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Divided Texas Supreme Court Narrows the Scope of ‘Unreasonably Dangerous Conditions’ in Premises Liability Case

By David V. Wilson II

A majority of the Texas Supreme Court recently reversed a jury verdict in a premises liability case by finding that a self-serve soft drink dispenser was not in itself an unreasonably dangerous condition. In Brookshire’s Grocery v. Taylor, 50 Tex. Sup. Ct. Jn. 170 (December 1, 2006), Mary Francis Taylor alleged that she slipped and fell on partially melted ice which had fallen from a soft drink dispenser in a Brookshire’s grocery store. She brought suit for her resulting injuries, claiming the dispenser was an unreasonably dangerous condition. Interestingly, she was granted a partial summary judgment by the trial court on the store’s premises liability, and was awarded damages in the ensuing jury trial. The Texarkana Court of Appeals affirmed, and Brookshire filed a Petition for Discretionary Review.
Without hearing oral argument, the Supreme Court reversed and rendered that Taylor take nothing. The majority of seven justices pointed out that Taylor, the trial court and court of appeals all appeared to agree that Brookshire had no actual or constructive knowledge of the ice on the floor which actually caused Taylor’s fall. Rather, Taylor had successfully argued to the courts below that the dispenser was itself a dangerous condition because there were insufficient mats on the floor around it and insufficient warning signs. She pointed out that the store admitted it was aware that ice regularly fell on the floor and bounced to the unmatted area where she fell.
The majority opinion authored by Justice Hecht rejected this argument, stating, “A condition is not unreasonably dangerous simply because it is not foolproof.” Justice Hecht opined that, following Taylor’s logic, the entire grocery store could be a dangerous condition since it is always the case that something more could have been done to prevent an accident. Having determined that the ice was the only dangerous condition, not the dispenser which spilled it, the majority reversed and rendered.
The case drew a concurring opinion by Justice Johnson and a dissenting opinion by Justice O’Neill. The dissent pointed out that the court had previously held that a store’s self service display could be an unreasonably dangerous condition in Corbin v. Safeway Stores, Inc., 648 S.W.2d 292, 295-297 (Tex. 1983). There, pointed out Justice O’Neill, the court said a self-service display can qualify as a dangerous condition when the manner of display creates an unreasonable risk of injury. Justice O’Neill, joined by Justice Medina, concluded that a jury could find the dispenser’s recurrent spilling of ice on an unmatted floor was the kind of unreasonable risk of injury discussed in Corbin.
Justice Johnson wrote a concurring opinion in response to the dissent. He suggested that Corbin set out premises liability elements which may no longer be Texas law. He added that the parties had not asked for a clarification of Corbin, but that the court should do so “in an appropriate case.”

David V. Wilson II is a shareholder with Hays, McConn, Rice & Pickering, P.C. He is licensed in both Texas and Nevada, and serves as articles editor of The Houston Lawyer.

Adverse Possession Requires Intent to Possess,
Not Mistaken Belief

By Fred A. Simpson

The Supreme Court of Texas reversed both lower courts without hearing oral argument in Tran v. Macha, __ S.W.3d __, 50 Sup.Ct.J. 186 (Dec.1, 2006). Next-door neighbors shared a driveway for many years, both believing the land on which it was constructed belonged to only one of them. However, a later survey revealed that the land actually all belonged to the other. When controversy arose between subsequent owners, a jury found the land previously passed by adverse possession and the court of appeals affirmed.
However, the Supreme Court considered the harshness of the doctrine of adverse possession and applied the literal meaning of the essential elements. Joint use is not enough, there must unmistakenly be an assertion of exclusive ownership in order for adverse possession to apply. Shared use of an easement is not the same as the owner’s exclusive use. There must be an intention to claim property as one’s own to the exclusion of all others, notwithstanding the ability of the claimant to allow others to use the property with the claimant’s express permission.

Proportionate Responsibility Applies to Dram Shop Claims Whether the Intoxicated Person was the Plaintiff or a Third Party

By Ruth E. Piller

In F.F.P. Operating Partners, L.P. v. Duenez, 50 Tex. Sup. Ct. J. 102, 2006 Tex. Lexis 1130 (Tex. Nov. 3, 2006), the Texas Supreme Court refused to revisit its decade-old holding that applied the proportionate responsibility scheme in Texas’ Civil Practice and Remedies Code to claims asserted under Texas’ Dram Shop Act.
Roberto Ruiz spent a day cutting firewood and drinking beer. He then drove to a Mr. Cut Rate convenience store, owned by FFP, where he bought a twelve-pack of beer from the assistant manager, Solis. Ruiz climbed in his truck, opened a can of beer, and drove onto a highway. About a mile and half from the convenience store, Ruiz crossed the center line and collided head-on with a car in which five members of the Duenez family was traveling. All five were injured.
Ruiz was arrested for drunk driving, pled guilty to intoxication assault, and went to prison. The Duenez family sued several parties (FFP, Ruiz, Solis, Nu-Way Beverage Company, and the owner of the land where Ruiz had been cutting firewood and drinking), but nonsuited all except FFP. FFP cross claimed against Ruiz as a responsible third party and a contribution defendant.
During the pretrial conference, the Duenezes were granted summary judgment on their claim that chapter 33 of the Civil Practice and Remedies Code did not apply. The trial court severed FFP’s cross-claim against Ruiz, which remains pending in the trial court. Consequently, FFP was the only trial defendant. The court refused to submit jury questions to determine Ruiz’s negligence or the proportionate responsibility of FFP and Ruiz.
Finding Ruiz was obviously intoxicated when he purchased the alcohol, and that his intoxication was a proximate cause of the collision, the jury returned a $35 million verdict against FFP. The Thirteenth Court of Appeals affirmed, holding the comparative responsibility statute applied only to first-party actions under the dram shop act, when the intoxicated patron was suing for his own injuries, but not when the plaintiff was an innocent third party injured by an intoxicated person. The appellate court also held the trial court did not abuse its discretion in severing FFP’s claim against Ruiz for contribution, because that claim was an indemnity claim.
The Supreme Court affirmed in 2004, but agreed to rehearing. While the motion was pending, all but two of the plaintiffs settled their claims against FFP. The case was reargued and this opinion was substituted for the 2004 opinion, which was withdrawn.
Justice Wainwright wrote the Court’s opinion, which analyzed the Dram Shop Act and chapter 33 and reviewed its holding in Smith v. Sewell, 858 S.W.2d 350 (Tex. 1993). Although the appellate court held that Sewell did not apply to a third-party Dram Shop claim such as the Duenezes’, the Supreme Court disagreed, holding that the alcohol provider may be liable for the same conduct, regardless of whether the intoxicated person injures himself or a third party. The Supreme Court further held that since FFP’s liability arose from the actions of its employees rather than from Ruiz’s actions, FFP’s claim against Ruiz was not for indemnification but was for contribution for Ruiz’s proportionate share of the damages. As such, the trial court abused its discretion in severing FFP’s claim against Ruiz. The Court also found that the trial court abused its discretion by proceeding to trial with only FFP and by refusing to submit jury questions for determination of Ruiz’s negligence and proportion of responsibility. The court reversed and remanded to the trial court for a new trial
In dissenting opinions, Chief Justice Jefferson and Justice O’Neill asserted the Legislature abolished the proximate cause element for a third party to recover in a Dram Shop Claim and replaced it with a form of vicarious or imputed liability.

Ruth E. Piller is a shareholder at Hays, McConn, Rice & Pickering, P.C., where she practices civil appellate and trial law. She is a former editor in chief of The Houston Lawyer and serves on its editorial board.

Intertwined Attorneys’ Fees and Exemplary Damages

By T. Michael Wall

The Supreme Court of Texas sets new ground rules for recovery of attorneys’ fees in mixed contract and tort cases, delimiting federal constitutional boundaries of exemplary damages in Tony Gullo Motors I, L.P. and Brien Garcia v. Chapa, ___ S.W.3rd ____, 50 Tex. Sup. Ct. J. 278 (Dec. 22, 2006).
Ms. Chapa paid Gullo $30,200 for a Toyota Highlander “Limited.” When she arrived at the dealership, she was given a base-model Highlander instead. She later accepted delivery of another base-model based on Gullo’s representations that the engine in the base model was the same as the “Limited” and that Gullo would install certain upgrades. Gullo failed to install the upgrades.
Chapa sued for breach of contract, fraud and DTPA violations. A jury found economic damages of $7,213, mental anguish damages of $21,693, exemplary damages of $250,000, and attorneys’ fees of $20,000. The trial court granted judgment on the contract claim, but denied claims for attorneys’ fees because they were not segregated. The court of appeals disagreed and awarded her all amounts found by the jury, but reduced exemplary damages to $125,000.
The Supreme Court found error by court of appeals under the one-satisfaction rule. The Court first concluded that because Gullo did not contest damage awards for breach of contract, Chapa was entitled to recover her economic damages under a breach of contract theory. But, the Court looked further to determine entitlement to more.
Gullo argued that the exemplary damages were unconstitutional under federal substantive law. The Court adhered to the analysis of the U.S. Supreme Court under three “guideposts”: (1) the nature of the defendant’s conduct, (2) the ratio between exemplary and compensatory damages, and (3) the size of civil penalties in comparable cases. The Court examined evidence supporting the first guidepost by considering five more factors: (1) whether the harm was physical or economic, (2) whether the actions threatened the health or safety of others, (3) whether the actions were a repeated or isolated instance, (4) whether Ms. Chapa would be financially ruined, and (5) whether the conduct was deceitful rather than accidental.
The Court found that the exemplary damages were more than 17 times Chapa’s economic damages, observing “the court of appeals judgment pushes against, if not exceeds, the constitutional limit.” The Court drew on penalties permitted in comparable cases for violations of the Texas Occupations Code ($10,000) and those collectable under the DTPA ($20,000), finding the jury verdict of $250,000 constitutionally excessive, and remanding the case to the court of appeals.
The Court also laid down a new approach for recovery of attorneys’ fees in contract cases that also involve claims on which attorneys’ fees may not be based. The Court’s new approach appears to be motivated by a policy concern that parties were invoking the “inextricably intertwined” exception and recovering attorneys’ fees for services performed to pursue claims that do not permit recovery of attorneys’ fees.
Chapa recovered 100 percent of her attorneys’ fees (a significant fact in this opinion). The court of appeals approved this award on grounds that Chapa was not required to segregate fees because she “was required to prove essentially the same facts in pursuing each of her three causes of action,” an approach seemingly required by Stewart Title Guaranty Co. v. Sterling, 941 S.W.2d 68 (Tex. 1997). The Court reviewed difficulties encountered by the previous approach, noting that the Chapa award impermissibly included fees for work done on the fraud claim because Chapa recovered 100 percent of her attorneys’ fees whereas her attorney no doubt devoted time to the fraud claim (for which attorneys’ fees are not recoverable).
The Court then set forth its new analysis, focusing on the function of legal services and the nature of claims advanced. All attorneys’ fees that relate “solely” to a claim for which such fees are unrecoverable must be segregated and cannot be recovered. Whether facts support two “intertwined” claims will no longer be the test. Under Gullo, “it is only when discrete legal services advance both a recoverable and unrecoverable claim that they are so intertwined that they need not be segregated.”

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