Shielded by the Exclusive Remedy

Author: Monique Larmond

Guest Editor: Chelsey Leigh

May 14, 2018 8:00am

On May 3, 2018, the executives of Austin Bridge & Road LP (“ABR”) sighed a huge relief after winning the support of a Texas appellate court. The Court of Appeals for the First District of Texas, rendered its opinion appealing a 17 million dollar verdict against ABR from a construction project gone wrong.

Background

Austin Commercial was the prime contractor on a project associated with Baylor University’s football stadium. Austin Commercial subcontracted to ABR and ABR subcontracted to Derr & Isbell Construction LLC.

Dario Suarez, was an employee of Derr & Isbell, who performed steel work for the building of a bridge across the Brazos River in connection with the construction of Baylor University’s McLane Stadium. Suarez and his coworker were working on a “man-lift” supported on a barge on the Brazos River and both were wearing safety tethers. The lift fell off the barge into the Brazos River. Unfortunately, Suarez was unable to free himself and he drowned.

At Trial

The estate of Suarez and members of his family filed suit against Austin Commercial, ABR and Derr & Isbell and multiple other entities associated with the project. ABR asserted an exclusive remedy affirmative defense, alleging it was a member of an Owner Controlled Insurance Program (“OCIP”), “organized under Texas Labor Code 406.123 and as such [is] considered employers of the deceased whose exclusive remedy for negligence is a claim under the Texas Workers Compensation Act, Texas Labor Code 408.001.” ABR subsequently filed a motion for summary judgment on this same ground and asserted ABR was deemed a statutory employer of Suarez. The Suarez’s filed a no-evidence motion for summary judgment on the same issue, alleging there was no evidence to support the exclusive remedy defense. The trial court agreed and denied ABR’s motion for summary judgment.

After the judge rejected ABR’s motion, the case went to trial. The Suarez’s asserted ABR “participated in safety planning, implementation and enforcement for the pedestrian bridge job” and that its actions “constitute[d] negligence which [was] a proximate cause of the incident,” and because of this a jury found ABR one hundred percent liable for Suarez’s death. The jury awarded $2 million in damages from a finding of gross negligence by Bob Beam (ABR’s supervising employee at the time of the incident), $5 million for Jose Suarez’s pain and mental anguish; $7.72 million to his widow for his lost earnings, companionship and mental anguish; and $1 million to each of his children.

On Appeal

ABR challenged the 17 million dollar verdict awarded to the Suarez’s on six grounds. Relevant to this article, ABR argued    the exclusive-remedy provision of the Texas Workers’ Compensation Act bars the Suarez’s’ negligence claims because Baylor University, as the owner of the project on which Jose Suarez was killed, purchased an OCIP, which covered all subcontractors and sub-subcontractors, including ABR and Derr & Isbell Construction, LLC and asserted the Suarez’s received death benefits under the OCIP workers’ compensation policy.

The Texas appellate court agreed and concluded ABR established its exclusive-remedy defense as a matter of law and that there was no evidence supporting the jury’s gross negligence findings. The appellate court reversed the trial court’s judgment and rendered judgment that the Suarez’s, unfortunately, take nothing.

Takeaway

When subcontracting in a construction project, pay close attention to the provisions, which may shield or protect contracts/subcontractors for work related injuries. If there is an OCIP, make sure all contractors/subcontractors enroll, if applicable in your jurisdiction.

Copyright © 2018 Tyson & Mendes LLP. All Rights Reserved. Website by Big Behavior.