Thursday, October 01, 2020

Limitations on Responsible Third-Party Practice -- Dallas Court of Appeals Affirms Trial Court's Order Striking RTP Designation

By Jonathan Spigel

 

In a decision earlier this year, the Dallas Court of Appeals denied mandamus relief to a defendant that sought to designate another business entity as a responsible third party (RTP).  In In re Eagleridge Operating, LLC, a gas well operator sought to designate a prior gas well operator as an RTP in a gas line rupture/personal injury suit.  Approximately four months prior to the subject gas line rupture and resulting personal injury, the well was operated by Aruba (a minority interest holder in the  gas well).  However, at the time of the gas line rupture/personal injury, Eagleridge was the gas well operator (and Aruba had previously sold its minority interest).  Shortly after the personal injury lawsuit was filed against the gas well owner and Eagleridge, Eagleridge filed a motion to designate Aruba as an RTP, claiming that Aruba created a condition on the well site that led to the rupture/personal injury.

 

The Role of the Responsible Third Party

RTP motion/practice is a convenient, strategic way in which a defendant can lessen – or totally avoid – potential liability in a lawsuit.  The pleading burden is a fairly low one – as long as the plaintiff could have sued the potential RTP as an actual party defendant (with some statutory exceptions not applicable in this case), and the moving party pleads some basis for holding the RTP responsible for the plaintiff’s injury -- the trial court has no discretion in granting the motion.  Once the motion is granted/the RTP is designated, and as long as sufficient evidence is presented at trial justifying the RTP’s submission in the liability question in the jury charge, the jury is free to consider and assess proportionate responsibility to the RTP.  However, the RTP is not an actual party defendant represented by counsel at trial, and fault/responsibility findings against an RTP have no financial consequences against that RTP.  In other words, the plaintiff collects nothing from the RTP – the proportionate responsibility finding against the RTP only operates to lessen the potential responsibility of the true defendants in the jury charge.

 

The Application in Eagleridge

However, in Eagleridge, the trial court’s striking of Eagleridge’s RTP designation of Aruba was upheld by the Dallas Court of Appeals because Aruba, as a prior gas well operator, had no legal liability to the plaintiffs in their negligence and gross negligence suit.  Despite Eagleridge’s arguments in favor of Aruba having a dual-capacity role – prior well operator and creator of the premises condition giving rise to the gas line rupture - the Dallas Court of Appeals disagreed and held that however pled, the case was really a premises liability case and a prior well operator cannot have premises liability to an injured plaintiff in such a situation.  

The takeaway here is that while RTP practice is often a great way for a defendant to potentially lessen – or totally avoid – responsibility in litigation, and while the pleading burden is generally low, if the potential RTP would not normally have potential legal liability to the injured party, the RTP designation will not stand. 
 

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