Court Opinion

ID: 9958103
Source: CourtListenerOpinion
Date Created: 2024-04-08 07:10:55.068226+00
Date Added: 2024-06-11T08:17:48.289104
License: Public Domain

Opinion issued April 2, 2024

                                     In The

                               Court of Appeals
                                    For The

                         First District of Texas
                            ————————————
                               NO. 01-21-00593-CV
                           ———————————
                       JEREMY SOUDERS, Appellant
                                       V.
                 EXXON MOBIL CORPORATION, Appellee

                    On Appeal from the 80th District Court
                            Harris County, Texas
                      Trial Court Case No. 2018-51413

                          CONCURRING OPINION

      I am compelled by binding precedent to concur in this Court’s opinion and

judgment. A different result might have obtained had that precedent recognized the

distinction between “actual knowledge”—a legal construct—and “actual,

subjective knowledge”—a description of a state of consciousness. Discovery
would have been different, the trial would have been different, and the jury charge

would have been different.

                                          ***

      The 74th Texas Legislature enacted Chapter 95 in 1995. Act of May 8, 1995,

74th Leg., R.S., ch. 136, § 2, 1995 Tex. Gen. Laws 976–77 (codified at TEX. CIV.

PRAC. & REM. CODE §§ 95.001–.004). In it, the Legislature specified that a

property owner can be held liable to an independent contractor only if “the

property owner had actual knowledge of the danger or condition resulting in” the

harm to the independent contractor. TEX. CIV. PRAC. & REM. CODE § 95.003(2)

(emphasis added).

      Also in 1995, the 74th Legislature—the very same group of 181 men and

women—amended Chapter 41 to specify that a defendant can be held liable for

exemplary damages for malice only if the defendant acted with “actual, subjective

awareness of the risk involved.” Act of April 6, 1995, 74th Leg., R.S., ch. 19, § 1,

1995 Tex. Gen. Laws 109 (codified at TEX. CIV. PRAC. & REM. CODE §41.001(7)

(defining “malice”)); see generally Mobil Oil Corp. v. Ellender, 968 S.W.2d 917,

921 n.2 (Tex. 1998).1

1
      The prior definition required “actual awareness on the part of the defendant that
      the act will, in reasonable probability, result in human death, great bodily harm, or
      property damage.” Act of June 3, 1987, 70th Leg., 1st C.S., ch. 2, § 2.12, 1987
      Tex. Gen. Laws 44 (formerly codified at TEX. CIV. PRAC. & REM. CODE
      § 41.001(6) (defining “malice”)).
                                            2
      Had the 74th Legislature wanted to require “actual, subjective awareness” as

a predicate to Chapter 95 liability, it could have; instead, it used that phrase in

Chapter 41, and a different phrase, “actual knowledge,” in Chapter 95. There is no

reason for the Legislature to have used different terminology if it meant to signify

the same state of mind. “Actual, subjective awareness” is thus different from

“actual knowledge.”

      Case law suggests a hierarchy of different modes of “actual” possession of

knowledge:

      1.     “Actual notice” seems to require some level of awareness of a legally
             operative fact by the actor, and is defined in opposition to
             “constructive notice.” “Constructive notice” is a legal inference and
             arises only by operation of law—for instance, when a deed is
             recorded, the public at large has “constructive notice” of its existence,
             or when a registered agent is served with process, the principal has
             “constructive notice” of a lawsuit.

      2.     “Actual knowledge” can be express, which is closer to a true state of
             mind, and requires some level of scienter on the part of the actor. It
             can also be implied, so that a negligent tortfeasor is not excused from
             negligently (or intentionally) perpetuating a state of ignorance of
             hazardous conditions or activities. Unlike “constructive notice,”
             which operates automatically, or “constructive knowledge,” which has
             been defined as “knowledge that a person, after reasonable inspection,
             ought to have or has reason to have,” Williams v. Canpro Invs., Ltd.,
             No. 14-11-00816-CV, 2012 WL 3052956, at *3 (Tex. App.—Houston
             [14th Dist.] July 26, 2012, no pet.) (mem. op.), implied actual
             knowledge occurs only in the event of some misfeasance, and is an
             inference of fact, not of law.

      3.     “Actual, subjective awareness” is the most specific category, and the
             hardest to prove. It requires evidence of the actor’s subjective state of
             mind.

                                          3
      Equating the statute’s requirement of “actual knowledge” to “actual,

subjective awareness,” and wholly disregarding the significance of negligent

ignorance leads to an absurd result: A premises owner’s negligence in failing to

perform, say, appropriate inspections is excused by its negligence in failing to

perform appropriate air monitoring. Texas courts should avoid that absurdity by

recognizing, first, that the Legislature did not equate “actual knowledge” with

“actual, subjective awareness.” That much is apparent from a comparison of the

74th Legislature’s enactments in Chapter 95 with those in Chapter 41.

      Second, Texas courts should recognize that under Texas common law,

“actual knowledge” included implied actual knowledge, which means that a

defendant cannot escape liability if its lack of actual knowledge is caused by its

own negligent ignorance. Welborn Mortg. Corp. v. Knowles, 851 S.W.2d 328, 331

(Tex. App.—Dallas 1993, writ denied) (“Where there is a duty of finding out and

knowing,2 negligent ignorance ha[d] the same effect in law as actual knowledge.”).

Properly defined, actual knowledge embraces those things that can be determined

by exercising the means at hand. Portman v. Earnhart, 343 S.W.2d 294, 297 (Tex.

Civ. App.—Dallas 1960, writ ref’d n.r.e.). Actual knowledge in a legal sense exists

“. . . where the means are at hand, which if pursued by proper inquiry the full truth

2
      Such as the duty to perform continuous air monitoring, as required by INEOS’s
      safety manual.
                                         4
might have been ascertained . . . . [N]egligent ignorance has the same effect in

law as actual knowledge.” Hexter v.Pratt, 10 S.W.2d 692, 693 (Tex. Comm’n

App. 1928, judgm’t affirmed) (emphasis added); see Champlin Oil & Refining Co.

v. Chastain, 403 S.W.2d 376, 388 (Tex. 1965) (“Means of knowledge with the

duty of using them are in equity equivalent to knowledge itself.” (quoting Hexter,

10 S.W.2d at 693)).

      Such was the state of Texas common law in 1995, when Chapter 95 was

enacted (and Chapter 41 was amended). The Legislature acted with knowledge of

that common law rule. See Phillips v. Beaber, 995 S.W.2d 655, 658 (Tex. 1999).

That common-law rule has never been abrogated or changed. Texas courts’ current

misprision of the term “actual knowledge” allows no inquiry into why a premises

owner is unaware of a particular hazard; if this persists, premises owners will be

able to avoid liability for their negligent acts by remaining negligently or willfully

ignorant. This policy incentive is, at best, perverse. In other contexts, willful

ignorance is equated with bad faith. See Assoc. Indem. Corp. v. CAT Contracting

Inc., 964 S.W.2d 276, 285 (1998). Under current Texas law, bad faith ignorance

would be excused, because premises owners would now have the economic

incentive to remain ignorant of the hazards on their premises, no matter how

dangerous. Sound public policy requires the legislatively-chosen term to be defined

as it was in common law in 1995.

                                          5
                                           Peter Kelly
                                           Justice

Panel consists of Justices Kelly, Goodman, and Rivas-Molloy.

Justice Kelly, concurring.

                                       6