Richard Powell v. Valero Energy Corporation and Valero Refining - Texas, L.P. ( 2019 )

NUMBER 13-18-00209-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
RICHARD POWELL, Appellant,
v.
VALERO ENERGY CORPORATION
AND VALERO REFINING – TEXAS, L.P., Appellees.
On appeal from the 319th District Court
of Nueces County, Texas.
MEMORANDUM OPINION
Before Chief Justice Contreras and Justices Longoria and Hinojosa
Memorandum Opinion by Justice Hinojosa
Appellant Richard Powell appeals the trial court’s summary judgment dismissing
his premises liability and negligence claims against appellees Valero Energy Corporation
and Valero Refining—Texas, L.P. (VEC and VRT respectively). By three issues, which
we treat as two, Powell argues that the trial court erred in granting summary judgment
because: (1) VRT is not entitled to the Texas Workers’ Compensation Act’s (the TWCA)
exclusive remedy defense, see TEX. LAB. CODE ANN. § 408.001(a) (West, Westlaw
through 2017 1st C.S.); and (2) VEC’s evidence does not negate the duty element of
Powell’s claims. We affirm.
I. BACKGROUND
VRT contracted with Qualspec, Inc. (Qualspec) to perform inspection work at its
Bill Greehey refinery (the Refinery) in Corpus Christi, Texas. The parties’ contractual
relationship was governed by a multi-site work agreement (the Agreement). With
respect to the provision of workers’ compensation insurance, the agreement provided as
follows:
9. Insurance
a. Non-ROCIP.
Unless [Qualspec] has been (or will be, prior to commencing
the Work) enrolled in Valero’s Rolling Owner Controlled
Insurance Program (“ROCIP”), [Qualspec] shall maintain at all
times over the term of this Agreement the insurance
coverages described in Exhibit D, Minimum Insurance
Requirements, with limits and coverages not less than those
specified therein.
The insurance required by this section 9.a. shall be
maintained by [Qualspec] at its own expense at all times
during the term of this Agreement.
....
b. ROCIP.
As part of the material consideration for [VRT’s] agreement to
enter into this Agreement, [Qualspec] has agreed to
participate in the ROCIP program whenever it is available and
applicable to any Work, and when Valero has requested that
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[Qualspec] so participate. To the extent that [Qualspec]
participates in ROCIP, [Qualspec] agrees that it will discount
its pricing for the Work as appropriate to reflect its insurance
savings.
An exhibit to the Agreement further provided that the ROCIP covers “the workers’
compensation losses associated with on site exposures” and “covers enrolled Contractors
and Subcontractors of all tiers[.]” Pursuant to section 9.b. of the Agreement, VRT elected
to provide workers’ compensation coverage to Qualspec and its employees through the
ROCIP. Thereafter, Powell, a Qualspec employee, was injured while working as an
inspector at the refinery. Powell does not dispute that he received benefits under the
workers’ compensation policy provided by VRT.
Powell sued VRT and VEC, alleging causes of action for negligence and premises
liability. VRT and VEC filed a combined traditional motion for summary judgment
supported by the following evidence: (1) the Agreement; (2) the applicable workers’
compensation policy; (3) employee affidavits; and (4) an amendment to the Agreement
recognizing that Altech Inspections, Inc. had changed its legal name to Qualspec Inc.
VRT sought summary judgment on the basis of the TWCA’s exclusive remedy
defense. See id. VRT argued that it qualified as Powell’s statutory employer under the
TWCA because it entered into a written agreement to provide workers’ compensation
coverage to Qualspec and its employees.
VEC, on the other hand, argued that it owed no duty to Powell because it did not
own or operate the premises where Powell was injured. VEC relied on the affidavit
testimony of Ethan A. Jones, an employee of Valero Services, Inc., a subsidiary of VEC.
Jones testified that VEC is a holding company that has no employees, sells no goods or
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services, and owns or leases no real property. Jones averred that VEC did not own any
interest in the Refinery and that it had no employees present at the Refinery. Jones
testified that VRT owns, operates, and controls the Refinery.
Powell filed a response to VRT and VEC’s motion for summary judgment,
supported by answers to interrogatories and an evidentiary affidavit. Powell argued that
VRT failed to present evidence of a written agreement to provide workers’ compensation
coverage. With respect to VEC, Powell noted that the applicable insurance policy listed
VEC as a project sponsor. Powell maintained that this constituted evidence that VEC
exercised control over the Refinery.
The trial court entered summary judgment in favor of the Valero entities and
dismissed Powell’s causes of action. This appeal followed.
II. STANDARD OF REVIEW
We review a grant of summary judgment de novo. KCM Fin. LLC v. Bradshaw,
457 S.W.3d 70, 79 (Tex. 2015); Nall v. Plunkett, 404 S.W.3d 552, 555 (Tex. 2013). In
conducting our review, we view the evidence in the light most favorable to the nonmovant
and make all reasonable inferences and resolve all doubts in the nonmovant’s favor.
Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999).
In a traditional summary-judgment motion, a movant must state specific grounds,
and a defendant who conclusively negates at least one essential element of a cause of
action or conclusively establishes all the elements of an affirmative defense is entitled to
summary judgment. Nall, 404 S.W.3d at 555 (citing TEX. R. CIV. P. 166a(c)). An issue
is conclusively established “if reasonable minds could not differ about the conclusion to
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be drawn from the facts in the record.” Childs v. Haussecker, 974 S.W.2d 31, 44 (Tex.
1998). Once the movant produces evidence entitling it to summary judgment, the burden
shifts to the nonmovant to present evidence creating a fact issue. Walker v. Harris, 924
S.W.2d 375, 377 (Tex. 1996).
III. EXCLUSIVE REMEDY DEFENSE
By his first issue, Powell argues that VRT failed to establish its exclusive remedy
defense “because it did not provide workers’ compensation insurance coverage for
Qualspec employees like Powell.”
A. Applicable Law
The TWCA was intended to benefit employees and employers. Port Elevator-
Brownsville v. Casados, 358 S.W.3d 238, 241 (Tex. 2012).
The [TWCA] was adopted to provide prompt remuneration to employees
who sustain injuries in the course and scope of their employment. . . . The
act relieves employees of the burden of proving their employer’s
negligence, and instead provides timely compensation for injuries sustained
on-the-job. . . . In exchange for this prompt recovery, the act prohibits an
employee from seeking common-law remedies from his employer, as well
as his employer’s agents, servants, and employees, and for personal
injuries sustained in the course and scope of his employment.
Wingfoot Enters. v. Alvarado, 111 S.W.3d 134, 142 (Tex. 2003) (quoting Hughes Wood
Prods., Inc. v. Wagner, 18 S.W.3d 202, 206–07 (Tex. 2000) (citations omitted)).
“Recovery of workers’ compensation benefits is the exclusive remedy of an employee
covered by workers’ compensation insurance coverage . . . against the employer . . . for
. . . a work-related injury sustained by the employee.” TEX. LAB. CODE ANN. § 408.001(a).
The TWCA recognizes that a general contractor may procure workers’
compensation coverage for subcontractors and subcontractors’ employees. Alvarado,
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111 S.W.3d at 141. A general contractor is deemed the employer of a subcontractor and
the subcontractor’s employees if the general contractor provides, in accordance with a
written agreement, workers’ compensation insurance coverage to the subcontractor and
its employees. TEX. LAB. CODE ANN. § 406.123 (West, Westlaw through 2017 1st C.S.);
HCBeck, Ltd. v. Rice, 284 S.W.3d 349, 353 (Tex. 2009). The TWCA’s “deemed
employer/employee relationship extends throughout all tiers of subcontractors.” Etie v.
Walsh & Albert Co., 135 S.W.3d 764, 768 (Tex. App.—Houston [1st Dist.] 2004, pet.
denied). Furthermore, a premises owner, such as VRT, may be a general contractor for
purposes of the TWCA. Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 440,
444–45 (Tex. 2009). (holding that a premises owner who “wears the hat of a general
contractor” who subscribes to workers’ compensation coverage under TWCA and enters
into written agreement to provide coverage to all contractors and contractors’ employees
at its work site is entitled to assert the “exclusive remedy defense”).
Courts construe the TWCA liberally in favor of coverage as a means of affording
employees the protections the Texas Legislature intended. See Casados, 358 S.W.3d
at 241. The TWCA has a “decided bias” for coverage and courts interpret the statute in
a way that favors blanket coverage to all workers on a site. See HCBeck, 284 S.W.3d
at 359; Summers, 282 S.W.3d at 451; Alvarado, 111 S.W.3d at 140.
B. Analysis
The parties’ arguments focus on what it means to “provide” workers’ compensation
insurance as that term is used in section 406.123 of the labor code. See TEX. LAB. CODE
ANN. § 406.123. It is undisputed that VRT secured workers’ compensation coverage for
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Qualspec pursuant to its ROCIP 1 program as contemplated by section 9.b. of the
Agreement. Nevertheless, Powell maintains that, because VRT could have required
Qualspec to procure its own coverage, VRT did not agree to “provide” coverage. In
particular, Powell notes that VRT agreed to provide coverage through the ROCIP only
when “it is available and applicable” to a particular project. Powell further argues that
Qualspec, not VRT, provides coverage under the Agreement because Qualspec is
required to discount its pricing for the project to reflect its insurance savings.
In determining whether VRT provided coverage by written agreement, we look to
the common meaning of “provide.” Halferty v. Flextronics Am., LLC, 545 S.W.3d 708,
713 (Tex. App.—Corpus Christi 2018, pet. filed). “Provide” as it is used in the context of
section 406.123(a) of the labor code means “to supply or make available.” MERRIAM
WEBSTER’S NINTH NEW COLLEGIATE DICTIONARY 948 (1990); see Flextronics, 545 S.W.3d
at 713. We have previously held that a general contractor does not provide coverage
simply by requiring its subcontractors to secure their own coverage. Flextronics, 545
S.W.3d at 714. Rather, the general contractor must do something more than pass the
onus of obtaining coverage to the subcontractor. Id. It must assure coverage by putting
“something in the pot.” Id. at 713. VRT required Qualspec to participate in its ROCIP on
qualifying projects, and with respect to Powell, it provided workers’ compensation
1 An owner controlled insurance program, or OCIP, is designed to secure insurance, including
workers’ compensation insurance, at a reasonable price for all workers at a job site or construction site.
TIC Energy & Chem., Inc. v. Martin, 498 S.W.3d 68, 70 n.7 (Tex. 2016) (citing HCBeck, Ltd. v. Rice, 284
S.W.3d 349, 359–60 & n. 6 (Tex. 2009)). OCIPs provide many benefits, including “allow[ing] the highest-
tiered entity to ensure quality and uninterrupted coverage to the lowest-tiered employees.” Id. (quoting
HCBeck, 284 S.W.3d at 359).
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coverage through the ROCIP. As such, VRT has done more than simply pass the onus
of obtaining coverage to a subcontractor.
VRT’s agreement to provide coverage is similar in many respects to the agreement
addressed by the Texas Supreme Court in Summers. 282 S.W.3d 433. In that case,
Entergy contracted with IMC to perform maintenance at its facilities. Id. at 435–36. By
written agreement, Entergy agreed to provide workers’ compensation insurance for IMC’s
employees in exchange for IMC’s lower contract price. Id. at 436. John Summers, an
IMC employee, was injured while working at an Entergy site. Id. Summers applied for,
and received, benefits under the workers’ compensation policy purchased by Entergy.
Id. Interpreting the TWCA’s applicable definition, the Court held that Entergy qualified
as a general contractor under the TWCA, and, as such, it was entitled to the exclusive
remedy defense because it provided workers’ compensation by written agreement. Id.
at 437–38.
Like the premises owner in Summers, VRT, acting as its own general contractor,
secured workers’ compensation coverage for its subcontractor by written agreement.
Also, like Summers, the injured employee received benefits under the workers’
compensation policy provided by VRT. Accordingly, we conclude that VRT “provided”
coverage as contemplated by the TWCA.
We are unpersuaded by Powell’s arguments to the contrary. First, Powell
maintains that the Agreement allows VRT to choose if it provides coverage through the
ROCIP, but the Agreement imposes no obligation for VRT to provide coverage. The
Agreement, which covered multiple sites, allows that certain “Work” may not qualify for
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coverage through the ROCIP. However, in determining whether VRT has “provided”
coverage under the TWCA, it is of no consequence that coverage might not have been
made available for other services. Rather, “we look at what did happen, not what might
happen.” HCBeck, 284 S.W.3d at 359 n.4. In this instance, however, VRT determined
that Qualspec’s inspection services at the Refinery was qualifying “Work,” and it required
Qualspec to enroll in its ROCIP. As a result, Powell received compensation under the
applicable policy for his injuries. Extending the exclusive remedy defense to VRT under
such circumstances is consistent with the TWCA’s “decided bias” for coverage. See id.
at 359; Summers, 282 S.W.3d at 451; Alvarado, 111 S.W.3d at 140. In that regard,
several courts have extended the exclusive remedy defense to multi-tier coverage
arrangements similar to the subject agreement. See HCBeck, 284 S.W.3d at 359 n.4
(explaining that the fact that the premises owner “was not contractually bound to continue
the OCIP” did not preclude statutory employer status for general contractor); Etie, 135
S.W.3d at 765 (holding that a general contractor was a statutory employer where it
exercised its option to provide workers’ compensation coverage); see also Cook v. White
Const. Co., No. 03-10-00114-CV, 2011 WL 3371542, at *4 (Tex. App.—Austin Aug. 4,
2011, no pet.) (mem. op.) (concluding that the general contractor was a statutory
employer where the premises owner could have discontinued the OCIP coverage but did
not); Lazo v. Exxon Mobil Corp., No. 14-06-00644-CV, 2009 WL 1311801, at *2 (Tex.
App.—Houston [1st Dist.] 2009, no pet.) (mem. op.) (holding that the premises owner was
a statutory employer where agreement stated that premises owner could provide OCIP
coverage and it did so).
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In addition, the fact that Qualspec agreed to work for a discounted rate in exchange
for coverage does not equate to Qualspec having provided its own coverage. See
HCBeck, 284 S.W.3d at 361 (concluding that a general contractor was a statutory
employer where it provided coverage through owner’s OCIP but subcontractors “adjusted
[their] individual contract price[s] to reflect the premiums [owner] paid for the coverage”);
Summers, 282 S.W.3d at 435–36 (concluding that premises owner provided coverage
where it agreed to do so in exchange for a lower contract price); Becon Const. Co. v.
Alonso, 444 S.W.3d 824, 831 (Tex. App.—Beaumont 2014, pet. denied) (holding that a
general contractor was a statutory employer where it provided coverage through its own
OCIP but subcontractors “effectively purchased the coverage” by “adjusting the prices
they charged for their work”).
We hold that VRT conclusively established its entitlement to the exclusive remedy
defense. See Nall, 404 S.W.3d at 555. Accordingly, the trial court did not err in granting
summary judgment in favor of VRT. We overrule Powell’s first issue.
IV. DUTY
By its second issue, Powell argues that VEC failed to conclusively negate the duty
element of Powell’s claims. Both parties agree that the existence of a duty hinges on
whether VEC’s evidence conclusively established that it did not have the right to control
the Refinery.
A. Applicable Law
Like any other negligence action, a defendant in a premises case is liable only to
the extent it owes the plaintiff a legal duty. Gen. Elec. Co. v. Moritz, 257 S.W.3d 211,
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217 (Tex. 2008). Whether a duty exists is a threshold inquiry in premises liability case
and a question of law for the court. Dukes v. Philip Johnson/Alan Ritchie Architects,
P.C., 252 S.W.3d 586, 592 (Tex. App.—Fort Worth 2008, pet. denied).
Duty in the context of premises liability is “commensurate with the right of control.”
Lefmark Mgmt. Co. v. Old, 946 S.W.2d 52, 53–54 (Tex. 1997); La China v. Woodlands
Operating Co., L.P., 417 S.W.3d 516, 522 (Tex. App.—Houston [14th Dist.] 2013, no
pet.); see also Cty. of Cameron v. Brown, 80 S.W.3d 549, 556 (Tex. 2002) (“The relevant
inquiry is whether the defendant assumed sufficient control over the part of the premises
that presented the alleged danger so that the defendant had the responsibility to remedy
it.”). A party in control of a premises “is under the same duty as the owner to keep the
premises . . . in safe condition.” City of Denton v. Page, 701 S.W.2d 831, 834 (Tex.
1986); see La China, 417 S.W.3d at 522. Control can be demonstrated by ownership,
occupation, management, or possession of property. Lefmark Mgmt. Co., 946 S.W.2d
at 54; see De Leon v. Creely, 972 S.W.2d 808, 812 (Tex. App.—Corpus Christi 1998, no
pet.) (explaining that control requires physical control of the property or the intention to
occupy or possess the property). The elements of control can be proven by a contractual
agreement assigning a right to control or evidence of actual control. Dow Chem. Co. v.
Bright, 89 S.W.3d 602, 606 (Tex. 2002); La China, 417 S.W.3d at 522.
B. Analysis
VEC’s summary judgment affidavit established that VEC: (1) is strictly a holding
company; (2) has no employees, sells no goods or services, and owns or leases no real
property; (3) does not own or operate any plants in Corpus Christi, Texas, including the
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Refinery at issue; and (4) does not have any employees present at the Refinery. The
affidavit further provides that VRT, not VEC, owns, operates, and controls the Refinery.
Powell offered no controverting evidence regarding these facts.
Powell maintains that the affidavit fails to negate duty because it does not
specifically provide that VEC lacked the right to control the Refinery. However, one could
easily infer this fact from language used in the affidavit. See La China, 417 S.W.3d at
523 (concluding that an affidavit which provided that defendants were not owners,
lessors, lessees, or managers of a premises and had no employees at the premises was
sufficient to establish the lack of a duty owed to the plaintiff despite not using the words
control or occupy); Gunn v. Harris Methodist Affiliated Hosps., 887 S.W.2d 248, 251 (Tex.
App.—Fort Worth 1994, writ denied) (concluding that an affidavit providing that defendant
did not own, maintain, or operate premises where plaintiff was injured was sufficient to
establish a lack of duty). Therefore, we conclude that VEC’s summary judgment affidavit
adequately demonstrated that it did not have the right to control the Refinery.
Next, Powell argues that there exists a fact issue concerning VEC’s right to control
the premises because VEC was listed as the project sponsor of the ROCIP. While this
evidence may speak to some measure of operational control by VEC over its subsidiary
VRT, it does not constitute evidence that VEC had the right to control the Refinery where
Powell was injured. See Exxon Corp. v. Tidwell, 867 S.W.2d 19, 23 (Tex. 1993) (“[I]n a
case alleging negligence in maintaining a safe workplace, the court’s inquiry must focus
on who had specific control over the safety and security of the premises, rather than the
more general right of control over operations.”); Coastal Corp. v. Torres, 133 S.W.3d 776,
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779 (Tex. App.—Corpus Christi 2004, pet. denied) (explaining that a right of control over
operations of a subsidiary in general is not sufficient to hold a parent corporation liable
for torts of the subsidiary).
We conclude that VEC conclusively negated an essential element of Powell’s
claims. See Nall, 404 S.W.3d at 555. Therefore, the trial court did not err in granting
VEC’s motion for summary judgment. We overrule Powell’s second issue.
V. CONCLUSION
We affirm the trial court’s judgment.
LETICIA HINOJOSA
Justice
Delivered and filed the
28th day of February, 2019.
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