Tuesday, April 12, 2016

Premises Liability

By Bill Siegel

The Texas Supreme Court *1 has recently held that a prior property owner cannot be liable for negligence to an injured third party as a result of his previous ownership of the property.  In the same decision, the Supreme Court distinguished the premises liability of the previous owner from liability based on the negligence of an independent contractor who created the dangerous condition by providing services, labor or materials for such owner, holding that such an independent contractor may still be liable.

Occidental designed and installed an acid addition system at one of its plants.  Six years later, Occidental sold the plant.  Eight years after the sale, an employee of the new owner was injured while using the acid addition system.  The employee sued Occidental, claiming that Occidental had negligently designed the system.  The trial court and the court of appeals held that Occidental was negligent and held Occidental liable notwithstanding that Occidental no longer owned the property.  The Texas Supreme Court reversed holding that, as a prior owner, Occidental could not be held liable under a negligence theory and could further not be held liable under a premises liability theory because it did not own the property at the time of the injury.
Generally, a property owner owes a duty to those persons invited on the property to make the premises safe or to warn of dangerous conditions if it would be reasonably prudent to do so.  This duty generally runs with the ownership or control of the property.  Thus, once the property is sold, the duty passes to the new owner.
Conversely, an independent contractor can be held liable in negligence for creating a dangerous condition on property, as the Texas Supreme Court held in Strakos v. Gehring. *2  The Texas Supreme Court held however, that a prior owner has no duty to any subsequent invitee.  As a result, because an owner’s duty is established under a premises liability theory, any duty owed to an invitee was extinguished upon the sale of the property:

An owner who creates a dangerous condition on its own property has breached no duty of care unless and until the owner exposes certain people to the danger. The owner’s duty in this instance is rooted in its control over the property, which is to say premises liability. Such liability rests on two theoretical assumptions: (1) the property owner controls the premises and is therefore responsible for dangerous conditions on it, see Cnty. of Cameron v. Brown, 80 S.W.3d 549, 556 (Tex. 2002), and (2) the property owner is in a superior position to know of and remedy the dangerous condition, see Austin v. Kroger Texas, L.P., 465 S.W.3d 193, 203 (Tex. 2015).[Footnote omitted] Third parties, such as the owner’s contractors or servants, may share that duty while they control the property, but, as Strakos recognizes, the duty of these third parties is not necessarily co-extensive with that of the property owner because “the modern approach is to place contractors on the same footing as manufacturers of goods and apply the same general principles of negligence even after the acceptance of the work.” Strakos, 360 S.W.2d at 792. The contractor’s duties are thus tied not only to its control of the premises but also to the quality of its contracted work. This latter duty may be judged under ordinary-negligence principles even after the contractor no longer controls the premises. Id.
Thus, once the property is conveyed, a property owner is absolved from premises liability to a party injured as a result of a dangerous condition whether the dangerous condition was originally created by the owner or not.  An independent contractor who created the dangerous condition may nevertheless continue to be liable.

*1   Occidental Chemical Corporation v. Jason Jenkins, No. 13-0961; January 8, 2016.

*2   360 S.W.2d 787 (Tex. 1962)

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