The summary judgment personal injury case of AEP Tex. Cent. Co. v. Arredondo, 612 S.W.3d 289 (Tex. 2020) addressed in my previous blog article (previous article) made its way to the Supreme Court of Texas (SCOTX). This case involved injuries to a landowner who stepped into a hole allegedly created when the contractor, T&D Solutions, LLC, removed a utility pole on the landowner’s property. T&D was hired by the utility company, AEP, to remove the pole. The San Antonio Court of Appeals previously found that fact issues existed as to whether both T&D and AEP were liable for the injuries caused to the Plaintiff landowner. SCOTX agreed that fact issues existed as to whether T&D (the contractor) was liable but held that as a matter of law AEP (the utility) was not liable to the Plaintiff landowner. Thus, SCOTX affirmed the San Antonio Court of Appeals decision as to T&D and reversed as to AEP.
Background. On July 1, 2012, AEP & T&D entered into a contract for T&D to provide AEP with distribution line construction and maintenance related services. The contract designated T&D as an independent contractor solely responsible for supervising its employees and subcontractors.
AEP issued a directive to T&D to remove a utility pole on the Plaintiff landowner’s property. T&D removed the pole and certified that the job was completed in December. Some 7 months later in July, Plaintiff was injured, while mowing her lawn, when she stepped into a 2.5’ deep hole in the area where the pole had been removed.
The Plaintiff landowner subsequently sued Defendants AEP and T&D for negligence. The trial court granted the Defendants’ motion for summary judgment finding as a matter of law that Defendants were not liable to Plaintiff. On appeal, the San Antonio Court of Appeals found that fact issues existed as to the liability of AEP and T&D and reversed the judgment of the trial court as to these parties. AEP and T&D filed a petition for review with SCOTX.
SCOTX review. On review, SCOTX first addressed whether the San Antonio Court of Appeals correctly held that fact issues existed as to T&D’s negligence. In contending that there were no fact issues, T&D relied upon the deposition testimony of its foreman stating that the crew immediately filled the hole with dirt after the pole was removed. However, the Plaintiff presented evidence that she fell into a 2.5’ hole in the location where the pole was removed. Thus, fact issues existed as to whether T&D failed to exercise ordinary care in removing the pole. SCOTX affirmed the Court of Appeals decision in this respect.
However, SCOTX disagreed with the Court of Appeal’s decision as to AEP, the utility. AEP asserted that it owed no duty to Plaintiff to ensure that its contractor performed its work safely. The Plaintiff landowner contended, in part, that the written contract between AEP and T&D gave AEP the right to control T&D’s work so that AEP owed a duty to Plaintiff.
SCOTX recognized that it had adopted § 414 of the Restatement (2nd ) of Torts that states:
One who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care.
AEP Tex. Cent. Co. v. Arredondo, supra, *295.
The Plaintiff contended that the following contractual terms gave AEP the right to control T&D’s work so that AEP had a duty to use reasonable care in exercising this control:
• [T&D] shall have an authorized representative at the Site to whom [AEP] may give instructions at all times when Work is being performed.
• When Work is performed on private property, … [T&D] shall use its best efforts to arrange for the completion of Work to be with the least inconvenience practicable to [the owner]. Work performance on private property shall be done as expeditiously as possible and the premises restored immediately.
AEP Tex. Cent. Co. v. Arredondo, supra, *296.
SCOTX held that since neither of these provisions sets forth requirements as to “the means, method or details of [T&D’s] work,” then they did not support the legal proposition that AEP owed Plaintiff a duty of care. Thus, SCOTX reversed the San Antonio Court of Appeals decision as to AEP and found as a matter of law that AEP was not liable to Plaintiff for her injuries.
Lessons learned. Drafting contracts between owners and general contractors or general contractors and subcontractors can be tricky. Owners may be tempted to include specific requirements in contracts with their general contractors retaining control over the details of the general contractor’s work. In turn, general contractors may be tempted to do the same in their contracts with their subcontractors. After all, this might help prevent injuries arising from the work. However, the flip side to retaining this control is that owners or general contractors may end up being liable for injuries negligently caused by their contractors.