Court Opinion

ID: 4051712
Source: CourtListenerOpinion
Date Created: 2016-09-29 01:45:25.591105+00
Date Added: 2024-06-11T14:31:10.930633
License: Public Domain

FILED
                                                                     13-0961
                                                                     2/12/2015 11:50:09 AM
                      TEXAS CIVIL JUSTICE LEAGUE                     tex-4124973
                                                                     SUPREME COURT OF TEXAS
                      400 West Fifteenth Street, Suite 1400          BLAKE A. HAWTHORNE, CLERK
                          Austin, Texas 78701-1648
                               512.320.0474 (T)
                                www.tcjl.com

                             February 12, 2015

Supreme Court of Texas
P.O. Box 12248
Austin, Texas 78711

Re: No. 13-0961; Occidental Chemical Corporation v. Jason Jenkins.

To the Honorable Members of the Texas Supreme Court:

      Pursuant to Rule 11, Texas Rules of Appellate Procedure, amicus

curiae Texas Civil Justice League files this amicus letter in the above-

referenced cause.

                           Statement of Interest

      The Texas Civil Justice League (“TCJL”) is a non-profit association

of Texas businesses, health care providers, professional and trade

associations, and individuals dedicated to maintaining a fair and balanced

civil justice system. Since its inception in 1986, TCJL has consistently

striven, through legislative advocacy and participation in important matters

before the Court, to achieve a fair and balanced tort liability system that

provides access to judicial remedies for legitimate claims, while encouraging

capital investment and job creation in this state. TCJL’s membership

includes numerous manufacturers and other businesses that own and make
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improvements to real property, either directly or with the assistance of

contractors, and that frequently sell such property to another manufacturer or

business. Its membership also includes engineers and contractors that design

and construct improvements to real property and that do business with the

reasonable expectation that statutes of repose will operate effectively in our

state. The outcome of this case is of critical importance to these businesses

and to their employees. It is equally important to the jurisprudence of this

state. This letter has been prepared in the ordinary course of TCJL’s

operations.

                             Summary of Argument

         The First District Court of Appeals erred in reversing the trial court’s

determination that the Respondent’s claim was barred by Texas’s ten-year

statute of repose for a person who constructs or repairs an improvement to

real property. If the Court of Appeals’ decision is permitted to stand, it will

effectively nullify the statute in cases in which any part of the construction

or repair of an improvement to real property is performed by a third-party

contractor hired by the property owner. Such a construction of the statute

would radically and adversely alter ordinary industry practices in Texas and

potentially threaten the viability of major construction projects in the state.
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                                   Argument

The First Court of Appeals’ refusal to apply §16.009, Civil Practice and
Remedies Code, in this case is grossly erroneous and poses a serious
threat to Texas’s manufacturing economy.

         By virtually every measure, the Texas economy in recent years has

surged well ahead of the national economy on the strength of its diverse

manufacturing, technology, and energy sectors. Many national observers

attribute this vitality in part to the public policy decisions made by the Texas

Legislature and faithfully enforced by this Court. Indeed, in the last decade

this Court has frequently been called upon to decide on the construction of

legislative enactments designed to make the Texas economic climate

attractive to investment and job creation, as well as to restore fairness to the

adjudication of legal disputes in Texas courts. The present case is no

exception.

         Like most states, the Texas Legislature has enacted a ten-year statute

of repose that applies to claims against persons that construct or repair

improvements to real property. TEX. CIV. PRAC. & REM. CODE § 16.009. The

public policy rationale for statues of repose is straightforward: to protect the

state’s primary economic engine—construction—from uncertain and

incalculable liabilities that may occur far into the future. Without such

certainty, construction projects could not be effectively or affordably
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insured. Without effective and affordable insurance, construction grinds to a

halt. One might reasonably ask whether the Petitioner in this case—or any

property owner—would have made a substantial investment in plant

improvements (including safety improvements) if it thought the Texas

statute of repose did not apply. And until now, no case of which we are

aware has ever suggested that it does not.

         In its present form, §16.009 was adopted in 1985 as part of the Texas

Legislative Council’s nonsubstantive code revision project.1 This legislation,

which stretched to more than 900 pages, codified the Texas Civil Practice

and Remedies Code as it appears today. The legislation was passed in both

houses without opposition and on non-record votes.2 As the Court of

Appeals points out in its opinion, when §16.009 was codified, the language

of the statute was slightly changed.3 The Court of Appeals seems to attach

some importance to this alteration, which it emphasizes in its attempt to

distinguish this case from the Dallas Court of Appeals’ decision in

McCulloch v. Fox & Jacobs, Inc., 696 S.W.2d 918 (Tex.App.—Dallas,

1985, writ ref’d n.r.e.). Ultimately, the Court of Appeals appears to decide

that Petitioner could not be a “constructor” of an improvement to real
1
  See S.B. 797, Acts 1985, 69th Leg., ch. 959, Sec. 1, eff. Sept. 1, 1985.
2
  See S.B. 797, Enrolled Version, 69th Leg., R.S., 1985.
3
  See Jenkins v. Occidental Chemical Corporation, 415 S.W.3d 14, 27 (Tex.App—
Houston [1st Dist.]), footnote 10. The Court notices that the term “furnish” was moved
from the body to the title of the statute, hardly a substantive change.
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Page 5

property because some of the work was “furnished” by an independent

contractor.4 If this reading of the statute were correct, it would mean that

every owner of real property in this state, from a residential home to a multi-

billion dollar manufacturing facility, is indefinitely liable for defects in

construction or repairs the owner initiates, while the contractors who

actually “hammered the nails and turned the screws” are not. This reading

defies common sense: the 1985 nonsubstantive codification of 16.009 makes

it clear that no such distinction between an owner and a “constructor” exists.

         In its initial November 17, 2011 opinion in the case, the Court of

Appeals makes a curious assertion that §16.009(e)(2) categorically excludes

owners of real property from the statute.5 Citing a single prior opinion (also

by the First Court of Appeals), the Court states that a statute of repose is not

intended “to protect owners because they have control over the realty.”6 But

the statute merely says that it “does not bar an action” against a person in

actual possession or control of the real property when the injury occurred—

i.e. the current owner or lessee. The statute, however, can apply to a former

owner of the property, one who is no longer “in possession or control” of the

property when the injury occurs. As a former owner of the real property on
4
   From a purely factual standpoint, the Court of Appeals seems to ignore that the
Petitioner itself “furnished” the construction of the piping for the pH-balancing system.
See Petitioner’s BOM, p. 38.
5
  See Petitioner’s BOM, Tab C, at p. 18.
6
  Ibid.
TCJL
Page 6

which the injury occurred, Petitioner is plainly covered by the statute of

repose established in §16.009.

         In addition, the Court’s reading reveals an irreconcilable contradiction

in the Court of Appeals’ reasoning. On one hand, the Court of Appeals

excludes property owners from the protection of §16.009 because they have

no “control” over the work of third-party contractors. On the other, the Court

of Appeals excludes property owners from the statute because “they have

control over the realty.” The statute simply cannot be construed to have this

nonsensical effect. The real inquiry under §16.009 is whether the owner,

with or without the assistance of third-party contractors, constructed or

repaired an improvement to real property.

         The Court of Appeals appears to have recognized the absurdity of its

analysis in the withdrawn opinion, since it drops the allusion to

§16.009(e)(2) in its final opinion on rehearing. But rather than clarifying the

error in the previous analysis, the Court compounds its mistake by adding a

footnote in response to Petitioner’s argument pointing out the same

contradiction that TCJL asserts here.7 In this footnote the Court claims that

no contradiction exists in its reading of §16.009 because Petitioner was a

“designer” of the acid addition system, a category distinct from “owner” and

7
 See Jenkins v. Occidental Chemical Corporation, 415 S.W.3d 14, 27 (Tex.App—
Houston [1st Dist.]), footnote 11.
TCJL
Page 7

“contractor.” The Court of Appeals thus deftly sidesteps its own

contradictory reasoning by shifting the analysis to §16.008, a similar statute

of repose for architects, engineers, interior designers, and landscape

architects. The end result is a contorted reading of the two statutes that splits

the “owner” into three “distinct” identities or “roles.” This interpretation

makes no more sense than the Court’s reading of §16.009 to exclude owners.

The Court appears to recognize this problem in the next footnote, when it

denies implying that a property owner can never be a “constructor,” as long

as it “personally performs construction work” or “when it has general

contractor-like involvement in the project.”8 Deeper into a morass of

contradictory reasoning we go. The Court of Appeals’ opinion converts a

simple and straightforward statutory limitations provision into a maze of

legal fictions, false boundaries, meaningless categories, and utter confusion.

          Whereas many of the rulings this Court has to make involve highly

contested legislative pronouncements that balance competing interests, such

is not the case here. Until now, a high degree of consensus has existed on

this question, a consensus long shared by the Texas Legislature and the

many interests that seek to influence its policy decisions in the civil justice

arena. We see no compelling public policy justification for disturbing the

8
    Ibid., footnote 12.
TCJL
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consensus in this particular case and creating a serious rupture in well settled

Texas law.

         The Court of Appeals appears to have based its decision on a false and

contradictory premise: that the performance of construction by a third-party

contractor nullifies the statute of repose. If this interpretation of the statute is

correct, then the common business practice of contracting with qualified

third-party contractors for major industrial construction requiring the

investment of tens or hundreds of millions of dollars will change radically.

Businesses seeking to make capital investments in real property

improvements and repairs will be faced with doing everything in-house or

risking liability for such projects forever. Not only will the Court of Appeals

decision dramatically affect the cost of insuring construction projects, it will

damage the health and vibrancy of the construction industry as a whole, at a

time when Texas’ economic growth is heavily dependent on that very

industry. Such a result makes no sense under any reasonable understanding

of the language or policy objectives of 16.009 and must be corrected.

         There is no question that Texas’ enduring economic strength depends

fundamentally on the ability of Texas businesses to rely on clear and

unambiguous limitations periods. TCJL has long maintained that this

economic success story has been a steady and long-term improvement in the
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Page 9

civil justice system. Such improvement is anchored both in judicious and

carefully considered legislative policy choices and in this Court’s consistent

and beneficial judicial restraint with respect to expanding tort liability by

fiat. The statute of repose at issue in this case is only one of these important

policy choices, but the certainty it imparts is particularly vital to the stability

of the whole tort liability system.

                               Conclusion and Prayer

         TCJL respectfully requests this Court to grant review in this cause,

reverse the Court of Appeals’ decision, and reinstate the trial court’s order.

                                                Respectfully submitted,

                                                /s/ George S. Christian
                                                GEORGE S. CHRISTIAN
                                                State Bar No. 04227300
                                                400 West 15th Street, Suite 400
                                                Austin, Texas 78701
                                                512.791.1429
                                                george@thechristianco.com
                                                ATTORNEY FOR AMICUS
                                                CURIAE TEXAS CIVIL
                                                JUSTICE LEAGUE

                    CERTIFICATE OF COMPLIANCE

      I certify that this document contains 1,675 words in the portions of the
document that are subject to the word limits of Texas Rule of Appellate
Procedure 9.4(i), as measured by the undersigned’s word-processing
software.
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Page 10

                                             /s/ George S. Christian

                      CERTIFICATE OF SERVICE

       I hereby certify that a true and correct copy of the foregoing amicus
letter has been served by electronic mail to all attorneys of record as listed
below on August 19, 2013.

Counsel for Petitioner
Occidental Chemical Corp.:            DEBORAH G. HANKINSON
                                      State Bar No. 00000020
                                      dhankinson@hankinsonlaw.com
                                      JOSEPH B. MORRIS
                                      State Bar No. 14489700
                                      jmorris@hankinsonlaw.com
                                      RICK THOMPSON
                                      State Bar No. 00788537
                                      rthompson@hankinsonlaw.com
                                      HANKINSON LLP
                                      Texas 75201 214.754.9190
                                      214.754.9140 (fax)

                                      BARRY N. BECK
                                      State Bar No. 02004000
                                      bbeck@cbtd.com
                                      DAVID W. LAURITZEN
                                      State Bar No. 00796934
                                      dlauritzen@cbtd.com
                                      RICK G. STRANGE
                                      State Bar No. 19355700
                                      rstrange@cbtd.com
                                      COTTON BLEDSOE TIGHE &
                                      DAWSON, P.C.
                                      500 West Illinois, Suite 300
                                      Midland, Texas 79701
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                         432.685.8553
                         432.684.3124 (fax)

Counsel for Respondent
Jason Jenkins:           Russell S. Post
                         rpost@brsfirm.com
                         BECK REDDEN LLP
                         1221 McKinney Street, Suite 4500
                         Houston, Texas 77010
                         Kurt B. Arnold
                         karnold@arnolditkin.com
                         Cory D. Itkin
                         citkin@arnolditkin.com
                         ARNOLD & ITKIN, LLC
                         1401 McKinney Street, Suite 2550
                         Houston, Texas 77010

                               /s/ George S. Christian
                               George S. Christian