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Berkel & Co. Contractors, Inc. v. Lee

Court of Appeals of Texas, Fourteenth District

January 23, 2018


         On Appeal from the 149th District Court Brazoria County, Texas Trial Court Cause No. 75576-CV

          Panel consists of Justices Christopher, Jamison, and Donovan. (Donovan, J., dissenting).


          Tracy Christopher Justice

         This is an appeal from a final judgment rendered after a trial by jury in a personal-injury lawsuit. The injury occurred on a commercial construction site following the collapse of a crane. The claimant was the general contractor's superintendent, and he sued a subcontractor on claims of negligence, gross negligence, and intentional injury. The jury made findings in favor of the claimant, and the trial court rendered judgment based on the jury's award.

         On original submission, we determined that the central issue was whether the Texas Workers' Compensation Act precluded the claimant's recovery of common law damages, and we concluded that it did. We explained that, under the Act, an injured worker's exclusive remedy for work-related injuries is his receipt of workers' compensation benefits. Because we concluded that the Act applied, we held that the subcontractor was immune from any liabilities arising out of its negligence. We recognized that the Act has an exception for gross negligence when the worker suffers a fatal injury, but we held that this exception did not apply because the claimant's injury was non-fatal. We also recognized that the Act has another exception for intentional injuries, but we held that the claimant could not recover under this exception because the evidence did not support a finding that an employee of the subcontractor intended to produce the specific consequences of his conduct. Based on these holdings, we concluded that the claimant's recovery of common law damages could not be sustained, and we reversed and rendered judgment that the claimant take nothing on his claims against the subcontractor.

         Following our opinion, the claimant filed a motion for rehearing that challenged our liability analysis. The claimant asked that we revise our opinion to affirm the trial court's judgment or, in the alternative, that we remand for a new trial in the interest of justice. We grant the motion in part, withdraw our previous opinion, and issue this opinion on rehearing in its stead. Our liability analysis remains unchanged, but we remand in the interest of justice.


         Skanska USA Building, Inc. was the general contractor on a large-scale construction project, and Tyler Lee was Skanska's superintendent. Berkel & Company Contractors, Inc. was one of the subcontractors, and it was responsible for drilling the foundation pilings of an office building that was planned for the project.

         Lee suffered his injury as Berkel's crew was attempting to complete one of its pilings. To understand how that injury occurred, we begin with an explanation of how the crew normally installs those pilings.

         To make a piling, the crew starts by drilling a hole into the earth using an auger, which is essentially just a large helical drill bit. Once the hole is drilled to a certain depth, the crew pumps grout into the hole through a shaft in the middle of the auger. The crew then gradually extracts the auger, allowing the grout to fill the hole. After the auger is removed, the crew drops a cage made out of steel rebar into the grout. The piling is formed as the grout hardens around the cage.

         Heavy machinery is required to complete the pilings, which on this project were between 90 and 110 feet deep. To drill down to those depths, the crew used a 130-foot auger. To operate an auger of that size, the crew used a crawler crane with a 190-foot boom. The crew also staked a 150-foot column known as "the leads" into the ground next to the auger to guide the auger in a vertical position. The crane lifted the leads into place along with the auger.

         Berkel adopted a number of policies to ensure that its pilings were completed safely. One of those policies provided that a piling should never be started unless sufficient grout is on site to fill an entire hole. This policy was violated on the day of Lee's injury.

         After completing a piling, the crew had a few cubic yards of grout to spare, enough to fill a hole to a depth of about fifteen or twenty feet, but well short of the amount needed to fill a hole completely. Berkel's superintendent, Chris Miller, did not want to see this grout go to waste, and because the grout was set to expire soon, he ordered his crew to begin another piling.

         Berkel's foreman, Mark Stacy, expressed opposition to Miller's plan. Stacy did not want to drill another hole until a fresh batch of grout had arrived on the jobsite. Miller responded that more grout was on its way, and because the crew was already behind schedule, he told Stacy, "If you don't drill down, I'll find somebody else that will." Stacy acquiesced, and then Miller left the jobsite.

         While Miller was away, the crew pumped the old grout into a newly drilled hole, expecting that a fresh delivery of grout would be delivered soon. Against the crew's expectations, the delivery was delayed by traffic, and as the crew was forced to wait, the grout in the hole began to harden.

         When the delivery finally arrived, nearly forty minutes had passed. The crew resumed its operation by drilling back down into the old grout, intending for the old grout to mix more evenly with the new grout. But the old grout created a plug around the auger, and when the new grout was pumped into the hole, the pressures beneath the plug began to build, until a sudden release forced the auger to shoot up about five feet. This upward movement caused the cable connected to the auger to backlash. The crew halted the operation so that the cable could be tightened. When the operation was restarted, the crew discovered that the auger was stuck.

         Augers occasionally get stuck, and Berkel has a set of guidelines for unsticking them. Stacy tried to unstick the auger without success for nearly ten minutes, and then Miller returned to the jobsite.

         Miller was, in his own words, "livid" to discover that the auger was stuck. He knew that if the auger could not be freed, then the auger would have to be cut, and the crew would fall behind schedule at least one or two days.

         Miller told Stacy to step aside: "Get the F out of the way. I'm taking over." Miller then positioned himself under the boom, fifteen feet away from the leads, making him closer to the leads than anyone else on the jobsite. For the next twenty-five to forty minutes, Miller gave commands to Berkel's crane operator, Andrew Bennett.

         Miller told Bennett to "bump" the auger, or turn it alternately between forward and reverse. When Bennett tried this bumping procedure, no rotational movement could be observed in the auger itself. However, unusual movement could be observed in the hydraulic lines that powered the auger. These lines were hanging from the boom of the crane, and they were heavy, weighing more than a ton. During the bumping procedure, the lines jerked in spasms, or "danced" as they were described by the crew, creating side loads that the boom was never designed to carry. The lines also sprayed so much hydraulic fluid that Bennett had to wipe it clean from the window of his cab.

         Miller also told Bennett to hoist the auger with the crane. Hoisting caused the crane to become unbalanced. The tracks at the front of the crane dug deeper into the ground, while the tracks at the rear of the crane lifted up. In the industry, this is known as "tipping" the crane, and it is a sign that the crane is attempting to lift a load beyond the crane's rated capacity.

         Bennett tried to stop the operation. He left his cab at least five times and told Miller that the crane was overloaded and that continuing would be unsafe. Berkel's excavator operator, Chris Prestridge, also tried to warn Miller, telling him that the tracks of the crane were coming off the ground.

         Miller disregarded all of these warnings. He screamed at Bennett, "Pull it out! Pull it out!"

         Under Miller's commands, the crane was placed under so much strain that its boom bowed and bent, until it eventually snapped in half and came crashing down.

         With the collapse of the boom, the leads toppled over onto one side, away from the crane. Lee, who was standing behind a barricade, far away from the crane, saw the leads plummeting in his direction. He dove, trying to evade their fall, but the leads landed on his left leg, pinning him to the ground.

         A track hoe was needed to lift the leads off of Lee. When the leads were finally removed, Lee discovered that his leg had been crushed and severed below the knee. Doctors were unable to save it. Because Lee's knee had been so badly damaged, doctors had to amputate above the knee so that Lee could be fitted with a prosthetic.

         Lee was the only person harmed in the incident. Berkel's entire crew of about ten men, including Miller, managed to escape injury.

         Lee recovered workers' compensation benefits through a plan administered by Skanska, but he sued Berkel seeking an additional recovery at common law.[1] The jury awarded Lee more than $35 million in actual damages.[2] The jury also awarded him $8.5 million in exemplary damages, based on Berkel's gross negligence.

         Berkel moved for judgment notwithstanding the verdict, but that motion was denied.


         Berkel raises multiple issues in this appeal, challenging both liability and damages. We only address the liability issues because they are dispositive. These issues focus on the applicability of the Texas Workers' Compensation Act and its exception for injuries that are the result of an intentional tort.

         I. Overview of the Act

         The Texas Workers' Compensation Act provides reciprocal benefits to covered employees and their subscribing employers. For the covered employee who sustains a work-related injury, the Act guarantees the prompt payment of medical bills and lost wages, without regard to who was at fault for causing the injury. See HCBeck, Ltd. v. Rice, 284 S.W.3d 349, 350 (Tex. 2009). For the subscribing employer, the Act provides immunity from the injured employee's common law claims. Id. This immunity is achieved by the following provision, which declares workers' compensation benefits the injured employee's exclusive remedy:

Recovery of workers' compensation benefits is the exclusive remedy of an employee covered by workers' compensation insurance coverage or a legal beneficiary against the employer or an agent or employee of the employer for the death of or a work-related injury sustained by the employee.

Tex. Lab. Code § 408.001(a). Under the plain text of this provision, the employer's immunity extends to his servants, which means that the co-employees of an injured employee are also protected from common law liabilities. Id.

         The exclusive-remedy provision is an essential component to the Act, but it has exceptions, one of which is statutory. The Act provides that if an employee suffers a fatal injury because of the intentional act or omission of the employer or because of the employer's gross negligence, then the employee's surviving spouse or heirs are not prohibited from recovering exemplary damages. Id. § 408.001(b).

         Another exception is court-made. In 1916, three years after the Act was passed into law, the Texas Supreme Court determined that the Act does not prohibit a worker from seeking common law damages when the worker suffers a non-fatal injury caused by the intentional tort of another. See Middleton v. Tex. Power & Light Co., 108 Tex. 96, 109, 185 S.W. 556, 560 (1916). This intentional-injury exception is not based on any particular statutory provision. The Court simply explained that the worker's right to seek redress for such injuries is "protected by the Constitution and could not be taken away." Id., 185 S.W. at 560.

         This court-made exception is still a part of our law today. See Medina v. Herrera, 927 S.W.2d 597, 600 (Tex. 1996) (concluding that the intentional-injury exception survived legislative changes to the Act).

         II. May Berkel claim the exclusive-remedy defense?

         The applicability of the exclusive-remedy provision is the central issue in this case. If the provision does not apply, then there would be no statutory bar to Lee's common law claims.

         However, if the provision does apply, then Lee cannot recover on his claim for negligence. The same is true about Lee's claim for gross negligence because Lee did not suffer a fatal injury. Lee would be limited to his workers' compensation benefits, unless his recovery of common law damages can be sustained on a theory that Berkel committed an intentional tort.

         To resolve this central issue, we must first answer a threshold question: May Berkel claim the exclusive-remedy defense when Berkel is not Lee's actual employer or co-employee? Berkel argues on appeal that it may, even though Lee worked for the general contractor and Berkel was just a subcontractor. Berkel preserved this point in its motion for JNOV, which the trial court denied.

         We review the trial court's ruling on a motion for JNOV under the same standard for any motion that would render judgment as a matter of law. See Cent. Ready Mix Concrete Co., Inc. v. Islas, 228 S.W.3d 649, 651 (Tex. 2007). We consider all of the evidence in the light most favorable to the nonmovant, indulging every reasonable inference and resolving any doubts against the motion. See Union Banks Ins. Co. v. Shelton, 889 S.W.2d 278, 287 (Tex. 1994). To the extent that the trial court's ruling was based on a pure question of law, our review is de novo. See In re Humphreys, 880 S.W.2d 402, 404 (Tex. 1994).

         Two provisions in the Act govern the employment relationship between general contractors and subcontractors. The first provision establishes the general rule that a subcontractor and its employees are not the employees of the general contractor. See Tex. Lab. Code § 406.122(b). This rule applies only if the subcontractor is operating as an independent contractor and the subcontractor has entered into a written agreement with the general contractor in which the subcontractor has assumed the responsibilities of an employer. Id.

         The second provision establishes a permissive exception to the general rule, allowing the general contractor to be deemed the statutory employer of the subcontractor and the subcontractor's employees "for purposes of the workers' compensation laws of this state." Id. § 406.123(e). To create this deemed employer- employee relationship, the Act requires the general contractor and the subcontractor to enter into a written agreement under which the general contractor provides workers' compensation insurance coverage to the subcontractor and the employees of the subcontractor. Id. § 406.123(a).

         The undisputed evidence shows that Skanska, the general contractor and Lee's actual employer, agreed to provide workers' compensation insurance to all of its subcontractors and their employees through a contractor-controlled insurance program (CCIP). During the bidding process, Skanska instructed its prospective subcontractors to omit the cost of workers' compensation insurance, as that coverage would be provided through the CCIP. Once the contracts were awarded, Skanska required all of its subcontractors to enroll in the CCIP as a condition to performing work on the jobsite. Berkel enrolled in the CCIP, and Berkel's written agreement with Skanska confirms that Skanska provided insurance coverage to Berkel and its employees through the CCIP. Thus, for purposes of the Act, Skanska is Berkel's statutory employer, and Lee, as Skanska's actual employee, is Berkel's statutory co-employee.

         As a co-employee, Berkel is entitled to rely on the Act's exclusive-remedy provision, meaning that the trial court erred by rendering judgment against Berkel on the findings that Berkel was negligent and grossly negligent. See TIC Energy & Chem., Inc. v. Martin, 498 S.W.3d 68, 78 (Tex. 2016) (concluding that the exclusive-remedy provision protected a subcontractor against the common law claims of a general contractor's employee ...

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