Case Law Update: Energen Resources Corporation v. Wallace

Following an explosion at a water well, Wallace – a worker at the site injured in the incident – brought this negligence claim against Energen Resources Corporation as owner of the oil and gas leasehold estate in the land upon which the well was situated. The issue before the Texas Supreme Court was the applicability of Chapter 95 of the Texas Civil Practice & Remedies Code.

Chapter 95 applies to any negligence claim “that arises from the condition or use of an improvement to real property where the contractor or subcontractor constructs, repairs, renovates, or modifies the improvement.” For property owners to be liable under Chapter 95, they must “exercise or retain some control over the manner in which the work is performed.”

Here, the water well was completed at Energen’s request to facilitate the drilling and operations of an oil well. After an unexpected migration of gas, the oil well was shut in, which led to pressure at the water well where the explosion occurred. Because of the two different wells, the issue was to determine from which well the claim arose. Plaintiff Wallace, who was working on the water well but not the oil well, alleged that negligence at the oil well caused his injuries, which would bar application of Chapter 95. Energen countered that the water well may not have been the “only cause” of Wallace’s damages, but since it was a cause, Chapter 95 applied. The Court agreed, and also held that Energen “neither exercised actual control nor retained contractual control over plaintiff’s work.” Though an Energen geologist recommended a site for the water well, this was insufficient to meet the “control” requirement.