Southcross Energy Partners GP, LLC. v. Ivy Gonzalez on Behalf of M.R. Gonzalez, M.N. Gonzalez, Minor Children, and the Estate of Jesus Gonzalez, Jr. Amy and Jesus Gonzalez, Sr. And Rene Elizondo ( 2021 )

Fourth Court of Appeals
San Antonio, Texas
OPINION
No. 04-18-00515-CV
SOUTHCROSS ENERGY PARTNERS GP, LLC,
Appellant/Cross-Appellee
v.
Ivy GONZALEZ on Behalf of M.R. Gonzalez, M.N. Gonzalez, Minor Children, and the Estate
of Jesus Gonzalez, Jr.; Amy Gonzalez; Jesus Gonzalez, Sr.; and Rene Elizondo,
Appellees/Cross-Appellants 1
From the 229th Judicial District Court, Duval County, Texas
Trial Court No. DC-16-139
Honorable Sandra L. Watts, Judge Presiding 2
Opinion by: Luz Elena D. Chapa, Justice
Sitting: Luz Elena D. Chapa, Justice
Irene Rios, Justice
Liza A. Rodriguez, Justice
Delivered and Filed: February 24, 2021
AFFIRMED IN PART, REVERSED AND RENDERED IN PART
This is a personal injury case arising out of an explosion on the property of appellant
Southcross Energy Partners GP, LLC, during repair work on Southcross’s gas pipeline. The
appellees, and the plaintiffs in the trial court, are the estate and family members of Jesus Gonzalez,
1
Rene Elizondo is the only appellee who is not a cross-appellant.
2
Sitting by assignment. Judge Sandra L. Watts presided over some of the post-trial proceedings and signed the final
judgment. The Honorable Ana Lisa Garza, Former Presiding Judge of the 229th Judicial District Court, presided over
the trial proceedings and some of the post-trial proceedings.
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Jr., who died from injuries caused by the explosion, and Rene Elizondo, who was severely injured.
Southcross appeals the money judgment the trial court rendered in appellees’ favor after a jury
trial, seeking reversal and rendition of a take-nothing judgment. The Gonzalezes cross-appeal the
judgment, seeking reversal and a remand for a new trial. We affirm as to compensatory damages,
but reverse and render as to the exemplary damages.
FACTUAL BACKGROUND
Southcross owns and operates a gas pipeline traversing Duval County. To replace a valve
on the pipeline, Southcross decided to perform hot taps. A hot tap is a procedure by which a
machine is used to cut into a gas pipeline while gas is still flowing through it. According to the
American Petroleum Institute (API) 3:
Hot tapping is the technique of attaching a welded branch fitting to piping or
equipment in service, and then creating an opening in that piping or equipment by
drilling or cutting a portion of the piping or equipment within the attached fitting. .
. . . Hot tapping is usually performed when it is not feasible, or is impractical, to
take the equipment or piping out of service, or to purge or clean it by conventional
methods. With proper review to determine that a hot tap is appropriate, and
development and conformance to job-specific procedures, many hot tap
connections have been safely made without interfering with the process operation.
The API acknowledges the “risk that hot work may provide a source of personnel exposure or
ignition hazards which could lead to a fire or explosion.” Southcross’s Safety Manual, which
contains written procedures for performing hot taps, also begins by acknowledging that hot taps
are “exceptionally dangerous.”
The API has recommended standards under which hot taps should be performed only as a
last resort after considering various factors. Before conducting a hot tap, the API standards
recommend that operators consider the following questions, in the following order:
3
The trial court admitted into evidence a copy of the API’s 2003 publication “Safe Hot Tapping Practices in the
Petroleum & Petrochemical Industries.”
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1. Is Service Continuity Essential?
2. Is System Shutdown Impractical?
3. Are Written Hot Tap Procedures Available?
4. Is Needed Special Equipment Available?
5. Will Equipment Provide Proven Effective Protection for Employees?
If any question is answered in the negative, the API standards instruct operators to proceed with
an alternative to hot tapping.
When Southcross decided to replace the valve, none of Southcross’s employees were
trained or qualified to perform hot taps. Southcross also lacked the necessary equipment.
Southcross received a bid from Furmanite 4 to perform the hot taps and repairs for the valve
replacement project. Furmanite had experience in performing hot taps and owned a hot tap
machine. To obtain approval for the expenses, an Authorization for Expenses (AFE) form was
prepared and emailed to Southcross’s highest corporate safety officer, William Boyer, in Harris
County. Boyer and two other Southcross supervisors approved the expenses via email that same
morning. None of the written correspondence reflected any consideration of the API standards for
determining whether to proceed with an alternative to hot tapping.
For assistance with performing the hot taps, Furmanite subcontracted with another
company, Galbraith Contracting, to transport Furmanite’s hot tap machine and connect the
machine to Southcross’s pipeline. On the day the work was to be performed, Southcross failed to
issue a hot tap permit, as required by Southcross’s written safety procedures. Furthermore,
Furmanite’s hot tap machine was not properly maintained by Furmanite and was not pressure
tested before the hot taps, as required by Furmanite’s safety policies. Also, to keep its bid lower,
4
“Furmanite” refers collectively to the Furmanite Corporation and other entities that were named defendants but
settled before trial.
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Furmanite sent only one hot tap technician when its policies required two such technicians based
on the project specifications.
Five people were present at the job site where the hot taps were performed. Jacob Baker,
Furmanite’s hot tap technician, performed two hot taps using Furmanite’s hot tap machine.
Galbraith sent a crew consisting of Severo Sepulveda, the foreman, and Gonzalez and Elizondo as
manual laborers to assist with “digging and bolting.” Also present was Southcross’s construction
coordinator Dennis Henneke, who had assisted in preparing the cost estimate for the AFE form
and who was overseeing Furmanite’s work on the pipeline.
Baker performed the first hot tap without incident. The second hot tap, however, required
manually rotating a crank on the machine. During the second hot tap, Baker became fatigued.
Henneke, a Southcross employee who was not licensed, trained, or experienced in performing hot
taps, took over for Baker, and started operating Furmanite’s machine. When Henneke started
struggling with Furmanite’s machine, Sepulveda directed Gonzalez and Elizondo to assist
Henneke. The machine overpressurized from a combination of the mechanical pressure within the
machine and the pressure from the live gas pipeline, but Henneke did not make proper adjustments
to the machine. The hot tap machine then exploded, killing Henneke and Gonzalez and severely
injuring Elizondo’s leg.
PROCEDURAL BACKGROUND
The Gonzalezes and Elizondo sued Furmanite and Southcross. Furmanite settled, and the
claims against Southcross proceeded to a jury trial. The jury returned findings in favor of the
Gonzalezes and Elizondo as to Southcross’s liability for negligence and gross negligence and
found specific dollar amounts for various elements of compensatory damages, as well as punitive
damages.
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Southcross filed a motion for judgment notwithstanding the verdict, challenging the
sufficiency of the evidence to support the jury’s findings and raising other issues. The Gonzalezes
filed a motion for new trial, arguing one of the jurors was disqualified because she did not reside
in Duval County. The trial court denied both motions.
The trial court rendered a final judgment in favor of the Gonzalezes and Elizondo. The
compensatory damages found by the jury were offset almost entirely by a settlement credit. On
appeal, Southcross challenges the jury’s liability findings. The Gonzalezes cross-appeal, arguing
the trial court erred by denying their motion for new trial.
SOUTHCROSS’S APPEAL
Southcross raises three issues: (1) there is legally insufficient evidence of a duty owed to
Gonzalez and Elizondo; (2) there is legally insufficient evidence of gross negligence; and (3)
alternatively, the trial court misapplied the damages cap on exemplary damages in Chapter 41 of
the Civil Practice & Remedies Code by treating the Gonzalezes as a single claimant.
A. Sufficiency of the Evidence
The evidence is legally insufficient when “(a) [there is] a complete absence of evidence of
a vital fact; (b) the court is barred by rules of law or of evidence from giving weight to the only
evidence offered to prove a vital fact; (c) the evidence offered to prove a vital fact is no more than
a mere scintilla; (d) the evidence establishes conclusively the opposite of the vital fact.” Gharda
USA, Inc. v. Control Sols., Inc., 464 S.W.3d 338, 347 (Tex. 2015). Without an objection to the jury
charge, we measure the legal sufficiency of the evidence against the jury charge as given. See Wal-
Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 715 (Tex. 2001).
1. Negligence Liability for Compensatory Damages
In response to a broad-form general negligence question, the jury found Southcross’s
negligence proximately caused Gonzalez’s and Elizondo’s injures. The jury also made special-
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issue findings that Southcross’s failure to ensure a qualified crew performed the hot tap
proximately caused the injuries, and that the work involved a special danger, a peculiar risk, and a
grave risk of serious harm. “A negligence cause of action has three elements: (1) a legal duty, (2)
breach of that duty, and (3) damages proximately caused by the breach.” Carrera v. Yañez, 491
S.W.3d 90, 94 (Tex. App.—San Antonio 2016, no pet.). Southcross challenges only the duty
element. Duty is a threshold question of law, decided from the facts surrounding the occurrence in
question. Pagayon v. Exxon Mobil Corp., 536 S.W.3d 499, 503 (Tex. 2017).
a. The Parties’ Arguments
Southcross argues it owed no duty to Gonzalez and Elizondo to ensure its independent
contractor and subcontractor (Furmanite and Galbraith) exercised ordinary care in performing or
assisting in performing the hot taps. Southcross contends no evidence shows it exercised any
control over the hot taps, and the jury’s special issue-findings are immaterial and not supported by
legally sufficient evidence. The Gonzalezes and Elizondo argue Southcross owed them a duty
because of its own acts and omissions, not necessarily based on the acts and omissions of a
contractor, and further, the evidence supports the jury’s findings.
The Gonzalezes and Elizondo argue we need not address the duty-related rules regarding
independent contractors because their primary theory of negligence is direct liability through
Boyer’s negligent failure to comply with the API standards to consider alternatives to hot taps
before approving expenses for the hot taps. Southcross indirectly responds to this argument in its
challenge to the gross negligence finding, by contending the evidence conclusively establishes
Boyer did consider alternatives to hot taps and there is no evidence that he failed to consider
alternatives as required by the API standards.
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b. Applicable Rules
Generally, a landowner owes no duty “to see that an independent contractor performs work
in a safe manner.” Redinger v. Living, Inc., 689 S.W.2d 415, 418 (Tex. 1985). There are at least
two exceptions; one exception is when the landowner “exercises some control” over a contractor’s
work. See id. A second exception is when the “work itself involves a nondelegable duty, whether
inherently dangerous or statutorily prescribed.” Fifth Club, Inc. v. Ramirez, 196 S.W.3d 788, 795
(Tex. 2006).
However, a landowner may owe a business invitee “a duty not to injure the invitee through
contemporaneous negligent activity.” Austin v. Kroger Tex., L.P., 465 S.W.3d 193, 215 (Tex.
2015). An employee of a contractor performing work on the landowner’s premises is a business
invitee. Smith v. Henger, 226 S.W.2d 425, 431 (Tex. 1950). The acts of a landowner’s employees
within the course and scope of their employment are attributable to the landowner. See Goodyear
Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 757 (Tex. 2007). When courts have not yet
addressed whether a duty exists under the facts surrounding the occurrence in question, courts
must address whether a duty should be recognized by weighing public policy considerations. See
Pagayon, 536 S.W.3d at 503.
c. Evidence of a Duty Without Considering the Rules for Independent
Contractors
We first consider whether Boyer owed a duty to Gonzalez and Elizondo when he approved
expenses for a hot tap. Boyer approved the expenses for hot taps on February 12, 2016. Gonzalez’s
and Elizondo’s injuries did not occur until two months later, on April 12, 2016, during the second
hot tap. Boyer’s approval of expenses is therefore not a contemporaneous activity causing
Gonzalez’s and Elizondo’s injuries, and no party has argued this case presents any premises
liability theories. See United Scaffolding, Inc. v. Levine, 537 S.W.3d 463, 471 (Tex. 2017)
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(explaining the difference between general ordinary negligence and premises liability). The
Gonzalezes and Elizondo cite no authority establishing that when a defendant’s corporate safety
officer approves expenses for a contractor, the defendant owes a duty to a subcontractor’s
employees, who have not yet been hired to perform any work and who have not yet entered the
company’s property. Conversely, Southcross cites no authority that such a duty does not exist, and
Southcross does not squarely respond to this theory of direct negligence. To the extent we can
liberally construe Southcross’s arguments about Boyer having considered alternatives to hot taps
on the matter of gross negligence as applying to the issue of ordinary negligence, Southcross’s
arguments relate to the element of breach, not duty; and Southcross does not challenge the
sufficiency of the evidence supporting the breach element of the jury’s ordinary negligence
findings. See Kenyon v. Elephant Ins. Co., No. 04-18-00131-CV, 2020 WL 1540392, at *5 (Tex.
App.—San Antonio Apr. 1, 2020, pet. filed) (explaining the difference between duty and breach
elements of negligence).
We conclude we need not address whether Boyer owed Gonzalez and Elizondo a duty
when he approved the expenses for the hot tap because courts have already recognized the
existence of a duty owed by a landowner to business invitees. Gonzalez’s and Elizondo’s injuries
occurred at a gas processing facility owned by Southcross. Southcross is therefore a landowner
owing a duty to business invitees. See Kroger, 465 S.W.3d at 215. Because Gonzalez and Elizondo
were employees of a subcontractor performing work for Southcross on its property, they were
business invitees. See Smith, 226 S.W.2d at 431. The acts of Henneke, a Southcross employee,
during the hot tap were attributable to Southcross because Henneke was working as the
construction supervisor and coordinator for Southcross and working on Southcross’s valve
replacement project. See Mayes, 236 S.W.3d at 757. Thus, while Henneke was using the hot tap
machine, Southcross owed Gonzalez and Elizondo a duty not to injure them through Henneke’s
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contemporaneous activity. See Kroger, 465 S.W.3d at 215. Legally sufficient evidence therefore
shows Southcross owed Gonzalez and Elizondo a duty in support of their respective causes of
action for negligence.
d. Evidence of a Duty Under the Rules for Independent Contractors
Southcross argues it owed no duty because: (1) the injuries were caused by the acts and
omissions of a contractor, Furmanite; (2) Southcross did not have actual or contractual control
over Furmanite’s work; (3) the exceptions for nondelegable duties, including mandatory
safeguards or precautions and peculiar risks, do not apply; and (4) the jury’s findings are not
supported by legally sufficient evidence. We hold these independent contractor rules are inapposite
because legally sufficient evidence shows Southcross owed Gonzalez and Elizondo a duty based
on an employee’s contemporaneous activity. See id. But, in an abundance of caution, we address
Southcross’s arguments regarding the duty rules for contractors.
Even if the general “no duty” rule for contractors were applicable, we alternatively hold
the record establishes several exceptions to this rule. The undisputed evidence shows that when
Baker became fatigued, Henneke assumed control of the operation of the hot tap machine and
performed Furmanite’s work himself. A Southcross employee therefore exercised some control
over the manner in which Furmanite’s work was performed. See Redinger, 689 S.W.2d at 418. At
oral argument, Southcross argued a separate question on control was not submitted to the jury.
However, in its briefing and at oral argument, Southcross did not cite any authorities or provide
any explanation for why the broad-form, general negligence question on the issue of control was
an improper question to submit to the jury. See TEX. R. APP. P. 38.1(i); United Scaffolding, 537
S.W.3d at 471 (stating that generally, unless the plaintiff’s negligence theory is premises liability,
“a plaintiff need only submit a general-negligence question in support of its claim for a defendant’s
liability under a negligent-activity theory”). Furthermore, Southcross admitted at oral argument it
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is undisputed Henneke was operating the hot tap machine and performing work Furmanite was
hired to perform when the machine exploded; thus, a separate finding specifically on Southcross’s
control over Furmanite’s work was unnecessary. See Sullivan v. Barnett, 471 S.W.2d 39, 44 (Tex.
1971) (“Submission of an issue on an undisputed fact is unnecessary.”). 5
Alternatively, Southcross was required to ensure the “tap made on a pipeline under pressure
[was] performed by a crew qualified to make hot taps,” 49 C.F.R. § 192.627, and this “qualified
crew” requirement is therefore a nondelegable duty. See Fifth Club, 196 S.W.3d at 795 (stating a
duty is nondelegable when it is imposed by law because of concerns for public safety). The jury
found Southcross’s failure to ensure a qualified crew performed the hot tap proximately caused
Gonzalez’s and Elizondo’s injuries. Southcross argues the jury’s answer to the “qualified crew”
question must be disregarded because the question is not “tied to” the question on negligence.
Southcross cites no authority and does not argue why jury questions must be “tied to” each other
to be valid. See TEX. R. APP. P. 38.1(i). Instead, we must harmonize jury findings and construe
them together to support the judgment when possible. Bender v. S. Pac. Transp. Co., 600 S.W.2d
257, 260 (Tex. 1980).
Southcross argues the jury’s qualified crew finding must be disregarded because the federal
requirement that hot taps be performed by a qualified crew is not sufficiently specific. First, by not
raising this specific objection in the trial court, Southcross did not preserve this complaint for
appeal. See TEX. R. APP. P. 33.1(a). Second, Southcross cites no authority squarely holding a safety
requirement does not give rise to a nondelegable duty if the governing language is too general. See
5
During the charge conference, Southcross objected to the lack of an instruction defining “control” in the general
negligence question. Southcross does not complain of charge error on appeal. Nevertheless, in considering this issue
as an alternative holding, we have measured the legal sufficiency of the evidence against the legal principles governing
a landowner’s control over a contractor’s work, despite the absence of an instruction relating to control in the general
negligence question submitted to the jury.
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id. Third, in MBank El Paso, N.A. v. Sanchez, the supreme court held a general requirement not to
“breach the peace” created a nondelegable duty in repossessing a car. See 836 S.W.2d 151, 152–
54 (Tex. 1992). 6 The specific requirement to ensure a qualified crew performs a hot tap is more
definitive than a general requirement not to breach the peace. We cannot say the qualified crew
requirement lacks sufficient specificity or that the jury’s finding must be disregarded on this basis.
Legally sufficient evidence supports the qualified crew finding. Leslie Cole, a Furmanite
employee, testified this particular job required two licensed hot tap technicians, but Furmanite
provided only one technician—Baker—to keep its bid lower. Baker was unable to perform the hot
taps and complete the job by himself without becoming fatigued. Henneke performed the second
hot tap, and it is undisputed he was not qualified to do so. Sepulveda instructed Gonzalez and
Elizondo to assist with the hot tap, and it is undisputed that Gonzalez and Elizondo were also not
qualified to perform the hot tap. 7 Because a federal regulation established Southcross had a
nondelegable duty to have a qualified crew perform the hot tap, Southcross had a duty to ensure a
qualified crew performed the hot tap, even though it hired a contractor to perform the work. See
Fifth Club, Inc., 196 S.W.3d at 795. 8
And, alternatively, we cannot hold—as a matter of law and as an issue of first impression—
that hot taps are not inherently dangerous. The state of the record in this case precludes us from
making such a holding. Boyer, Southcross’s highest corporate safety officer, testified hot taps are
6
Southcross relies on MBank El Paso, but quotes the analysis from the dissenting opinion.
7
For the first time at oral argument, Southcross argued the failure to ensure a qualified crew performed the work was
not a proximate cause of the plaintiffs’ injuries. This issue was not briefed, and is therefore waived. See TEX. R. APP.
P. 38.1(i). Furthermore, Greg Evans, Southcross’s Director of Operations for the Gulf Coast Region, testified that part
of being experienced in operating a hot tap machine is experience with the “feel” of the machine in terms of the amount
of sustainable pressure. Southcross’s engineering expert testified that had Henneke adjusted the hot tap machine
properly, the machine might not have exploded.
8
Although Southcross presented evidence at trial that it made some effort to ensure Furmanite was sending a qualified
technician by using the Veriforce system to check qualifications, Southcross does not challenge the breach element
on appeal. See TEX. R. APP. P. 38.1(i).
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“exceptionally dangerous.” He also testified Southcross’s written procedure on hot taps states,
“Hot tapping is exceptionally hazardous.”
Greg Evans, Southcross’s Director of Operations for the Lower Gulf Coast, testified “hot
tapping is inherently hazardous,” which imposed an obligation on Southcross to “practice all due
diligence.” Boyer further testified there are also dangers when using alternatives to hot tapping,
such as a “cold cut,” because of the dangers presented by any residual natural gas. Thus, the
evidence shows that regardless of which procedure was used to conduct repairs on the gas pipeline,
the inherent dangers presented by natural gas would have been present. See Prudential Fire Ins.
Co. v. United Gas Corp., 199 S.W.2d 767, 772 (1946) (stating it “is generally known that natural
gas is highly explosive and dangerous,” and holding such dangers must be accounted for when
considering a pipeline operator’s standard of care).
Southcross’s corporate representatives admitted hot tapping is inherently dangerous.
Southcross also cites no evidence showing hot taps are not inherently dangerous. See TEX. R. APP.
P. 38.1(i). Applying our standard of review, and considering the specific evidence in the record
before us and the absence of on-point authority supporting Southcross’s position, we cannot say—
on this record—that hot taps are not inherently dangerous as a matter of law. Thus, if the duty rules
regarding independent contractors apply, we alternatively hold there is sufficient evidence
showing Southcross’s duty to ensure the work was performed safely was nondelegable. See Fifth
Club, 196 S.W.3d at 795. We therefore conclude the duty element of the jury’s negligence finding
is supported by legally sufficient evidence.
2. Gross Negligence – Liability for Punitive Damages
The jury found Gonzalez’s and Elizondo’s injuries resulted from gross negligence
attributable to Southcross. Southcross argues the gross negligence finding is not supported by
legally sufficient evidence. Southcross seeks a reversal of the trial court’s award of exemplary
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damages and rendition of a take-nothing judgment on the Gonzalezes’ and Elizondo’s gross
negligence claims. See TEX. CIV. PRAC. & REM. CODE § 41.003(a)(3) (providing gross negligence
gives rise to liability for exemplary damages).
Exemplary damages “are awarded as a penalty or by way of punishment but not for
compensatory purposes.” Id. § 41.001(5). The burden of proof for exemplary damages is clear and
convincing evidence. Id. § 41.003(b). “‘Clear and convincing’ means the measure or degree of
proof that will produce in the mind of the trier of fact a firm belief or conviction as to the truth of
the allegations sought to be established.” Id. § 41.001(2). “Because of this heightened burden of
proof, we apply a heightened standard of review.” Columbia Med. Ctr. of Las Colinas, Inc. v.
Hogue, 271 S.W.3d 238, 248 (Tex. 2008). A plaintiff cannot satisfy this heightened evidentiary
burden or shift the burden to the defendant “by evidence of ordinary negligence.” See TEX. CIV.
PRAC. & REM. CODE § 41.003(b).
a. Applicable Law
“Gross negligence consists of both objective and subjective elements.” U-Haul Int’l, Inc.
v. Waldrip, 380 S.W.3d 118, 137 (Tex. 2012). “‘Gross negligence’ means an act or omission: (A)
which when viewed objectively from the standpoint of the actor at the time of its occurrence
involves an extreme degree of risk, considering the probability and magnitude of the potential
harm to others; and (B) of which the actor has actual, subjective awareness of the risk involved,
but nevertheless proceeds with conscious indifference to the rights, safety, or welfare of others.”
TEX. CIV. PRAC. & REM. CODE § 41.001(11); see Lee Lewis Constr., Inc. v. Harrison, 70 S.W.3d
778, 785 (Tex. 2001).
The jury charge tracked the statutory requirements for gross negligence, including both the
objective and subjective components. However, the jury charge specifically limited the jury’s
consideration to the acts and omissions of Southcross’s corporate safety officer, William Boyer:
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Because no party objected to the question being limited to Boyer’s acts and omissions, we measure
the legal sufficiency of the evidence by the charge as it was submitted to the jury. See Sturges, 52
S.W.3d at 715. In post-submission briefing, the parties agreed our review is limited to whether
clear and convincing evidence shows Boyer was grossly negligent.
b. The Parties’ Arguments
Southcross challenges both the objective and subjective components of the jury’s gross
negligence finding. The Gonzalezes and Elizondo argue the extreme degree of risk involved was
the risk of explosions during hot taps; Boyer was aware of the risk of explosions in conducting hot
taps; and Boyer proceeded with conscious indifference by failing to follow industry standards
recommended by the API before approving the expenses for the hot taps. Southcross argues there
is not an extreme degree of risk associated with hot tapping, the risk in this case was created by
Furmanite’s negligent failure to maintain its hot tap machine, and no evidence shows Boyer was
aware of this risk and proceeded with conscious indifference to this risk after approving the
expenses for the hot taps.
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c. “Act or Omission by William Boyer”
We begin by considering how the jury was charged with respect to the Gonzalezes and
Elizondo’s theories of predicate negligence as they relate to the “act or omission of William
Boyer.” For an act or omission to constitute gross negligence, the act or omission complained of
must first constitute ordinary negligence. See Hogue, 271 S.W.3d at 248. For gross negligence,
“the act or omission complained of must depart from the ordinary standard of care to such an extent
that it creates an extreme degree of risk of harming others.” Id. Gross negligence therefore requires
a predicate act or omission of ordinary negligence. See id.; Kenyon, 2020 WL 1540392, at *20.
However, gross negligence requires more than ordinary negligence; for a negligent act or omission
to constitute gross negligence, a jury must find both the objective and subjective components by
clear and convincing evidence. See TEX. CIV. PRAC. & REM. CODE § 41.003(b); Shell Oil Co. v.
Humphrey, 880 S.W.2d 170, 174 (Tex. App.—Houston [14th Dist.] 1994, writ denied).
In our analysis of the ordinary negligence claims, we held legally sufficient evidence shows
Southcross owed a duty based on: (1) Henneke’s contemporaneous activity of operating
Furmanite’s hot tap machine; (2) Henneke’s control over Furmanite’s work; and (3) to the extent
Furmanite retained all control over the safety aspects of performing the hot taps, Southcross’s
nondelegable duty arising from the performance of the hot taps. The jury also found Furmanite’s
negligence proximately caused the injuries in this case. Regarding Furmanite’s negligent acts and
omissions that contributed to the injuries, the evidence shows Furmanite sent only one licensed
technician to perform the hot taps when its safety policies required two for Southcross’s valve
replacement project, failed to maintain its hot tap machine, failed to pressure test its hot tap
machine before the incident, and its employee Baker allowed a Southcross employee Henneke, a
person not qualified to perform hot taps, to operate Furmanite’s hot tap machine.
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The Gonzalezes and Elizondo do not argue, and no evidence shows, Boyer was actually,
subjectively aware of any of these negligent acts or omissions, and these negligent acts and
omissions occurred after Boyer approved expenses for the hot tap. It is undisputed that Boyer is
an employee of Southcross who works in Harris County and who was not present on the site in
Duval County where the explosion occurred until the day after the explosion. No direct or
circumstantial evidence shows Boyer actually knew, on the day of the explosion, whether
Southcross employees were acting with reasonable prudence and following Southcross’s written
safety procedures. No direct or circumstantial evidence shows Boyer knew Furmanite violated its
policies by sending only one technician, failed to pressure test and adequately maintain its hot tap
machine, and allowed an unqualified Southcross employee to perform the hot tap.
Instead, the Gonzalezes and Elizondo argue the predicate negligence giving rise to gross
negligence liability was Boyer’s approval of expenses for the hot taps without analyzing the API
standards and considering alternatives. Although we did not address whether Southcross owed a
duty to Gonzalez and Elizondo based on Boyer’s approval of expenses for the hot taps in analyzing
ordinary negligence, we will assume Southcross owed such a duty in our analysis of whether
sufficient evidence supports the gross negligence finding. We also assume without deciding legally
sufficient evidence supports the objective component of the jury’s gross negligence finding, and
proceed to considering the subjective component.
d. The Subjective Component
To establish the subjective component of gross negligence, “the plaintiff must show that
the defendant knew about the peril, but his acts or omissions demonstrate that he did not care” in
“proceeding” with conscious indifference. Diamond Shamrock Ref. Co. v. Hall, 168 S.W.3d 164,
173 (Tex. 2005). The “conscious indifference” test focuses on the actor’s mental state. Wal-Mart
Stores, Inc. v. Alexander, 868 S.W.2d 322, 325 (Tex. 1993). Circumstantial evidence may be
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sufficient to show an actor’s mental state. See Lee Lewis Constr., 70 S.W.3d at 785. However, the
evidence must show the actor was subjectively aware not only of the magnitude of potential harm,
but also a high probability of potential harm. See Alexander, 868 S.W.2d at 325 (requiring proof
the actor “proceeded with knowledge that harm was a ‘highly probable’ consequence”).
The parties dispute whether the evidence shows Boyer, personally, applied the API
standards and considered alternatives to hot tapping. We will assume the evidence shows Boyer
failed to follow the API standards and that he was negligent in personally failing to do so. 9 We
will also assume the evidence shows no other Southcross employee involved in the valve
replacement project followed the API standards and considered alternatives to hot tapping. But
some evidence of ordinary negligence, such as evidence that an actor negligently failed to take a
safety precaution, is insufficient under the clear and convincing standard to show the actor was
subjectively aware his negligence created an extreme degree of risk and nevertheless proceeded
with conscious indifference to that risk. See Lee Lewis Constr., Inc., 70 S.W.3d at 785.
“Conversely, some evidence of care does not defeat a gross-negligence finding.” Id.
No evidence shows that when Boyer emailed his approval of expenses for the hot taps, he
knowingly failed to analyze the API standards, and approved the expenses for hot taps with
indifference to whether any Southcross employee involved in the valve replacement project had
analyzed the API standards. Although the Gonzalezes’ and Elizondo’s petroleum engineering
expert, Greg Perkin, testified a pipeline operator, as an entity, should apply the API standards and
consider alternatives to a hot tap, no evidence shows such an analysis must be, should be, or
ordinarily is conducted personally by the pipeline operator’s highest corporate safety officer. In
9
During his testimony, Boyer was evasive and expressed uncertainty about whether the hot taps were necessary under
the API standards. The jury reasonably could have inferred that if Boyer was uncertain about how the API standards
applied to the valve replacement project at the time of trial, he more likely than not did not know whether the hot taps
were necessary when he approved the Authorization for Expenses.
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other words, if any Southcross employee involved in the valve replacement project had considered
the API standards and determined a hot tap was required, Southcross would have met the standard
of care argued by the Gonzalezes and Elizondo, even if Boyer did not consider the API standards
personally.
Although we assume the evidence shows Boyer did not consider the API standards, and
that no other Southcross employee did so, we will determine whether the evidence shows Boyer
was subjectively aware that no one at Southcross had considered the API standards when
determining whether the valve replacement project required hot taps. Before approving expenses
for the hot taps, the documentation provided to Boyer consisted of the AFE form and the emails
pertaining to the AFE form. The emails did not contain any analysis of the API standards. The
AFE form contained a list of expected expenses and the following project description and
justification:
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Although the AFE form does not reflect an analysis of the API standards, there is no evidence
showing an analysis of the API standards is typically reflected on the AFE forms submitted for
corporate approval. The AFE form, which was prepared by other Southcross employees, states the
valve replacement project will “require” two hot taps. Thus, while the AFE form is circumstantial
evidence showing Boyer was aware no analysis of the API was documented on the AFE form
itself, a jury could not reasonably infer from the AFE form—alone—that Boyer was subjectively
aware that all other Southcross employees involved in the valve replacement project had failed to
analyze the API standards for considering alternatives to a hot tap when concluding the valve
replacement project will “require” two hot taps.
Additionally, our heightened standard of review precludes us from diregarding undisputed
facts in considering the sufficiency of evidence suporting a gross negligence finding. In re J.F.C.,
96 S.W.3d 256, 266 (Tex. 2002). It is undisputed that the API standards relate to the reasonableness
of performing hot taps, and involve weighing not only safety considerations, but also the feasibility
and service-interruption implications of shutting down a gas pipeline. Specifically, the first two
API standards involve considering the feasibility of shutting the pipeline down and the necessity
of service continuity. The last three API standards involve logistics and safety considerations for
hot taps; specifically, whether written hot tap procedures are available; whether special equipment
for performing hot taps is available; and whether the equipment will provide proven effective
protection for employees.
The Gonzalezes and Elizondo posit that the evidence shows Boyer did not consider, or
sufficiently consider, the API standard of whether a system shutdown was feasible. Assuming this
position is supported by the evidence, this position would merely establish Boyer failed to consider
the feasibility of alternatives, not necessarily that Boyer failed to consider the API standards related
to safety. The Gonzalezes and Elizondo argue that action in the face of a known risk can establish
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conscious indifference. But in the cases upon which they rely, the actor was aware a certain safety
precuation was not being taken in the face of known risk. See Hogue, 271 S.W.3d at 253 (evidence
showed defendant was subjectively aware of the lack of sufficient medical resources, which
created an extreme risk); Lee Lewis Constr., 70 S.W.3d at 786 (defendant personally observed an
“ineffective fall-protection system” on construction of a high rise); Mobil Oil Corp. v. Ellender,
968 S.W.2d 917, 924 (Tex. 1998) (“Mobil vice principals knew that not providing protective gear,
not monitoring and not warning workers about benzene exposure was an extreme risk to contract
workers”).
This case is distinguishable because there is no evidence showing Boyer was subjectively
aware that a safety precaution was not taken. Instead, the evidence conclusively establishes
undisputed facts related to the safety recommendations contained in the last three API standards.
It is undisputed Southcross had written, detailed procedures for hot taps; 10 in approving expenses,
Boyer was approving the hiring of a contractor, Furmanite, who had experience with and special
equipment for performing hot taps; Southcross had used Furmanite’s hot tapping services in the
past without any safety incidents; and the API standards acknowledge hot taps are frequently
performed safely. There is no evidence showing that, at the time Boyer approved expenses for the
hot taps for the valve replacement project, the hot taps for the project presented a higher probability
of explosions than any other hot tap, or that Boyer was aware of any such heightened probability
based on a likelihood that Southcross’s and Furmanite’s employees would not follow all written
safety procedures. See Agrium U.S., Inc. v. Clark, 179 S.W.3d 765, 768 (Tex. App.—Amarillo
10
Although several of those procedures were not followed on the day the hot taps were performed, as explained above,
the Gonzalezes and Elizondo do not argue, and there is no evidence showing, Boyer was subjectively aware
Southcross’s written procedures were not followed.
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2005, pet. denied) (considering the existence of safety procedures as relevant to conscious
indifference). 11
The Gonzalezes and Elizondo argue, however, Boyer’s conscious indifference was shown
by a Powerpoint document Boyer referred to during a presentation at a conference of energy
executives. The Powerpoint is dated July 2017, over a year after the April 2016 explosion. In their
briefs, the Gonzalezes and Elizondo isolate quotes from the Powerpoint, and argue these quotes
show Boyer’s subjective state of mind is one of someone who does not care about the rights, safety,
or welfare of those injured in accidents involving oil and gas pipelines:
During a private conference on maintaining a company’s image, Boyer told oil
executives that “significant incident[s]” are inevitable and “it is just a matter of time
before you will have [one].” When such an “incident” does occur, he advised,
operators should “[e]mphasize that it was an accident and unfortunate.” It is
important, he continued, to “convey genuine interest in repairing the damage and
finding the cause of the incident.” In private, Boyer said nothing about actually
repairing the damage, finding the root cause, or avoiding catastrophes in the first
place.
(citations omitted). The Powerpoint, titled “Pipeline Operations in the era of ‘new Media’: ‘What
happens when things go really wrong’?” consists of several slides relating to how social media
posts pertaining to pipeline accidents can interfere with a company’s post-accident public relations
strategy. Merely discussing public relations strategies for after a catastrophic accident does not
necessarily show conscious indifference to the rights, safety, and welfare of workers before such
an accident occurs, which is what is required for gross negligence. See TEX. CIV. PRAC. & REM.
CODE § 41.001(11).
11
The Agrium court noted, “It is beyond doubt that other measures could have been taken by all involved to prevent
the incident or reduce the risk involved. But what cannot be ignored is the fact that Agrium had in place procedures
which obviated the danger inherent in working on pressurized lines. And, we find no evidence of record suggesting
that had those procedures been completely followed, the incident would have nonetheless occurred. Nor did we find
evidence that like incidents had occurred in the past despite full compliance with the procedures.” Id. The same is true
in this case.
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In sum, the charge limited the jury’s consideration to the acts and omissions of Boyer. The
evidence on which the Gonzalezes and Elizondo rely to show Boyer’s ordinary negligence—
failing to apply the API standards or to consider alternatives to a hot tap—is the same evidence
they rely on to show Boyer was consciously indifferent and thus grossly negligent. But some
evidence of ordinary negligence under a preponderance standard is insufficient to show gross
negligence under the clear-and-convincing-evidence standard. Even if Boyer did not adequately
consider the feasibility of alternatives to hot taps, the undisputed facts establish Southcross had
written safety procedures for hot taps and, by approving the AFE form, Boyer was relying on
Furmanite to perform the hot taps with its equipment and qualified personnel. No evidence shows
Boyer was personally aware that other Southcross and Furmanite employees failed to comply with
Southcross’s or Furmanite’s safety policies and procedures during this incident or in the past.
Applying our heightened standard of review, accounting for the undisputed facts in this case, and
having thoroughly considered all of the evidence arguably relevant to the gross negligence finding,
we cannot say the conscious indifference element of the jury’s gross negligence finding regarding
Boyer is supported by legally sufficient evidence. We are therefore compelled to reverse the award
of punitive damages.
THE GONZALEZES’ CROSS-APPEAL
The Gonzalezes argue the trial court erred by denying their motion for new trial because a
juror, Juror 6, was disqualified. In their motion for new trial, the Gonzalezes argued Juror 6 was
disqualified because she was a resident of Nueces County, not Duval County where the trial was
held. “A person is disqualified to serve as a petit juror unless the person . . . is a resident of . . . the
county in which the person is to serve as a juror.” TEX. GOV’T CODE § 62.102(3).
The Gonzalezes did not object or make a for-cause challenge to Juror 6’s qualifications to
serve on the jury during voir dire. The Gonzalezes claim they were injured by Juror 6 being one
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of the ten jurors who determined the amount of compensatory damages. Juror 6, along with the
other eleven members of the jury, found Southcross liable for gross negligence and determined the
amount of punitive damages. Southcross argues the Gonzalezes did not preserve error, the trial
court did not abuse its discretion, and the Gonzalezes were not harmed.
We review a trial court’s denial of a motion for new trial based on a juror’s disqualification
for an abuse of discretion. BZ Tire Shop v. Brite, 387 S.W.3d 837, 838 (Tex. App.—San Antonio
2012, no pet.). A trial court does not abuse its discretion if its decision is based on conflicting
evidence. Frezza v. Flores, 567 S.W.3d 417, 420 (Tex. App.—San Antonio 2018, pet. denied).
And, we do not substitute our opinion for the trial court’s. Keeton v. Carrasco, 53 S.W.3d 13, 25
(Tex. App.—San Antonio 2001, pet. denied). 12
In her juror questionnaire, Juror 6 wrote her county of residence is Duval County. She
signed the questionnaire certifying her answers to all questions were true and correct. During voir
dire, Juror 6 stated under oath that she worked in Nueces County, where she drove every day
except a few days a week, and then she would drive back to stay with her parents who lived in
Duval County. The record also contains a copy of Juror 6’s driver’s license, showing her address
is in Duval County, and her voter registration form from 2016 on which she represented under
penalty of perjury that she resided in Duval County.
Although the Gonzalezes rely on Juror 6’s testimony, the testimony of her mother and
stepfather, and documentary evidence, there is conflicting evidence in the record. Each side
presented a significant amount of evidence on which county Juror 6 intended to be her residence.
12
In the Gonzalezes’ brief, they argue, “The abuse of discretion standard of review applies.” At oral argument, the
Gonzalezes argued the standard of review is de novo because the trial court applied an improper construction of the
statute imposing the juror residency requirement. The Gonzalezes rely on comments the trial court made during the
new trial hearing, but “oral comments from the bench are not written findings of fact.” In re Doe 10, 78 S.W.3d 338,
340 n.2 (Tex. 2002). Nevertheless, on the legal issue of what “residence” means, we will assume the Gonzalezes’
proposed construction of “residence” is proper, and that “residence” means a person’s home—the fixed place of
habitation to which they intend to return after any temporary absence.
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Because the evidence is conflicting, we cannot substitute our judgment for the trial court’s or say
the trial court abused its discretion by denying the Gonzalezes’ motion for new trial. See Frezza,
567 S.W.3d at 420; Brite, 387 S.W.3d at 838; Keeton, 53 S.W.3d at 25.
CONCLUSION
We reverse the exemplary damages awards and render a take-nothing judgment on the
Gonzalezes and Elizondo’s gross negligence claims. In all other respects, the trial court’s judgment
is affirmed.
Luz Elena D. Chapa, Justice
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