Last month the Texas Supreme Court handed down a decision in Occidental Chemical Corporation v. Jason Jenkins (No. 13-0961), a premises liability case in which TCJL participated as an amicus curiae. The case involved two legal issues of significant importance to the Texas business community: (1) whether a property owner who creates a dangerous condition on its property may be held liable for injuries for negligence after the property owner has sold the property and relinquished control; and (2) whether the 10-year statute of repose for registered or licensed professionals who design, plan, or inspect improvements to real property applied to Occidental’s construction of the safety system at issue in the case. The Dallas Court of Appeals ruled that Occidental was liable both in negligence and premises liability and that the statute of repose did not apply.
In a unanimous opinion authored by Justice Devine, SCOTX reversed the Court of Appeals and rendered judgment for Occidental. The Court’s decision rested on an analysis of whether Occidental, as a premises owner whose liability generally ceases upon conveyance of the premises, could also be considered an independent contractor with continuing liability for the creation of a dangerous condition. Jenkins further argued that a former property owner who improves real property may be held liable for injuries as though it were a product manufacturer. The Court rejected both arguments, holding that Occidental was a premises owner, not an independent contractor, and that once Occidental sold and gave up control over the property, it had no continuing duty to persons who may be exposed to a dangerous condition on the premises. The Court made it clear that “premises-liability principles apply to a property owner who creates a dangerous condition on its property, and that the claim of a person injured by the condition remains a premises-liability claim as to the owner-creator, regardless of how the injured party chooses to plead it” (11). If an injury occurs after the owner-creator conveys the property, “the premises-liability claim will, as a general rule, lie against the property’s new owner, who ordinarily assumes responsibility for the property’s condition with the conveyance” (12). Having disposed of the case on the premises liability issue, the Court did not reach the statute of repose question.
The Court’s decision clarifying Texas law will have positive long-term implications for Texas manufacturers and other businesses that make substantial capital investments in the state. Thanks to the Court’s adherence to longstanding premises liability law and precedent, Texas businesses will not have to deal with long-tail liability for improvements constructed long before the transfer of ownership of property.