regular gas tests . . . .” See Torrington Co. v. 

Stutzman, 46 S.W.3d 829, 837 (Tex. 2000). The jury was instructed 

that “Oiltanking was negligent only if” it “undertook to perform 

services that it knew or should have known were necessary” for each 

claimant’s protection; it failed to exercise ordinary care in performing 

those services; and the claimants either relied upon Oiltanking’s 

performance, or that performance increased the risk of harm to them. 

See id. at 838.

 The jury answered “yes” in response to Jury Question No. 3, which 

submitted a liability theory against Oiltanking “[w]ith respect to the 

condition of the premises . . . .” The jury was instructed that 

“Oiltanking was negligent only if” the “condition posed an 

unreasonable risk of harm;” Oiltanking “had actual knowledge of the 

danger;” and Oiltanking “failed to exercise ordinary care to protect 

[the claimants] from the danger, by both failing to adequately warn

[the claimants] of the condition and failing to make the condition 

reasonably safe.” See generally Clayton W. Williams, Jr., Inc. v. 

Olivo, 952 S.W.2d 523, 528-29 (Tex. 1997); see also Occidental 

Chem. Corp. v. Jenkins, No. 13-0961, 2016 WL 82662, at *2 (Tex. 

Jan. 8, 2016) (“Although premises liability is itself a branch of 

negligence law, it is a ‘special form’ with different elements that 

define a property owner or occupant’s duty with respect to those who 

enter the property.”) (quoting W. Invs., Inc. v. Urena, 162 S.W.3d 

547, 550 (Tex. 2005)).

 Jury Question No. 3 was predicated on a “yes” answer to Jury 
5

Question No. 2, which the jury provided. Jury Question No. 2 asked: 

“Did Oiltanking exercise or retain some control over the manner in 

which L-Con performed its work, other than the right to order the 

work to start or stop or to inspect progress or receive reports?”

 Taken together, the “yes” answers to Jury Questions Nos. 2 and 3 

satisfy the control and actual knowledge requirements for a property 

owner’s liability on claims arising from death or injury to an 

independent contractor’s employees who construct, repair, renovate, 

or modify an improvement to real property. See Tex. Civ. Prac. & 

Rem. Code Ann. § 95.003(1), (2) (Vernon 2011).

 The jury answered “yes” to Jury Question No. 4, which submitted a 

negligent activity theory against Oiltanking under which “negligence” 

was defined as the “failure to use ordinary care, that is, failing to do 

that which a person of ordinary prudence would have done under the 

same or similar circumstances or doing that which a person of 

ordinary prudence would not have done under the same or similar 

circumstances.” The charge defined “ordinary care” as “that degree 

of care, which would be used by a person of ordinary prudence under 

the same or similar circumstances.” See generally Colvin v. Red Steel 

Co., 682 S.W.2d 243, 245 (Tex. 1984).

The jury assessed actual damages totaling $21,057,710.63. The trial court signed a 

final judgment against Oiltanking in conformity with the jury’s affirmative 

answers and damage awards, which Oiltanking now challenges on appeal.

ANALYSIS

Oiltanking assails the trial court’s judgment based on the following grounds.
6

1. The claimants’ causes of action based on negligent activity and 

negligent undertaking lack support in the evidence and are foreclosed 

under Texas law.

2. The evidence does not support the jury’s “yes” answers as to the 

Chapter 95 elements of control and actual knowledge necessary to 

establish property owner Oiltanking’s liability arising from death or 

injuries to an independent contractor’s employees who were 

constructing, repairing, renovating, or modifying an improvement to 

real property. Additionally, no liability attaches because the hazard at 

issue was not concealed.

3. The trial court erred by striking Oiltanking’s designation of L-Con as 

a responsible third party and failing to submit questions addressing LCon’s liability in the jury charge. See Tex. Civ. Prac. & Rem. Code 

Ann. § 33.003 (Vernon 2015).

4. The trial court erred in imposing spoliation sanctions.

5. The record cannot support bystander damages for Javier Delgado’s 

brothers Samuel and Jose; damages for Doyle Todd’s, Raul 

Granados’s, and Edgar Delgado’s future lost earnings; and mental 

anguish damages for Javier Delgado’s father Jesus.

We begin by addressing Oiltanking’s first two issues together.

I. Liability Findings

The jury charge provided three routes to establish Oiltanking’s liability in 

connection with the explosion that killed and injured employees of independent 

contractor L-Con while they were modifying an improvement to real property on 

Oiltanking’s premises. The three routes are negligent undertaking pursuant to Jury 
7

Question No. 1; premises liability under Jury Question No. 3; and negligent 

activity under Jury Question No. 4.

The parties devote considerable briefing to a dispute about whether 

Oiltanking’s basis for liability should be characterized as negligent undertaking, 

premises liability, or negligent activity. In connection with this dispute, Oiltanking 

contends (among other arguments) that this record contains no evidence to support 

the jury’s “yes” answers to Jury Question No. 1’s negligent undertaking 

submission and Jury Question No. 4’s negligent activity submission. Oiltanking 

contends that “the trial court erred in submitting liability questions pertaining to 

negligent activity and negligent undertaking in the jury charge, because these 

theories of liability are inapplicable in a premises liability context . . . .” 

Oiltanking further contends that “Chapter 95 is the exclusive remedy for all 

negligence claims against a property owner like Oiltanking.”

As discussed more fully below, case law developments after the parties 

submitted their briefs streamline the analysis here by establishing that – regardless 

of the negligence theory being invoked by the claimants – Chapter 95’s 

requirements must be satisfied before liability can attach to property owner 

Oiltanking under the circumstances presented in this case. See Abutahoun v. Dow 

Chem. Co., 463 S.W.3d 42, 43-44 (Tex. 2015).

These developments make it unnecessary to decide precisely how these 

claims should be characterized in this case. We also need not decide whether 

sufficient evidence supports the “yes” answers to Jury Question No. 1 submitting 

negligent undertaking or Jury Question No. 4 submitting negligent activity. 

Regardless of the particular negligence theory submitted to the jury in this case, 

Chapter 95’s control and actual knowledge requisites must be satisfied under 

Abutahoun. See id.
8

As to the jury’s premises liability finding in response to Jury Question No. 

3, Oiltanking contends there is no evidence to support (1) the predicate “yes” 

answer to Jury Question No. 2, upon which Jury Question No. 3 was conditioned, 

asking whether Oiltanking exercised or retained some control over the manner in 

which L-Con performed its work; and (2) the “actual knowledge” component of 

Jury Question No. 3. Oiltanking also contends liability does not attach because the 

hazard was not concealed. Oiltanking does not otherwise challenge the liability 

elements submitted in Jury Question No. 3.

If Oiltanking is correct and there is no evidence of either control or actual 

knowledge as required under Abutahoun, then liability is foreclosed. If there is 

some evidence of control and actual knowledge, and if Oiltanking’s no-concealedhazard argument is not viable, then the otherwise unchallenged answer to Jury 

Question No. 3 establishes a basis for Oiltanking’s liability.

We will discuss Abutahoun further in the course of addressing Chapter 95’s 

requirements.

II. Scope of Chapter 95

Chapter 95 was enacted in 1996 as part of a sweeping tort-reform package. 

Ellwood Tex. Forge Corp. v. Jones, 214 S.W.3d 693, 699 (Tex. App.—Houston 

[14th Dist.] 2007, pet. denied) (citing Dyall v. Simpson Pasadena Paper Co., 152 

S.W.3d 688, 699 (Tex. App.—Houston [14th Dist.] 2004, pet. denied) (en banc)). 

“It was enacted because the legislature recognized that property owners often want 

to hire someone with expertise to repair or renovate some improvement on their 

property.” Dyall, 152 S.W.3d at 699.

Chapter 95 applies to a claim

(1) against a property owner, contractor, or subcontractor for personal 

injury, death, or property damage to an owner, a contractor, or a 
9

subcontractor or an employee of a contractor or subcontractor; and

(2) 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 Ann. § 95.002 (Vernon 2011). “Claim” means “a 

claim for damages caused by negligence.” Id. § 95.001(1) (Vernon 2011). 

“Property owner” means “a person or entity that owns real property primarily used 

for commercial or business purposes.” Id. § 95.001(3).

Chapter 95 contains the following limitation on 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:

(1) 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

(2) 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.

Id. § 95.003(1), (2).

Section 95.003(1) codifies the holding in Redinger v. Living, Inc., 689 

S.W.2d 415 (Tex. 1985), which in turn adopted section 414 and the accompanying 

comments of the Restatement (Second) of Torts. See Ellwood, 214 S.W.3d at 700; 

Dyall, 152 S.W.3d at 699. Redinger held that, while a premises owner owes no 

general duty to ensure that an independent contractor performs its work in a safe 

manner, the owner nonetheless may be liable if it retains some control over the 

manner in which the contractor’s work is performed. Redinger, 689 S.W.2d at 

418.
10

Section 95.003(2) limits a premises owner’s liability by requiring a plaintiff 

to prove the owner had actual knowledge of a dangerous condition on the premises

– not merely constructive knowledge. See Ellwood, 214 S.W.3d at 700; Dyall, 152 

S.W.3d at 699. As this court has recognized, the use of an actual knowledge 

standard means that “Chapter 95 [i]ncreased the [r]equirements for [l]iability to be 

[i]mposed.” Ellwood, 214 S.W.3d at 699.

Subsection 95.003(1)’s control requirement and subsection 95.003(2)’s 

actual knowledge requirement “both . . . ‘must be met before liability will be 

imposed upon the property owner.’” Dyall, 152 S.W.3d at 699 n.15 (quoting Kelly 

v. LIN Television of Tex., L.P., 27 S.W.3d 564, 567 (Tex. App.—Eastland 2000, 

pet. denied)).

The supreme court recently revisited Chapter 95 to decide whether it 

“applies to an independent contractor’s negligence claims against a property owner 

when the claims are based on injuries arising out of the property owner’s negligent 

activities and not the independent contractor’s own work.” Abutahoun, 463 

S.W.3d at 43. The supreme court held that “Chapter 95 applies to all independent 

contractor claims for damages caused by a property owner’s negligence when the 

requirements of section 95.002(2) are satisfied.” Id. at 43-44.

Abutahoun rejected a contention that “Chapter 95 applies only to claims 

against property owners arising ‘out of the contractor’s work, and does not apply to 

a contractor who is a passive victim of the contemporaneous negligent activities of 

the premises owner.’” Id. at 47. The supreme court determined that Chapter 95 

unambiguously “applies to a claim against a property owner for an independent 

contractor’s personal injury, death, or property damage caused by negligence.” Id. 

at 48. “The Legislature did not distinguish between negligence claims based on 

contemporaneous activity or otherwise, and neither shall we.” Id. “Furthermore, . 
11

. . section 95.002 says nothing about the actor who causes the negligence claim to 

arise and makes no distinction between harm caused by a contractor’s actions and 

harm caused by another’s actions.” Id.

“We can only conclude that the Legislature intended for Chapter 95 to apply 

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. “For the sake of thoroughness, we note 

that section 95.002(2)’s inclusion of ‘condition or use’ preserves the notion that 

claims based on a premises defect are distinct from claims based on negligent 

activities.” Id. “Despite their differences, both claims are a species of 

negligence.” Id. (citation omitted). “[B]oth types of claims fall within the 

common meaning of the term ‘negligence’ that appears, undefined, in section 

95.001(1) . . . .” Id. at 51.

The supreme court stated: “Chapter 95 applies to independent contractors’ 

claims against property owners for damages caused by negligence when those 

claims arise from the condition or use of an improvement to real property where 

the independent contractor constructs, repairs, renovates, or modifies the 

improvement.” Id. at 53. “Chapter 95 limits property owner liability on claims for 

personal injury, death, or property damage caused by negligence, including claims 

concerning a property owner’s own contemporaneous negligent activity.” Id. This 

language in Abutahoun sweeps broadly enough to encompass all flavors of 

negligence submitted in the jury charge against Oiltanking, including negligent 

activity and negligent undertaking.1

 

1

To the extent of any conflict between Abutahoun and Elmgren v. Ineos USA, LLC, 431 

S.W.3d 657 (Tex. App.—Houston [14th Dist.] 2014), aff’d in part and rev’d in part, ___ S.W.3d 

___, No. 14-0507, 2016 WL 3382144 (Tex. June 17, 2016), we apply Abutahoun’s analysis and 

holding regarding Chapter 95’s applicability to negligence claims other than those characterized 
12

The supreme court further stated: “[W]hen section 95.002 makes Chapter 

95 applicable to an independent contractor’s negligence claim against a property 

owner that arises from the condition or use of an improvement to real property, the 

independent contractor’s sole means of recovery is by satisfying section 95.003.” 

Id. at 51; see also Occidental Chem. Corp., 2016 WL 82662, at *5 (“[P]remisesliability principles apply to a property owner who creates a dangerous condition on 

its property, and . . . the claim of a person injured by the condition remains a 

premises-liability claim as to the owner-creator, regardless of how the injured party 

chooses to plead it.”). Thus, when Chapter 95 applies, the employees of an 

independent contractor must establish that section 95.003’s control and actual 

knowledge conditions have been met before liability can be imposed on the 

property owner. Abutahoun, 463 S.W.3d at 52.

Before turning to the parties’ contentions regarding evidence of control and 

actual knowledge on this record, we pause to address a waiver argument.

The claimants contend Oiltanking waived all arguments regarding Chapter 

95 because Oiltanking failed to request and obtain jury findings on issues 

establishing applicability under section 95.002. The claimants further contend that 

findings favorable to them on disputed facts under section 95.002 may be implied 

in support of the trial court’s judgment under Texas Rule of Civil Procedure 279.

 

as premises liability claims. See Chase Home Fin., L.L.C. v. Cal W. Reconveyance Corp., 309 

S.W.3d 619, 630 (Tex. App.—Houston [14th Dist.] 2010, no pet.) (This court must follow prior 

holding of another panel of this court “[a]bsent a decision from a higher court or this court sitting 

en banc that is on point and contrary to the prior panel decision or an intervening and material 

change in the statutory law[.]”); see also Ineos USA, LLC v. Elmgren, ___ S.W.3d ___, No. 14-

0507, 2016 WL 3382144, at *3 (Tex. June 17, 2016) (“[T]he court erred in holding that Chapter 

95 applies only to the Elmgrens’ premises-liability claims. The trial court correctly applied 

Chapter 95 to all of the Elmgrens’ negligence-based claims, at least against Ineos.”). Abutahoun

did not disturb those portions of Elmgren’s analysis pertaining to issues other than Chapter 95’s 

applicability to claims denominated as negligent activity and negligent undertaking. See Ineos

USA, LLC, 2016 WL 3382144, at *3-9.
13

The claimants do not point to any evidence indicating that a fact dispute 

existed about whether their claims were “against a property owner . . . for personal 

injury [or] . . . death to . . . an employee of a contractor or subcontractor” as 

required under section 95.002(1). Nor do they point to any evidence indicating 

that fact disputes existed about whether their claims arose “from the condition or 

use of an improvement to real property where the contractor or subcontractor 

constructs, repairs, renovates, or modifies the improvement” under section 95.002. 

According to Oiltanking, the claimants “never disputed that Oiltanking was 

a ‘property owner,’ or that Javier Delgado was an ‘employee of a contractor’ 

whose claim ‘arises from the condition or use of an improvement to real property 

where the contractor constructs, repairs, renovates, or modifies the improvement’” 

under section 95.002. Oiltanking contends the claimants argued in the trial court 

that “Chapter 95 does not apply to their negligent undertaking or negligent activity 

claims.” This argument no longer is viable after Abutahoun.

We reject the claimants’ waiver argument because they have identified no 

material disputed facts concerning Oiltanking’s status as a property owner; LCon’s status as an independent contractor employing the claimants; the nature of 

the claimants’ welding work on Oiltanking’s premises with respect to renovating

or modifying an improvement to real property; or whether the wrongful death and 

injury claims at issue arose from the condition or use of an improvement to real 

property where the claimants were renovating or modifying the improvement. The 

claimants assert in their appellate brief that “a key question is whether the injuries 

were occasioned by the same improvement that L-Con was constructing, repairing, 

renovating, or modifying.” They provide no argument or record discussion 

indicating that (1) this “key question” was actually in dispute in the trial court; or 

(2) the claimants’ injuries were attributable to an improvement other than the 24-
14

inch pipe L-Con had been hired to modify.

2

 These circumstances confirm that a 

waiver contention is unwarranted. See, e.g., XCO Prod. Co. v. Jamison, 194 

S.W.3d 622, 632-33 (Tex. App.—Houston [14th Dist.] 2006, pet. denied) (no jury 

submission is required with respect to facts that are undisputed or conclusively 

established) (citing Sullivan v. Barnett, 471 S.W.2d 39, 44 (Tex. 1971), and Meek 

v. Bishop, Peterson & Sharp, P.C., 919 S.W.2d 805, 808 (Tex. App.—Houston 

[14th Dist.] 1996, writ denied)).

Having mapped the narrower legal terrain on which this battle now must be 

fought, we turn to section 95.003(2)’s actual knowledge requirement because it is 

dispositive.3

 

2 As discussed more fully below, the claimants attributed the explosion to an 

accumulation of flammable vapors arising from hydrocarbon residue inside the same 24-inch 

pipe that was being welded. Resolution of this case does not require us to address different 

circumstances involving injuries attributable to a condition or use of an improvement other than 

the improvement being repaired or modified by the independent contractor. Cf. Hernandez v. 

Brinker Int’l, Inc., 285 S.W.3d 152, 157-58 (Tex. App.—Houston [14th Dist.] 2009, no pet.).

3

The claimants argue on rehearing that a remand is warranted in light of Abutahoun. We 

disagree because all parties knew Chapter 95’s actual knowledge requirement was a contested 

issue in this case. This contested issue was hard-fought pretrial through summary judgment and

at trial, and was submitted in the jury charge. Abutahoun addressed the legal reach of Chapter 

95’s requirements with respect to negligence claims denominated as something other than 

premises liability, but it did not change the evidentiary showing necessary to demonstrate actual 

knowledge under Chapter 95. On rehearing, the claimants state that “Oiltanking did not have 

actual knowledge” of the “presence of flammable vapors outside the plumber’s plug, mixed with 

air and near the flame.” Although they suggest on rehearing that the record should be 

“developed more fully with respect to Oiltanking’s actual knowledge of its inept remedial 

efforts” based upon the pervasive presence of hydrocarbons at this facility, the claimants also 

have acknowledged that (1) the specific injury-causing hazard at issue in this case “arose during 

the work” being performed by L-Con; and (2) “[t]he hazardous condition of which Oiltanking 

had actual knowledge was not the specific fumes on the wrong side of [the] plumber[’s] plug.” 

As discussed more fully below, the supreme court’s analysis of Chapter 95’s actual knowledge 

requirement confirms that actual knowledge in these circumstances requires more than 

knowledge of a need for elaborate safety precautions due to “the mere presence of flammable or 

explosive gasses at a petrochemical plant.” See Ineos USA, LLC, 2016 WL 3382144, at *8-9.
15

III. Actual Knowledge Under Chapter 95

The claimants had to prove “Oiltanking had actual knowledge of the danger”

as an element of liability under Question No. 3. This element comports with 

Chapter 95. See Tex. Civ. Prac. & Rem. Code Ann. § 95.003(2).

“[K]nowledge that an activity is potentially dangerous is not sufficient to 

satisfy the second prong of Section 95.003—actual knowledge of the danger is 

required.” Dyall, 152 S.W.3d at 709 n.18. “Actual knowledge requires knowledge 

that the dangerous condition existed at the time of the accident, as opposed to 

constructive knowledge which can be established by facts or inferences that a 

dangerous condition could develop over time.” City of Corsicana v. Stewart, 249 

S.W.3d 412, 414-15 (Tex. 2008). “Actual knowledge of a dangerous condition is 

what a person actually knows, as distinguished from constructive knowledge, or 

what a person should have known.” Elmgren v. Ineos USA, LLC, 431 S.W.3d 657, 

665 (Tex. App.—Houston [14th Dist.] 2014), aff’d in part and rev’d in part, __ 

S.W.3d __, No. 14-0507, 2016 WL 3382144 (Tex. June 17, 2016); see also Kelly, 

27 S.W.3d at 572-73 (evidence of negligent failure to inspect for stress fractures 

and metal fatigue is not equivalent to actual knowledge of danger of tower collapse 

due to stress fractures).

Oiltanking contends that legally insufficient evidence supports an 

affirmative finding on actual knowledge. The test for legal sufficiency is whether 

the evidence at trial would enable reasonable and fair-minded people to reach the 

verdict under review. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005).

When reviewing the legal sufficiency of the evidence, we consider the evidence in 

the light most favorable to the verdict and indulge every reasonable inference to 

support it. Id. at 822. We credit favorable evidence if a reasonable juror could and 

disregard contrary evidence if a reasonable juror could not. Id. at 827.
16

Assessing the legal sufficiency of evidence supporting a finding that 

“Oiltanking had actual knowledge of the danger” requires a discussion of the trial 

record addressing how the explosion occurred. We now turn to this task, 

presenting such testimony in light of the applicable standard of review.

A. Trial Testimony

Oiltanking and L-Con operated under a Master Service Agreement that 

designated L-Con as an independent contractor. Pursuant to the Master Service 

Agreement, Oiltanking hired L-Con to reroute a 24-inch pipe connected to an oil 

storage tank. Both the storage tank and the section of pipe being rerouted were 

located above ground.

L-Con worked on the pipe on June 1 and June 2, 2012. L-Con employees 

began working during the afternoon on June 1 and welded for about 45 minutes 

before stopping for the day about 4:30 p.m. They resumed work shortly after 6:40 

a.m. on June 2 and continued until the explosion occurred at approximately 8:10 

a.m.

Before L-Con’s employees began work on June 1, Oiltanking personnel 

closed valves to cut off the flow of hydrocarbons to the pipe and pumped out the 

pipe. Oiltanking personnel then installed “slip blinds” to isolate the storage tank 

from the portion of pipe being modified. After Oiltanking installed the slip blinds, 

L-Con employees moved into the area around the tank and set up equipment to 

perform a “cold cut” on the pipe. A “cold cut” involves cutting the pipe without 

producing sparks that could cause ignition of hydrocarbons.

The cold cut created a gap of several feet separating the pipe from the oil 

storage tank. Once the cold cut was completed, an L-Con employee installed a 

metal “plumber’s plug” inside the separated portion of the pipe approximately two 
17

or three feet from the opening. The circular plumber’s plug matched the 

circumference of the 24-inch pipe. The plug featured a rubber seal around its 

circumference that could be expanded to create a barrier between (1) the open end 

of the pipe created by the cold cut, which is where L-Con was to weld a new 

flange; and (2) the remaining portion of the separated pipe located behind the plug.

The face of the disk-shaped plumber’s plug included a vent pipe to allow 

attachment of a vent hose extending out of the 24-inch pipe’s open end. The 

combination of vent pipe and hose was intended to (1) prevent pressure from 

building up behind the plug; and (2) vent gases from any residual hydrocarbons 

present behind the plug for safe release into an area about 30 feet away from the 

open end of the 24-inch pipe being welded. Oiltanking owned the plumber’s plug 

and vent pipe installed by L-Con.4

Following L-Con’s installation of the plumber’s plug, Oiltanking shift 

supervisor Damon Huggins removed residual hydrocarbons by wiping down the 

inside of the 24-inch pipe from the front edge of the plumber’s plug forward to the

open end where welding would occur. Huggins testified that he did not check to 

determine whether residual hydrocarbons were present inside the pipe behind the 

plumber’s plug and did not wipe down the inside of the pipe behind the plumber’s 

plug to remove any residual hydrocarbons that might be present there.

Oiltanking required a “Work Permit” form to be signed before L-Con could 

proceed with welding. Among other things, the form contains a check-box list of 

specific statements in a section labeled “Hot Work Permit.” These statements 

 

4 After the June 2 explosion, Oiltanking obtained a different type of plumber’s plug 

called a “CARBER” tool so that the welding job L-Con began on June 1 could be completed. 

The “CARBER” tool has the same hose fitting as the plumber’s plug used on June 2. The 

“CARBER” tool differs from the plumber’s plug used on June 2 because the “CARBER” tool (1) 

has a gauge allowing pressure behind the plug to be monitored; and (2) allows water to circulate 

to keep the pipe perimeter cool.
18

included the following.

 “A Gas-free Certificate is required for the work[;]”

 “The equipment has been de-pressurised/flushed/drained/purged and 

is free of hazardous material[;]” and

 “The immediate work site has been cleared from combustible 

materials[.]”

Huggins signed the permit form as the “Authorized Permit Issuer” allowing L-Con

to proceed with welding. His signature appears under this statement: “I confirm 

that all necessary measures have been taken to ensure the work is carried out 

safely.” All boxes on the “Hot Work Permit” portion of the form were checked. 

Huggins also signed the separate “Gas-free Certificate” portion of the form, which 

contains this statement: “The confined space/equipment/vessel/work site . . . has 

been gas tested by an Approved Gas Tester and certified gas-free.” The date 

“6/2/12” and the time “0630” are written next to both locations on the form bearing 

Huggins’s signature.

The “Gas-free Certificate” portion of the form contains handwritten 

notations of zero for “Gas (% L[ower]E[xplosive]L[imit]),” zero for hydrogen 

sulfide “(ppm),” and an oxygen percentage of “20.8.” The initials “DH” and 

“KM” appear next to these figures. The “DH” initials stood for “Damon Huggins.” 

The “KM” initials stood for “Kevin McCrory,” who was the Oiltanking shift 

supervisor on June 1. Huggins testified that McCrory “filled out this permit, 

getting it ready for me” and did so “[p]robably before he went home [on] Friday” 

June 1. Huggins testified that McCrory did not perform a gas test on June 2, and 

that McCrory’s initials should not have been on the June 2 “Gas-free Certificate” 

portion of the work permit. Huggins testified that “. . . Kevin McCrory was not 

there Saturday. He filled the permit out Friday and the only – I did the signing off 
19

on it.” McCrory testified that placing his initials on the June 2 form “was a 

mistake.”

Huggins testified that he performed a “gas test” himself to check the 

concentration of flammable hydrocarbon vapors once on June 1 and again 

“somewhere around 6:40” on the morning of June 2. A record from Huggins’s gas 

meter indicated that it had been used at 9:15 a.m. on June 2. Huggins testified that 

the gas meter had been calibrated on June 1, but “the time was off on the meter” by 

“2 hours and 33 minutes” and he did not reset the time and date readings on the 

meter. Huggins also testified that he did not document on the June 2 permit (1) the 

exact time he performed the gas test on June 2; or (2) a notation indicating that the 

gas meter’s time record was inaccurate.

Oiltanking’s engineering expert Roger Craddock testified that no explosion 

would have occurred on June 2 if no hydrocarbons were present in the 24-inch pipe 

behind the plumber’s plug while Javier Delgado was using a torch to weld a flange 

on the pipe’s open end. Craddock also testified that Oiltanking could have purged 

the 24-inch pipe with nitrogen; cleaned the inside of the pipe with soap and water 

to remove hydrocarbon residue; or disconnected the pipe and taken it to another 

location to weld.

Craddock noted that the vent hose was not connected to the vent pipe 

following the explosion. He opined that the explosion occurred because an 

unidentified person unhooked the vent hose attached to the plumber’s plug while 

L-Con’s work was underway, which allowed hydrocarbon vapors inside the pipe to 

migrate from behind the plumber’s plug and enter the area in front of the plug; 

come into contact with the arc of Javier Delgado’s welding torch; and ignite. 

Delgado was decapitated when the explosion shattered the plumber’s plug and 

expelled the pieces from the 24-inch pipe’s opening where he was working.
20

The claimants’ expert process safety engineer, Michael Sawyer, testified that 

Oiltanking (1) improperly cleaned explosive material from the 24-inch pipe and 

failed to remove residual hydrocarbons from the portion of the pipe behind the 

plumber’s plug; (2) failed to adequately survey the work area for explosive vapors; 

and (3) used a “very sloppy” permit procedure under which the “Gas-free 

Certificate” portion of the form was filled out on June 1 instead of June 2. 

According to Sawyer, “This was a sloppy, fraudulent permit that provided 

incorrect information to the contractors saying that everything was okay to do hot 

work.” Sawyer also stated: “It’s just that it was sloppy and had incorrect 

information communicated to the contractors and the permit is used as the final 

authorization to begin work.” Sawyer agreed with Craddock’s testimony that no 

explosion would have occurred if no hydrocarbons had been present in the 24-inch 

pipe while Javier Delgado was using a welding torch on the pipe’s open end.

Sawyer characterized Craddock’s conclusion regarding removal of the vent 

hose during welding as “a rabbit trail” that “has nothing to do with the root cause.” 

According to Sawyer, the vent hose more likely than not became disconnected 

from the vent pipe due to the explosion’s force.

Sawyer stated: “No one in the process plant that’s a prudent owner/operator 

relies on one barrier or one safeguard. There’s multiple safeguards and barriers for 

all processes because of the materials that are involved, the hydrocarbons.” 

According to Sawyer, a rubber seal on the plumber’s plug could not be relied upon 

to create a complete barrier that would exclude hydrocarbon vapors from the open 

end at which Javier Delgado was welding. In Sawyer’s opinion, hydrocarbon 

vapors attributable to residue in the pipe accumulated behind the plumber’s plug. 

He opined that these vapors likely leaked through the plumber’s plug via the 

rubber seal and other gaps in the plug during welding; entered the area where 
21

Javier Delgado was welding at the pipe’s open end; and ignited when they came 

into contact with the arc from his welding torch. Sawyer also stated: “Oiltanking 

knew what material had flowed through that line for X number of years. They 

knew the physical properties of the material, how hazardous it was and they also –

Oiltanking knew that if you’re going to have a heat source like welding carried on 

in that area, it needs to be clear of all hydrocarbons.”

B. Application of the Actual Knowledge Standard

Oiltanking contends as follows based on this record: “[T]here is no 

evidence in the record supporting a finding that Oiltanking had actual knowledge 

of a hydrocarbon gas leak during the welding.” Oiltanking also contends: “At 

most, Plaintiffs claim that Oiltanking negligently failed to ensure that the pipe was 

safe despite knowing that the pipe was potentially dangerous . . . .”

The claimants argue on appeal that (1) “the hazard arose during the work” 

being performed by L-Con; and (2) “Oiltanking had actual and superior knowledge 

of the hydrocarbons left in the adjacent tank and in the pipe, and should not have 

certified in writing to L-Con the pipe was clear of hydrocarbons.” They contend 

Oiltanking “knew of the existence of the hydrocarbons within and around the 

improvement upon which the welders were working” because crude oil had been 

pumped from the tank through the 24-inch pipe within a day of L-Con’s arrival to 

begin work. They assert in briefing that “Oiltanking issued a hot work permit 

without actually testing whether the worksite was safe; failed to clean the residual 

hydrocarbons from the pipe; [and] failed to properly clean and sniff the welding 

site . . . .” During closing argument, the claimants’ counsel urged the jury to 

answer “yes” to Jury Question No. 3 as follows:

So we know that Oiltanking had actual knowledge of the danger. 

What was their actual knowledge? We just moved 72,000 barrels of 
22

product through this pipe. That’s actual knowledge. They did it. 

They documented it and here it is and this is an exhibit that’s going 

back with you so you’ll have an opportunity to look at Oiltanking’s 

actual knowledge of the danger, which is the crude oil.

This closing argument tracks claimants’ written appellate arguments, in which they 

contend: “Oiltanking had actual knowledge that its tanks were indeed filled with 

oil, and that elaborate safety precautions are necessary to protect workers from the 

risk of explosive vapors--hence the detailed Hot Work Permit.” And, again in their 

post-submission brief, claimants urge as follows:

The hazardous condition of which Oiltanking had actual knowledge 

was not the specific fumes on the wrong side of [the] plumber[’s]

plug. Rather, it was the explosive hydrocarbons that coursed through 

the pipes and tanks on a regular, daily basis. The Hot Work Permit 

was how Oiltanking undertook to protect Delgado and the other 

welders from that pervasive hazard.

In resolving whether these circumstances meet Chapter 95’s “actual knowledge” 

threshold, we look to the analysis of section 95.003(2) in Elmgren, 431 S.W.3d at 

666. This court addressed similar contentions in Elmgren relating to a property 

owner’s actual knowledge of flammable gas leaking into a pipe at a chemical plant.

Elmgren, who worked for an independent contractor, sued the property 

owner for injuries he sustained in an explosion while replacing a valve on a 

supposedly gas-free portion of pipe on the property owner’s premises. Id. at 660. 

The accident occurred despite (1) the use of a “lock out tag out (LOTO) procedure 

to ensure there was no gas present in the line;” and (2) a “zero result” on a sniff 

test for flammable gas conducted approximately six hours before the explosion. 

Id. The property owner invoked Chapter 95 in response to Elmgren’s negligence 

claim. Id.

Property owner Ineos sought summary judgment under section 95.003(2) 

because “there was no evidence Ineos had actual knowledge that gas existed in the 
23

pipe on which [Elmgren] was working at the time of the accident.” Id. at 665. “In 

addition to the line being LOTO and the sniff test performed prior to the work 

resulting in zero, Ineos pointed to testimony from [Elmgren] that he did not have 

any information from anyone indicating Ineos knew of any valves leaking gas 

before his accident.” Id. at 665-66. Elmgren’s summary judgment response 

pointed to evidence that the valves in question sometimes leak even when new; a 

similar explosion had occurred a few months earlier; the property owner’s work 

permit required a “fire watch” procedure to be followed; and the property owner 

changed its procedures following the explosion to require a full nitrogen purge 

before allowing valve replacements. Id. at 666. Elmgren also pointed to testimony 

that “the better practice is to perform the sniff test closer in time to when the work 

begins.” Id.

This court affirmed summary judgment in favor of the property owner 

because “none of this evidence indicates Ineos had actual knowledge of any valve 

allegedly leaking gas into the line that resulted in [Elmgren’s] injuries at the time 

of the accident.” Id. “The evidence does not show [Ineos working team leader 

Jonathan] Pavlovsky was aware that any new gate valve at Ineos’ plant was 

leaking.” Id. “The evidence shows that there had previously been flammable gas 

in a line during a prior repair and that there are arguably better methods for 

clearing and checking a line for gas.” Id. “At most, Ineos may have had 

knowledge of a possibility that gas could exist in the line, but knowledge of a 

potential danger or condition is not enough. Id. (citing Bishop v. Nabisco, Inc., No. 

14-03-00639-CV, 2004 WL 832916, at *3 (Tex. App.—Houston [14th Dist.] Apr. 

20, 2004, no pet.) (mem. op.)). Accordingly, this court concluded that Elmgren 

failed to proffer any evidence raising a fact question on the property owner’s actual 

knowledge under section 95.003(2). See Elmgren, 431 S.W.3d at 666.
24

This conclusion applies with equal force here. It can be assumed for 

argument’s sake that the claimants articulated a colorable basis for a negligent 

activity or negligent undertaking claim by contending that a “hazard arose during 

the work” performed by L-Con when Oiltanking used inferior methods for 

excluding hydrocarbon vapors from a hot work area; employed a “very sloppy” hot 

work permitting process; and used deficient sniff test procedures. Even with this

assumption, more is required here after Abutahoun – namely, evidence of actual 

knowledge. See Abutahoun, 463 S.W.3d at 50-53. The claimants have not 

identified evidence that satisfies section 95.003(2) in this record. Knowledge that 

Oiltanking’s facility handles crude oil, that “elaborate safety precautions” are 

warranted because the facility handles crude oil, and that the pipe at issue had been 

used to transport crude oil from an adjacent tank shortly before L-Con’s work 

began, is at most knowledge of a potential danger or condition from the presence 

of flammable vapors. As in Elmgren, knowledge of this nature does not establish 

that “Oiltanking had actual knowledge of the danger” as required under section 

95.003(2), Abutahoun, and Jury Question No. 3. See Elmgren, 431 S.W.3d at 666. 

To hold otherwise impermissibly would dilute the actual knowledge requirement 

by making it indistinguishable from the “should have known” standard for 

constructive knowledge. See id. at 665 (citing City of Corsicana, 249 S.W.3d at 

414-15).

This conclusion is underscored by Ineos USA, LLC v. Elmgren, ___ S.W.3d 

___, No. 14-0507, 2016 WL 3382144, at *3 (Tex. June 17, 2016), which was 

decided after the original panel opinion issued in this case. The Texas Supreme 

Court affirmed this court’s determination that Elmgren proffered no evidence 

capable of raising a fact issue to defeat summary judgment on Chapter 95’s “actual 

knowledge” requirement. Id. at *7 n.4 (“[W]e ultimately agree with the trial court 
25

and the court of appeals that the Elmgrens presented no evidence that Ineos had 

actual knowledge of the danger or condition that resulted in Elmgren’s injury.”); 

see also id. at *8-9.

The supreme court noted Ineos’s contention that “there was no evidence that 

[Ineos or its working team leader Pavlovsky] knew of any leak or that gas was 

present in the pipe on which Elmgren was working at the time of the accident.” Id. 

at *8. “To the contrary, they contend, the record established that they lacked such 

knowledge because they had performed a lockout-tagout procedure and a sniff test 

that indicated the line had no gas in it.” Id. “In response, the Elmgrens . . . 

contend that the ‘danger or condition’ was the presence of explosive gases and 

hydrocarbons in the plant.” Id. “According to the Elmgrens . . . Ineos had actual 

knowledge that the entire plant was explosive.” Id.

The supreme court rejected Elmgren’s argument because “[w]e do not agree 

that the presence of gas at the plant was the ‘danger or condition resulting in’ 

Elmgren’s injuries.” Id. at *9. “If the mere presence of flammable or explosive 

gasses at a petrochemical plant were a ‘danger or condition,’ the property owner 

would always have ‘actual knowledge’ of the danger but would never ‘fail[] to 

adequately warn’ because the injured worker would also always have such 

knowledge.” Id. The supreme court also rejected Elmgren’s reliance on the 

existence of elaborate safety procedures to demonstrate actual knowledge. Id. at 

*8.

The supreme court’s rejection of actual knowledge of a generalized hazard

forecloses the claimants’ rehearing reliance upon Oiltanking’s “knowledge that 

hydrocarbons pervaded the premises;” or a contention that “Oiltanking knew full 

well of the hazards on its premises;” or a contention that Oiltanking knew of the 

“explosive hydrocarbons that coursed through the pipes and tanks on a regular, 
26

daily basis.” As to the specific danger, the claimants stated in their postsubmission brief that the “hazardous condition of which Oiltanking had actual 

knowledge was not the specific fumes.” 

IV. Remaining Issues

Having concluded that there is no evidence of actual knowledge, we need 

not address section 95.003(1)’s control prong. See Elmgren, 431 S.W.3d at 666. 

We also need not address Oiltanking’s remaining issues on appeal.

CONCLUSION

We reverse the trial court’s judgment and render a take-nothing judgment in 

favor of Oiltanking.

/s/ William J. Boyce

Justice

Panel consists of Justices Boyce, McCally and Donovan.